Monday, April 02, 2007

Mexico City: PEMEX missing a ton of money and 1.5 million barrels of oil

The audit for the budget year 2005 recently completed by Mexico's Auditoría Superior de la Federación, kind of like our GAO, found a ton of money as well as almost 1.5 million barrels of oil missing from PEMEX. And you wonder where all the money goes?

The ASF discovered that PEMEX had transferred some 2 billion 688 million pesos to the oil company union, the STPRM. That was actually the good news because the ex-director of PEMEX, Raúl Muñoz Leos, had signed an agreement with the union to pay it 7 billion 781 million pesos. The ASF said that, 1., Muñoz Leos signed the agreement without ever budgeting the money, which is illegal; 2., Muñoz Leos signed the agreement without permission from the PEMEX board of directors, which is illegal; 3., Muñoz Leos signed the agreement without the approval of both the Secretary of Energy and the Secretary of Hacienda (the tax man), also illegal.

The ASF also said that only 963 million pesos of the transferred money could be considered legitimate union business of one kind or another. The remaining 1.7 billion pesos was for illigitimate uses. Those "legitimate" uses were to pay for May Day celebrations and the annual commemoration of the anniversary of the nationalization of Mexico's oil. 90 million dollars worth of partying that should really be a wake.

The ASF said that documents which it had reviewed indicated that much of the 1.7 billion pesos was intended for "housing" costs of workers. However, said the ASF, the law requires PEMEX itself, not the union, to provide housing programs for its workers through banks and other financial institutions. If PEMEX was in fact also doing this, then what was the 1.7 billion pesos really used for? No one yet knows because the ASF is not empowered to audit the union's books. In other words, no one will ever know.

And the union's secretary treasurer, Congressman Ricardo Aldana, signed illegal, un-numbered reciepts accepting the money. He and other union officials were, at one time, in hot water for accepting billions of pesos in PEMEX money on behalf of the union rank-and-file and then sending that money on to the PRI for use in the presidential campaign of 2000. No one has ever been punished for that large scale robbery referred to here as "PemexGate".

The ASF said,
"We're becoming accustomed to tripping over the same rock twice.

It's not a lack of procedures controlling the director general (of PEMEX) but it has to be said that the spending rules are all in place and here we are seeing that, once again, the rules were ignored."
The ASF also detected a slight discrepancy between what PEMEX says it invoiced in 2005 and what the transportation unit says it actually shipped.

PEMEX invoiced 618,154,800 barrels but the office responsible for transport says it only moved 616,667,100, a loss of 1 million 487 thousand barrels of oil, about 5 billion pesos. The ASF is asking for answers but as yet neither PEMEX nor its refiners have been able to account for 5 billion pesos in missing oil. PEMEX pipelines, pumping facilities, storage tanks and transport ships and tankers all suffer from daily leaks but 1.487 million barrels seems like a lot to dribble out into the bays, lakes, rivers and roadways.

Add the 5 billion pesos in missing oil to at least 1.7 billion pesos in illegaly transferred and now disappeared money and the total is 6.7 billion pesos, or more than 600 million US of A dollars. Most experts, including PEMEX's current director, estimate that the national oil company loses about 1 billion dollars a year to internal corruption. The ASF just found 60% of it.

Since the Mexican government finances itself at somewhere between 40 and 60 percent directly from PEMEX, the above mentioned loss in 2005 alone might account for some other interesting things that the ASF turned up. PEMEX is owed by various federal departments, from 2004, 192.5 million pesos. From 2005, the CFE (the federal light company) still owes PEMEX 137,176,000 pesos, the Airport Authority owes 45,255,000 pesos, the Army and Navy owe 10,127,000 pesos while various "private entities" still owe PEMEX 119,617,000 pesos. And that's just from 2004/2005.

What's worse, the ASF discovered that PEMEX has no program in place to collect said overdue monies. That, says the ASF, is also against the law. The joys of nationalized industries, eh? What does PEMEX, the nationalized oil company, do when the CFE, the nationalized light company, won't pay its bills? Cut it off? Probably not. That would create fistfights during presidential cabinet meetings. Most unbecoming of overpaid bureaucrats.

Now, all of this auditing business is a fairly recent development brought on by various fiscal and other government reforms voted into law over the objections of whomever had the ox most likely to be gored. Can you imagine what the total losses to the Mexican people have been throughout all the long 60-some year history of PEMEX, its union and the PRI when there were no audits? Trillions of pesos, hundreds of billions of dollars, without doubt.

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