Mexico’s States Gained Power and Money; Then Came Corruption

3/13/2017 Wall Street Journal

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Stringer Meixco/Reuters

XALAPA, Mexico—One day last October, the governor of Veracruz state was scheduled to appear on a morning news program. He never showed up.

Instead, Javier Duarte disappeared, the same day authorities asked a judge for a warrant to arrest him. Many in Mexico think he was tipped off.

Mr. Duarte has since been charged with racketeering and using illegally obtained funds. Investigators believe he used front men and a web of phantom companies to divert public funds and acquire real estate in Mexico, Houston and Miami. With Veracruz state’s affairs in disarray, federal and state auditors said $2.5 billion spent by his administration was unaccounted for.

Mr. Duarte, who before vanishing denied wrongdoing in a series of media interviews, has become the public face of corruption in Mexico and an embarrassment to the ruling Institutional Revolutionary Party. Its hopes for retaining power in elections next year are hampered by the alleged financial malfeasance not just of Mr. Duarte but of half a dozen other former state governors.

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