MEXICO CITY (AP) — A Mexican court held the first hearing Tuesday in what President Andrés Manuel López Obrador said would be a “watershed” corruption case against the former head of the state-owned oil company.
López Obrador said that the trial of Emilio Lozoya, the former head of Petroleos Mexicanos, “is a before and after” moment in what the president describes as the main priority of his administration, fighting corruption.
Lozoya has reportedly agreed to cooperate with prosecutors and will act as a protected witness in return for possible sentence reductions or elimination of charges. The court opened proceedings Tuesday via a video link because of coronavirus pandemic restrictions and the fact that Lozoya has been under treatment in a hospital for pre-existing conditions.
The Brazilian construction giant Odebrecht, investigated throughout the region in recent years for buying big government contracts with generous bribes, allegedly gave Lozoya $4 million to put toward the 2012 presidential campaign of López Obrador’s predecessor, Enrique Peña Nieto of the Institutional Revolutionary Party.
Lozoya, who directed Pemex from 2012 to 2016 during the Peña Nieto administration, has always denied wrongdoing, but fled Mexico and led authorities on a monthslong overseas manhunt. Spanish police arrested Lozoya in the Spanish city of Malaga in February, and he was extradited to Mexico in mid-July.
At Tuesday's hearing, Lozoya told the court he was innocent of the charges and would prove it. The hearing wasn't open to the public, but according to an informal synopsis of the session provided by the court system, Lozoya said he had been “systematically intimidated, pressured and used.” But he did not say by whom; there had been speculation that he may have felt pressure to raise money for the presidential campaign.
According to the synopsis, Lozoya reiterated “my commitment to collaborate with Mexican government authorities.”
The hearing focused on charges in a 2013 case in which a Mexican firm, Altos Hornos de Mexico, sold an overpriced old fertilizer plant to Pemex after allegedly paying Lozoya around $3.4 million in 2012. According to prosecutors, the money went though accounts controlled by Lozoya and his sister, and they used most of it to buy a house in an upscale neighborhood in the capital.
Prosecutors asked the judge to order Lozoya held for trial on money-laundering charges.
Lozoya said he had declared the property as required on audit forms that government employees must fill out, but prosecutors said he tried to hide the payments and the transaction.
Prosecutors said Lozoya pushed for the purchase of the fertilizer plant even though it would have been cheaper to build a new one.
López Obrador said the new owner of the plant has since offered to repay as much as $200 million related to the purchase. The president said Mexico hopes to get back some of the money from bribes and crooked contracts, and he criticized the fact that Mexican corruption cases often play out in U.S. courts — and that money recovered in those cases also often remains in the United States. He said he has instructed Mexican diplomats to try and get some of it returned to Mexico.
Odebrecht allegedly kicked in an additional $6 million once Peña Nieto was in office. Some of that money was allegedly used to bribe federal lawmakers into voting for his signature energy reform package, known as the Pact for Mexico.
“Mr. Lozoya is letting it be known that there were these bribes and that the money was used to buy the energy reform and that the money was divided among the parties’ legislators,” López Obrador said last week. López Obrador opposed the reform, which opened up Mexico's energy sector to greater private investment.
López Obrador said Tuesday the case “will help a lot, I repeat, in banishing corruption from Mexico," adding that graft is a bigger problem for Mexico than the coronavirus pandemic.
“I am convinced that it (corruption) is Mexico's main problem, it is not a pandemic ... it is a plague," López Obrador said.