Same firm, new house: Mexico leader's conflict-of-interest storm grows

MEXICO CITY (Reuters) - Mexican President Enrique Pena Nieto faced fresh questions on Wednesday about his dealings with a company at the center of a conflict-of-interest scandal, after it emerged that he enjoyed rent-free use of a house belonging to the firm as a campaign office.

Mexico's President Enrique Pena Nieto sits during a meeting with lawyers in Mexico City November 21, 2014. REUTERS/Tomas Bravo

Already under pressure over the government’s handling of the presumed massacre of 43 students abducted by corrupt police in southwestern Mexico in September, Pena Nieto is facing his most difficult period since taking office two years ago.

On Nov. 3, the government announced a Chinese-led consortium had won a no bid contract to build a $3.75 billion high-speed rail link in central Mexico.

Three days later, the government abruptly canceled the deal, just before a report by news site Aristegui Noticias showed that a subsidiary of Grupo Higa, a company that formed part of the consortium and had won various previous contracts, owned the luxury house of first lady Angelica Rivera.

Under public pressure, Rivera said she would give up the house. But neither she nor Pena Nieto have addressed the apparent conflict of interest stemming from the government’s business with Grupo Higa.

On Wednesday, Aristegui Noticias published a new story that said Pena Nieto used a different property belonging to another Grupo Higa subsidiary as an office when he was president-elect in 2012.

Eduardo Sanchez, the president’s spokesman, said Pena Nieto unwittingly used the property. Sanchez said it was leased from the Grupo Higa firm by Humberto Castillejos, the president’s legal adviser, who lent it rent-free to Pena Nieto’s team.

“If I invite you to my house, do you come to my house and ask me under whose name it is? Neither does the president,” Sanchez said, denying there were conflicts of interest.

The spokesman also said there were no more properties Pena Nieto or his team had used belonging to Grupo Higa.

“No, there is no other house that was used in a professional capacity,” Sanchez said.

Castillejos could not immediately be reached for comment.

Jorge Luis Lavalle, a senator with the opposition conservative National Action Party, said the public saw a clear conflict of interest in the dealings of Pena Nieto and his government with Grupo Higa.

“It needs to be investigated. All these doubts need to be dispelled fully and clearly,” he said. “We now have another case with no explanation.”

Additional reporting by Ana Isabel Martinez; Editing by Simon Gardner and Tom Brown