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DE RUEHMC #0109/01 0761521
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P 171521Z MAR 09
FM AMCONSUL MONTERREY
TO RUEHC/SECSTATE WASHDC PRIORITY 3581
INFO RUEHME/AMEMBASSY MEXICO PRIORITY 4636
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEHMC/AMCONSUL MONTERREY 9150

UNCLAS SECTION 01 OF 04 MONTERREY 000109 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KCOR ECON PGOV MX
SUBJECT: SLOW PROGRESS ON ANTI-CORRUPTION INITIATIVES IN NUEVO LEON 
 
MONTERREY 00000109  001.2 OF 004 
 
 
¶1.      (SBU)  Summary.  There have been a number of allegations 
of public corruption  in Nuevo Leon - including bribes for 
transit police and building inspectors and misuse of funds - but 
these cases have resulted in few negatives consequences for 
those named.  The only exception occurred when prominent local 
business associations complained of the `corruption without 
limits' by Monterrey Mayor Adalberto Madero.  Although Madero 
was not charged with any crime, his candidacy for the PAN 
nomination in the Nuevo Leon governor's race stalled.  Nuevo 
Leon does have new institutions designed to promote 
accountability and transparency, but their reach is still 
limited.  To strengthen the rule of law, Post has sponsored a 
speaker series to encourage anti-corruption efforts and 
increased transparency in Nuevo Leon.  End Summary. 
 
 
 
Corruption Cases in Nuevo Leon 
 
 
 
¶2.      (SBU)  Mexico clearly has a major problem with 
corruption.  Transparencia Mexicana (the Mexican chapter of 
Transparency International) estimated that Mexicans paid 27 
billion pesos (approximately US$2.7 billion at the time) in 
bribes to all levels of government in 2007, accounting for 8% of 
total income of the average Mexican, and 18% of the income of 
the poorest Mexicans.  The same study found that Nuevo Leon is 
the eighth least corrupt state in Mexico, having improved from 
2002 and 2005.  In contrast, the Mexican NGO Center for Economic 
Studies for the Private Sector (CEESP) found that Nuevo Leon was 
the fifth most corrupt state in 2006 in terms of bribes required 
to open a new business, since officials solicited a bribe 20% of 
the time. 
 
 
 
¶3.      (SBU)  Although rumors constantly swirl about possible 
corruption, in three specific cases concrete evidence came to 
light: 
 
 
 
 
 
-           In January 2007 the leading newspaper El Norte took 
photographs of Monterrey city transit police receiving bribes of 
up to 1,000 pesos (nearly $100 USD at the time) to allow drivers 
to avoid drunk driving fines.  Mayor Madero announced that 
although over 200 transit police failed to pass the confidence 
tests (20% of the force) he would only fire 52 officers.  Later 
on, he reinstated all but six officers and took no action 
against top transit police officials.  Working level transit 
police complained to the newspaper that they had quotas of 
kickbacks to pay their supervisors, but these allegations were 
never investigated. 
 
-          In November 2007, Kena Yanez, the head of the Nuevo 
Leon Youth Institute, was photographed and recorded conspiring 
with another employee to falsify a contract. .  The video 
remains available on YouTube.  Yanez was fired, but has not been 
civilly or criminally charged.  Indeed, she has smoothly 
transitioned to a new career as an NGO consultant. 
 
-          In July 2008 El Norte published recorded 
conversations by Monterrey officials in charge of parking meters 
discussing a 30,000 pesos kickback (about $3,000 USD then). 
Madero eventually dismissed 35 employees, including the head of 
parking meter collections.  Madero also decided to eliminate 
parking meters from the streets of Monterrey, purportedly to 
eliminate corruption; this move also deprived the city of 
US$250, 000 each month in needed revenue. 
 
 
 
¶4.      (SBU)  Comment.  All of these cases were uncovered by 
the press; public officials on their own initiative unearth 
little, if any, wrongdoing.   When the press broke the story, 
the authorities made no apparent attempt to investigate whether 
corruption was systemic, but simply fired the people directly 
implicated.  End Comment. 
 
 
 
Case Study of Monterrey Mayor Madero 
 
 
 
¶5.       (SBU)  When Monterrey Mayor Madero entered office in 
2006, political insiders gossiped that all Monterrey city 
 
MONTERREY 00000109  002.2 OF 004 
 
 
officials were expected to support `the project' to help Madero 
become the PAN candidate for Governor of Nuevo Leon in 2009. 
Madero reputedly hired 400 PAN activists in his administration 
and installed his former chauffeur as his chief of staff.  There 
were many rumors that Madero was raising money from informal 
businesses and siphoning off bribes from the transit police and 
others.  An El Norte poll in July 2008 found that 56% of 
Monterrey residents thought that Madero was corrupt (31% did 
not).  Despite this, for most of 2008 Madero led the public 
opinion polls among PAN aspirants by a wide margin and he 
garnered strong support among party militants. 
 
 
 
¶6.      (SBU)  Madero's luck turned bad in September 2008 when a 
coalition of Mexican business associations publicly denounced 
him for `corruption without limit.'   The businessmen complained 
that Madero's administration was charging `intolerable' bribes 
for approval of requests for items such as construction permits. 
 Madero's public image suffered, his poll numbers fell, but he 
still led the surveys.  Many influential Panistas worried that 
Madero would win either an open primary or a vote by PAN members 
to become PAN's candidate for Governor.  However, in February 
2009 the PAN party backed away from prior promises to hold a 
primary, and national PAN leadership handpicked federal Senator 
Fernando Elizondo as the party's candidate for Governor of Nuevo 
Leon.  Senator Elizondo is generally viewed as a clean 
politician.  End Note. 
 
 
 
¶7.      (SBU)  Comment.  The Madero case represents perhaps the 
only case in which  a truly big fish who has suffered from 
allegations of corruption.  Two factors distinguish this case: 
1) The allegations were made by influential businessmen, not 
newspapers or NGOs; and 2) The businessmen did not denounce 
corruption per se, but corruption without limit, implying that a 
certain level of hanky-panky was acceptable.  End Comment. 
 
 
 
Do the Corruption Watchdogs Bark? 
 
 
 
¶8.      (U)  The local press, led by the newspaper chain El 
Norte is an effective watchdog on public corruption.  As noted, 
the press has conducted sting operations to catch public 
servants such as transit police soliciting bribes.  The media 
also presses for transparency by requesting government 
documents, pushing for stronger government power to investigate 
misuse of funds, and checking whether politicians have followed 
through on their promises to build effective anti-corruption 
institutions. 
 
 
 
¶9.      (SBU)  Nuevo Leon has several NGOs dedicated to 
transparency, including Red Civica, Citizens against Corruption, 
a local university, Renace and Vertebra.  Post gathered the NGO 
organizations together to develop a speaker series on practices 
to control corruption.  Our impression is that the NGOs are 
sincere, reasonably well informed, but most have few members 
beyond the heads of the NGOs (Renace is the exception).  Post's 
PAS section sponsored the initial session, and aside from the 
universities, the NGOs were not able to bring many people to the 
presentations.  Post also invited many business associations, 
only one of which sent a representative.  In short, the NGOs 
need to substantially increase their resources and membership to 
effectively pressure for change. 
 
 
 
 
 
¶10.   (SBU)  At the end of the Vicente Fox presidency, the 
Monterrey chapter of the business association COPARMEX, working 
with the administration of Nuevo Leon Governor Gonzalez Paras 
and the University of Monterrey, persuaded UN anti-corruption 
researchers to transfer the focus of one of their lagging 
projects to the state of Nuevo Leon.  Manuel Zambrano, the 
President of COPARMEX Nuevo Leon, admitted to conoff that the UN 
effort had bogged down in Monterrey as well, but noted that work 
on several worthwhile initiatives - such as the idea of 
establishing an independent prosecutor solely dedicated to 
anti-corruption and formulating transparency indicators - would 
continue under the aegis of the state's citizens council on 
public security. 
 
 
 
MONTERREY 00000109  003.2 OF 004 
 
 
 
¶11.  (SBU)  In 2008 Nuevo Leon established a new state audit 
commission, replacing a politicized office which had been under 
the direct control of the state legislature.  Sergio Marenco 
Sanchez became Nuevo Leon's auditor, with an eight year term. 
Marenco Sanchez had substantial experience as an accountant in 
large Mexican companies and appears to be qualified.  Marenco 
Sanchez described his office as similar to the U.S. General 
Accounting Office, because it examines the use of state and 
municipal funds and reports its findings to the state 
legislature.  Marenco Sanchez plans to hire 150 auditors for his 
office, and he emphasized his independence from the political 
process --  since he can only be dismissed by a supermajority of 
75% of the state legislators. The auditors are now reviewing 
2008 spending by the state and municipalities. 
 
 
 
¶12.  (SBU)  Although the new state auditor provides a new tool 
against public corruption, there are several key limitations. 
First, the auditors look at public spending, not bribery, so it 
is not in their purview to examine if public officials have been 
bribed.  In Nuevo Leon state and city controllers are in charge 
of investigations into bribery, so if a mayor receives bribes, 
the mayor's own controller would be in charge of the 
investigation.  Second, the state auditor only reports his 
findings to the legislature, not publicly.  Nuevo Leon's 
legislature passed on the first reading of a reform which would 
allow the results of the audits to be made public, but so far 
the local PAN party has blocked the required second reading of 
the law and it has not come into force.  Note.  PAN 
gubernatorial candidate Elizondo has supported the reform.  End 
Note.  Since the state audit findings are confidential, Morenco 
Sanchez could not discuss whether the auditor has been 
investigating any specific cases. 
 
 
 
¶13.  (U)  According to a 2008 study by Transparency and 
Availability of Fiscal Information (ITDIF in Spanish), Nuevo 
Leon ranked thirteenth (out of 31) in transparency among Mexican 
states.  That could improve with the 2008 inauguration of the 
Nuevo Leon Commission for Transparency and Access to Public 
Information.  The Transparency Commission requires that state 
and municipal governments publish information on the internet 
and respond to written requests for information.  Commissioners 
have five year terms of office and can only be removed for 
cause. 
 
 
 
¶14.     (SBU)  According to Commission President Guillermo 
Mijares Torres, students, businessmen, media and neighbors 
(upset with nearby construction projects) have most frequently 
requested public information.  If the government does not 
produce the information, the requestor makes a written request, 
and the Commission renders a decision within three weeks. 
Commissioner Mijares admits that they need to change the 
bureaucratic culture so that government willingly shares 
information  He contended that the Commission finds for the 
requesting citizen 98% of the time.  The Commission also has the 
power to fine recalcitrant bureaucrats. 
 
 
 
¶15.    (SBU)  Several journalists complain that Nuevo Leon is 
not fully living up to the law.  El Norte editor and law 
professor Miguel Trevino complained that his newspaper must 
always make written requests for information and pay for them. 
Note.  Under the law, requestors do not have to pay for 
information but they do need to pay for copies. End Note. 
Several other journalists have pointed out that the state and 
municipal institutions have not yet published on the internet 
all the information required.  However, the Transparency 
Commission appears to be a move in the right direction.  El 
Norte editor Trevino thinks that Nuevo Leon's institutions are 
generally adequate, but there is a vast gap between the legal 
requirements and social norms, where corruption is winked at and 
accepted.  He argues that corruption must become socially 
unacceptable before the institutions can work properly.  Trevino 
called on the NGOs to make corruption a key issue in the 2009 
political campaigns. 
 
 
 
Comment 
 
 
 
¶16.    (SBU)  Comment.  Monterrey is a business town, but 
 
MONTERREY 00000109  004.2 OF 004 
 
 
businessmen have rarely complained to poloff about corruption, 
seeing it as an intractable but manageable problem.  However, 
the influx of drug cartel money, combined with a permissive 
attitude toward bribery and lax enforcement, has created a 
deadly brew.  While Nuevo Leon has several of the key tools in 
place to effectively combat corruption, such as an aggressive 
media, the transparency law, and a new state auditor, the press 
and the NGO community must raise public awareness of the true 
costs of corruption to change public attitudes.  To promote the 
rule of law, Post hosted the anti-corruption NGOs in several 
strategy sessions and has planned a speaker series increase 
public awareness.  End Comment. 
WILLIAMSON