MARCH 24-30, 2008

1. PRD CRISIS CONTINUES
2. SECRETARY OF LABOR INTERVENES IN UAM STRIKE
3. PRIVATIZATION OF PEMEX


1. PRD CRISIS CONTINUES
The Technical Electoral Commission administering internal elections for the PRD presidency and state leaders announced Sunday that final results will not be available until next Wednesday, and even those results will be subject to review by the party’s National Commission of Guarantees and Vigilance.  The election, held two weeks ago, is mired in disputes over widespread fraud committed by the two leading candidates for the party presidency, former Mexico City mayor Alejandro Encinas and long time party operative Jesus Ortega.  Encinas is backed by former PRD presidential candidate Andres Manuel Lopez Obrador, while Ortega enjoys the support of many PRD elected officials as well as some PAN and PRI leaders, including several PRI Governors who reportedly intervened in the election by distributing gifts in exchange for votes.  Ballot counting stopped last week when the two sides could not agree on how to deal with widespread fraud, including ballot boxes with more than 90% support for one candidate (known as “zapatos”), PRD members removed from election rolls (Encinas claimed as many as 30% of party members were unable to vote), ballot boxes stuffed with more than 1,000 ballots (each election site was limited to 1,000 ballots),  polling stations that returned results but were never officially opened, and ballots that were stolen or burnt.  While most of the state returns have already been tabulated, at least seven states remain uncounted – the Federal District, Chiapas, and Mexico State (the three represent about half of the accredited PRD members in the country), plus Oaxaca, Zacatecas, Puebla and Tabasco.  No matter who wins, the election is widely viewed as a disaster for the PRD.


2. SECRETARY OF LABOR INTERVENES IN UAM STRIKE
The Secretary of Labor intervened this week in the labor strike at the Universidad Autonoma Metropolitana (UAM), negotiating a tentative agreement between UAM administrators and union leaders that will very likely face stiff opposition from the rank and file this coming week.  The agreement maintains salary increases, offered since the beginning of the 58 day strike, of 4.25%, with 1.2% increases in fringe benefits, plus 50% pay for days lost during the strike and a one time payment of 2,500 pesos per worker.  Workers are demanding 10% wage increases, which would still put them behind last year’s salaries because of new income tax laws.  The union leadership, which is closely affiliated with the PRD, opposed the strike from the beginning, but the rank and file has been surprisingly united in the face of a UAM bureaucracy that has not changed its position since the beginning of the longest strike in UAM history.


3. PRIVATIZATION OF PEMEX
The national debate around privatization of Pemex heated up this week as the Calderon administration released a long-promised report entitled “Diagnosis: Situation of Pemex.”  According to the report, Pemex declined from the sixth largest oil producer in the world in 2000 to ninth in 2006 and eleventh in 2007.  While the Calderon administration used the report to argue for privatization of the national petroleum monopoly, the results were predictable after successive PAN administrations de-capitalized oil production, refining and exploration.  The report claims Pemex has only nine years of proven reserves, while simultaneously Calderon dangles unexplored “deep water riches” before the international investment community.  Pemex provides more than 40% of the federal budget and is the most heavily taxed oil company in the world, yet investment in infrastructure and exploration is at record lows, leading Mexico to spend nearly half its income from oil exports on gasoline imports from refineries in Texas.  Pemex has not drilled any significant new wells in the past seven years. 

Privatization of Pemex is high on the Calderon agenda, but widespread popular opposition and a series of oil-related scandals involving Interior Secretary Juan Mouriño make reform legislation unlikely this year.  The lower House installed a commission on Tuesday to investigate contracts signed by Mouriño on behalf of his family business while he served as assistant to then Energy Secretary Felipe Calderon and as head of the energy commission in the lower house.  He is accused of illegal influence pedaling.  The investigative commission, composed of members of the PAN, PRI and Green Party, did not name Mouriño during their initial public meeting.  The PRD and other opposition parties refused to take part in the commission, even though it was the PRD that initially revealed Mouriño’s signed contracts.  Most observers consider the commission, headed by a member of the Green Party, perhaps Mexico’s most corrupt political party, to be a fraud.  The commission will finish its work within two months, and it is widely anticipated that Mouriño will be exonerated.  However, new evidence of fraud implicating Mouriño or other officials from the Calderon administration could force the commission to conduct a genuine investigation.  Thousands of federal employees with access to sensitive government information were fired by Calderon when he took office in 2006, making room for Calderon loyalists.  This may come back to haunt Calderon as former officials reveal new information in coming weeks about PAN corruption.

With the PAN in favor of privatization and the PRD opposed, the PRI is the defining party in any debate.  Senate leader Manlio Beltrones of the PRI criticized anything “that smells of privatization” this week, a change in discourse from previous public statements, though this may represent a new strategy on the part of the PRI and PAN to discredit “privatization” while still accomplishing a de facto privatization through reform of federal statues.