PEMEX: Energy scandals on both sides of the border

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PEMEX: Energy scandals on both sides of the border

Mexico-U.S.

pemexTake the money EN RON is the way wags are putting it North of the border. In Mexico pundits don’t find humor in the fact that Pemex (Petroleos Mexicanos, state owned oil company) revenues were skimmed and laundered by the PRI party to finance their candidates for municipal, state and federal elections.

The scandal involves U.S. oil companies who buy crude oil from Pemex (Mexico). One version of the “skimming” story portends that a percentage of U.S. oil company payments were given to wives of PRI party elected officials in the form of hard goods: automobiles, appliances, etc. Those goods were to be raffled and the proceeds used to help poor Mexican families. Instead the monies went into the PRI party’s political coffers.

Another version is that the money was laundered by the Pemex Union in the form of a loan then deposited in the PRI presidential campaign fund for candidate La Bastida, in his losing bid to Vicente Fox . Fox and his PAN party toppled the PRI which had controlled all of Mexico’s federal, state and municipal governments for seventy years prior.

PRIIt is unlikely that the monies to support PRI candidates were diverted without the knowledge of U.S. oil company executives. To date, the conspiracy between the PRI and gringo oil interests is a belief not a proven fact. However, in the minds of most Mexicanos, U.S. oil and Pemex conspiracies existed long before the latest campaign fund scandal.

Mexicanos find it hard to stomach that oil exported to the U.S. costs a dollar a gallon more in Mexico than at the pumps North of the border. One of the most popular conspiracy theories is that George Bush senior “cut a sweetheart deal” for Mexican oil with Carlos Salinas de Gortari, Mexico’s most despised of former Presidents.

I don’t believe that U.S. oil bears the major blame for high oil prices in Mexico. That does not mean I don’t believe that U.S. oil has not used political payoffs to achieve their profit goals. However, the main reason Pemex gouges the national consumer is that corruption is a Pemex tradition: Mexicans politicians, Pemex leadership and the oilworker’s union have a long history of unsavory conspiratorial practices.

In management training, I learned that in order to determine the cause of a problem it is always helpful to compare the defective situation with a similar situation that is working reasonably well and study the differences. The similar situation is Venezuela’s state run oil company. Venezuela exports more crude oil than Mexico and overall production is higher. What is different about Venezuela is that it achieves her production goals with one half the number of employees of Mexico’s Pemex.

A recent article appeared in Mexico’s press in which workers explained that their low production was due to too many workers assigned to the same project . The crowd of workers keep getting in each other’s way.
Pemex is like Mexico’s judicial system. Corruption is throughout the system; at every conceivable level. How can you catch the bad guys when the bad guys are the cops and keepers of the system: street cops, detectives, prosecutors, judges, lawyers, clerks, you name it. All playing a funky game of delivering “justice” via a rampant use of bribes and paid witnesses.

Meanwhile those assigned to combat crime, are aiding, abetting and often committing the crimes. A few years ago, the state of Morales had a kidnap rate of one per day. The police unit assigned to kidnapping was discovered to be the major kidnapping gang, often brutally killing their victims after receiving the ransom money. Mexico is like that and its citizens have become stoic and cynical, accepting the reality that it will take generations to change.

The same applies to Pemex. How can you expect reform when labor, management and the politicians all are co conspirators in ripping off the most important economic sector of Mexico’s economy? Pemex revenues provide the government with 36% of its total income. When billions are involved the corruption opportunity is too savory to resist in this “get your piece of the action” cultural milieu.

For me, the most depressing aspect of this situation, is that public opinion is so shaped by old Socialist dogma, that the majority of Mexicano’s would rather get ripped off by a state run company than allow the government to privatize oil and make it competitive. They illogically cling to state owned oil as if Mexico’s sovereignty depended on it.

North of the border we are fed propaganda that supports military adventures in the middle east. The lie is that we are dependent on mid east oil. We are not, and in fact, the world’s largest oil reserves in the world are in the Gulf of Mexico. Conservation, alternative fuel sources and better oil production cooperation with Latin America will serve all Americans better.

I love my homeland but working, within its system, “gets me down” at times.
Especially when I fill up my tank at the PEMEX gas pump.

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