Mexico City — Luis Alfonso Sanchez Contreras searched the capital's trendy Condesa neighborhood for two years to find the right spot for a pasta restaurant. So the entrepreneur wasn't about to let a spaghetti-like tangle of red tape come between him and his dream.
He registered his business with tax authorities. He got permits to remodel his restaurant's interior. He asked permission to set up sidewalk tables. He won approval to install a tank of natural gas.
"I wanted to do everything by the book," said Sanchez, a bespectacled 44-year-old former bank manager.
So when local officials solicited an under-the-table payment of $1,350 to speed approval of his business operating license, Sanchez said, he balked. More than five months later, authorities still haven't granted him permission to open. Sanchez's bills are mounting. But he refuses to pony up.
"It just perpetuates this rotten system," said Sanchez, who has sunk $70,000 into the venture. "They are public servants. Their job is to serve the people, not to enrich themselves."
Officials in the permit office of Sanchez's borough of Cuauhtemoc declined several requests for an interview. Nor would they respond to his allegations that they had hit him up for a bribe.
Corruption remains a huge obstacle to Mexico's advancement. It is a hidden tax that stifles job creation, retards economic growth, erodes respect for law and order, and poisons citizens' trust in their institutions.
To be sure, corruption is a global phenomenon plaguing rich nations as well as poor ones. Witness the billions in waste and fraud that have accompanied federal payouts from Hurricane Katrina in the United States.
But in Mexico, it is an ongoing disaster. Mexican officials have estimated that as much as 9% of Mexico's gross domestic product is siphoned off annually to corruption. In 2005 that would have amounted to $69 billion, or more than the nation spends on education and defense combined.
One of President Vicente Fox's first acts upon taking office in late 2000 was to create a Cabinet-level position for an anti-corruption czar. A landmark transparency law was implemented under his watch to give average citizens more access to public records.
Yet election authorities in 2003 slapped nearly $50 million in fines on Fox's Alliance for Change, the political coalition that helped get him elected, for campaign finance violations that included failing to disclose millions in donations and accepting money from prohibited sources. The scandal tarnished his image as the maverick who was going to clean up Mexican politics.
Whoever succeeds him as president this December has his work cut out for him. Corruption in Mexico remains endemic and takes myriad forms, including kickbacks on government contracts, funds looted from social programs and drug money that has compromised courts, cops and political candidates. One out of every 5 businesses in Mexico admits to making "extra-official" payments to win public contracts, speed government paperwork or skirt regulations, according to a 2005 report by the Center for Economic Studies of the Private Sector in Mexico City.
The average Mexican's most frequent brush with the system is \o7la mordida, \f7or "the bite." Those are the small bribes, "tips" and other extracurricular handouts that public servants and others squeeze out of the citizenry to perform routine functions.
Last year more than 1 in 10 transactions for basic public services involved an under-the-table payment, according to Transparencia Mexicana, the Mexican chapter of the global anti-corruption group Transparency International.
Trying to keep the city tow-truck driver from hauling your car away? Depending on how affluent the neighborhood, how fancy your wheels and how well you haggle, a quick 20 bucks can get you off the hook in Mexico City. Want your garbage collected? Some municipal sanitation workers won't touch your table scraps without a weekly "tip." Need a copy of that public document quickly? Many reason that it's better to pay up than miss a deadline.
In all, Transparencia Mexicana estimates that Mexicans in 2005 paid out nearly $2 billion to public servants in more than 115 million acts of corruption to settle traffic tickets, obtain driver's licenses, hasten building permits and the like. That's equal to the entire 2006 budget of the National Autonomous University of Mexico, the country's largest seat of higher learning.
That $2 billion "could have gone to private investment, opening new businesses and creating new jobs," said Eduardo Bohorquez, director of Transparencia Mexicana. "It creates a barrier to development."
The trend has worsened since 2003, when the nonprofit group calculated that only about 1 in 12 transactions involved such payoffs. In international rankings, businesspeople give communist Cuba better marks than Mexico when it comes to perceived corruption.
