I could dizzy you up with figures in pesos and dollars, but the fact is that the government owned Petróleos Mexicanos (Pemex) is not only bankrupt but as a highly contaminated oil tanker that is sinking, it is about to bring under literally thousands of small companies it owes money to.
Just last month President Enrique Peña Nieto had to remove the now-former Pemex CEO Emilio Lozoya to replace him with current CEO José Antonio González Anaya.
As it turns out, the removal of Lozoya was not accidental but an obvious political move to cover up for yet another corrupt Mexican official. Lozoya sank Pemex deeper into debt.
On one hand, Lozoya laid off over 14,000 workers to downsize the payroll. But on the other he brought in a team of “experts” who cost the company twice the amount of the laid-off workers in what observers now see as a sheer act of pillaging.
According to one observer, Pemex stopped paying its suppliers six months ago and the Peña Nieto administration is now at a crossroads in which it must decide to pay up or provoke thousands of bankruptcies.
Upon announcing the Pemex “crisis” last month, Finance Secretary Luis Videgaray announced that these small suppliers – whose debt is on the average of 60 million pesos – should start lining up at government owned banks National Financing Agency (Nafin), the National Works Bank (Banobras) and even the Mexican Imports-Exports Bank (Bancomext).
The problem is that these three banks have their financial plans laid out in advance and using their funding to pull Pemex out of bankruptcy was not in the program.
Another problem at hand the small Pemex suppliers are confronting is the lack of credit from commercial banks, which are not willing to risk their money – not even for loan shark fees – because of the threat that in the end, neither Pemex nor the finance secretariat will honor those debts.
In fact, since January Standard and Poor’s declared Pemex an unviable company to receive loans causing again panic among the already panicked suppliers who had confidence in the present administration and its marvelous “energy reform” changes to the Mexican Constitution, which were supposed to bring wellbeing.
This is not to blame the president for the woes of Pemex suppliers. By removing Lozoya and bringing in González Anaya was mostly a political move of removing the rotten and replacing it with the good.
To González Anaya’s credit, he is responsible for cleaning up the finances of the Mexican Social Security Institute (IMSS) and making it in a three year period into a viable institution by reducing purchasing costs and bringing out the IMSS out of a technical bankruptcy — much to the joy of the millions of workers who pay fees to get medical attention and pensions.
When the removal of Emilio Lozoya from Pemex was announced personally by Finance Secretary Luis Vidagaray, Lozoya had no choice but take his team of thieves and pick up their money bags and leave.
In three years he had led Pemex into its worst historical crisis to sink it into an $87,000 billion debt, a 90 percent increase over 2012 when the Peña Nieto administration took it over.
Production went down and soon the $20 billion cash reserves the company had in 2013 disappeared to put the company in the red by 2015.
When Lozoya was literally fired by Videgaray and replaced by González Anaya, unfortunately Videgaray once again performed that heinous act so typical of former Pemex administrations of forgive and forget. In short, if Lozoya wronged the “people’s company” bad he could just walk scot free without punishment or perhaps in his conscience not even the remorse of wrong doing.
The demise of Pemex could easily be blamed on the plummeting of oil prices as well as production over the past two years, but it is not the case.
It is yet another case of criminal impunity so many public officials have been guilty of in the past.
The problem now is not just “tearing one hair off the cat” – as the Spanish proverb goes – but the very fact that the Pemex bankruptcy and Emilio Lozoya’s misbehavior may bring down a once productive part of the Mexican economy.
Can González Anaya pull Pemex out of the hole Lozoya left it in?
Really, it doesn’t matter, as Lozoya’s alleged grand larceny is but the tip of the iceberg and that’s why I told you I would not dizzy you up with figures of stolen monies.
