Ex-Pemex CEO still in jail after US $10-million release offer rejected

Former Pemex CEO Emilio Lozoya remains in jail on corruption charges after failing to reach a compensation agreement with the state oil company.

The newspaper Reforma reported Monday that Lozoya — accused of corruption in cases involving Brazilian construction company Odebrecht and steelmaker Altos Hornos de México (AHMSA) during the 2012–2018 government of Enrique Peña Nieto — had reached an agreement with Pemex that would allow him to leave jail in exchange for payments of over US $10 million.

However, at a court hearing on Monday on the AHMSA case, a lawyer for Pemex said the conditions needed for the agreement were not in place. The state oil company argued that Lozoya’s compensation offer of more than $3 million for the corrupt purchase of a dilapidated fertilizer plant from AHMSA in 2015 was insufficient given the financial damage he caused. Lozoya is accused of accepting more than $3 million in kickbacks from AHMSA to effect the purchase.

A second hearing scheduled for Tuesday — at which Lozoya’s offer to compensate for his involvement in the Odebrecht case with a payment of over $7 million was to be considered — was postponed on Pemex’s request. No new date was set.

As a result of Pemex’s rejection of the compensation offer in the AHMSA case and the postponement of the second hearing, Lozoya didn’t have the opportunity to formally conclude the agreement that would have resulted in a suspension of the charges against him and his release from the Reclusorio Norte prison in Mexico City.

The former official — accused of receiving multimillion-dollar payments from both Odebrecht and AHMSA in exchange for awarding a lucrative refinery contract to the former and buying the rundown fertilizer plant from the latter — was extradited to Mexico from Spain in July 2020 and has been in jail since November.

He initially avoided jail for over a year due to poor health and a “protected witness” cooperation agreement he struck with the federal Attorney General’s Office (FGR). His freedom came to an end in October shortly after he was seen dining at a high-end Mexico City restaurant, which put a spotlight on the alleged preferential treatment he was receiving.

If Lozoya and Pemex are unable to reach a compensation agreement in which the former effectively buys his way out of jail, the ex-Pemex chief will face trial on charges of bribery, money laundering and criminal association. A conviction could see him sentenced to almost four decades behind bars.

The former Pemex CEO has implicated a who’s who of Mexico’s political elite in the corruption of which he is accused, including former presidents Peña Nieto, Carlos Salinas and Felipe Calderón, ex-cabinet minister Luis Videgaray and 2018 presidential candidate Ricardo Anaya.

Based on Lozoya’s claims, the FGR accused Peña Nieto of being the author of a bribery scheme that allegedly used Odebrecht money to buy lawmakers’ support for the former government’s structural reforms, in particular the energy reform which opened up the sector to foreign and private companies after an almost 80-year state monopoly.

President López Obrador pledged there would be “no protection for anyone” involved in the Odebrecht corruption case but said Monday that he supported a compensation agreement as long as Lozoya paid fair compensation for his crimes.

With reports from El País and Animal Político