Even as It Hurts Mexican Economy, Bribery Is Taken in Stride
By RANDAL C. ARCHIBOLD
Published: April 23, 2012
MEXICO CITY — Every now and then, the health department shows up at José Luis García's food store in an affluent neighborhood here. Mr. García immediately reaches for his wallet.
"They first say there is some fine and then they say, 'We can fix this another way,' " said Mr. García, who typically pays $50 to $100 to make the inspectors go away.
It is an article of faith here that the fastest way to resolve difficulties with a health inspector, traffic police officer or nettlesome ministry functionary is to pay a sum under the table.
A baroque bureaucracy, something economists have long warned slows the potential for growth here, and low pay for public servants leads to peso-greased shortcuts for the simplest transactions.
The bigger the project, experts say, the more palms that are likely to spread open.
"Although you may have all your permits, they say you have to contribute something," said Salvador Contreras, a contractor on an office building going up on a major boulevard. "If you do it the normal way or without paying, it can take double the normal time to do anything."
As deep as the bribery, as well as the resulting frustration, is the acceptance. So the report in The New York Times over the weekend that Wal-Mart de México had paid bribes to speed up the expansion of its empire here and then sought to cover up the payments came as no surprise. What raised eyebrows were the amounts involved — more than $24 million — and that the surreptitious behavior, which Mexicans are confronted with on a much smaller scale in their everyday lives, was so publicly revealed.
"They learned all the bad tricks here," Carlos Salas, a food stand vendor who himself admits to paying off municipal inspectors, said of the executives of Wal-Mart.
Fiscal watchdogs chafe at the way bribery and other forms of corruption are taken in stride here. Studies have found it costs the economy upward of $114 billion — 10 percent of its gross domestic product — and dampens potential investment.
The Mexican chapter of Transparency International said corruption over all was on the rise in Mexico and last year ranked it 100 out of 183 countries in its perception of corruption index, and last among the 34 countries in the Organization for Economic Cooperation and Development.
A study in January by Global Financial Integrity, a research group in Washington, said Mexico over all had lost $872 billion between 1970 to 2010 to crime, corruption and tax evasion, with an acceleration of losses since the North American Free Trade Agreement began in 1994 and ushered in a wave of foreign investment.
"It is very much a part of business," said Heather Lowe, legal counsel for the group. "It is an international business issue, but it hits Mexico significantly."
"What our report showed," she added, "is a disregard for the rule of the law among a lot of the business community in Mexico, whether it is to evade taxes or engage in bribery or other crimes. There is a general disregard for the law in Mexico, and American law, too."
Mexico is the only developing country that shares a border with a major industrial democracy, making temptation go both ways, she said.
While Mexican bribery investigations are few and far between — government officials here have promised to look into the Wal-Mart allegations — American prosecutors have sought to crack down in recent years, using a 1977 law that bars American companies from paying bribes abroad.
In May, a California company and two of its executives were convicted on conspiracy charges for bribing a Mexican electric utility executive with a yacht, Ferrari and other goods in exchange for contracts. And last month Bizjet agreed to pay $11.8 million to settle charges it bribed Mexican and Panamanian officials to win aircraft maintenance work from government agencies.
But promised reforms in Mexico never seem to take root, with a justice system rife with impunity and botched and delayed investigations. On top of the business-related bribes are the drug-related ones, in which members of organized crime groups buy off police officers or politicians to look the other way.
"We have good laws," Luis Carlos Ugalde, a Mexican political scientist, wrote in Nexos magazine last year, in a lengthy dissection of corruption in Mexico and impediments to cleaning it up. "But they do not have an effect on the real world of corruption."
A report in October by the O.E.C.D. said Mexico needed to make criminal enforcement of foreign bribery a priority.
But there was no sign the Walmart affair would lead to a federal investigation here.
Government officials have generally lavished praise on Walmart, now Mexico's largest private employer and retailer with more than 2,000 stores and restaurants.
Just a couple of weeks ago President Felipe Calderon, after meeting with its chief executive, celebrated its clean energy goals in its stores and its contributions to the economy, including a promised 23,000 new jobs, although labor groups have complained about its wages and the placement of a subsidiary store near archaelogical ruins.
Mr. Calderon's office had no comment Monday.
Late Monday night, the Mexican economy ministry said in a statement that because the Walmart internal probe focused on permits and licences obtained at the municipal and state level it fell outside federal government jurisdiction.
"The federal government does not have province in the matters which the investigation alludes to,'' the statement said. It promised cooperation nonetheless with American authorities.
Sometimes there is no need for an investigation. Street vendors and the other Mexican merchants rebel. A few years ago, a group of vendors near a busy subway station got together and decided against paying off "leaders," who in turn say that they pay off city officials. So far, they have remained, but other vendors still pay bribe money out of fear of a crackdown.
http://www.nytimes.com/2012/04/24/world/americas/bribery-tolerated-even-as-it-hurts-mexican-economy.html?_r=0
:lol:
I think you better campaign for the new head of the USDA (OT, in case you missed his problem solving program), he can continue to moonlight as ... well whatever it is that he does :shock: