Ex-governor Javier Duarte of Veracruz Ex-governor Javier Duarte of Veracruz, the state that tops the list of those with missing funds.

States can’t account for 98 billion pesos

5 states responsible for 56% of the total, with Veracruz leading the way

Nearly 100 billion pesos in federal funds destined for infrastructure projects, the paying off of public debt, social programs and wages in Mexico’s 32 states are unaccounted for, according to the Federal Auditor’s Office (ASF).

The 98.9 billion pesos (US $5.5 billion) went missing between 2013 and 2015.

The extent to which the states are to blame is evident in the statistic that for every 100 pesos misappropriated in public administration in the country, state governments are responsible for 66.

Perhaps an even starker indication of the problem is that 16 former state governors are either in prison, waiting to face justice or on the run.

All were accused of the misuse of public funds among other crimes with two recent examples being the apprehension of former Tamaulipas governor Tomás Yarrington in Italy and the arrest of Roberto Borge, ex-governor of Quintana Roo, in Panama.

However, in terms of the amounts allegedly embezzled, Veracruz, Jalisco, the State of México, Michoacán and Oaxaca were the worst offenders.

Together, those five states account for 56% of all missing funds with Veracruz leading the way with a total of 28 billion pesos allegedly embezzled in the 2013-15 period.

Possibly the most high-profile case of a corrupt state governor is that of Javier Duarte, who was in power in Veracruz from 2010 to 2016 before stepping down and fleeing the country.

During his governorship he is accused of operating a network of “ghost companies” to facilitate the illegal diversion of government funds.

His actions attracted widespread media attention when he was subsequently arrested on corruption charges in Guatemala after six months on the run and his alleged crimes have become emblematic of a much wider problem.

According to the ASF, the alleged misappropriation during Duarte’s term “is the highest [diversion of funds] that we have been able to establish in the history of the ASF, which was created in 2000.”

The next worst culprit is Michoacán, a state plagued by poverty, inequality and violence, where the destination of close to 14 billion pesos was unreported in the relevant period.

Most of the money went missing during the two periods that Fausto Vallejo served as the Institutional Revolutionary Party (PRI) governor of the state.

He came to office in February 2012 but was forced to temporarily step down due to ill health in April 2013 before returning to power later in the year.

During these periods he signed off on funds that were allegedly illegally diverted to irregular bank accounts by the then head of the Secretariat of Finance, Marcela Figueroa.

The man who replaced him as interim governor for six months in 2013, Jesús Reyna, also has a questionable track record as he was subsequently arrested in April 2014 for suspected links to the Caballeros Templarios cartel.

Other sectors that also have funds unaccounted for include public universities — 6.8 pesos out of every 100 pesos missing, municipal governments and state auditor’s offices — 5.4 pesos, and health care providers — 3.5.

When all of the missing funds are added up, the ASF, says the total comes to some 148.8 billion pesos (US $8.2 billion).

However, the actual sum of funds misappropriated by state governments is likely to be even higher because currently the ASF can only audit federal funds that are allocated to the states and not revenues that are generated by the states themselves.

With the introduction of the National Anti-Corruption System it is expected that the ASF will have greater access to state accounts and will be better able to determine the full extent of corrupt practices.

Source:  Milenio (sp)

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