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| Presidential Ally Is Arrested, and Mexico Corruption Investigation Deepens | Presidential Ally Is Arrested, and Mexico Corruption Investigation Deepens |
| (35 minutes later) | |
| CHIHUAHUA, Mexico — A former deputy in President Enrique Peña Nieto’s party has been arrested as part of an investigation into the illegal use of public money to fuel his party’s campaigns in Mexican elections last year, state officials announced Wednesday. | |
| The former deputy, Alejandro Gutierrez, is one of several allies of Mexico’s president suspected of taking part in an embezzlement scheme to propel his party’s chances at a time of deep dissatisfaction with the government, according to former officials connected to the scheme and hundreds of pages of documents reviewed by The New York Times. | |
| The arrest of Mr. Gutiérrez, a veteran figure who helped control the finances of the governing Institutional Revolutionary Party, or PRI, is part of a widening inquiry into the enormous corruption that occurred under the previous governor of the state of Chihuahua. The governor was a close friend of Mexico’s president and a rising star in the party before he fled to the United States to avoid corruption charges. | |
| The case against him has already ensnared a half-dozen former state officials, some of whom are now cooperating with the authorities. | The case against him has already ensnared a half-dozen former state officials, some of whom are now cooperating with the authorities. |
| But the investigation is spreading and threatens to reach the highest ranks of government, according to testimony from the former state officials and financial records obtained by The Times. | But the investigation is spreading and threatens to reach the highest ranks of government, according to testimony from the former state officials and financial records obtained by The Times. |
| Mr. Gutierrez is being investigated in connection with what former state officials call a nationwide plan to funnel tens of millions of dollars in public money to help the party’s candidates in gubernatorial elections in 2016. | Mr. Gutierrez is being investigated in connection with what former state officials call a nationwide plan to funnel tens of millions of dollars in public money to help the party’s candidates in gubernatorial elections in 2016. |
| The money was sent to states with friendly governors in the party, who then created a trail of government contracts with fake companies that ultimately sent the money back for use in campaigns, according to the testimony and records. | The money was sent to states with friendly governors in the party, who then created a trail of government contracts with fake companies that ultimately sent the money back for use in campaigns, according to the testimony and records. |
| At the time, top officials in the PRI were worried about losing the state elections in June 2016. The former state officials say the pattern of embezzling money to finance elections occurred in several states where the PRI was frightened of losing control. | At the time, top officials in the PRI were worried about losing the state elections in June 2016. The former state officials say the pattern of embezzling money to finance elections occurred in several states where the PRI was frightened of losing control. |
| The documents obtained by The Times focus largely on the embezzlement scheme in Chihuahua. According to the records, millions of dollars were transferred in January 2016 from the federal government to the state for the purpose of education. | The documents obtained by The Times focus largely on the embezzlement scheme in Chihuahua. According to the records, millions of dollars were transferred in January 2016 from the federal government to the state for the purpose of education. |
| The money was then diverted to four companies used to embezzle money — businesses that the nation’s tax auditor has blacklisted as front companies, according to the government contracts obtained by The Times. | The money was then diverted to four companies used to embezzle money — businesses that the nation’s tax auditor has blacklisted as front companies, according to the government contracts obtained by The Times. |
| Those companies, supposedly hired by the state of Chihuahua to provide educational services, received nearly $14 million in their accounts, according to the contracts and the bank records showing that the money had been received. | Those companies, supposedly hired by the state of Chihuahua to provide educational services, received nearly $14 million in their accounts, according to the contracts and the bank records showing that the money had been received. |
| But the companies provided no such services, according to affidavits from current education officials in the state. Instead, the money was turned into cash and returned to the PRI to be used for election campaigns, according to the former state officials connected to the scheme. | But the companies provided no such services, according to affidavits from current education officials in the state. Instead, the money was turned into cash and returned to the PRI to be used for election campaigns, according to the former state officials connected to the scheme. |
| One of them, Ricardo Yáñez, the former minister of education in Chihuahua, described the plot in a sentencing document. He is serving a four-year prison sentence. | One of them, Ricardo Yáñez, the former minister of education in Chihuahua, described the plot in a sentencing document. He is serving a four-year prison sentence. |
| Not all of the money went to politicking, however. | Not all of the money went to politicking, however. |
| About $230,000 was deposited directly into a business account operated by Mr. Gutierrez, the former PRI treasurer, according to officials and witness testimony. | About $230,000 was deposited directly into a business account operated by Mr. Gutierrez, the former PRI treasurer, according to officials and witness testimony. |
| The web of payments suggest a tie between the embezzlement scheme and the party’s national leaders. | The web of payments suggest a tie between the embezzlement scheme and the party’s national leaders. |
| Contracts and bank records show that millions of dollars went to some of the same phony companies, or companies connected to them, in the states of Sonora and Durango. Bank records also show hundreds of thousands of dollars in deposits to some of the companies by the state of Colima. And in their testimony, the former state officials connected to the scheme said it was carried out in the states of Veracruz and Tamaulipas. | Contracts and bank records show that millions of dollars went to some of the same phony companies, or companies connected to them, in the states of Sonora and Durango. Bank records also show hundreds of thousands of dollars in deposits to some of the companies by the state of Colima. And in their testimony, the former state officials connected to the scheme said it was carried out in the states of Veracruz and Tamaulipas. |
| State officials in Veracruz did not respond to repeated requests for comment. And the current governor of Tamaulipas, an opposition politician who won his seat during the 2016 elections, said a review by his employees found no contracts with the four main fake companies. | State officials in Veracruz did not respond to repeated requests for comment. And the current governor of Tamaulipas, an opposition politician who won his seat during the 2016 elections, said a review by his employees found no contracts with the four main fake companies. |