Global News

This article first appeared in Infobae on July 19, 2021.

Authorities in Mexico and the United States are investigating the U.S. firm WhiteWater Midstream for the alleged case of corruption in millionaire contracts with the Federal Electricity Commission (CFE), the Mexican state electricity company, which, in turn, warned that it will take legal action against several former officials for this case.

Last Friday, through a statement, the CFE assured that the contracts were delivered to WhiteWater between 2016 and 2017, in the last years of the administration of former President Enrique Peña Nieto, under suspicious circumstances given that the company was recently created and had no assets or experience in the industry.

“The contracts with this company are unfavorable and unbalanced, with leonine clauses and conditions such as CFE cannot terminate under any circumstances a gas contract for 15 years, cannot penalize the private company under situations of non-compliance in the supply, the amounts of CFE’s guarantees to the company are out of market and the gas volumes are increasing and without being linked to the needs with CFE’s generation plants,” the report states.

Likewise, the state-owned electric company added that it tried to initiate a process to renegotiate the conditions of the contracts, however, the company’s executives refused to reach an agreement.

Reuters news agency tried to contact WhiteWater’s spokespersons to find out their position, but was unsuccessful.

It should be noted that, according to the CFE, among the suspicious contracts is that of a gas pipeline in the United States for “billions of dollars” and for more than 20 years, which was assigned without a bidding process and without the approval of the Ministry of Finance.

“There is a gas pipeline contract in the United States, which was unnecessary for CFE’s purposes and needs, that was assigned without a transparent and competitive bidding process that guaranteed the best conditions for the Commission and the Mexican State,” the statement said.

An investigation by the journalistic platform for the Americas, CONNECTAS, called “The unknown winners of the energy reform in Mexico”, names as one of the main beneficiaries, precisely, the company WhiteWater.

Then they explain how Guillermo Turrent, who after 16 years in the United States, returned to Mexico in 2013 – in the six-year term of Peña Nieto – to join the CFE staff. In 2015 he became the director of CFE International, the CFE subsidiary in charge of managing negotiations with foreign companies, which, by the way, was so well protected legally in its creation, that it managed to leave it out of the responsibility of explaining its operations.

Guillermo Turrent is currently under investigation for signing the contracts that the CFE itself is now complaining about. According to CONNECTAS’ investigation, his relationship with the WhiteWater businessmen is far from being a mere coincidence.

And the fact is that he worked at Shell with the one who was the founder of WhiteWater Midstream in 2016, when those agreements were signed, named Matthew Calhoun. At the end of the 90s, the U.S. state of California experienced what Mexico experienced with its energy reform: they opened up to private initiative in search of lower prices for citizens.

But the opposite happened and in the early 2000s California suffered an energy crisis so serious that it triggered blackouts – with terrible losses in the millions of dollars – in cities such as San Diego and San Francisco. Shell, according to investigations, took advantage of the prices that were being imposed by the crisis to sell competitively. And the names of Turrent and Calhoun figured in the whole scheme, although they were not accused in it.

As CONNECTAS points out, after doing that in California, they again found themselves facing a newly liberalized state energy market: the Mexican one.