Spanish police arrest former head of Mexico's state oil firm Pemex

MEXICO CITY/MADRID (Reuters) - Spanish police on Wednesday arrested Emilio Lozoya, the former chief executive of Mexico’s state oil firm Pemex, giving President Andres Manuel Lopez Obrador his first high-profile win in his government’s anti-corruption drive.

A man sits on a bench at the entrance of the main police station where is supposed to be former chief executive of Mexico's state oil firm Pemex, Emilio Lozoya, after he was arrested by Spanish police in Malaga, Spain, February 12, 2020. REUTERS/Jon Nazca

Lozoya, who has not been seen publicly since mid-2019, is accused in Mexico of corruption related to a wide-ranging bribery and money laundering case involving Brazilian construction firm Odebrecht SA. He has denied wrongdoing.

His detention is a major coup for Lopez Obrador, a leftist who won power on an anti-graft platform and who has sought to paint former administration officials as members of a corrupt elite since taking office in December 2018.

Lozoya, who was indicted in Mexico last year, was one of former President Enrique Pena Nieto’s closest aides, and ran Petróleos Mexicanos, known as Pemex, from 2012 to 2016.

Lozoya was detained in the Spanish city of Malaga, the police said.

Lozoya’s lawyer, Javier Coello, said his client had yet to decide whether to fight extradition from Spain or return voluntarily from Mexico.

“It’s his personal decision. We have all the evidence necessary to defend him,” he told Mexican TV station Milenio.

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While Lopez Obrador employs fierce anti-corruption rhetoric, his administration has not pursued any former Mexican presidents for graft and formal charges have only been pressed against one ex-minister in Pena Nieto’s scandal-plagued administration.

However, the U.S. government has in recent months launched a series of court cases against former Mexican officials, including Peno Nieto ally and former top security official, Genaro Garcia Luna.

The head of Mexico’s Public Administration Ministry, Irma Sandoval, congratulated Mexico’s attorney general on Twitter for the arrest of Lozoya, whom she branded a “representative and operator of the worst structural corruption.”

Coello said Mexico’s attorney general had requested Lozoya’s detention over the Odebrecht case and for allegedly receiving a bribe from one of Mexico’s largest steelmakers, Altos Hornos de Mexico, or AHMSA, before he became a government official.

Part of the investigation into Lozoya has been focused on money transfers that AHMSA made to a shell company allegedly set up by Odebrecht to pay bribes. That shell firm in turn allegedly sent the funds to Lozoya and his relatives.

Lozoya was the manager of Pena Nieto’s winning 2011 presidential campaign.

During Lozoya’s term as Pemex chief the company was rocked by a series of scandals, including investments in two struggling fertilizer plants that Mexico’s Federal Audit Office (ASF) said “destroyed value.”

During Pena Nieto’s term, Pemex took on an additional $47 billion in loans to cement its place as the world’s most indebted oil company. It was creaking under $106 billion in debt by the time the former president left office in 2018.

In July, Lozoya’s mother was arrested in Germany in connection with money laundering charges.

Lozoya’s German wife, Marielle Eckes, is also the target of an outstanding arrest warrant, along with Lozoya’s sister Gilda Lozoya.

Additional reporting by Raul Cortes; Writing by Drazen Jorgic; Editing by Marianna Parraga, Marguerita Choy, Paul Simao and Richard Chang