Mexico’s former CFE officials to face trial by jury in US over corruption allegations

Two ex officials at Mexico’s state electricity company, the Federal Electricity Commission (CFE), are set to stand trial by jury in a court in Texas as part of an ongoing civil case for alleged corruption. Guillermo Turrent, who led the company’s private subsidiary abroad, CFE International (CFEi), and Javier Gutiérrez, former head of operations at CFEi, are accused of granting billions of dollars of unnecessary and overpriced natural gas contracts to Whitewater Midstream between 2016 and 2018. At the time it received the contracts, Whitewater was a small, unknown startup in Austin, Texas founded by friends and former colleagues of Turrent.

According to a transcript of a May 4 hearing obtained by EL PAÍS, a judge in Houston, Texas scheduled for Turrent and Gutiérrez to appear in a jury trial in October 2024, a date that could change should there be adjustments to the court’s timeline. The legal team for CFEi alleges that the Whitewater contracts benefitted the Texas company and its executives and “inflicted substantial, long-lasting harm on CFEi, as well as CFE…and ultimately the Mexican people.”

In 2021, the CFE opened an investigation into the contracts awarded to Whitewater, a recently formed energy company with no previous track record in the industry, following an investigation by EL PAÍS that exposed the long-standing ties between Turrent, Gutierrez and the founders of the Texas company.

Turrent and Gutiérrez have invoked their fifth amendment rights as U.S. citizens, which protects them from self-incrimination as it relates to interrogatories, according to a public record. Both have dual citizenship in Mexico and the U.S.

In preparation for the jury trial, the legal team for CFEi has issued a subpoena to Matthew Calhoun, a founder of Whitewater Midstream who has a long-standing relationship with Turrent dating back to their time as colleagues at Royal Dutch Shell in California in the early 2000s. The subpoena requests that Calhoun disclose any documents or electronic communications between him, Turrent and Gutiérrez. It also commands Calhoun to produce all information “concerning any payments, funds, [or] compensation” from 2013 to the present that were linked to Turrent, Gutiérrez or their private consulting companies. Calhoun was previously the Chief Executive Officer of a company known as Antaeus Group, which received contracts from the CFE during the time Turrent and Gutiérrez were executives at the state company.

In the transcript obtained by EL PAÍS, the defense team for Turrent and Gutiérrez has issued a motion to dismiss the case in the U.S., arguing that the proceedings should be held in Mexico. The CFEi legal team disagrees, given that all of the contracts in question were signed in the U.S. and fall under U.S. jurisdiction.

CFE is a state-owned company implicitly backed by Mexican taxpayers. Its subsidiary, CFEi, was constituted as a private company in the U.S., even if it is wholly owned by a government-run firm in Mexico. The contracts between CFEi and Whitewater are governed by U.S. law and pertain to pipelines in the state of Texas.

Given the proposed timeline for the case, the October 2024 jury trial would commence following the conclusion of the Andrés Manuel López Obrador administration, which has spearheaded the investigation into possible corruption related to the Whitewater contracts awarded by the CFE. Mexico will elect a new president in July 2024. In Mexico, the Anticorruption Prosecutor in the Attorney General’s office is conducting a criminal investigation against Turrent and has an ongoing case open against Gutiérrez.

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