Layers of Corruption Facilitate Fuel Theft in Mexico

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From corrupt oil workers to public officials to possibly even private companies, fuel theft from the Mexico’s state-owned oil company Pemex has a lot of partners.

Recent interviews with individuals involved in fuel theft published in different news outlets have shown the extent of this network.

Speaking with Spanish daily El País, a former police officer turned “huachicolero” — the term used to describe those who take part in fuel theft — and a police chief explained the reasons behind the spike in the illegal practice observed in the past few years is directly related to this democratization of the trade.

According to both, the “milking” of pipelines intensified after Pemex handed maps of the pipelines to local governments, in an effort to prevent explosions. But the maps ended up in the hands of criminal groups.

“At first we were helped by Pemex officers,” said the huachicolero, adding that the company’s employees showed criminals how to pierce through the pipelines. According to the police chief, a Pemex engineer who worked in his municipality charged criminal groups 25,000 pesos (an estimated $1,250) for every illegal fuel extraction he carried out on their behalf.

In an interview with Mexican daily Milenio, an anonymous source involved in fuel theft said Pemex officers tell the huachicoleros the exact times when the fuel will pass through the pipelines, and provide them with the equipment necessary to extract it. But he also highlighted that these employees are just the first step in the corruption chain, which supposedly involves “white-collar thugs.”

“[Corruption] involves public prosecutors, municipal authorities, state secretaries, and goes as far up as you can imagine,” the source told Milenio, before adding that in his municipality huachicoleros must pay 10,000 pesos every month (an estimated $540) to the Federal Police in order to operate freely. 

Milenio highlighted that the corruption linked to fuel theft has also implicated the ex-public security secretary of state of Puebla Facundo Rosas Rosas, as well as various police officers and a mayor. And the newspaper said it has carried out an investigation since July 2016 on the alleged use of stolen fuel in the construction of an Audi plant in Puebla, which could implicate the leader of Mexico’s powerful Workers Confederation (Confederación de Trabajadores) union.

El Universal reported May 25 that four mayors were under investigation by intelligence and judicial authorities. Several gasoline station owners are also under investigation, El Universal said.

InSight Crime Analysis

Fuel theft has long plagued Mexico, but according to the Financial Times the practice grew by 2,000 percent over the last decade, costing Pemex at least $1 billion per year.

As InSight Crime reported at the beginning of the year, Pemex employees are key cogs in the fuel theft machine. Indeed, 123 Pemex employees and 12 former employees were arrested between 2006 and 2015 in connection with the activity.

SEE ALSO: Coverage of Oil Theft

Nonetheless, very little is known about the corruption that takes place at the highest levels that helps oil this criminal operation. Earlier this month Proceso reported that the government was yet to design a plan to investigate Pemex’s high-ranking officials, members of the Oil Workers Syndicate or authorities in the states where the fuel theft occurs.

The magazine also questioned whether the criminal activity was used to finance political campaigns, as members of the Institutional Revolutionary Party (Partido Revolucionario Institucional – PRI) claimed about the campaign of Puebla’s former governor, Rafael Moreno Valle, a member of the National Action Party (Partido Acción Nacional).

The trade of stolen fuel has also involved foreign companies. In the past few years, Pemex sued 23 US firms it accused of purchasing and distributing stolen Mexican fuel. The company, however, did not win any of these cases.

As for local authorities, Alberto Islas, a founding partner of the Mexico City-based security consultancy Risk Evaluation, told InSight Crime the increase in revenues from sales of stolen fuel gives criminal groups more means to bribe officers and operate undisturbed. According to Islas, the authorities’ complicity is “fundamental” for those taking part in the criminal activity.

In addition to the layers of corrupt officials and businessmen, according to recent reports, there are two main criminal groups that are currently competing in the illegal trade. The oldest one is the so-called Bukanas, which has become a close to the Zetas. But in the last few years the group has been challenged by Antonio Martínez Fuentes, alias “El Toñín,” who has been linked to the Jalisco Cartel New Generation (Cartel de Jalisco Nueva Generación – CJNG).

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