Pemex bribery case on trial in US federal court

A trial in the United States involving Mexico’s state-owned oil company, Petróleos Mexicanos (Pemex), and Swiss energy giant Vitol is now underway. On August 21, Javier Aguilar, a 49-year-old U.S. citizen, appeared before a federal judge in Texas and admitted to paying bribes to Pemex officials in Mexico, Ecuador, and Brazil.

U.S. federal prosecutors have charged Aguilar with violating the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). According to a statement from the US Department of Justice (DOJ), Aguilar, a former oil trader for Vitol Inc., is alleged to have conspired with others to bribe Mexican officials in order to secure contracts with the Mexican government through Pemex Procurement International (PPI). The five-count indictment returned on August 3 also charges Aguilar with money laundering in connection with this scheme. Vitol Inc. is the U.S. subsidiary of the Vitol group, one of the largest global energy traders.

In December 2020, Vitol executives confessed to U.S. authorities that they paid bribes to Petróleos Mexicanos as well as public officials in Brazil and Ecuador, seeking inside information to secure contracts. The case was initially filed in New York, but it was dismissed by a judge who decided it was the wrong jurisdiction for the case. Mexican President Andrés Manuel López Obrador then initiated a parallel investigation in Mexico.

A few months later, Pemex CEO Octavio Romero said that Vitol offered Pemex $17 million to compensate for the damages caused by the corruption. Vitol also committed to completing the work for the contracts at no cost. López Obrador later said Vitol’s compensation payments amounted to $30 million. In June 2021, López Obrador announced in a press conference that Vitol was obligated to disclose the names of the Pemex employees involved in the bribery case. In September 2021, Reuters reported that Pemex had initially canceled its contracts with Vitol, but then resumed negotiations a year later.

The DOJ says Aguilar allegedly met with procurement managers at PPI between September 2017 and April 2018 and agreed to pay bribes for confidential, inside information to assist Vitol in winning business from PPI, including a contract to supply ethane to Pemex through PPI. In particular, Aguilar allegedly agreed to make payments totaling approximately $600,000 in order to assist Vitol in winning the ethane contract. “To promote the bribery scheme and to conceal the proceeds derived from it, Aguilar and his co-conspirators caused the bribes to be paid through a series of transactions and shell companies, according to the charges,” said the DOJ statement.

According to federal authorities in the U.S., although PPI operates as a private company, its employees should be treated as public officials because PPI is a wholly owned subsidiary of a state-owned company. This could potentially impact the case of two former employees of CFE International, the private foreign arm of Mexico’s Federal Electricity Commission (CFE). These individuals are currently facing a civil trial in the U.S. for allegedly awarding influence-peddling contracts to an unnamed U.S. company.

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