This article by Nicholas BergSamantha BadlamJoshua Asher and Molly Gachignard was published by Law360 on November 29, 2017. 

Mexico’s anti-corruption enforcement regime, the National Anti-Corruption System (NAS), was adopted by Mexico’s Congress on July 6, 2016, and approved by President Peña Nieto on July 18, 2016.1 While approval of the NAS marked an important step forward in Mexico’s reform efforts, since that time the NAS has suffered a series of setbacks and delays, as the Peña Nieto government has stalled implementation of many key aspects of the NAS.2 Nevertheless, as the recent resignation of Mexico’s attorney general, Raúl Cervantes, demonstrates, there is reason to be cautiously optimistic. A longtime member of the ruling PRI party and a close ally of President Peña Nieto, Cervantes cited the ongoing debate in Mexico surrounding the appointment of an independent anti-corruption prosecutor as the reason for stepping down.

Cervantes’ resignation signals a potential victory for a broad coalition of anti-corruption activists in their demands for a truly independent prosecutor — a central pillar of Mexico’s anti-corruption reform efforts. More broadly, Mexican civil society groups, made up of academics and activists alike, are heavily engaged in the implementation of the NAS and are pushing for reforms despite what may seem like the current presidency’s attempts to frustrate substantial progress. At the same time, these groups face an uphill battle, working with few resources and against a culture where corruption is viewed as a price of conducting business that will not be easy to overcome. Should these groups succeed and an independent prosecutor ultimately be appointed, companies doing business in Mexico should expect to see an increase in corruption investigations, as well as increased coordination between U.S. and Mexican enforcement authorities, which may also result in a spike in U.S. prosecutions.

Role of Civil Society in Passage of the NAS

The enactment of the NAS resulted from persistent engagement and pressure by Mexican civil society groups more than a top-down political initiative. Peña Nieto presented his own, watered-down anti-corruption reform bill in November 2012, but the proposal was poorly received. Disappointed with Mexico’s federal government, civil society groups, academics and activists presented their own, more comprehensive version of the legislation. Civil society groups held closed-door meetings with Mexican authorities to advocate for the creation of the NAS and utilized a legal mechanism called a “citizen initiative” — a bill presented by citizens that Congress is legally required to discuss if it is backed by at least 110,000 signatures. In the end, 634,000 citizens signed their support for the bill, forcing Congress to eventually pass the legislation, after trying several times to reduce its scope. Enactment of the NAS thus marked a critical achievement for Mexico’s civil society against an otherwise lackluster government-led reform effort.3

There are several factors thought to be driving Mexico’s growing intolerance of corruption, despite a corruption climate historically resistant to reform. A growing middle class is demanding accountability and improved public services in the face of what seems like a constant slate of corruption scandals throughout the government, together with the highest violent crime rates Mexico has seen in 20 years.4 Social media is being used to expose corruption schemes that previously would have remained hidden and to mobilize citizens.5 Finally, President Peña Nieto’s own corruption scandal — his wife and finance minister purchased homes on credit from a government contractor close to the president — energized activists to push for an independent anti-corruption enforcement regime.

Critical Issues Impacting Success of the NAS

Despite the citizenry’s success in promoting effective anti-corruption legislation, the Mexican government has not taken necessary steps to implement the legislation. Most notably, the legislation provides for an independent prosecutor within the attorney general’s office, a key component of a strengthened anti-corruption enforcement regime, but that position has not yet been filled and it remains unclear how it will be financed.6

Cervantes was named attorney general in October 2016 and was approved overwhelmingly in the Senate. Civic leaders harshly criticized his appointment as an obstacle to fully implementing the NAS, and opposition parties and members of citizen movements mobilized using the hashtags #VamosPorMas (#Let'sGetMore) and #FiscaliaQueSirva (#Prosecutor'sOfficeThatWorks) to oppose Cervantes’ nomination.7 Citizens groups also prepared a second citizens bill that would reform the attorney general’s office to ensure an independent prosecutor separate from the attorney general’s office to investigate corruption.8 Faced with these criticisms, President Peña Nieto proposed a constitutional change in November 2016 that would place the Senate in charge of appointing the independent prosecutor. While the legislature passed the measure, the position of the independent prosecutor remains open with no one appointed to the role.9

In October 2017, Cervantes resigned his post, citing this debate over the appointment of an independent prosecutor, handing a victory to anti-corruption activists.10 Cervantes claimed that Mexico’s legislature would soon be discussing “new initiatives related to the attorney general’s office” and he decided to resign, “in order to not further delay the laws that Mexico needs.”11 Cervantes was viewed by anti-corruption activists as Peña Nieto’s attempt to shield the party’s powerbrokers from investigation.

Despite the recent successes of civil society groups with respect to the independent prosecutor, Peña Nieto’s government has continued to take steps to shield itself from legal scrutiny. Recently, the acting attorney general dismissed the Mexico’s top electoral crimes prosecutor, Santiago Nieto, after he complained that the former head of Mexico’s state oil company demanded that he close an investigation into campaign contributions from Brazilian construction company Odebrecht.12 In response to the firing, civil society groups and opposition groups denounced the dismissal as another attempt by Peña Nieto’s government to shield itself from corruption investigations.13 The Senate also has not appointed 18 judges to specialized courts created to adjudicate serious corruption-related administrative offenses committed by public servants, individuals, and corporate entities, and almost half of Mexico’s 32 states have not passed anti-corruption legislation required at the state level.

These will be areas where enhanced citizen engagement will be critical to ensure that entrenched governmental interests do not thwart reform. This is also where the Citizens Participation Committee can play an important role. One of the unique features of the NAS is the incorporation of a Citizens Participation Committee into the law’s framework. The CPC is one of several committees charged with helping to oversee the NAS, but, unlike other NAS committees, the CPC is staffed by five anti-corruption activists rather than by bureaucrats with ties to the major political parties. A representative of the CPC sits on the Coordinating Committee, which oversees the coordination efforts among the country’s various anti-corruption enforcement agencies at the national and local levels. The other primary purpose of the CPC is to liaise between the NAS and civil society in order to achieve the objectives of the NAS. The CPC is intended to channel inputs from civil society into the work of the NAS and to oversee progress and results. Using their access to the CPC, citizens can more effectively pressure government leaders and hold accountable their government in upholding the key performance indicators of the NAS.14

The current president of the CPC is Jacqueline Peschard Mariscal. Mariscal has worked at the Federal Electoral Institute and the access-to-information agency IFAI, and will serve as CPC president for one year.15 Peschard Mariscal is one of a number of citizen leaders in Mexico working to support reform efforts, often with little resources and in the face of personal peril. Another individual playing a leading role in Mexico’s reform efforts is Maria Elena Morera, president of the Mexican civic organization Common Cause.16 Morera’s husband was kidnapped in 2001, inspiring Morera’s fight against corruption. Morera negotiated with her husband’s kidnappers, five of whom were ultimately arrested and convicted.17 Morera works to strengthen public accountability and the rule of law in Mexico, and is a strong advocate for eliminating the prevalent violence in Mexico. While these leaders and others have provided immense leadership and enjoyed success in bolstering Mexico’s anti-corruption regime, the lack of resources available to them remains a concern for these citizen efforts going forward.

The success of Mexico’s civil society in pushing for reform suggests a new era for corruption enforcement in Mexico. With a presidential election in July 2018, citizen engagement continues to play an important role in these reform efforts. Though Peña Nieto and other members of the PRI have little incentive to strengthen Mexico’s anti-corruption enforcement regime since they may soon be out of power following next year’s elections, cautious optimism for Mexico and its citizens seems appropriate. Presidential candidate Andres Manuel Lopez Obrador is the early frontrunner for the 2018 presidential election.18 His likely electoral victory may inspire the appointment of an independent prosecutor prior to the 2018 election to avoid Lopez Obrador’s own selection. The campaign success of Lopez Obrador, the rise of social media, the renewed presence of citizens groups in Mexico’s political culture, and an inspired demand for transparency suggest that anti-corruption reforms are likely to progress, albeit at an uneven and uncertain pace. Should an independent prosecutor ultimately be appointed, companies doing business in Mexico should expect to see an increase in corruption investigations, as well as increased coordination between U.S. and Mexican enforcement authorities, which may also lead to a spike in U.S. prosecutions.