Mexico’s president has defended his release of the purported income of a journalist who reported on the lease by the president’s son of a Houston mansion owned by an executive of a major U.S. corporation.
The journalist, Carlos Loret, reported January 27 that José Ramón López Beltrán, the son of Mexican President Andrés Manuel López Obrador, in 2019 and 2020 had rented a house valued at approximately $1 million that was owned by Keith Schilling, who was then an executive of Baker Hughes Co. Loret’s report followed an investigation by Mexican-U.S. news website Latinus and advocacy group Mexicans Against Corruption and Impunity.
López Obrador, who voluntarily took a 60 percent salary cut after his election in 2018, has often railed against corruption in Mexico. The president reacted sharply to the critical news report about his son. During a February 11 news conference, López Obrador claimed that Loret earned around MXN 35.2 million (approximately $1.7 million) in 2021, far more than López Obrador's own salary of MXN 2.01 million. “Do you think this is because he’s a high-flying, very intelligent journalist, a good writer?” the president said. “No! It’s because of his hatchet jobs.”
López Obrador said he received the information about Loret’s income from a person who is not part of the government. “I have about 50 million [people] who inform me,” he said, adding that he will ask the Tax Administration Service and Treasury to verify the data.
Loret tweeted February 11 that the president had backed himself into a corner. “He doesn't know how to escape the scandal of his son's house,” Loret said. “And today he slanders me again, and on top of that, he puts me at risk by revealing inflated and false amounts of supposed income. It is very serious. It's a crime.”
López Obrador presented a chart at the news conference claiming that Loret was paid MXN 11.8 million by Grupo Televisa S.A.B., a major media company, in 2021. The chart also indicated that the reporter earned MXN 9.2 million from broadcasting company Radiopolis, MXN 6.3 million from Latinus, MXN 4.5 million from the Universal newspaper, MXN 600,000 from the Washington Post, and MXN 2.8 million from other sources.
Loret said the president had used Treasury data to persecute him. “He says that in 2021 I earned millions from Televisa, where I stopped working in 2019,” the journalist said.
López Obrador addressed the controversy at his daily news conference February 14. “Why does this man earn so much?” he said. “Because the mafias in power pay him to attack me, to weaken us.”
López Obrador said transparency is crucial. “The one who owes nothing fears nothing,” he said. "How can we not make this information known if this man is dedicated to beating not only the government — not only the president — but also the transformative work that millions of Mexicans are carrying out to end Mexico's main problem: corruption.”
The president also denied any conflict of interest. “My sons don’t have any influence in this government,” he said. “We don’t give contracts to people who are recommended to us.”
In a February 13 tweet, López Beltrán’s wife, Carolyn Adams, said that while she had worked in Mexico’s energy sector, she never had any dealings with Baker Hughes or its executives. Adams, a U.S. citizen, said she used a licensed real estate agent to rent the house. “Everything was done under formal American rules and requirements,” she said.
Baker Hughes told Tax Notes that it has been operating in Mexico for more than 60 years. “Baker Hughes had no involvement in the alleged transaction,” the company said in a statement. “The property in question has never been owned or directly or indirectly managed by Baker Hughes. The house is a private property and, according to public records, belonged to a former employee who left the company in 2019. The former employee had no involvement in our operations in Mexico.”
Schilling was quoted in a February 5 Bloomberg article as saying that he had no prior knowledge of who rented his house and that the tenants paid market rent.
On February 9 a Houston-based lawyer representing some unnamed Baker Hughes shareholders wrote to the company asking that it investigate the connection between the company and the rental of the house to López Beltrán and his wife. “The optics and the timing of these facts are simply not good,” said the lawyer, Juan Carlos Luna. The lease creates "the perception of a possible conflict of interest and a potential scenario which could have crossed the line of the legal and ethical obligations of Baker Hughes,” he said.
López Obrador has often commented publicly about the tax affairs of corporations operating in Mexico. In June 2020 he said that while Toyota Motor Corp. was the latest multinational company to put its tax affairs into order, some Canadian mining companies had underpaid their liabilities. In May 2020 he disclosed that IBM’s local subsidiary paid MXN 669 million to settle its tax liabilities. He also discussed recent settlements with Walmart de México and Fomento Económico Mexicano SAB de CV, Coca-Cola’s largest bottler in Latin America.