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Emilio Lozoya, former CEO of Pemex, Mexico's state-owned oil company. Emilio Lozoya, former CEO of Pemex, Mexico's state-owned oil company.

For US $10.7 million, former Pemex boss could buy impunity and get out of jail

The payment will buy his freedom and the suspension of criminal proceedings against him

Former Pemex CEO Emilio Lozoya – accused of corruption and imprisoned since November – has reached an agreement that will allow him to leave jail in exchange for over US $10.7 million in compensation, the newspaper Reforma reported Monday.

Extradited to Mexico from Spain in July 2020, Lozoya – the state oil company’s CEO between 2012 and 2016 – is accused of receiving more than $10 million in bribes from Brazilian construction company Odebrecht in exchange for awarding it a lucrative contract for work on the Pemex refinery in Tula, Hidalgo. He is also accused of taking a more than $3 million kickback from the president of Altos Hornos de México (AHMSA), a company from which Pemex purchased a dilapidated fertilizer plant in 2015 at an allegedly vastly inflated price.

Barring a last-minute change of mind by the federal Attorney General’s Office (FGR), the former Pemex chief is likely to be released from Mexico City prison Reclusorio Norte on Tuesday, Reforma reported, citing information from federal authorities.

The newspaper said that Lozoya has finally reached an agreement with authorities that will see him pay almost $10.8 million to Pemex in compensation for the Odebrecht and AHMSA cases.

The former official has also negotiated a conditional suspension of the two cases against him, Reforma said.

The Agro Nitrogenados fertilizer plant had been out of operation for 14 years when Lozoyo arranged for Pemex to buy it.
The Agro Nitrogenados fertilizer plant had been out of operation for 14 years when Lozoyo arranged for Pemex to buy it.

Pemex, which reportedly accepted the compensation offer last month, will receive $7.38 million for the Odebrecht case and $3.4 million for the “junk” fertilizer plant case.

An initial payment of $1 million will be made for each case after the agreement is signed, Reforma said. Lozoya will have to pay the full amounts by the end of the year.

The ex-official, a close ally of former president Enrique Peña Nieto, will put up five properties as a guarantee for the compensation amount. Among them are his home in the Mexico City neighborhood of Lomas de Bezares, his wife’s beach house in Ixtapa, Guerrero, and his father’s property in the Bosques del Pedregal neighborhood of the capital.

Reforma reported that the FGR will also suspend cases against Lozoya’s mother, sister and wife.

The former Pemex CEO in November offered to pay $5 million in exchange for the FGR withdrawing its accusations against him in connection with both the Odebrecht and AHMSA cases. But that offer was rejected.

President López Obrador said Monday that he approved of the pact between Lozoya and the FGR. “We agree with it because it means returning to the people what was stolen from them,” he said.

However, López Obrador added that Lozoya’s offer should be reviewed to determine whether it is fair compensation for the corrupt acts he is accused of committing.

It is surprising that the president doesn’t oppose the ex-Pemex chief’s offer to buy his way out of prison, given that he has made combating corruption and impunity central aims of his government.

Lozoya is one of the most high-profile Peña Nieto-era officials who have been detained on corruption charges. The previous federal government was plagued by scandals, including a massive embezzlement scheme, for which former cabinet minister Rosario Robles was detained. Robles is in prison but has not yet faced trial.

With reports from Reforma and El Financiero

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