Mexico’s government is facing fresh allegations of wrongdoing after it was revealed that the country’s finance minister bought a holiday home from a company which has won numerous lucrative public works contracts.
The revelations are likely to further deepen the crisis of credibility engulfing the administration of President Enrique Peña Nieto, who has faced a wave of protests over political corruption.
Speaking on Friday, finance minister Luis Videgaray denied he faced a conflict of interest after the Wall Street Journal reported that he had bought a house at an exclusive golf resort near the picturesque town of Malinalco in October 2012, two months before he entered the government.
The house was sold by a subsidiary of the Grupo Higa group, which has won hundreds of millions of dollars’ worth of government contracts during Peña Nieto’s time as governor of the state of Mexico and as president. The company also owns a house used during his 2012 presidential campaign.
Grup Higa formed part of a Chinese-led consortium that won a $3.7bn contract to build Mexico’s first high speed railway between the country’s capital and the city of Queretaro. That deal was abruptly cancelled days before a Mexican investigative website revealed that Grupo Higa had built a luxury mansion for Peña Nieto’s wife, a former soap opera star.
Although the government has strongly denied any wrongdoing, the case has helped fuel a wave of protests over rampant political corruption and the breakdown of law and order it has enabled. Popular anger has also been fuelled by the government reaction to the disappearance and probable massacre of 43 student teachers after they were detained by municipal police in the southern state of Guerrero.
According to an opinion poll released this week, carried out by the consulting company GEA, 85% of Mexicans believe what the president says “only a little” or “not at all”.
Much of the public fury on display in the protests has focused on the government’s refusal to accept that corruption affects federal politicians and institutions, as well as local authorities.
The real estate deals involving Grupo Higa, the president, and now also his finance minister are seen by many as further reasons to doubt the government’s repeated claims to be committed to both full transparency and pursuing corruption in all its forms.
“This is another element to add to the widespread feeling that the Peña Nieto government does not know how to distinguish between its responsibilities and its personal business transactions,” said leading political commentator Jesús Silva-Herzog.
“The justifications given to argue there is no conflict of interest have not been at all convincing. They are another reason for the public to suspect that this government is corrupt,” he said.
In a television interview on Friday, Videgaray admitted that the origins of his own real estate deal with Grupo Higa went back to a conversation at a social event with the company’s owner, Juan Armando Hinojoso, who he also acknowledged has a long personal relationship with the president.
The minister, however, insisted that he was not a public official at the time he made the subsequent arrangement to buy the house with his savings in what he described as “a strictly legal operation”.
Videgaray did, however, say he supported the idea of an independent investigation of the deal, which he said involved a loan from the company that he fully paid off in January.
This contrasts with the government’s refusal to entertain the idea of an independent investigation into the presidential mansion. Government spokespeople have repeatedly insisted all doubts have been fully addressed by a video released by first lady Angelica Rivera a few days after the scandal broke.
In the video, Rivera insisted that her husband had no direct association with the acquisition of the property, which she said she was paying for with money earned during her long career as a star of soap operas on the Televisa TV network, via a loan she had personally taken out with Grupo Higa.
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