The Americas Blog seeks to present a more accurate perspective on economic and political developments in the Western Hemisphere than is often presented in the United States. It will provide information that is often ignored, buried, and sometimes misreported in the major U.S. media.
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In 1991, Argentina fixed its peso to the US dollar, but the increasing value of the dollar led to a deep recession beginning in mid-1998, and default on dollar-denominated debt in December 2001. The currency board devalued the peso by 29 percent in January 2002, before the peso fell further over the year as the peg was abandoned completely.
The year 2001 also represented a low point in Argentina’s commodity prices. From 2001 to 2011, prices rose 187 percent — much faster than import prices generally, which rose 42 percent over the same period. This was the largest relative increase in commodity prices since 1933, shortly after Argentina abandoned the gold standard.
This has led some observers to attribute Argentina’s rapid economic growth after coming out of recession to a commodity boom, but an increase in commodity prices can cut both ways, increasing the price of purchases as well as sales. Indeed, there was considerable improvement in the terms of trade over 2001–2011, and the price of gross domestic product (GDP) relative to that of domestic demand (domestic consumption and investment) grew only about 7.5 percent. This suggests that the impact on real output was modest — perhaps less than 3 percent over the decade.
In a recent paper, Thomas Drechsel and Silvana Tenreyro study the economic effects of commodity price shocks. In part, they apply a vector autoregression (VAR) statistical model to data from Argentina going back to 1900. In brief, they find that an economy-wide shock[1] that immediately raises commodity prices by 9–11 percent temporarily increases real per-capita GDP 0.6–2.3 percentage points by the following year. They find through this approach no evidence that such a shock has any long-run effect.
Though real commodity prices doubled between 2001 and 2011, Drechsel and Tenreyro’s VAR model suggests that for most of the decade commodity-price shocks do not contribute meaningfully to the evolution of commodity prices over the decade. Figure 1 below shows historical real commodity prices (dark blue) along with simulated results having removed the exogenous price shocks after 2001 (light bands span 80, 90, and 95 percent of simulations). Only after 2010 did exogenous price shocks drive prices above the expected range.
Consequently, the accumulated price shocks after 2001 only increased GDP 4 percent by 2012 — raising the annualized rate of per-capita growth over 11 years from 2.8 percent to 3.2 percent. Though it may be that commodity-price shocks contributed to growth in Argentina, we see little evidence that it drove the rapid economic growth of the 2000s. This is seen in Figure 2.
Finally, we may repeat the above analysis using our measure of trade windfalls — the price of GDP relative to that of domestic demand — in lieu of real commodity prices. As Figure 3 shows, the additional purchasing power that was made available through changes in trade prices had no observable effect on GDP.
[1] Unexpected movements in commodity prices are correlated with unexpected movements in other macroeconomic variables in the model. Drechsel and Tenreyro assume that such movements in commodity prices may have contemporaneous effects on other variables, yet other variables have no contemporaneous impact on commodity prices. The other variables are likewise ordered so that an exogenous “GDP shock” may contemporaneously move consumption, investment, and the balance of trade, but only such a price shock may so move commodity prices. Our counterfactual simulations involve removing the price shocks that affect all endogenous variables, leaving in place those shocks that by assumption do not contemporaneously affect commodity prices.
In 1991, Argentina fixed its peso to the US dollar, but the increasing value of the dollar led to a deep recession beginning in mid-1998, and default on dollar-denominated debt in December 2001. The currency board devalued the peso by 29 percent in January 2002, before the peso fell further over the year as the peg was abandoned completely.
The year 2001 also represented a low point in Argentina’s commodity prices. From 2001 to 2011, prices rose 187 percent — much faster than import prices generally, which rose 42 percent over the same period. This was the largest relative increase in commodity prices since 1933, shortly after Argentina abandoned the gold standard.
This has led some observers to attribute Argentina’s rapid economic growth after coming out of recession to a commodity boom, but an increase in commodity prices can cut both ways, increasing the price of purchases as well as sales. Indeed, there was considerable improvement in the terms of trade over 2001–2011, and the price of gross domestic product (GDP) relative to that of domestic demand (domestic consumption and investment) grew only about 7.5 percent. This suggests that the impact on real output was modest — perhaps less than 3 percent over the decade.
In a recent paper, Thomas Drechsel and Silvana Tenreyro study the economic effects of commodity price shocks. In part, they apply a vector autoregression (VAR) statistical model to data from Argentina going back to 1900. In brief, they find that an economy-wide shock[1] that immediately raises commodity prices by 9–11 percent temporarily increases real per-capita GDP 0.6–2.3 percentage points by the following year. They find through this approach no evidence that such a shock has any long-run effect.
Though real commodity prices doubled between 2001 and 2011, Drechsel and Tenreyro’s VAR model suggests that for most of the decade commodity-price shocks do not contribute meaningfully to the evolution of commodity prices over the decade. Figure 1 below shows historical real commodity prices (dark blue) along with simulated results having removed the exogenous price shocks after 2001 (light bands span 80, 90, and 95 percent of simulations). Only after 2010 did exogenous price shocks drive prices above the expected range.
Consequently, the accumulated price shocks after 2001 only increased GDP 4 percent by 2012 — raising the annualized rate of per-capita growth over 11 years from 2.8 percent to 3.2 percent. Though it may be that commodity-price shocks contributed to growth in Argentina, we see little evidence that it drove the rapid economic growth of the 2000s. This is seen in Figure 2.
Finally, we may repeat the above analysis using our measure of trade windfalls — the price of GDP relative to that of domestic demand — in lieu of real commodity prices. As Figure 3 shows, the additional purchasing power that was made available through changes in trade prices had no observable effect on GDP.
[1] Unexpected movements in commodity prices are correlated with unexpected movements in other macroeconomic variables in the model. Drechsel and Tenreyro assume that such movements in commodity prices may have contemporaneous effects on other variables, yet other variables have no contemporaneous impact on commodity prices. The other variables are likewise ordered so that an exogenous “GDP shock” may contemporaneously move consumption, investment, and the balance of trade, but only such a price shock may so move commodity prices. Our counterfactual simulations involve removing the price shocks that affect all endogenous variables, leaving in place those shocks that by assumption do not contemporaneously affect commodity prices.
Months after Hurricane Maria the lights are still not back on for all Puerto Ricans. The extensive damage caused by the storm, along with the slow pace of restoring electricity have highlighted the struggles of Puerto Rico’s Electric Power Authority (PREPA). Prior to the storm, PREPA was already dealing with old and failing infrastructure, and a debt burden of about $9 billion dollars. When the storm hit, the embattled utility was not prepared to respond to the damage.
The Fiscal Plan released by Puerto Rico’s government does not question whether privatizing PREPA is needed, but rather presents it as the only viable option. The plan claims that by privatizing the utility, it will “transform” it into an efficient, reliable, and cost-effective energy provider. The proposed privatization process consists of a mix between selling assets, and offering concessions to private companies to run operations.
However, privatization is no panacea for fixing public utilities, and Puerto Rico’s past experience should ring alarm bells. Two failed attempts at privatizing water services resulted in the government having to retake control of the utility in even worse shape. The disastrous results of Puerto Rico Aqueducts and Sewers Authority (PRASA) contracting with private companies to manage its operations are detailed in this report by Puerto Rico’s Comptroller’s Office.
In the 90s, Puerto Rico’s water services were struggling with quality issues, as well as with their finances. As a response to PRASA’s operational issues, then Governor Pedro Rosselló (the current governor’s father) created a commission to negotiate and oversee the privatization of water services. The first contract to oversee and manage water services in Puerto Rico was entered into in 1995 with a subsidiary of the French multinational Veolia.
However, after Veolia took over, things only got worse. Service quality worsened and prices for consumers increased, along with the agency’s operational deficit. To make matters worse, Veolia was not complying with environmental regulations, prompting fines and sanctions from the US Environmental Protection Agency. PRASA was ill-equipped to oversee and enforce its contract with Veolia and for years complied with the increased payments requested by Veolia, despite the lack of tangible improvements.
The contract with Veolia ended in 2001 and was not renewed. Instead Puerto Rico sought a different private contractor to take over operations. This time, Puerto Rican officials claimed they had a “top-notch Evaluation Committee” that selected an operator that would “bring current operations to world-class standards.” PRASA entered into a 10-year, $4 billion contract with Ondeo, a subsidiary of French multinational Suez, that “this time” included clauses to assure compliance with its stated goals, while also promising to bring huge savings for the government.
Less than two years later, after numerous disputes and disagreements with Ondeo, which repeatedly requested more money than the initial agreement from PRASA, while also failing to update the system’s infrastructure, PRASA paid the company a settlement to rescind the contract. After the termination of the second contract, public management of water services was resumed.
Somehow, this disastrous experience seems to have been quickly forgotten by the ardent proponents of privatization. When PREPA was slow to respond to the damage caused by the hurricane, privatization was aggressively pushed as the only solution to effectively rebuild the power grid. Furthermore, Puerto Rico’s plan for PREPA criticizes the agency in charge of regulating the utility, the Puerto Rico Energy Commission (PREC), and calls for creating a “reasonable regulatory process” for the future private owners. Handing over a public utility to the private sector, while calling for less regulation should be cause for concern.
While there is a clear need to reform PREPA, privatization is not necessarily the answer, as Puerto Rico’s own history shows. While agreeing to hand over a concession to a private firm might appear to save money at first, in practice things do not always work out as planned. And no matter who is in charge of PREPA, there is no doubt it needs a strong and accountable regulator to oversee it and protect consumers.
Months after Hurricane Maria the lights are still not back on for all Puerto Ricans. The extensive damage caused by the storm, along with the slow pace of restoring electricity have highlighted the struggles of Puerto Rico’s Electric Power Authority (PREPA). Prior to the storm, PREPA was already dealing with old and failing infrastructure, and a debt burden of about $9 billion dollars. When the storm hit, the embattled utility was not prepared to respond to the damage.
The Fiscal Plan released by Puerto Rico’s government does not question whether privatizing PREPA is needed, but rather presents it as the only viable option. The plan claims that by privatizing the utility, it will “transform” it into an efficient, reliable, and cost-effective energy provider. The proposed privatization process consists of a mix between selling assets, and offering concessions to private companies to run operations.
However, privatization is no panacea for fixing public utilities, and Puerto Rico’s past experience should ring alarm bells. Two failed attempts at privatizing water services resulted in the government having to retake control of the utility in even worse shape. The disastrous results of Puerto Rico Aqueducts and Sewers Authority (PRASA) contracting with private companies to manage its operations are detailed in this report by Puerto Rico’s Comptroller’s Office.
In the 90s, Puerto Rico’s water services were struggling with quality issues, as well as with their finances. As a response to PRASA’s operational issues, then Governor Pedro Rosselló (the current governor’s father) created a commission to negotiate and oversee the privatization of water services. The first contract to oversee and manage water services in Puerto Rico was entered into in 1995 with a subsidiary of the French multinational Veolia.
However, after Veolia took over, things only got worse. Service quality worsened and prices for consumers increased, along with the agency’s operational deficit. To make matters worse, Veolia was not complying with environmental regulations, prompting fines and sanctions from the US Environmental Protection Agency. PRASA was ill-equipped to oversee and enforce its contract with Veolia and for years complied with the increased payments requested by Veolia, despite the lack of tangible improvements.
The contract with Veolia ended in 2001 and was not renewed. Instead Puerto Rico sought a different private contractor to take over operations. This time, Puerto Rican officials claimed they had a “top-notch Evaluation Committee” that selected an operator that would “bring current operations to world-class standards.” PRASA entered into a 10-year, $4 billion contract with Ondeo, a subsidiary of French multinational Suez, that “this time” included clauses to assure compliance with its stated goals, while also promising to bring huge savings for the government.
Less than two years later, after numerous disputes and disagreements with Ondeo, which repeatedly requested more money than the initial agreement from PRASA, while also failing to update the system’s infrastructure, PRASA paid the company a settlement to rescind the contract. After the termination of the second contract, public management of water services was resumed.
Somehow, this disastrous experience seems to have been quickly forgotten by the ardent proponents of privatization. When PREPA was slow to respond to the damage caused by the hurricane, privatization was aggressively pushed as the only solution to effectively rebuild the power grid. Furthermore, Puerto Rico’s plan for PREPA criticizes the agency in charge of regulating the utility, the Puerto Rico Energy Commission (PREC), and calls for creating a “reasonable regulatory process” for the future private owners. Handing over a public utility to the private sector, while calling for less regulation should be cause for concern.
While there is a clear need to reform PREPA, privatization is not necessarily the answer, as Puerto Rico’s own history shows. While agreeing to hand over a concession to a private firm might appear to save money at first, in practice things do not always work out as planned. And no matter who is in charge of PREPA, there is no doubt it needs a strong and accountable regulator to oversee it and protect consumers.
This interview with Marco Ramiro Lobo, a non-voting member of the Honduran electoral authority (TSE by its Spanish acronym) was published on December 3rd by El Faro. In the days since, the TSE has conducted a partial review of actas in an attempt to satisfy concerns raised by international observers and the political opposition, and has agreed to recount the 5000 actas discussed in the interview. However, both the second and third-place finishers continue to reject the results provided by the TSE, which they say has lost all credibility. Both parties filed legal challenges to the results requesting a full vote-by-vote recount and the annulment of the elections, respectively. More than two weeks since the election, many questions remain about how things went so wrong.
He’s an alternate member but, after the president of the Supreme Electoral Tribunal (TSE in Spanish) of Honduras, he is the most visible of the tribunal’s four magistrates. He doesn’t have a vote, but he has a voice and he has made certain that he is heard. Marco Ramiro Lobo was appointed by the Honduran congress three years ago, and today he appears to be the magistrate most opposed to the decisions of the tribunal’s president, David Matamoros. He’s demanding an in-depth investigation of two system failures by the TSE’s vote-tallying technology. He admits that the TSE bears the primary responsibility for the political and social crisis gripping Honduras a week after its presidential election.
The tribunal consists of a magistrate, President David Matamoros, from the National Party, a representative from the Liberal Party, Erick Rodríguez, a member of the tiny Democratic Christian Party, Saúl Bonilla, and Lobo, a member of the small Party of Democratic Unification (UD). The Honduran congress refused to name a representative from the Free Party or the Party for Innovation and Unity (PINU), which make up the Opposition Alliance headed by Salvador Nasralla and Mel Zelaya, who are currently denouncing the reported results as fraudulent.
Without representatives on the tribunal, the opposition has relied on the resistance of magistrate Lobo to legitimate its concerns about the electoral process. But Lobo says there are clear differences of criteria among the members of the Tribunal: on one side Rodríguez and himself; on the other Matamoros and Bonilla.
After a week without official results, and violence breaking out in the streets, the TSE was scheduled to begin a special recount this Sunday [December 3rd], beginning with one thousand actas [tally sheets from voting stations signed by witnesses from political parties] sent to the TSE for special monitoring. Unfortunately, this recount will take place without observers from the Opposition Alliance, which has refused to endorse the process until the TSE commits to reviewing 5000 already processed actas with vote counts that have led to the suspicion that they were altered during the transmission process. Magistrate Lobo insists that these demands should be satisfied or else the final declaration of a winner will lack credibility.
How would you explain the current chaos?
Look, when the court met to outline its proceedings, we decided that we would give a preliminary announcement after tallying 750 actas and seeing a stable trend. But we didn’t end up doing this.
But the president of the Supreme Electoral Tribunal (TSE), David Matamoros, said late on the 26th that there wasn’t a stable trend… What does the tribunal qualify as a stable trend?
It’s a proportional representation of each of the country’s regions. We already had a stable trend that night. The tendency of the results had grown in favor of Nasralla. The president of the tribunal didn’t want to give the announcement because his party was losing.
Tell me a little bit about that night and the discussion to convince Matamoros to announce the results.
Two magistrates, Erick Rodríguez and I, wanted to give the preliminary results. The other two magistrates said the results were too close. We already had 57 percent of the actas, and they indicated a stable trend in voting outcome. At one in the morning (on Monday, the 27th) the Organization of American States (OAS) mediated an agreement. Two people came from the OAS: Gerardo de Icaza and Gerardo Vásquez. A statement needed to be made. I think this is the origin of the conflict, because this ten hour period of silence created enormous doubts. And within the tribunal there have continued to be different visions.
So you and Rodríguez had opposing views to those of Matamoros and Escobar?
Yes.
But you’re an alternate on the tribunal. You don’t have the right to vote. So it was two versus one.
I participate in all of the tribunal’s formal meetings, but I don’t vote. Up until now, we had never voted on anything.
The tribunal didn’t vote on anything? Who decided then, for example, which of the Opposition Alliances’ demands to agree to and which to dismiss?
During this entire process, we haven’t voted. Those issues have been managed by the [tribunal] presidency. I imagine he consults with the other two magistrates, but not with me.
Much of the general population is denouncing fraud surrounding the election. Is there fraud?
There are doubts. Many doubts. First, the tribunal’s silence. Second, the suspension of the vote count the day after the election. Then the first breakdown of the vote-counting system at 9 a.m. on Wednesday. The system went down for five hours. After that the system came back up but the counting was intermittent until it broke down again Thursday morning. It came back online again five hours later. This raised doubts for many, including me.
And what reason was given for these system failures?
They told us that the system broke because the memory was too full, and when they tried to increase the system’s memory capacity, the system broke instead. I’m not a technical person who can determine what happened, but this created even more doubts because before the system went down Nasralla had an advantage with an already stable trend. When the system started running again, the voting trend reversed to favor Hernández and hasn’t changed since. We invested millions so that we could have a reliable voting system. They told us that if there were an emergency, there would be backup servers… They should verify the tribunal’s database and the logs. We have asked for an audit.
Do you think the system failures were an accident?
I’m not sure if it was an accident or was deliberate. But we need an investigation.
So there’s been fraud or the tribunal is highly incompetent. Is there a third option?
It’s a partisan tribunal that represents party interests. I think the biggest problem with the tribunal is that it takes partisan positions that clearly relate to its members’ political tendencies.
And what is your political preference?
I come from the Party of Democratic Unification (UD), a very small party. But look, partisanship should not control this process, because there were already clearly defined protocols. It wasn’t the protocols that failed, but rather the political will of the tribunal to follow its own protocols.
You’re saying that processing the data has been slow because of politicization?
The TSE was initially very successful at transmitting the results. By 7 p.m. the transmission from voting centers was already much more successful than we had expected. This wasn’t the problem, but rather, as I said, the tribunal’s silence despite that fact that we already had the information.
Salvador Nasralla has denounced irregularities in the transmission of the actas.
We are obliged to take into consideration any request from anyone with doubts [regarding the election process]. What’s important is that when we make a final announcement, we do so without any remaining concerns or doubts. We should resolve the issues raised in the complaints. They aren’t difficult to resolve.
Then why haven’t they been resolved?
We’ve begun meeting with the Opposition Alliance. In addition to their current requests, they’ve added a request for access to the database logs. We’re coming up with the best way to get them that information.
What about the demand to recount the five thousand actas transmitted from vote-tallying center at the National Institute for Professional Development (INFOP) that the Alliance suspects were altered?
I think they should check these 5000 actas.
Is there disagreement around this issue?
The tribunal has not met to make a formal decision.
How long would it take to carry out this partial recount?
We could probably check the 5000 actas in three or four days.
Have any of the magistrates received external pressure?
I can only speak for myself. No one has pressured me at all. I can’t speak for the other magistrates because we don’t discuss these matters.
Does the popular action in the streets of Honduras act as a form of pressure on the tribunal?
Yes. The later this goes, the tenser it becomes. There are Hondurans who have died for no reason. If we had done things properly…
But they haven’t been done properly.
No.
Taking this all into account, if the TSE declares Juan Orlando Hernández to be the winner, many people won’t believe them.
It’s going to be difficult. Very difficult. At this point, any result will be complicated regardless of the explanations we give. Doubts are going to persist.
This interview with Marco Ramiro Lobo, a non-voting member of the Honduran electoral authority (TSE by its Spanish acronym) was published on December 3rd by El Faro. In the days since, the TSE has conducted a partial review of actas in an attempt to satisfy concerns raised by international observers and the political opposition, and has agreed to recount the 5000 actas discussed in the interview. However, both the second and third-place finishers continue to reject the results provided by the TSE, which they say has lost all credibility. Both parties filed legal challenges to the results requesting a full vote-by-vote recount and the annulment of the elections, respectively. More than two weeks since the election, many questions remain about how things went so wrong.
He’s an alternate member but, after the president of the Supreme Electoral Tribunal (TSE in Spanish) of Honduras, he is the most visible of the tribunal’s four magistrates. He doesn’t have a vote, but he has a voice and he has made certain that he is heard. Marco Ramiro Lobo was appointed by the Honduran congress three years ago, and today he appears to be the magistrate most opposed to the decisions of the tribunal’s president, David Matamoros. He’s demanding an in-depth investigation of two system failures by the TSE’s vote-tallying technology. He admits that the TSE bears the primary responsibility for the political and social crisis gripping Honduras a week after its presidential election.
The tribunal consists of a magistrate, President David Matamoros, from the National Party, a representative from the Liberal Party, Erick Rodríguez, a member of the tiny Democratic Christian Party, Saúl Bonilla, and Lobo, a member of the small Party of Democratic Unification (UD). The Honduran congress refused to name a representative from the Free Party or the Party for Innovation and Unity (PINU), which make up the Opposition Alliance headed by Salvador Nasralla and Mel Zelaya, who are currently denouncing the reported results as fraudulent.
Without representatives on the tribunal, the opposition has relied on the resistance of magistrate Lobo to legitimate its concerns about the electoral process. But Lobo says there are clear differences of criteria among the members of the Tribunal: on one side Rodríguez and himself; on the other Matamoros and Bonilla.
After a week without official results, and violence breaking out in the streets, the TSE was scheduled to begin a special recount this Sunday [December 3rd], beginning with one thousand actas [tally sheets from voting stations signed by witnesses from political parties] sent to the TSE for special monitoring. Unfortunately, this recount will take place without observers from the Opposition Alliance, which has refused to endorse the process until the TSE commits to reviewing 5000 already processed actas with vote counts that have led to the suspicion that they were altered during the transmission process. Magistrate Lobo insists that these demands should be satisfied or else the final declaration of a winner will lack credibility.
How would you explain the current chaos?
Look, when the court met to outline its proceedings, we decided that we would give a preliminary announcement after tallying 750 actas and seeing a stable trend. But we didn’t end up doing this.
But the president of the Supreme Electoral Tribunal (TSE), David Matamoros, said late on the 26th that there wasn’t a stable trend… What does the tribunal qualify as a stable trend?
It’s a proportional representation of each of the country’s regions. We already had a stable trend that night. The tendency of the results had grown in favor of Nasralla. The president of the tribunal didn’t want to give the announcement because his party was losing.
Tell me a little bit about that night and the discussion to convince Matamoros to announce the results.
Two magistrates, Erick Rodríguez and I, wanted to give the preliminary results. The other two magistrates said the results were too close. We already had 57 percent of the actas, and they indicated a stable trend in voting outcome. At one in the morning (on Monday, the 27th) the Organization of American States (OAS) mediated an agreement. Two people came from the OAS: Gerardo de Icaza and Gerardo Vásquez. A statement needed to be made. I think this is the origin of the conflict, because this ten hour period of silence created enormous doubts. And within the tribunal there have continued to be different visions.
So you and Rodríguez had opposing views to those of Matamoros and Escobar?
Yes.
But you’re an alternate on the tribunal. You don’t have the right to vote. So it was two versus one.
I participate in all of the tribunal’s formal meetings, but I don’t vote. Up until now, we had never voted on anything.
The tribunal didn’t vote on anything? Who decided then, for example, which of the Opposition Alliances’ demands to agree to and which to dismiss?
During this entire process, we haven’t voted. Those issues have been managed by the [tribunal] presidency. I imagine he consults with the other two magistrates, but not with me.
Much of the general population is denouncing fraud surrounding the election. Is there fraud?
There are doubts. Many doubts. First, the tribunal’s silence. Second, the suspension of the vote count the day after the election. Then the first breakdown of the vote-counting system at 9 a.m. on Wednesday. The system went down for five hours. After that the system came back up but the counting was intermittent until it broke down again Thursday morning. It came back online again five hours later. This raised doubts for many, including me.
And what reason was given for these system failures?
They told us that the system broke because the memory was too full, and when they tried to increase the system’s memory capacity, the system broke instead. I’m not a technical person who can determine what happened, but this created even more doubts because before the system went down Nasralla had an advantage with an already stable trend. When the system started running again, the voting trend reversed to favor Hernández and hasn’t changed since. We invested millions so that we could have a reliable voting system. They told us that if there were an emergency, there would be backup servers… They should verify the tribunal’s database and the logs. We have asked for an audit.
Do you think the system failures were an accident?
I’m not sure if it was an accident or was deliberate. But we need an investigation.
So there’s been fraud or the tribunal is highly incompetent. Is there a third option?
It’s a partisan tribunal that represents party interests. I think the biggest problem with the tribunal is that it takes partisan positions that clearly relate to its members’ political tendencies.
And what is your political preference?
I come from the Party of Democratic Unification (UD), a very small party. But look, partisanship should not control this process, because there were already clearly defined protocols. It wasn’t the protocols that failed, but rather the political will of the tribunal to follow its own protocols.
You’re saying that processing the data has been slow because of politicization?
The TSE was initially very successful at transmitting the results. By 7 p.m. the transmission from voting centers was already much more successful than we had expected. This wasn’t the problem, but rather, as I said, the tribunal’s silence despite that fact that we already had the information.
Salvador Nasralla has denounced irregularities in the transmission of the actas.
We are obliged to take into consideration any request from anyone with doubts [regarding the election process]. What’s important is that when we make a final announcement, we do so without any remaining concerns or doubts. We should resolve the issues raised in the complaints. They aren’t difficult to resolve.
Then why haven’t they been resolved?
We’ve begun meeting with the Opposition Alliance. In addition to their current requests, they’ve added a request for access to the database logs. We’re coming up with the best way to get them that information.
What about the demand to recount the five thousand actas transmitted from vote-tallying center at the National Institute for Professional Development (INFOP) that the Alliance suspects were altered?
I think they should check these 5000 actas.
Is there disagreement around this issue?
The tribunal has not met to make a formal decision.
How long would it take to carry out this partial recount?
We could probably check the 5000 actas in three or four days.
Have any of the magistrates received external pressure?
I can only speak for myself. No one has pressured me at all. I can’t speak for the other magistrates because we don’t discuss these matters.
Does the popular action in the streets of Honduras act as a form of pressure on the tribunal?
Yes. The later this goes, the tenser it becomes. There are Hondurans who have died for no reason. If we had done things properly…
But they haven’t been done properly.
No.
Taking this all into account, if the TSE declares Juan Orlando Hernández to be the winner, many people won’t believe them.
It’s going to be difficult. Very difficult. At this point, any result will be complicated regardless of the explanations we give. Doubts are going to persist.
It has been eight years since the Honduran military removed democratically elected president Manuel Zelaya from office. The post-coup period was characterized by social turmoil, violent repression by state forces, and a breakdown in the rule of law.
In November 2013, shortly before Honduras’ last presidential elections, CEPR published a report on the country’s economic situation since the 2009 coup showing that economic growth had slowed, social spending had decreased, and unemployment had worsened.
On Sunday, November 26, Honduras will again be holding presidential elections. In this post, we provide a brief, fresh overview of the macroeconomic and social indicators in Honduras since the coup, in order to help understand the economic context in which these elections will unfold.
1. Economic Growth: In the years preceding the coup, Honduras averaged 3.8 percent annual per capita GDP growth. Since 2010, this has dropped to 1.8 percent. The figure below compares Honduras’ per capita GDP growth with the region. Though higher than regional peers Guatemala and El Salvador, the decline relative to the pre-coup period was deeper in Honduras.
2. Unemployment: The labor market has gotten considerably worse since the 2009 coup. Unemployment reached a low of 3.0 percent in 2008, but has steadily increased to 7.4 percent in 2016. These numbers only tell part of the story. Developing countries often follow a pattern of low formal unemployment rates and high underemployment rates. The lack of a social safety net often forces people in developing countries to take any work they can find, regardless of quality or equitability. Subemployed workers either receive less than the minimum wage, or work fewer hours than they desire. The graph below shows unemployment, subemployment, and total underemployment, the sum of unemployment and subemployment, since 2005. After falling 10.5 percentage points from 2005 to 2008, underemployment has since increased by 27.5 percentage points. More than 63 percent of the economically active population is either unemployed, working for less than minimum wage, or working fewer hours than desired.
3. Unemployment by Gender: The employment situation has been particularly devastating for women. Historically, the underemployment rate for women has been significantly lower than that for men. Since 2008, however, the female underemployment rate has more than doubled, and in 2015, for the first time, the rate for women actually surpassed that for men though there was a slight improvement in 2016.
4. Minimum Wage: Increasing unemployment and underemployment has occurred in a context of a minimum wage that is rising far slower than it did in the years preceding the coup. President Manuel Zelaya drastically increased the minimum wage from 2006 to 2009. During that time period, the average annual real minimum wage increase was 18.9 percent. Since the coup, however, the minimum wage has been increasing far more slowly, at just 7.1 percent.
5. Poverty: After the coup, poverty skyrocketed in Honduras. In 2009 before the coup, 58.1 percent of households were in poverty. By 2012, that figure has risen to 66.5 percent. Though that figure has decreased over the last four years, it remains above its pre-coup level at 60.9 percent. This decline can be at least partially attributed to policy choices, such as the slashing of social spending following the coup.
6. Extreme Poverty: Not only has Honduras experienced consistently high poverty rates, but the majority of this is extreme poverty. The graph below compares the percent of the population in extreme poverty to the rate of those not in poverty at all. As can be seen, from 2007 to 2009 the number of people out of poverty surpassed those in extreme poverty for the first time in years. This trend was reversed after the coup, and from 2011 to 2015 extreme poverty was greater. In 2016, extreme poverty dropped below nonpoverty levels for the first time in years, though it remained above its pre-coup level.
7. Spending Priorities: After the coup, social spending especially on education decreased. Under the Juan Orlando Hernández administration, this trend has continued, while spending on the military and public security has increased. The graph below also shows the very small percentage of total public spending that is allocated to the Rule of Law & Human Rights. Though spending for education and health remains far higher than for defense, as a percent of total spending it has decreased significantly from 21 percent to 17.1 percent. Despite the continuing flagrant abuse of human rights in the country and the lack of rule of law, especially since the coup, the paltry amount spent in these areas is especially alarming.
8. Public and Private Spending: Honduras was in a strong position to increase government spending in the wake of the 2009 global economic recession and its coup d’etat. However, public consumption’s contribution to GDP growth, as shown in the graph below, decreased after 2009 and turned negative in 2010 and 2011. Though it has returned to a positive level more recently, it is still below its pre-coup levels. The government has instead prioritized private sector development to spur economic growth; however, for most of the post-coup years private sector spending contributed less to GDP growth than in the years prior. After a spike in 2015, it fell precipitously in 2016.
9. Public and Private Capital Formation: A similar trend can be seen by looking at the contribution to GDP growth of Gross Fixed Capital Formation. The majority of investment in Honduras is undertaken by the private sector, which accounts for more than 85 percent of total gross fixed capital formation. As can be seen in the graph below, private sector investment plummeted during 2009 and has not recovered to pre-crisis levels. Though the Honduran government is relying on the private sector to spur development, private sector gross fixed capital formation actually contributed negatively to GDP growth in 2016.
It has been eight years since the Honduran military removed democratically elected president Manuel Zelaya from office. The post-coup period was characterized by social turmoil, violent repression by state forces, and a breakdown in the rule of law.
In November 2013, shortly before Honduras’ last presidential elections, CEPR published a report on the country’s economic situation since the 2009 coup showing that economic growth had slowed, social spending had decreased, and unemployment had worsened.
On Sunday, November 26, Honduras will again be holding presidential elections. In this post, we provide a brief, fresh overview of the macroeconomic and social indicators in Honduras since the coup, in order to help understand the economic context in which these elections will unfold.
1. Economic Growth: In the years preceding the coup, Honduras averaged 3.8 percent annual per capita GDP growth. Since 2010, this has dropped to 1.8 percent. The figure below compares Honduras’ per capita GDP growth with the region. Though higher than regional peers Guatemala and El Salvador, the decline relative to the pre-coup period was deeper in Honduras.
2. Unemployment: The labor market has gotten considerably worse since the 2009 coup. Unemployment reached a low of 3.0 percent in 2008, but has steadily increased to 7.4 percent in 2016. These numbers only tell part of the story. Developing countries often follow a pattern of low formal unemployment rates and high underemployment rates. The lack of a social safety net often forces people in developing countries to take any work they can find, regardless of quality or equitability. Subemployed workers either receive less than the minimum wage, or work fewer hours than they desire. The graph below shows unemployment, subemployment, and total underemployment, the sum of unemployment and subemployment, since 2005. After falling 10.5 percentage points from 2005 to 2008, underemployment has since increased by 27.5 percentage points. More than 63 percent of the economically active population is either unemployed, working for less than minimum wage, or working fewer hours than desired.
3. Unemployment by Gender: The employment situation has been particularly devastating for women. Historically, the underemployment rate for women has been significantly lower than that for men. Since 2008, however, the female underemployment rate has more than doubled, and in 2015, for the first time, the rate for women actually surpassed that for men though there was a slight improvement in 2016.
4. Minimum Wage: Increasing unemployment and underemployment has occurred in a context of a minimum wage that is rising far slower than it did in the years preceding the coup. President Manuel Zelaya drastically increased the minimum wage from 2006 to 2009. During that time period, the average annual real minimum wage increase was 18.9 percent. Since the coup, however, the minimum wage has been increasing far more slowly, at just 7.1 percent.
5. Poverty: After the coup, poverty skyrocketed in Honduras. In 2009 before the coup, 58.1 percent of households were in poverty. By 2012, that figure has risen to 66.5 percent. Though that figure has decreased over the last four years, it remains above its pre-coup level at 60.9 percent. This decline can be at least partially attributed to policy choices, such as the slashing of social spending following the coup.
6. Extreme Poverty: Not only has Honduras experienced consistently high poverty rates, but the majority of this is extreme poverty. The graph below compares the percent of the population in extreme poverty to the rate of those not in poverty at all. As can be seen, from 2007 to 2009 the number of people out of poverty surpassed those in extreme poverty for the first time in years. This trend was reversed after the coup, and from 2011 to 2015 extreme poverty was greater. In 2016, extreme poverty dropped below nonpoverty levels for the first time in years, though it remained above its pre-coup level.
7. Spending Priorities: After the coup, social spending especially on education decreased. Under the Juan Orlando Hernández administration, this trend has continued, while spending on the military and public security has increased. The graph below also shows the very small percentage of total public spending that is allocated to the Rule of Law & Human Rights. Though spending for education and health remains far higher than for defense, as a percent of total spending it has decreased significantly from 21 percent to 17.1 percent. Despite the continuing flagrant abuse of human rights in the country and the lack of rule of law, especially since the coup, the paltry amount spent in these areas is especially alarming.
8. Public and Private Spending: Honduras was in a strong position to increase government spending in the wake of the 2009 global economic recession and its coup d’etat. However, public consumption’s contribution to GDP growth, as shown in the graph below, decreased after 2009 and turned negative in 2010 and 2011. Though it has returned to a positive level more recently, it is still below its pre-coup levels. The government has instead prioritized private sector development to spur economic growth; however, for most of the post-coup years private sector spending contributed less to GDP growth than in the years prior. After a spike in 2015, it fell precipitously in 2016.
9. Public and Private Capital Formation: A similar trend can be seen by looking at the contribution to GDP growth of Gross Fixed Capital Formation. The majority of investment in Honduras is undertaken by the private sector, which accounts for more than 85 percent of total gross fixed capital formation. As can be seen in the graph below, private sector investment plummeted during 2009 and has not recovered to pre-crisis levels. Though the Honduran government is relying on the private sector to spur development, private sector gross fixed capital formation actually contributed negatively to GDP growth in 2016.
Two weeks ago, the Food and Agriculture Organization of the United Nations (FAO) released a report on food insecurity and nutrition in Latin America and the Caribbean. The report highlighted a regional increase in food insecurity, a first since the agency started collecting annual data for the Millennium Development Goals in 2000. The authors noted that the food crisis in Venezuela was central to this increase. While the percentage of the population in Venezuela experiencing undernourishment was lower than several other countries in the region ? such as Bolivia, Guatemala, Haiti, and Honduras ? in the last three years, Venezuela contributed an estimated 1.3 million newly food-insecure people to Latin America’s total.
The FAO study confirms that the Bolivarian Republic is facing a growing hunger crisis that requires action. For the past year and a half, the media have decried the Venezuelan government for its management of the crisis, but the figures they have cited do not match the FAO’s. Over the past 18 months, it has become accepted fact that the crisis is even worse than the FAO describes: the New York Times writes that “93 percent of the [Venezuelan] population cannot afford food,” and CNN reports Venezuelans “in the past year dropp[ed] an average of 19 pounds.” (In addition, a Jacobin article states: “Almost 90 percent of the population cannot buy enough food,” while The Independent laments that “75 per cent of the country’s population has lost an average of 19 pounds.”) This is because media coverage on hunger in Venezuela has relied primarily on anecdotal evidence and an inconclusive report authored in part by a member of the political coalition trying to remove Venezuelan President Nicolás Maduro from office.
US newspapers and journals often attribute their Venezuelan hunger figures to “a recent survey … by the country’s leading universities.” The survey in question was published on February 27, 2016 by Simón Bolívar University, the Central University of Venezuela, and the Bengoa Foundation. The report, which focuses on Venezuelan nutrition, is part of an annual review covering the state of living conditions in the country. Maritza Landaeta-Jiménez, who as recently as 2013 was a member of the Venezuelan opposition’s Nutrition Commission, headed the 2016 research. The document, based on a survey of 6,413 Venezuelans, reported that 93 percent of Venezuelans felt that they did not have enough money to purchase food, and that 72.7 percent of Venezuelans had lost an average of 8.7 kilograms (19 pounds) in the past year. However, the same survey revealed that 67.5 percent of Venezuelans were eating three meals a day, and only 25 percent of the country felt that their nutrition could be categorized as “deficient.”
The two pairs of statistics tell different stories about the situation in Venezuela. The first pair ? 93 percent of the population lacking food money, and an average weight loss of 19 pounds for 73 percent of Venezuelans ? depicts a country in dire, humanitarian crisis. The second pair ? 67.5 percent of the population eating three meals a day, and only 25 percent feeling deficient in their nutrition ? shows a country that is struggling, but also coping with its economic and political stress. Given that these figures appear only pages apart from each other in a short report, any reader should have determined that the survey’s results are at best inconclusive, and at worst contradictory. (Three-quarters of the population is losing 19 pounds on average, but only 25 percent think they’re not getting enough food?)
Unfortunately, the results of the survey have not been questioned; quite the opposite. The English-speaking press has reported the 90-plus percent/19 pounds statistics so many times that they’ve apparently become facts that don’t require citation. Yet according to a broad LexisNexis search, the 25 percent deficient figure has never been reported in English-language newspapers.
The FAO has provided evidence that food insecurity in Venezuela has increased over the past three years. This does not excuse US journalists and policymakers from crafting narratives with indeterminate sources like the Simón Bolívar University report. The policy implications of such careless reporting are substantial. A Treasury Department press release in July justifying sanctions against Venezuela stated, “tens of millions of Venezuelans are going hungry.” Not only is this figure at least two-and-a-half times the total estimate of 4 million given by the FAO, it is also directly in line with the 90 percent statistic from the inconclusive report.
The press should pay greater attention when vetting its sources, particularly in cases where circumstances limit the availability of data. It should also use internationally accredited sources, such as the FAO’s annual reports ? which provide figures showing that Honduras, Guatemala, and El Salvador ? close US allies in Central America, are suffering from similar rates of food insecurity as Venezuela. These hunger crises have received far less attention than the problems facing the Bolivarian Republic, despite the fact that these Central American food shortages are both well-documented and enduring. The media would do well to give them attention.
Two weeks ago, the Food and Agriculture Organization of the United Nations (FAO) released a report on food insecurity and nutrition in Latin America and the Caribbean. The report highlighted a regional increase in food insecurity, a first since the agency started collecting annual data for the Millennium Development Goals in 2000. The authors noted that the food crisis in Venezuela was central to this increase. While the percentage of the population in Venezuela experiencing undernourishment was lower than several other countries in the region ? such as Bolivia, Guatemala, Haiti, and Honduras ? in the last three years, Venezuela contributed an estimated 1.3 million newly food-insecure people to Latin America’s total.
The FAO study confirms that the Bolivarian Republic is facing a growing hunger crisis that requires action. For the past year and a half, the media have decried the Venezuelan government for its management of the crisis, but the figures they have cited do not match the FAO’s. Over the past 18 months, it has become accepted fact that the crisis is even worse than the FAO describes: the New York Times writes that “93 percent of the [Venezuelan] population cannot afford food,” and CNN reports Venezuelans “in the past year dropp[ed] an average of 19 pounds.” (In addition, a Jacobin article states: “Almost 90 percent of the population cannot buy enough food,” while The Independent laments that “75 per cent of the country’s population has lost an average of 19 pounds.”) This is because media coverage on hunger in Venezuela has relied primarily on anecdotal evidence and an inconclusive report authored in part by a member of the political coalition trying to remove Venezuelan President Nicolás Maduro from office.
US newspapers and journals often attribute their Venezuelan hunger figures to “a recent survey … by the country’s leading universities.” The survey in question was published on February 27, 2016 by Simón Bolívar University, the Central University of Venezuela, and the Bengoa Foundation. The report, which focuses on Venezuelan nutrition, is part of an annual review covering the state of living conditions in the country. Maritza Landaeta-Jiménez, who as recently as 2013 was a member of the Venezuelan opposition’s Nutrition Commission, headed the 2016 research. The document, based on a survey of 6,413 Venezuelans, reported that 93 percent of Venezuelans felt that they did not have enough money to purchase food, and that 72.7 percent of Venezuelans had lost an average of 8.7 kilograms (19 pounds) in the past year. However, the same survey revealed that 67.5 percent of Venezuelans were eating three meals a day, and only 25 percent of the country felt that their nutrition could be categorized as “deficient.”
The two pairs of statistics tell different stories about the situation in Venezuela. The first pair ? 93 percent of the population lacking food money, and an average weight loss of 19 pounds for 73 percent of Venezuelans ? depicts a country in dire, humanitarian crisis. The second pair ? 67.5 percent of the population eating three meals a day, and only 25 percent feeling deficient in their nutrition ? shows a country that is struggling, but also coping with its economic and political stress. Given that these figures appear only pages apart from each other in a short report, any reader should have determined that the survey’s results are at best inconclusive, and at worst contradictory. (Three-quarters of the population is losing 19 pounds on average, but only 25 percent think they’re not getting enough food?)
Unfortunately, the results of the survey have not been questioned; quite the opposite. The English-speaking press has reported the 90-plus percent/19 pounds statistics so many times that they’ve apparently become facts that don’t require citation. Yet according to a broad LexisNexis search, the 25 percent deficient figure has never been reported in English-language newspapers.
The FAO has provided evidence that food insecurity in Venezuela has increased over the past three years. This does not excuse US journalists and policymakers from crafting narratives with indeterminate sources like the Simón Bolívar University report. The policy implications of such careless reporting are substantial. A Treasury Department press release in July justifying sanctions against Venezuela stated, “tens of millions of Venezuelans are going hungry.” Not only is this figure at least two-and-a-half times the total estimate of 4 million given by the FAO, it is also directly in line with the 90 percent statistic from the inconclusive report.
The press should pay greater attention when vetting its sources, particularly in cases where circumstances limit the availability of data. It should also use internationally accredited sources, such as the FAO’s annual reports ? which provide figures showing that Honduras, Guatemala, and El Salvador ? close US allies in Central America, are suffering from similar rates of food insecurity as Venezuela. These hunger crises have received far less attention than the problems facing the Bolivarian Republic, despite the fact that these Central American food shortages are both well-documented and enduring. The media would do well to give them attention.
Last month, a joint investigation by In These Times and the Puerto Rico-based Centro de Periodismo Investigativo revealed the top 10 holders of Puerto Rico’s $74.8 billion debt. The authors write:
The popular narrative of Puerto Rico’s debt holders is that they are “small” individual bondholders—rookie investors who trusted their savings to financial firms. But our investigation reveals that some of the most aggressive players demanding debt repayment in Puerto Rico’s bankruptcy court are so-called “vulture firms.” These hedge funds specialize in high-risk “troubled assets” near default or bankruptcy and cater to millionaire and billionaire investors.
While these bondholders are tied up in court with Puerto Rico and the congressionally mandated Oversight Board, the situation on the ground remains grim after the devastation caused by Hurricanes Irma and Maria. Storm-related damages are estimated to be as high as $95 billion.
If Puerto Rico was unable to pay its debt before the storms, it’s virtually impossible now. But that hasn’t stopped at least one vulture, GoldenTree Asset Management, from doubling down on its Puerto Rico bet.
Number five on the In These Times/Centro de Periodismo Investigativo list, GoldenTree reportedly held $587,253,141 worth of Puerto Rican COFINA bonds (bonds backed by income from Puerto Rico’s sales tax). That figure was based on a court filing from mid-August. On October 26, however, bondholders were required to again disclose their financial interests. That filing showed GoldenTree holding assets valued at $852,578,549, meaning that in the last two months, GoldenTree has acquired an additional $250 million in Puerto Rican bonds.
This is classic vulture behavior ? and exactly why many are now arguing for urgent and significant debt relief for the struggling island.
It’s impossible to know exactly when or at what cost GoldenTree acquired those additional bonds ? a spokesperson for GoldenTree declined to answer questions on the timing or cost of the purchases. But even before the hurricanes, COFINA bonds were trading at significantly less than face value. After Hurricane Maria, with Puerto Rico’s inability to pay becoming more obvious, prices have plummeted even further. Given that, and based on where some COFINA bonds are currently trading, it appears unlikely GoldenTree would have paid more than 20 cents on the dollar. At that price, if GoldenTree were repaid in full just on these recent acquisitions it would stand to make a tidy 400 percent profit.
Steven Tananbaum, GoldenTree’s chief investment officer, told a business conference in September (after Hurricane Irma, but before Hurricane Maria) that he continued to view Puerto Rican bonds as an attractive investment. GoldenTree is spearheading a group of COFINA bondholders that collectively holds about $3.3 billion in bonds. But with Puerto Rico facing an unprecedented humanitarian crisis, and lacking enough funds to even begin to pay back its massive debt load, these vulture funds are relying on their ability to convince politicians and the courts to make them whole. The COFINA bondholder group has spent $610,000 to lobby Congress over the last two years, while GoldenTree itself made $64,000 in political contributions to federal candidates in the 2016 cycle.
For vulture funds like GoldenTree, the destruction of Puerto Rico is yet another opportunity for exorbitant profits. Let’s hope the politicians and the courts don’t let them get away with it.
Last month, a joint investigation by In These Times and the Puerto Rico-based Centro de Periodismo Investigativo revealed the top 10 holders of Puerto Rico’s $74.8 billion debt. The authors write:
The popular narrative of Puerto Rico’s debt holders is that they are “small” individual bondholders—rookie investors who trusted their savings to financial firms. But our investigation reveals that some of the most aggressive players demanding debt repayment in Puerto Rico’s bankruptcy court are so-called “vulture firms.” These hedge funds specialize in high-risk “troubled assets” near default or bankruptcy and cater to millionaire and billionaire investors.
While these bondholders are tied up in court with Puerto Rico and the congressionally mandated Oversight Board, the situation on the ground remains grim after the devastation caused by Hurricanes Irma and Maria. Storm-related damages are estimated to be as high as $95 billion.
If Puerto Rico was unable to pay its debt before the storms, it’s virtually impossible now. But that hasn’t stopped at least one vulture, GoldenTree Asset Management, from doubling down on its Puerto Rico bet.
Number five on the In These Times/Centro de Periodismo Investigativo list, GoldenTree reportedly held $587,253,141 worth of Puerto Rican COFINA bonds (bonds backed by income from Puerto Rico’s sales tax). That figure was based on a court filing from mid-August. On October 26, however, bondholders were required to again disclose their financial interests. That filing showed GoldenTree holding assets valued at $852,578,549, meaning that in the last two months, GoldenTree has acquired an additional $250 million in Puerto Rican bonds.
This is classic vulture behavior ? and exactly why many are now arguing for urgent and significant debt relief for the struggling island.
It’s impossible to know exactly when or at what cost GoldenTree acquired those additional bonds ? a spokesperson for GoldenTree declined to answer questions on the timing or cost of the purchases. But even before the hurricanes, COFINA bonds were trading at significantly less than face value. After Hurricane Maria, with Puerto Rico’s inability to pay becoming more obvious, prices have plummeted even further. Given that, and based on where some COFINA bonds are currently trading, it appears unlikely GoldenTree would have paid more than 20 cents on the dollar. At that price, if GoldenTree were repaid in full just on these recent acquisitions it would stand to make a tidy 400 percent profit.
Steven Tananbaum, GoldenTree’s chief investment officer, told a business conference in September (after Hurricane Irma, but before Hurricane Maria) that he continued to view Puerto Rican bonds as an attractive investment. GoldenTree is spearheading a group of COFINA bondholders that collectively holds about $3.3 billion in bonds. But with Puerto Rico facing an unprecedented humanitarian crisis, and lacking enough funds to even begin to pay back its massive debt load, these vulture funds are relying on their ability to convince politicians and the courts to make them whole. The COFINA bondholder group has spent $610,000 to lobby Congress over the last two years, while GoldenTree itself made $64,000 in political contributions to federal candidates in the 2016 cycle.
For vulture funds like GoldenTree, the destruction of Puerto Rico is yet another opportunity for exorbitant profits. Let’s hope the politicians and the courts don’t let them get away with it.
In 2015, the Obama administration announced that Venezuela had thrown the United States into a “national emergency” because Venezuela constituted “an unusual and extraordinary threat to the national security and foreign policy of the United States.” On August 25, the Trump administration cited this ongoing emergency to justify financial sanctions against Venezuela that are likely to deepen the economic crisis there and generate greater human suffering.
How does a country with a fraction of the US’s military budget and a government with no history of international aggression cause a national emergency in the most powerful state in the world? Sure, the short answer is always “politics.” But in this case, there’s a forty-year history of presidential overreach and unaccountability that calls for a closer look.
In 1976, the House and Senate, with Democratic supermajorities in both, were looking to curb executive power in the wake of the Vietnam War. On trial was the concept of the “national emergency,” a term derived from an amendment to the 1917 Trading with the Enemy Act (TWEA). This World War I law gave the president authority to impose unilateral sanctions and restrict trade with warring enemy countries. Initially, it said nothing about national emergencies. But in 1933, President Roosevelt amended Trading with the Enemy to include executive authority over “any transactions in foreign exchange, transfers of credit between or payments by banking institutions as defined by the President” during a time of national emergency. Roosevelt declared the first of the US’s newly defined national emergencies, and promptly froze a majority of bank assets to prevent bank runs during the heart of the Great Depression.
This might have been well and good had Roosevelt ended his national emergency. Unfortunately, he and his successors failed to do so. The emergency would last until Congress ended it in 1976. In expanding the president’s peacetime powers to include former war powers, Roosevelt set the stage for decades of executive expansion. According to a 1973 Senate report on the issue, Roosevelt established precedent: “In time of crisis the President should utilize any statutory authority readily at hand, regardless of its original purposes, with the firm expectation of ex post facto congressional concurrence.” To be clear, that’s the US government admitting that the president can do what he wants, when he wants, and Congress will back him up later if there’s a shred of legal evidence to support his actions.
Officially, the 94th US Congress (Jan. 1975 to Jan. 1977) wanted to recalibrate its relationship with the executive branch and limit presidential power. It was aware that “section 5 (b) [of the Roosevelt national emergency amendment to the TWEA] has become essentially an unlimited grant of authority for the President to exercise, at his discretion, broad powers in both the domestic and international economic arena, without congressional review,” as a House International Relations Committee report detailed. However ? the two acts the Congress passed over the next two years, the National Emergencies Act (NEA) and the International Emergency Economic Powers Act (IEEPA) ? ended up merely formalizing the process and powers related to a national emergency.
The NEA ended the current emergencies, required yearly extensions for any new emergency, and put in place language mandating that powers exercised by the president be traceable to a written law. In doing so, the National Emergencies Act “provided for [the] statutory resolution and definition concerning … national emergencies” as a 1976 House Judiciary Committee report on the bill stated, but the act did not “provide for orderly implementation and termination of future national emergencies,” which the same House report also called for. This fact becomes clear when examining the history of national emergencies since the passage of the two laws. The yearly extensions have been formalities, shown by the fact that so far 28 of them have lasted for more than a decade. Of the 54 total emergencies declared since 1976, 28 are still active. With the passage of the International Emergency Economic Powers Act in 1977, Congress explicitly gave the president the right to impose sanctions during a national emergency, circumventing their own attempt to limit presidential authority to powers written into law … by writing the power into law for him.
Presidents took that power and ran with it. The national emergency Jimmy Carter declared against Iran immediately after the passage of the NEA and IEEPA is still going today, as are the accompanying sanctions. The sanctions against Nicaragua in the 1980s were the product of a national emergency. The sanctions against Iraq in the 1990s have been estimated to have left at hundreds of thousands of Iraqi children dead. These sanctions also stemmed from a so-called “national emergency”. Currently, 18 countries are causing “national emergencies” in the US, and are therefore sanctioned. If that sounds silly, it should. The list includes Venezuela, which analysts believe will suffer greatly from sanctions targeting Venezuelan debt and oil profits.
Congress passed the National Emergency and International Emergency Economic Powers Acts to rebalance the relationship between the executive and the legislative branches of government. By codifying the process and powers surrounding a so-called national emergency, they instead gave the executive a primary vector to carry out unilateral foreign policy. Congress should consider reexamining this legislation, as it has clearly strengthened the president’s ability to carry out extraordinary and potentially destabilizing and harmful foreign policy measures, without any congressional involvement. A first step could be for Congress to set forth concrete criteria for what can be called a national emergency, particularly in cases that lead to sanctions.
In 2015, the Obama administration announced that Venezuela had thrown the United States into a “national emergency” because Venezuela constituted “an unusual and extraordinary threat to the national security and foreign policy of the United States.” On August 25, the Trump administration cited this ongoing emergency to justify financial sanctions against Venezuela that are likely to deepen the economic crisis there and generate greater human suffering.
How does a country with a fraction of the US’s military budget and a government with no history of international aggression cause a national emergency in the most powerful state in the world? Sure, the short answer is always “politics.” But in this case, there’s a forty-year history of presidential overreach and unaccountability that calls for a closer look.
In 1976, the House and Senate, with Democratic supermajorities in both, were looking to curb executive power in the wake of the Vietnam War. On trial was the concept of the “national emergency,” a term derived from an amendment to the 1917 Trading with the Enemy Act (TWEA). This World War I law gave the president authority to impose unilateral sanctions and restrict trade with warring enemy countries. Initially, it said nothing about national emergencies. But in 1933, President Roosevelt amended Trading with the Enemy to include executive authority over “any transactions in foreign exchange, transfers of credit between or payments by banking institutions as defined by the President” during a time of national emergency. Roosevelt declared the first of the US’s newly defined national emergencies, and promptly froze a majority of bank assets to prevent bank runs during the heart of the Great Depression.
This might have been well and good had Roosevelt ended his national emergency. Unfortunately, he and his successors failed to do so. The emergency would last until Congress ended it in 1976. In expanding the president’s peacetime powers to include former war powers, Roosevelt set the stage for decades of executive expansion. According to a 1973 Senate report on the issue, Roosevelt established precedent: “In time of crisis the President should utilize any statutory authority readily at hand, regardless of its original purposes, with the firm expectation of ex post facto congressional concurrence.” To be clear, that’s the US government admitting that the president can do what he wants, when he wants, and Congress will back him up later if there’s a shred of legal evidence to support his actions.
Officially, the 94th US Congress (Jan. 1975 to Jan. 1977) wanted to recalibrate its relationship with the executive branch and limit presidential power. It was aware that “section 5 (b) [of the Roosevelt national emergency amendment to the TWEA] has become essentially an unlimited grant of authority for the President to exercise, at his discretion, broad powers in both the domestic and international economic arena, without congressional review,” as a House International Relations Committee report detailed. However ? the two acts the Congress passed over the next two years, the National Emergencies Act (NEA) and the International Emergency Economic Powers Act (IEEPA) ? ended up merely formalizing the process and powers related to a national emergency.
The NEA ended the current emergencies, required yearly extensions for any new emergency, and put in place language mandating that powers exercised by the president be traceable to a written law. In doing so, the National Emergencies Act “provided for [the] statutory resolution and definition concerning … national emergencies” as a 1976 House Judiciary Committee report on the bill stated, but the act did not “provide for orderly implementation and termination of future national emergencies,” which the same House report also called for. This fact becomes clear when examining the history of national emergencies since the passage of the two laws. The yearly extensions have been formalities, shown by the fact that so far 28 of them have lasted for more than a decade. Of the 54 total emergencies declared since 1976, 28 are still active. With the passage of the International Emergency Economic Powers Act in 1977, Congress explicitly gave the president the right to impose sanctions during a national emergency, circumventing their own attempt to limit presidential authority to powers written into law … by writing the power into law for him.
Presidents took that power and ran with it. The national emergency Jimmy Carter declared against Iran immediately after the passage of the NEA and IEEPA is still going today, as are the accompanying sanctions. The sanctions against Nicaragua in the 1980s were the product of a national emergency. The sanctions against Iraq in the 1990s have been estimated to have left at hundreds of thousands of Iraqi children dead. These sanctions also stemmed from a so-called “national emergency”. Currently, 18 countries are causing “national emergencies” in the US, and are therefore sanctioned. If that sounds silly, it should. The list includes Venezuela, which analysts believe will suffer greatly from sanctions targeting Venezuelan debt and oil profits.
Congress passed the National Emergency and International Emergency Economic Powers Acts to rebalance the relationship between the executive and the legislative branches of government. By codifying the process and powers surrounding a so-called national emergency, they instead gave the executive a primary vector to carry out unilateral foreign policy. Congress should consider reexamining this legislation, as it has clearly strengthened the president’s ability to carry out extraordinary and potentially destabilizing and harmful foreign policy measures, without any congressional involvement. A first step could be for Congress to set forth concrete criteria for what can be called a national emergency, particularly in cases that lead to sanctions.
As Puerto Rico’s debt saga plays out in court, its Financial Oversight and Management Board continues to push for further austerity measures that directly impact the people of Puerto Rico. In an effort to comply with the demands of the board, the Puerto Rican government cut Christmas bonuses for all its employees. For the board these cuts were not sufficient, and in a letter sent last week to the governor, they are now mandating furloughs for government employees.
In March 2017, the Financial Oversight and Management Board, created through US Congress’ Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), certified a 10-year fiscal plan for Puerto Rico that called for severe spending cuts along with tax increases. However, all the proposed measures under the plan’s best case scenario only put aside $7.9 billion for debt repayment over 10 years, while the island’s current debt burden is estimated at over $73 billion.
This fiscal plan projects negative real growth until at least 2024, without taking into account the further negative impact the austerity measures would have on growth. Furthermore, the plan does not address many of the underlying issues that caused Puerto Rico’s economic decline. The plan sentences Puerto Rico to yet another lost decade, and despite its rejection by creditors that triggered a bankruptcy-like procedure, the board is continuing to push for the plan’s implementation.
A sizeable chunk of the spending cuts comes from “government right-sizing,” which targets overall operational costs, along with payroll expenses of the government. Currently, the government is the largest employer in Puerto Rico’s very weak labor market: over 23 percent of people employed in Puerto Rico work in the public sector. In their efforts to comply with the board’s demands, the government of Puerto Rico has already taken steps to reduce expenses, introducing measures to save $662 million for the 2018 fiscal year. To cut down on payroll costs, the government has cut the Christmas bonuses that employees had been receiving under its labor laws since 1969.
However, the fiscal board did not believe those cuts were sufficient and demanded another $218 million in savings through mandatory furloughs until at least the end of this year. The board is requiring a furlough of two to four days per month for almost all government employees. While the $218 million would barely make a dent in Puerto Rico’s fiscal shortfall, a 10 to 20 percent pay cut for almost a quarter of its labor force will be felt strongly by the island’s residents. Although Puerto Rican officials have pledged to not implement the furloughs, the fiscal board believes that it has the power to require their implementation. If implementation is delayed, the board has warned, the furloughs will be deeper.
The poverty rate in Puerto Rico is above 40 percent for families, and 60 percent for children. The median household income is barely above $19,000, much lower than on the mainland US, where median household income is around $55,000, despite comparable living costs. The lack of economic opportunities has spurred massive outmigration, with the island losing 10 percent of its population over the last decade. In a statement filed when bankruptcy proceedings began, the oversight board expressed concern with the Puerto Rican economy’s “bleak spiral” that will be exacerbated by out-migration as a result of the reduced demand for goods and services. This concern should extend to the consequences of cutting the incomes of over 200,000 government employees.
The board’s decision to directly reduce the disposable incomes of almost a quarter of the labor force will impact not only government employees but also overall demand in the economy, and possibly cause some government employees to move to the mainland. For Puerto Rico’s weak and hamstrung economy such measures can have devastating consequences. The negative feedback of the cuts is likely to offset the savings the government would achieve by imposing them in the first place. Instead of forcefully pushing for measures that punish the people of Puerto Rico and exacerbate the crisis, the board should put ordinary Puerto Ricans first, and work on solutions to revive the economy and protect workers.
As Puerto Rico’s debt saga plays out in court, its Financial Oversight and Management Board continues to push for further austerity measures that directly impact the people of Puerto Rico. In an effort to comply with the demands of the board, the Puerto Rican government cut Christmas bonuses for all its employees. For the board these cuts were not sufficient, and in a letter sent last week to the governor, they are now mandating furloughs for government employees.
In March 2017, the Financial Oversight and Management Board, created through US Congress’ Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), certified a 10-year fiscal plan for Puerto Rico that called for severe spending cuts along with tax increases. However, all the proposed measures under the plan’s best case scenario only put aside $7.9 billion for debt repayment over 10 years, while the island’s current debt burden is estimated at over $73 billion.
This fiscal plan projects negative real growth until at least 2024, without taking into account the further negative impact the austerity measures would have on growth. Furthermore, the plan does not address many of the underlying issues that caused Puerto Rico’s economic decline. The plan sentences Puerto Rico to yet another lost decade, and despite its rejection by creditors that triggered a bankruptcy-like procedure, the board is continuing to push for the plan’s implementation.
A sizeable chunk of the spending cuts comes from “government right-sizing,” which targets overall operational costs, along with payroll expenses of the government. Currently, the government is the largest employer in Puerto Rico’s very weak labor market: over 23 percent of people employed in Puerto Rico work in the public sector. In their efforts to comply with the board’s demands, the government of Puerto Rico has already taken steps to reduce expenses, introducing measures to save $662 million for the 2018 fiscal year. To cut down on payroll costs, the government has cut the Christmas bonuses that employees had been receiving under its labor laws since 1969.
However, the fiscal board did not believe those cuts were sufficient and demanded another $218 million in savings through mandatory furloughs until at least the end of this year. The board is requiring a furlough of two to four days per month for almost all government employees. While the $218 million would barely make a dent in Puerto Rico’s fiscal shortfall, a 10 to 20 percent pay cut for almost a quarter of its labor force will be felt strongly by the island’s residents. Although Puerto Rican officials have pledged to not implement the furloughs, the fiscal board believes that it has the power to require their implementation. If implementation is delayed, the board has warned, the furloughs will be deeper.
The poverty rate in Puerto Rico is above 40 percent for families, and 60 percent for children. The median household income is barely above $19,000, much lower than on the mainland US, where median household income is around $55,000, despite comparable living costs. The lack of economic opportunities has spurred massive outmigration, with the island losing 10 percent of its population over the last decade. In a statement filed when bankruptcy proceedings began, the oversight board expressed concern with the Puerto Rican economy’s “bleak spiral” that will be exacerbated by out-migration as a result of the reduced demand for goods and services. This concern should extend to the consequences of cutting the incomes of over 200,000 government employees.
The board’s decision to directly reduce the disposable incomes of almost a quarter of the labor force will impact not only government employees but also overall demand in the economy, and possibly cause some government employees to move to the mainland. For Puerto Rico’s weak and hamstrung economy such measures can have devastating consequences. The negative feedback of the cuts is likely to offset the savings the government would achieve by imposing them in the first place. Instead of forcefully pushing for measures that punish the people of Puerto Rico and exacerbate the crisis, the board should put ordinary Puerto Ricans first, and work on solutions to revive the economy and protect workers.
The June 4 governor’s election in the State of Mexico (or Edomex), the most populous state in Mexico, came close to ending the Partido Revolucionario Institucional’s (PRI) nearly nine-decade-long control over the state.
Throughout the campaign and its aftermath, PRI’s illegal election interference, or what the New York Times called “business as usual in the State of Mexico,” 1 was widely documented by independent observers. Even as PRI-controlled election monitors proclaimed their candidate the victor with a slim plurality, evidence of extensive irregularities undermined the results’ legitimacy. The absence of a clear mandate produced a scandal and strengthened the prospects of the leading opposition party ahead of the 2018 presidential elections.
It wasn’t the Partido de Acción Nacional (PAN), the right-wing party that had interrupted the PRI’s grip on the presidency with the elections of Vicente Fox in 2000 and Felipe Calderón in 2006, that threatened PRI’s stranglehold on the state. Rather, a new political force, the Movimiento Regeneración Nacional (Morena), emerged as the most credible challenger to the PRI.
Andrés Manuel López Obrador, the left-wing perennial presidential candidate, formed Morena in 2011 and formally organized it as a political party in early 2014. López Obrador (popularly known as “AMLO”) was previously a member of the Party of the Democratic Revolution (or PRD), and stood as that party’s candidate in two contested and ultimately unsuccessful presidential bids in 2006 and 2012, in which many believe that fraud played a decisive role. While the PRD emerged from the PRI’s left faction in the 1980s, the party recently turned to coalitions with the conservative PAN. Meanwhile, some of the PRD’s leadership has been linked to corruption scandals since at least the early 2000s. 2
In the 2017 elections, the State of Mexico Electoral Institute (IEEM) reported a significant increase in voter turnout to over 6 million people, or 53 percent of eligible voters. In 2011, the PRI candidate won overwhelmingly, with a 46 percent turnout, the year before the PAN’s 12-year interruption of PRI presidencies was halted. In 2005, a year before the PAN again won the presidency in a bitterly contested campaign against AMLO and the PRD, current president Enrique Peña Nieto won the governorship of Edomex with only 42 percent voter participation. 3
The IEEM’s initial official estimates failed to reach their own May 3 protocol of 1,800 voting booths tabulated, with only 1,347 included in the rapid count following the election. 4 Still, early estimates from the Preliminary Election Results Program (PREP) excited Morena supporters with a slim advantage for their candidate, Delfina Gómez, until the final tally days later declared the PRI’s Alfredo del Mazo Maza governor-elect with 33.69 percent, over Gómez’s 30.91 percent. 5 Morena supporters also noted that the National Electoral Institute (INE) had installed voting booths at a much slower pace than required by law, and that while the INE had promised that voting would begin at 8 a.m. and carry on until 6 p.m., by 9:50 a.m. officials had only installed 57 percent of Edomex voting booths. 6
Del Mazo may be the officially declared victor (with extensive irregularities, as we’ll see below) but Gómez and Morena’s rapid surge in the official vote count made it the closest governor’s election in Edomex on record. The incumbent PRI governor won with 61 percent of the vote in 2011, and the currently deeply unpopular President Enrique Peña Nieto, who survived credible allegations of corruption during his presidential campaign, had managed to officially win close to 50 percent of votes back in 2005.
IEEM’s figures depict a margin of about 170,000 votes in Del Mazo’s favor. With no comparable figures available prior to 1993, when “Mexico was still considered more or less a one-party state,” 7 it is likely that the Edomex elections were the most competitive in the state’s history. 8
Indeed, Animal Político describes the Edomex 2017 results as a “collapse” for the PRI, and “unprecedented growth” for the infant party, Morena. 9 In raw vote numbers, the PRI lost a million supporters, about a third of its 3 million vote total in 2011. When taken as a proportion of the election results, however, Del Mazo’s campaign results represent an abject failure. The 2011 PRI candidate had won with 62 percent of the vote, whereas Del Mazo managed 33 percent. 10
Fraud: Accusations and Evidence
Accusations of fraud marred the Edomex elections well before a single vote was cast. For example, the Washington Post reported that eligible voters were offered cash discounts from the PRI at local shops if they traded in their voting credentials and refrained from voting, a clear violation of Mexican election laws. 11 The Argentine outlet Segundo Enfoque and others reported that some voters traded in their electoral credentials for debit cards that would receive post-election deposits of 2,000 Mexican pesos, or about $100. 12
Reuters quoted PRI-supporter Maria de los Remedios Gonzales’ cynical logic in accepting PRI pamphlets that promised cash payouts should Del Mazo win: “Better the devil you know …. At the end of the day, it’s our money, and they give us a bit back.” 13 On the day of the election, independent observers reported that voters received burner phones to take into the ballot box and provide photographic evidence that they had voted for Del Mazo or other PRI candidates as part of a quid pro quo. 14
The New York Times is probably justified in identifying this kind of overt interference in the democratic process as “usual,” but as pre-election polls showed a tightening race, the tainted atmosphere of electoral sleight of hand took on a more blunt, violent air. For example, authorities have yet to identify who left the dozens of pigs’ heads stacked menacingly in front of the Morena state headquarters on June 3. 15 Pigs’ heads were also left in front of two other Morena offices in Tlalnepantla and Ixtapaluca-Chalco. 16
International and local observers documented a pattern of violent intimidation toward opponents to PRI rule. Alex Main, Senior Associate for International Policy at CEPR, participated in an independent investigation of the election proceedings in early June. Commenting at a joint press conference in Toluca, Main relayed that an observer from the civil society organization #NiUnFraudeMás, Soledad, had received threats: after an anonymous phone caller asked whether Soledad supported Morena, the unidentified person threatened her and her family with murder.
Main also received reports of intimidation of independent observers in the zone of Ahuizotla. Observers reported illegal busing of voters and, after taking photos of apparent PRI operatives, received death threats from an armed man near voting booth 2866. 17
Most alarming were disappearances of Morena party members. The PRI spokesman for Edomex and other officials confirmed at least two disappearances, one of a Morena official in Metepec, and another of the Morena coordinator in Atlacomulco, the area where Peña Nieto began his rise within the PRI, reportedly as part of the infamous Grupo Atlacomulco. 18 Peña Nieto had established local alliances with his uncle and former Edomex governor Arturo Montiel of Grupo Atlacomulco, before he became governor of Edomex and later head of state. The president, who is distantly related to his party’s Edomex candidate, currently boasts an approval rating of just 12 percent. 19
The spokesman assured the public: “Since the morning, I have been attentive … working with both the State Security Commission and the office of the Attorney General.” But the Peña Nieto administration’s documented record of near-universal impunity in the many disappearances of journalists, political figures, and others raises considerable doubt as to the successful resolution of these kidnappings. 20 Cristina “N.” was witness to the disappearance of her husband Óscar Juárez Cárdenez, the Atlacomulco representative. She saw two cars arrive from her balcony and later found her disappeared husband’s T-shirt on the street, tattered and blood stained. 21 Mexico City-based La Jornada also reported that state police forcibly removed about 20 Morena party members from their hotel rooms in Toluca on the discredited pretext of a bomb threat. 22
Much of Main and other observers’ testimony related to the municipality of Naucalpán, particularly the town of Chimalpa, where they witnessed physical threats and also non-violent obstacles and impediments to a fair election. The PRI’s ground operations included a system by which voters would receive their benefit for voting PRI under the guise of breakfast or a friendly gathering at nearby houses.
Christy Thornton, another election observer and professor of Latin American history at Rowan University, defined the so-called “casa amiga” program as a fraud “where PRI operatives coordinate various kinds of voter coercion, from outright buying of votes to incentivizing individuals to bring five or ten others with them to the polls.” 23 As an example of this systematic bribery, the observers witnessed eligible voters, “all women of very humble social condition,” who were apparently returning from voting booth 3002 to queue outside of a nearby house with a known PRI operative inside.
While illegal, the casa amiga and desayuno (breakfast) vote buying programs reflect the PRI’s broader campaign strategy of targeted patronage to affect election outcomes. Del Mazo campaigned on the “pink salary,” a promise to distribute over $100 every other month to more than 500,000 poor women. Del Mazo’s campaign manager framed the policy as “allowing the man to have the opportunity to leave to work to produce an income for his family.” In one of Del Mazo’s antiseptic campaign ads, the silver-haired scion quipped “they prepare breakfast … they deserve a dream.” 24
Spain’s El País reported pink cards were distributed as PRI “campaign objects/materials” before June 4 around the State of Mexico, and reminded readers of present PRI governor Ávila’s 2011 campaign “trick” of promising pharmaceutical aid, in the form of a green card, in return for a PRI vote. Noemí Romero, who lives in Edomex, said that when she and her mother went to the pharmacy after the 2011 election ended overwhelmingly in Ávila’s favor, the clerk laughed and asked why they would believe PRI’s promises. “We wanted the ground to swallow us up in shame. This pink salary, it is the same as the green card, it’s the same, they only changed the color.” 25 In 2017, however, #NiUnFraudeMás documented payouts in the form of pink debit cards.
While it is not illegal to promise social benefits for everyone as part of an election campaign pledge, the recent experience in Edomex included widespread illegal vote-buying techniques, as well as harassment, and even forced disappearances that appear to be campaign-related.
According to the advocacy campaign for electoral transparency, #NiUnFraudeMás, the seven most common forms of interference were:
“pressure on state and municipal government workers, transport workers, health workers, teachers and police; psychological terrorism; busing, voter coercion and vote-buying; violation of the campaign ban just prior to election day; exceeding campaign spending limits; inconsistencies between the collection of election day minutes in the official record, the rapid count, PREP and the district count; and deficiencies in electoral organization and training.”
Finally, the third report from #NiUnFraudeMás has links to video evidence of police intimidation and coercion on behalf of the PRI; police violence against journalist Alan García of the newspaper El Gráfico; 26 an attack against Morena representative Rodrigo Abdalá in Atlacomulco; and the intimidation of independent observers.
There were also less violent forms of interference: photo evidence of the pink salary system in quid pro quo form; PRI propaganda and misinformation on public transport; an apparent admission of illegal busing from multiple PRI operators; 27 illegal PRI counts of voters in front of voting booth 2266; 28 arbitrary elimination of votes in Toluca; 29 and insufficient ballots in densely populated areas.
There was an especially high presence of reported irregularities in the municipalities of Naucalpán and Ecatepec, where the rate of femicides sets another poor record. 30 The two zones tied with 39 reported electoral irregularities of a total of 601 in the 125 municipalities overall.
In sum, #NiUnFraudeMás described the PRI’s overall electoral blueprint as “a strategy of psychological warfare” and to create “fear [among] the militants and representatives of Morena and [within] the entire society.” 31
In mobilization against the thoroughly documented irregularities and fraud, the organization led by artists, academics, and activists called for a full recount, and, if necessary, a complete repeat of the gubernatorial election itself. #NiUnFraudeMás members also demanded the resignation of the PRI-controlled election counselors of the IEEM and the INE, among other officials. 32
#NiUnFraudeMás’s most recent press bulletin shores up the constitutional bonafides needed to demand both a “totally autonomous and independent citizen recount,” as well as “the nullification of the eventual ‘triumph’ of Alfredo del Mazo,” citing the Mexican constitution to bolster its case. Its July 10 press release notes that Article 6 affords Mexican citizens the right to “free access to diverse and timely information,” and Article 41 guarantees the right to “free, authentic and periodic elections.” 33
Institutional Investigations and Compromises
La Fiscalía Especializada Para la Atención de Delitos Electorales (FEPADE), the federal agency responsible for investigating voter fraud, reported evidence of interference before June 4. The agency at first refrained from detaining drivers of illegal busing operations, intercepted en route from the Plaza Américas in Naucalpán to Nezahualcóyotl, but without passengers, on a possible practice run. FEPADE promised an investigation. 34
Multiple reports emerged of an election day mobilization that included 3,500 PRI-voting bus riders on 70 buses, and that FEPADE arrested two bus drivers involved. Two days after the election, FEPADE announced that there were at least 192 outstanding arrest warrants, primarily for alleged vote purchasing and reported that most of the complaints filed related to “fraud in the vote counting.” 35 For example, one video uploaded to social media uncovered an instance of an IEEM official apparently inflating the PRI vote tally through officials inaccurately transmitting vote totals from one to another, verbally changing the results. 36
Both Morena and the PRD lodged an official complaint with the INE, arguing against the elections’ legitimacy because Del Mazo and the PRI exceeded spending limits by as much as 40 percent. 37 Horacio Duarte, a representative of Morena, said that someone close to Del Mazo and the PRI anonymously submitted folders with financial papers that purport to document the excess expenditure. The Morena representative also claimed that the evidence was derived from the “internal accounting system” of the PRI. 38
While the INE hastily refused a full recount, they did conduct a partial one, potentially to save face. Some of the results strongly suggest both fraud and a cover-up. John Ackerman, a researcher and law professor at the National Autonomous University of Mexico, observed a recount in Naucalpán de Juaréz, at voting booth 2836 in which, he said, Del Mazo’s vote total fell from 640 to 81 votes. Ackerman commented in a tweet with photographic evidence: “no wonder they don’t want to open the other ballots!” 39 During the vote count, the INE president of district 32 attempted to remove Ackerman from the premises with the use of police, while defending the democratic legitimacy of the process: “There are no delinquents here,” he said. 40
A week after the scandal-ridden election, AMLO formally appealed to the Tribunal Electoral del Estado de México (TEEM) with 45 legal challenges, one for each district in Edomex. He called for the Tribunal to “clean up the election” and declare Delfina Gómez the next governor of Edomex.
AMLO further accused the PRI of buying votes and filling ballot boxes “with an operation led and directed by Enrique Peña Nieto,” who is also the distant cousin of Del Mazo. 41 (Del Mazo’s family lineage is a legacy in Edomex, where both his father and grandfather served as PRI governors.)
AMLO went on to insist that, if the Tribunal rejects Morena’s challenges, the party would appeal to the national Electoral Tribunal. His social media speech averred: México “is a democratic republic, not a monarchy.” 42
According to the IEEM, Morena was not the only political party to challenge the results of the historically competitive June 4 election. The conservative PAN party also submitted appeals in 36 of the 45 electoral districts at play in Edomex, and the PRD challenged the results in 39 districts. All three parties accuse the PRI of federal interference and election fraud, citing irregularities in the district counts and in voter registration. In spite of IEEM’s June 9 announcement of victory for the PRI, the bellwether election may not be resolved until TEEM’s self-imposed deadline of August 16. 43
AMLO emphasized that if the TEEM rules in favor of the status quo, Morena will still appeal before the Mexican federal tribunal to annul the elections. AMLO attempted this level of legal appeal in the aftermath of the 2006 presidential race, and urged his supporters to occupy Mexico City’s Zócalo plaza for two months, but the tribunal ruled unanimously against the then PRD candidate despite documented irregularities. 44 Next year, Mexico again holds presidential elections, and Edomex was not the only suspicious electoral event of the year, not to speak of accusations of electoral espionage by Peña Nieto. 45
Conclusion
Just a fortnight after the election, opinion polling revealed massive discontent with the electoral authorities. In a national poll by the Mexico City newspaper Reforma, just 37 percent thought the INE to be prepared to organize the 2018 presidential elections. Nearly 70 percent of those polled agreed there was fraud in the Edomex elections, while only 14 percent believed in the elections’ legitimacy. The same poll found 60 percent of Mexicans thought the northern state of Coahuila’s gubernatorial elections were fraudulent, while only 10 percent maintained confidence in their “cleanliness.” 46 At least there, though, electoral officials with the INE sanctioned the PRI for its excess campaign spending. 47
In Edomex 55 percent of respondents in the Reforma poll favored legal challenges to the presumed PRI victories, while fewer than 30 percent oppose the ongoing litigation and appeals.
Even if, as expected, the legal challenges fail to overturn previously announced “victories,” the PRI’s brand has suffered greatly because of the relatively competitive elections. The only party more “weakened” by the elections, according to the poll, was the PRD ? perhaps because of its counterintuitive coalition with the conservative PAN. 48 Morena, meanwhile, was the only party considered “fortified” by a plurality of those polled, 35 to 25 percent. The Edomex election generally produced the specter of further deterioration of the PRI.
The paradoxical status of Mexican-US relations further undermines the PRI’s presidential chances next year. President Trump launched his most recent campaign by calling Mexicans “rapists” and “criminals.” Even former PAN president Vicente Fox responded more forcefully than the PRI’s Peña Nieto when Trump insisted that Mexico would pay for a central plank of his campaign – the border wall. 49 The PRI’s finance minister, Luis Videgaray, resigned as the humiliated “architect” of Trump’s boorish bullying of Peña Nieto in 2016, only to return newly empowered as Peña Nieto’s foreign minister. 50
The PRI’s attempts to cozy up to the Trump administration, demonstrated through their co-sponsorship of recent meetings in Cancún and the U.S. Southern Command, or their enthusiastic embrace of rapid NAFTA renegotiation, discredited the party as subservient to the newest neighbor to the north, namely Trump. AMLO, by contrast, filed a formal complaint against the wall with the Inter-American Commission on Human Rights in March. 51 Finally, according to Reuters, US officials “said Mexico had asked for the negotiations to be completed by the end of the year before the Mexican presidential election heats up,” to avoid benefitting the presidential ambitions of AMLO. 52
More important than the Trump effect, the strong showing by Morena in Edomex bolsters their chances in the 2018 presidential elections. Following the Edomex election, 57 percent of Mexican voters believe the PRI will lose the 2018 elections, while only 34 percent think the embattled party will retain the presidency — which the PRI has lost only twice since its founding in 1929. 53 Indeed, another recent Reforma poll relegated the PRI to third place with only 17 percent of national voters, compared with 23 percent for the PAN and 28 percent for AMLO and Morena. 54
The PRI’s star appears to be rapidly falling. Already last year, the party lost seven of twelve gubernatorial elections. Organizations like #NiUnFraudeMás are unlikely to end their concern or suspend their investigations. The hashtag movement emphasizes Article 6 of the Electoral Code of the State of Mexico, which pledges that “citizens and political parties are co-responsible for the organization, development and monitoring of the electoral process.” 55 The historically competitive Edomex election ensures that the official certification of the results, with the TEEM expected to formally declare Del Mazo governor by August 16, does not represent the end of the struggle for electoral democracy.
1 https://www.nytimes.com/2017/05/06/world/americas/mexico-elections-pri-pena-nieto-lopez-obrador.html
2 http://www.upi.com/Defense-News/2004/03/23/Analysis-Corruption-in-Mexico/26871080078886/
3 http://www.animalpolitico.com/2017/06/del-mazo-mas-bajo-pri-edomex/
4 http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 98-9
6 http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 106
7 https://www.economist.com/blogs/americasview/2011/07/state-elections-mexico
8 http://hoyentv.com/2017/06/11/ieem-reporta-participaci-n-del-53-por-ciento-de-votantes.html
http://www.animalpolitico.com/2017/06/del-mazo-mas-bajo-pri-edomex/
9 http://www.animalpolitico.com/2017/06/del-mazo-mas-bajo-pri-edomex/
10 ibid.
11 https://www.washingtonpost.com/world/an-election-in-the-heartland-of-mexicos-ruling-party-shows-where-country-may-be-headed/2017/06/01/4ea4e100-44b2-11e7-8de1-cec59a9bf4b1_story.html?utm_term=.583baf23c714
12 http://segundoenfoque.com/aumentaron-denuncias-de-fraude-en-elecciones-mexicanas-19-354585/
http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 91
13 http://www.reuters.com/article/us-mexico-election-idUSKBN18K0GL
14 http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 69
15 Cited in http://nacla.org/news/2017/06/06/cracks-fortress
16 http://www.sinembargo.mx/03-06-2017/3232283
17 https://www.youtube.com/watch?v=b5JEvLixKTU&feature=youtu.be and Alex Main
18 http://www.quien.com/espectaculos/2012/05/07/la-profecia-de-atlacomulco-enrique-pena-nieto
20 https://www.nytimes.com/2017/04/29/world/americas/veracruz-mexico-reporters-killed.html
http://www.excelsior.com.mx/nacional/2017/06/04/1167627
22 http://www.jornada.unam.mx/ultimas/2017/06/04/denuncian-secuestro-de-dos-militantes-de-morena-en-edomex
23 http://nacla.org/news/2017/06/06/cracks-fortress
24 https://internacional.elpais.com/internacional/2017/05/31/mexico/1496200285_716267.html https://www.youtube.com/watch?v=TGB6PLEfqrQ
25 Ibid., El País.
26 https://www.youtube.com/watch?v=cYt4RIpy4r8&feature=youtu.be
27 https://www.youtube.com/watch?v=sinPa8L3eJs&feature=youtu.be
28 https://www.youtube.com/watch?v=bHqQQvKYNl8&feature=youtu.be
29 http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 111
30 http://www.proceso.com.mx/472686/ecatepec-municipio-violento-las-mujeres-mexfem
31 http://niunfraudemas.org/documentos/BoletinPrensa_9Junio.pdf
33 http://niunfraudemas.org/documentos/BoletinPrensa_10Julio.pdf
35 http://pausa.mx/2017/06/06/24975/
36 https://www.youtube.com/watch?v=Keyn6bm77dA&feature=youtu.be
37 http://aristeguinoticias.com/1106/mexico/no-solo-es-morena-pan-prd-y-pt-tambien-solicitaran-anular-eleccion-en-edomex/ http://www.prd.org.mx/portal/index.php/2-principal/3128-rebaso-del-mazo-tope-de-gastos-de-campana-por-mas-de-48-millones-de-pesos
38 http://www.animalpolitico.com/2017/06/del-mazo-gasto-campana-morena/
http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 81, 92
39 https://twitter.com/JohnMAckerman/status/872583860957196292
40 https://www.youtube.com/watch?v=zWwCMIi8d1Y&feature=youtu.be
41 http://psn.si/morena-impugnaciones-eleccion-edomex/2017/06/
42 http://www.proceso.com.mx/490923/morena-presenta-45-impugnaciones-contra-eleccion-en-edomex
44 http://www.washingtonpost.com/wp-dyn/content/article/2006/09/05/AR2006090500606_pf.html
45 https://www.theguardian.com/us-news/2017/jul/07/trump-mexico-border-wall-pena-nieto-g20-summit
46 https://twitter.com/JohnMAckerman/status/877323657080487937
47 http://www.jornada.unam.mx/ultimas/2017/07/18/confirma-el-ine-que-el-pri-gasto-de-mas-en-coahuila
48 https://www.ft.com/content/19c33f58-3dd3-11e7-9d56-25f963e998b2?mhq5j=e2
51 http://www.newsweek.com/andres-manuel-lopez-obrador-mexico-donald-trump-us-border-wall-568681
52 http://www.reuters.com/article/us-usa-nafta-trade-mexico-idUSKBN1A70TT
53 https://twitter.com/JohnMAckerman/status/877323657080487937
54 https://www.reuters.com/article/us-mexico-politics-idUSKBN1A80RB
55 http://niunfraudemas.org/documentos/BoletinPrensa_10Julio.pdf
The June 4 governor’s election in the State of Mexico (or Edomex), the most populous state in Mexico, came close to ending the Partido Revolucionario Institucional’s (PRI) nearly nine-decade-long control over the state.
Throughout the campaign and its aftermath, PRI’s illegal election interference, or what the New York Times called “business as usual in the State of Mexico,” 1 was widely documented by independent observers. Even as PRI-controlled election monitors proclaimed their candidate the victor with a slim plurality, evidence of extensive irregularities undermined the results’ legitimacy. The absence of a clear mandate produced a scandal and strengthened the prospects of the leading opposition party ahead of the 2018 presidential elections.
It wasn’t the Partido de Acción Nacional (PAN), the right-wing party that had interrupted the PRI’s grip on the presidency with the elections of Vicente Fox in 2000 and Felipe Calderón in 2006, that threatened PRI’s stranglehold on the state. Rather, a new political force, the Movimiento Regeneración Nacional (Morena), emerged as the most credible challenger to the PRI.
Andrés Manuel López Obrador, the left-wing perennial presidential candidate, formed Morena in 2011 and formally organized it as a political party in early 2014. López Obrador (popularly known as “AMLO”) was previously a member of the Party of the Democratic Revolution (or PRD), and stood as that party’s candidate in two contested and ultimately unsuccessful presidential bids in 2006 and 2012, in which many believe that fraud played a decisive role. While the PRD emerged from the PRI’s left faction in the 1980s, the party recently turned to coalitions with the conservative PAN. Meanwhile, some of the PRD’s leadership has been linked to corruption scandals since at least the early 2000s. 2
In the 2017 elections, the State of Mexico Electoral Institute (IEEM) reported a significant increase in voter turnout to over 6 million people, or 53 percent of eligible voters. In 2011, the PRI candidate won overwhelmingly, with a 46 percent turnout, the year before the PAN’s 12-year interruption of PRI presidencies was halted. In 2005, a year before the PAN again won the presidency in a bitterly contested campaign against AMLO and the PRD, current president Enrique Peña Nieto won the governorship of Edomex with only 42 percent voter participation. 3
The IEEM’s initial official estimates failed to reach their own May 3 protocol of 1,800 voting booths tabulated, with only 1,347 included in the rapid count following the election. 4 Still, early estimates from the Preliminary Election Results Program (PREP) excited Morena supporters with a slim advantage for their candidate, Delfina Gómez, until the final tally days later declared the PRI’s Alfredo del Mazo Maza governor-elect with 33.69 percent, over Gómez’s 30.91 percent. 5 Morena supporters also noted that the National Electoral Institute (INE) had installed voting booths at a much slower pace than required by law, and that while the INE had promised that voting would begin at 8 a.m. and carry on until 6 p.m., by 9:50 a.m. officials had only installed 57 percent of Edomex voting booths. 6
Del Mazo may be the officially declared victor (with extensive irregularities, as we’ll see below) but Gómez and Morena’s rapid surge in the official vote count made it the closest governor’s election in Edomex on record. The incumbent PRI governor won with 61 percent of the vote in 2011, and the currently deeply unpopular President Enrique Peña Nieto, who survived credible allegations of corruption during his presidential campaign, had managed to officially win close to 50 percent of votes back in 2005.
IEEM’s figures depict a margin of about 170,000 votes in Del Mazo’s favor. With no comparable figures available prior to 1993, when “Mexico was still considered more or less a one-party state,” 7 it is likely that the Edomex elections were the most competitive in the state’s history. 8
Indeed, Animal Político describes the Edomex 2017 results as a “collapse” for the PRI, and “unprecedented growth” for the infant party, Morena. 9 In raw vote numbers, the PRI lost a million supporters, about a third of its 3 million vote total in 2011. When taken as a proportion of the election results, however, Del Mazo’s campaign results represent an abject failure. The 2011 PRI candidate had won with 62 percent of the vote, whereas Del Mazo managed 33 percent. 10
Fraud: Accusations and Evidence
Accusations of fraud marred the Edomex elections well before a single vote was cast. For example, the Washington Post reported that eligible voters were offered cash discounts from the PRI at local shops if they traded in their voting credentials and refrained from voting, a clear violation of Mexican election laws. 11 The Argentine outlet Segundo Enfoque and others reported that some voters traded in their electoral credentials for debit cards that would receive post-election deposits of 2,000 Mexican pesos, or about $100. 12
Reuters quoted PRI-supporter Maria de los Remedios Gonzales’ cynical logic in accepting PRI pamphlets that promised cash payouts should Del Mazo win: “Better the devil you know …. At the end of the day, it’s our money, and they give us a bit back.” 13 On the day of the election, independent observers reported that voters received burner phones to take into the ballot box and provide photographic evidence that they had voted for Del Mazo or other PRI candidates as part of a quid pro quo. 14
The New York Times is probably justified in identifying this kind of overt interference in the democratic process as “usual,” but as pre-election polls showed a tightening race, the tainted atmosphere of electoral sleight of hand took on a more blunt, violent air. For example, authorities have yet to identify who left the dozens of pigs’ heads stacked menacingly in front of the Morena state headquarters on June 3. 15 Pigs’ heads were also left in front of two other Morena offices in Tlalnepantla and Ixtapaluca-Chalco. 16
International and local observers documented a pattern of violent intimidation toward opponents to PRI rule. Alex Main, Senior Associate for International Policy at CEPR, participated in an independent investigation of the election proceedings in early June. Commenting at a joint press conference in Toluca, Main relayed that an observer from the civil society organization #NiUnFraudeMás, Soledad, had received threats: after an anonymous phone caller asked whether Soledad supported Morena, the unidentified person threatened her and her family with murder.
Main also received reports of intimidation of independent observers in the zone of Ahuizotla. Observers reported illegal busing of voters and, after taking photos of apparent PRI operatives, received death threats from an armed man near voting booth 2866. 17
Most alarming were disappearances of Morena party members. The PRI spokesman for Edomex and other officials confirmed at least two disappearances, one of a Morena official in Metepec, and another of the Morena coordinator in Atlacomulco, the area where Peña Nieto began his rise within the PRI, reportedly as part of the infamous Grupo Atlacomulco. 18 Peña Nieto had established local alliances with his uncle and former Edomex governor Arturo Montiel of Grupo Atlacomulco, before he became governor of Edomex and later head of state. The president, who is distantly related to his party’s Edomex candidate, currently boasts an approval rating of just 12 percent. 19
The spokesman assured the public: “Since the morning, I have been attentive … working with both the State Security Commission and the office of the Attorney General.” But the Peña Nieto administration’s documented record of near-universal impunity in the many disappearances of journalists, political figures, and others raises considerable doubt as to the successful resolution of these kidnappings. 20 Cristina “N.” was witness to the disappearance of her husband Óscar Juárez Cárdenez, the Atlacomulco representative. She saw two cars arrive from her balcony and later found her disappeared husband’s T-shirt on the street, tattered and blood stained. 21 Mexico City-based La Jornada also reported that state police forcibly removed about 20 Morena party members from their hotel rooms in Toluca on the discredited pretext of a bomb threat. 22
Much of Main and other observers’ testimony related to the municipality of Naucalpán, particularly the town of Chimalpa, where they witnessed physical threats and also non-violent obstacles and impediments to a fair election. The PRI’s ground operations included a system by which voters would receive their benefit for voting PRI under the guise of breakfast or a friendly gathering at nearby houses.
Christy Thornton, another election observer and professor of Latin American history at Rowan University, defined the so-called “casa amiga” program as a fraud “where PRI operatives coordinate various kinds of voter coercion, from outright buying of votes to incentivizing individuals to bring five or ten others with them to the polls.” 23 As an example of this systematic bribery, the observers witnessed eligible voters, “all women of very humble social condition,” who were apparently returning from voting booth 3002 to queue outside of a nearby house with a known PRI operative inside.
While illegal, the casa amiga and desayuno (breakfast) vote buying programs reflect the PRI’s broader campaign strategy of targeted patronage to affect election outcomes. Del Mazo campaigned on the “pink salary,” a promise to distribute over $100 every other month to more than 500,000 poor women. Del Mazo’s campaign manager framed the policy as “allowing the man to have the opportunity to leave to work to produce an income for his family.” In one of Del Mazo’s antiseptic campaign ads, the silver-haired scion quipped “they prepare breakfast … they deserve a dream.” 24
Spain’s El País reported pink cards were distributed as PRI “campaign objects/materials” before June 4 around the State of Mexico, and reminded readers of present PRI governor Ávila’s 2011 campaign “trick” of promising pharmaceutical aid, in the form of a green card, in return for a PRI vote. Noemí Romero, who lives in Edomex, said that when she and her mother went to the pharmacy after the 2011 election ended overwhelmingly in Ávila’s favor, the clerk laughed and asked why they would believe PRI’s promises. “We wanted the ground to swallow us up in shame. This pink salary, it is the same as the green card, it’s the same, they only changed the color.” 25 In 2017, however, #NiUnFraudeMás documented payouts in the form of pink debit cards.
While it is not illegal to promise social benefits for everyone as part of an election campaign pledge, the recent experience in Edomex included widespread illegal vote-buying techniques, as well as harassment, and even forced disappearances that appear to be campaign-related.
According to the advocacy campaign for electoral transparency, #NiUnFraudeMás, the seven most common forms of interference were:
“pressure on state and municipal government workers, transport workers, health workers, teachers and police; psychological terrorism; busing, voter coercion and vote-buying; violation of the campaign ban just prior to election day; exceeding campaign spending limits; inconsistencies between the collection of election day minutes in the official record, the rapid count, PREP and the district count; and deficiencies in electoral organization and training.”
Finally, the third report from #NiUnFraudeMás has links to video evidence of police intimidation and coercion on behalf of the PRI; police violence against journalist Alan García of the newspaper El Gráfico; 26 an attack against Morena representative Rodrigo Abdalá in Atlacomulco; and the intimidation of independent observers.
There were also less violent forms of interference: photo evidence of the pink salary system in quid pro quo form; PRI propaganda and misinformation on public transport; an apparent admission of illegal busing from multiple PRI operators; 27 illegal PRI counts of voters in front of voting booth 2266; 28 arbitrary elimination of votes in Toluca; 29 and insufficient ballots in densely populated areas.
There was an especially high presence of reported irregularities in the municipalities of Naucalpán and Ecatepec, where the rate of femicides sets another poor record. 30 The two zones tied with 39 reported electoral irregularities of a total of 601 in the 125 municipalities overall.
In sum, #NiUnFraudeMás described the PRI’s overall electoral blueprint as “a strategy of psychological warfare” and to create “fear [among] the militants and representatives of Morena and [within] the entire society.” 31
In mobilization against the thoroughly documented irregularities and fraud, the organization led by artists, academics, and activists called for a full recount, and, if necessary, a complete repeat of the gubernatorial election itself. #NiUnFraudeMás members also demanded the resignation of the PRI-controlled election counselors of the IEEM and the INE, among other officials. 32
#NiUnFraudeMás’s most recent press bulletin shores up the constitutional bonafides needed to demand both a “totally autonomous and independent citizen recount,” as well as “the nullification of the eventual ‘triumph’ of Alfredo del Mazo,” citing the Mexican constitution to bolster its case. Its July 10 press release notes that Article 6 affords Mexican citizens the right to “free access to diverse and timely information,” and Article 41 guarantees the right to “free, authentic and periodic elections.” 33
Institutional Investigations and Compromises
La Fiscalía Especializada Para la Atención de Delitos Electorales (FEPADE), the federal agency responsible for investigating voter fraud, reported evidence of interference before June 4. The agency at first refrained from detaining drivers of illegal busing operations, intercepted en route from the Plaza Américas in Naucalpán to Nezahualcóyotl, but without passengers, on a possible practice run. FEPADE promised an investigation. 34
Multiple reports emerged of an election day mobilization that included 3,500 PRI-voting bus riders on 70 buses, and that FEPADE arrested two bus drivers involved. Two days after the election, FEPADE announced that there were at least 192 outstanding arrest warrants, primarily for alleged vote purchasing and reported that most of the complaints filed related to “fraud in the vote counting.” 35 For example, one video uploaded to social media uncovered an instance of an IEEM official apparently inflating the PRI vote tally through officials inaccurately transmitting vote totals from one to another, verbally changing the results. 36
Both Morena and the PRD lodged an official complaint with the INE, arguing against the elections’ legitimacy because Del Mazo and the PRI exceeded spending limits by as much as 40 percent. 37 Horacio Duarte, a representative of Morena, said that someone close to Del Mazo and the PRI anonymously submitted folders with financial papers that purport to document the excess expenditure. The Morena representative also claimed that the evidence was derived from the “internal accounting system” of the PRI. 38
While the INE hastily refused a full recount, they did conduct a partial one, potentially to save face. Some of the results strongly suggest both fraud and a cover-up. John Ackerman, a researcher and law professor at the National Autonomous University of Mexico, observed a recount in Naucalpán de Juaréz, at voting booth 2836 in which, he said, Del Mazo’s vote total fell from 640 to 81 votes. Ackerman commented in a tweet with photographic evidence: “no wonder they don’t want to open the other ballots!” 39 During the vote count, the INE president of district 32 attempted to remove Ackerman from the premises with the use of police, while defending the democratic legitimacy of the process: “There are no delinquents here,” he said. 40
A week after the scandal-ridden election, AMLO formally appealed to the Tribunal Electoral del Estado de México (TEEM) with 45 legal challenges, one for each district in Edomex. He called for the Tribunal to “clean up the election” and declare Delfina Gómez the next governor of Edomex.
AMLO further accused the PRI of buying votes and filling ballot boxes “with an operation led and directed by Enrique Peña Nieto,” who is also the distant cousin of Del Mazo. 41 (Del Mazo’s family lineage is a legacy in Edomex, where both his father and grandfather served as PRI governors.)
AMLO went on to insist that, if the Tribunal rejects Morena’s challenges, the party would appeal to the national Electoral Tribunal. His social media speech averred: México “is a democratic republic, not a monarchy.” 42
According to the IEEM, Morena was not the only political party to challenge the results of the historically competitive June 4 election. The conservative PAN party also submitted appeals in 36 of the 45 electoral districts at play in Edomex, and the PRD challenged the results in 39 districts. All three parties accuse the PRI of federal interference and election fraud, citing irregularities in the district counts and in voter registration. In spite of IEEM’s June 9 announcement of victory for the PRI, the bellwether election may not be resolved until TEEM’s self-imposed deadline of August 16. 43
AMLO emphasized that if the TEEM rules in favor of the status quo, Morena will still appeal before the Mexican federal tribunal to annul the elections. AMLO attempted this level of legal appeal in the aftermath of the 2006 presidential race, and urged his supporters to occupy Mexico City’s Zócalo plaza for two months, but the tribunal ruled unanimously against the then PRD candidate despite documented irregularities. 44 Next year, Mexico again holds presidential elections, and Edomex was not the only suspicious electoral event of the year, not to speak of accusations of electoral espionage by Peña Nieto. 45
Conclusion
Just a fortnight after the election, opinion polling revealed massive discontent with the electoral authorities. In a national poll by the Mexico City newspaper Reforma, just 37 percent thought the INE to be prepared to organize the 2018 presidential elections. Nearly 70 percent of those polled agreed there was fraud in the Edomex elections, while only 14 percent believed in the elections’ legitimacy. The same poll found 60 percent of Mexicans thought the northern state of Coahuila’s gubernatorial elections were fraudulent, while only 10 percent maintained confidence in their “cleanliness.” 46 At least there, though, electoral officials with the INE sanctioned the PRI for its excess campaign spending. 47
In Edomex 55 percent of respondents in the Reforma poll favored legal challenges to the presumed PRI victories, while fewer than 30 percent oppose the ongoing litigation and appeals.
Even if, as expected, the legal challenges fail to overturn previously announced “victories,” the PRI’s brand has suffered greatly because of the relatively competitive elections. The only party more “weakened” by the elections, according to the poll, was the PRD ? perhaps because of its counterintuitive coalition with the conservative PAN. 48 Morena, meanwhile, was the only party considered “fortified” by a plurality of those polled, 35 to 25 percent. The Edomex election generally produced the specter of further deterioration of the PRI.
The paradoxical status of Mexican-US relations further undermines the PRI’s presidential chances next year. President Trump launched his most recent campaign by calling Mexicans “rapists” and “criminals.” Even former PAN president Vicente Fox responded more forcefully than the PRI’s Peña Nieto when Trump insisted that Mexico would pay for a central plank of his campaign – the border wall. 49 The PRI’s finance minister, Luis Videgaray, resigned as the humiliated “architect” of Trump’s boorish bullying of Peña Nieto in 2016, only to return newly empowered as Peña Nieto’s foreign minister. 50
The PRI’s attempts to cozy up to the Trump administration, demonstrated through their co-sponsorship of recent meetings in Cancún and the U.S. Southern Command, or their enthusiastic embrace of rapid NAFTA renegotiation, discredited the party as subservient to the newest neighbor to the north, namely Trump. AMLO, by contrast, filed a formal complaint against the wall with the Inter-American Commission on Human Rights in March. 51 Finally, according to Reuters, US officials “said Mexico had asked for the negotiations to be completed by the end of the year before the Mexican presidential election heats up,” to avoid benefitting the presidential ambitions of AMLO. 52
More important than the Trump effect, the strong showing by Morena in Edomex bolsters their chances in the 2018 presidential elections. Following the Edomex election, 57 percent of Mexican voters believe the PRI will lose the 2018 elections, while only 34 percent think the embattled party will retain the presidency — which the PRI has lost only twice since its founding in 1929. 53 Indeed, another recent Reforma poll relegated the PRI to third place with only 17 percent of national voters, compared with 23 percent for the PAN and 28 percent for AMLO and Morena. 54
The PRI’s star appears to be rapidly falling. Already last year, the party lost seven of twelve gubernatorial elections. Organizations like #NiUnFraudeMás are unlikely to end their concern or suspend their investigations. The hashtag movement emphasizes Article 6 of the Electoral Code of the State of Mexico, which pledges that “citizens and political parties are co-responsible for the organization, development and monitoring of the electoral process.” 55 The historically competitive Edomex election ensures that the official certification of the results, with the TEEM expected to formally declare Del Mazo governor by August 16, does not represent the end of the struggle for electoral democracy.
1 https://www.nytimes.com/2017/05/06/world/americas/mexico-elections-pri-pena-nieto-lopez-obrador.html
2 http://www.upi.com/Defense-News/2004/03/23/Analysis-Corruption-in-Mexico/26871080078886/
3 http://www.animalpolitico.com/2017/06/del-mazo-mas-bajo-pri-edomex/
4 http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 98-9
6 http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 106
7 https://www.economist.com/blogs/americasview/2011/07/state-elections-mexico
8 http://hoyentv.com/2017/06/11/ieem-reporta-participaci-n-del-53-por-ciento-de-votantes.html
http://www.animalpolitico.com/2017/06/del-mazo-mas-bajo-pri-edomex/
9 http://www.animalpolitico.com/2017/06/del-mazo-mas-bajo-pri-edomex/
10 ibid.
11 https://www.washingtonpost.com/world/an-election-in-the-heartland-of-mexicos-ruling-party-shows-where-country-may-be-headed/2017/06/01/4ea4e100-44b2-11e7-8de1-cec59a9bf4b1_story.html?utm_term=.583baf23c714
12 http://segundoenfoque.com/aumentaron-denuncias-de-fraude-en-elecciones-mexicanas-19-354585/
http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 91
13 http://www.reuters.com/article/us-mexico-election-idUSKBN18K0GL
14 http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 69
15 Cited in http://nacla.org/news/2017/06/06/cracks-fortress
16 http://www.sinembargo.mx/03-06-2017/3232283
17 https://www.youtube.com/watch?v=b5JEvLixKTU&feature=youtu.be and Alex Main
18 http://www.quien.com/espectaculos/2012/05/07/la-profecia-de-atlacomulco-enrique-pena-nieto
20 https://www.nytimes.com/2017/04/29/world/americas/veracruz-mexico-reporters-killed.html
http://www.excelsior.com.mx/nacional/2017/06/04/1167627
22 http://www.jornada.unam.mx/ultimas/2017/06/04/denuncian-secuestro-de-dos-militantes-de-morena-en-edomex
23 http://nacla.org/news/2017/06/06/cracks-fortress
24 https://internacional.elpais.com/internacional/2017/05/31/mexico/1496200285_716267.html https://www.youtube.com/watch?v=TGB6PLEfqrQ
25 Ibid., El País.
26 https://www.youtube.com/watch?v=cYt4RIpy4r8&feature=youtu.be
27 https://www.youtube.com/watch?v=sinPa8L3eJs&feature=youtu.be
28 https://www.youtube.com/watch?v=bHqQQvKYNl8&feature=youtu.be
29 http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 111
30 http://www.proceso.com.mx/472686/ecatepec-municipio-violento-las-mujeres-mexfem
31 http://niunfraudemas.org/documentos/BoletinPrensa_9Junio.pdf
33 http://niunfraudemas.org/documentos/BoletinPrensa_10Julio.pdf
35 http://pausa.mx/2017/06/06/24975/
36 https://www.youtube.com/watch?v=Keyn6bm77dA&feature=youtu.be
37 http://aristeguinoticias.com/1106/mexico/no-solo-es-morena-pan-prd-y-pt-tambien-solicitaran-anular-eleccion-en-edomex/ http://www.prd.org.mx/portal/index.php/2-principal/3128-rebaso-del-mazo-tope-de-gastos-de-campana-por-mas-de-48-millones-de-pesos
38 http://www.animalpolitico.com/2017/06/del-mazo-gasto-campana-morena/
http://niunfraudemas.org/documentos/TercerInforme.pdf pg. 81, 92
39 https://twitter.com/JohnMAckerman/status/872583860957196292
40 https://www.youtube.com/watch?v=zWwCMIi8d1Y&feature=youtu.be
41 http://psn.si/morena-impugnaciones-eleccion-edomex/2017/06/
42 http://www.proceso.com.mx/490923/morena-presenta-45-impugnaciones-contra-eleccion-en-edomex
44 http://www.washingtonpost.com/wp-dyn/content/article/2006/09/05/AR2006090500606_pf.html
45 https://www.theguardian.com/us-news/2017/jul/07/trump-mexico-border-wall-pena-nieto-g20-summit
46 https://twitter.com/JohnMAckerman/status/877323657080487937
47 http://www.jornada.unam.mx/ultimas/2017/07/18/confirma-el-ine-que-el-pri-gasto-de-mas-en-coahuila
48 https://www.ft.com/content/19c33f58-3dd3-11e7-9d56-25f963e998b2?mhq5j=e2
51 http://www.newsweek.com/andres-manuel-lopez-obrador-mexico-donald-trump-us-border-wall-568681
52 http://www.reuters.com/article/us-usa-nafta-trade-mexico-idUSKBN1A70TT
53 https://twitter.com/JohnMAckerman/status/877323657080487937
54 https://www.reuters.com/article/us-mexico-politics-idUSKBN1A80RB
55 http://niunfraudemas.org/documentos/BoletinPrensa_10Julio.pdf
In an article about Ecuador’s presidential transition that appeared in Bloomberg View, Mac Margolis claims that “Moreno takes over as Ecuador heads into its second year of recession.” However, this is not true.
Looking at quarterly GDP data for Ecuador, we see a different picture.
The figure above shows seasonally adjusted real quarterly GDP, and real quarterly GDP growth. As can be seen, in the past two years Ecuador has had three quarters of positive growth. In the second and third quarters of 2016, GDP grew by 0.5 percent per quarter, or 2 percent at an annualized growth rate. The last quarter of 2016 posted quarterly growth of 1.8 percent, or over 7 percent at an annualized rate. In the first quarter of 2017, growth was slightly negative, with a quarterly GDP drop of 0.15 percent (0.6 percent at an annualized rate).
Looking at the year-over-year growth from the first quarter of 2016 to the first quarter of 2017, we find a positive growth rate of 2.6 percent.
Bloomberg’s reporting on Greece, for example, uses the standard procedures and definitions of the economics profession, including quarterly (seasonally adjusted) data and an accepted definition of recession. The standards of reporting for Ecuador should not be any different.
While it is unfortunate that the positive growth posted by Ecuadorian GDP in the last three quarters of 2016 did not extend to the first quarter of 2017, presenting Ecuador’s economy as being in a two-year recession is simply wrong.
In an article about Ecuador’s presidential transition that appeared in Bloomberg View, Mac Margolis claims that “Moreno takes over as Ecuador heads into its second year of recession.” However, this is not true.
Looking at quarterly GDP data for Ecuador, we see a different picture.
The figure above shows seasonally adjusted real quarterly GDP, and real quarterly GDP growth. As can be seen, in the past two years Ecuador has had three quarters of positive growth. In the second and third quarters of 2016, GDP grew by 0.5 percent per quarter, or 2 percent at an annualized growth rate. The last quarter of 2016 posted quarterly growth of 1.8 percent, or over 7 percent at an annualized rate. In the first quarter of 2017, growth was slightly negative, with a quarterly GDP drop of 0.15 percent (0.6 percent at an annualized rate).
Looking at the year-over-year growth from the first quarter of 2016 to the first quarter of 2017, we find a positive growth rate of 2.6 percent.
Bloomberg’s reporting on Greece, for example, uses the standard procedures and definitions of the economics profession, including quarterly (seasonally adjusted) data and an accepted definition of recession. The standards of reporting for Ecuador should not be any different.
While it is unfortunate that the positive growth posted by Ecuadorian GDP in the last three quarters of 2016 did not extend to the first quarter of 2017, presenting Ecuador’s economy as being in a two-year recession is simply wrong.
