February 16, 2013 / 1:30 AM / 5 years ago

Mexico orders Pemex to explain questioned loan to union-paper

MEXICO CITY, Feb 15 (Reuters) - Mexico has ordered state oil monopoly Pemex to provide details about a controversial multimillion dollar loan it made to its trade union, Interior Minister Miguel Angel Osorio Chong told a Mexican newspaper.

Overhauling Pemex, which has been dogged by allegations of corruption, is one of the government’s top priorities in 2013, and this week daily Reforma revealed details of a 500 million peso ($39.42 million) loan the firm made to the union in 2011.

Osorio Chong told the paper that President Enrique Pena Nieto had ordered an explanation of that the loan, which has been questioned by lawmakers as potentially illegal.

“Let’s not get ahead of the official information, and once we have that we will provide our own information,” Osorio Chong said. “The public deserves to know, given what’s come out.”

“The president has instructed (Pemex chief Emilio Lozoya) to provide information relating to the article published,” he added.

Any revelations of wrongdoing at Pemex, which suffered a deadly explosion at its headquarters late last month, could increase pressure on the company to submit to changes.

According to Pemex’s loan agreement, which the company had ordered classified for a decade, the money was given to the union for 10 years, did not charge interest, and was used to build homes, the paper reported.

The union’s leader Carlos Romero Deschamps later defended the loan, saying it was part of Pemex’s duty to provide housing for its workers.

However, Reforma said Pemex had not reported any such housing project when it published the story this week.

Pena Nieto, a member of the Institutional Revolutionary Party (PRI), has pledged to shake up Pemex, whose oil output has slumped to less than 2.6 million barrels per day from 3.4 million bpd in 2004, and open it up to more private investment.

But this is no easy task as the company has been a symbol of Mexican self-sufficiency since the PRI nationalized the oil industry in 1938, and past attempts at reform have foundered.

The union has had to face down scandals in the past, notably during the 2000 presidential election, when it was accused of embezzling some $200 million from Pemex and funneling it into the PRI’s ultimately unsuccessful campaign.

The most serious charges in the row dubbed “Pemexgate” were dropped in 2003 but detractors still accuse union leaders of siphoning off cash and using Pemex contracts for their own gain.

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