Mexico News Update. February 5, 2023.

In this Mexico News update, I have only translated the information published by Mexicans Against Corruption and Impunity (Mexicanos Contra la Corrupción y la Impunidad or MCCI), and from an article written by Salvador Garcia Soto, a columnist from El Universal news media services. Because of the completeness in the content of both notes, I did not generate further analysis of the content, as I commonly do in my Mexico News Updates.

The New Revelations of “The Grey House”

On the same day that the president’s son occupied “The Grey House” in Houston, Pemex’ office in that city signed a contract with a subsidiary of Baker Hughes; and in the subsequent weeks signed 7 more. New documents attained by Mexicans Against Corruption and Impunity (MCCI or Mexicanos Contra la Corrupción e Impunidad) contradict the version that the same company providing services for the petroleum industry disclosed a year ago in their Northamerican division (which was led by the owner of “The Grey House”), where they stated that they had not had business dealings with Mexico.

On August 16, 2019, Jose Ramon Lopez Beltran, and his wife Carolyn Adams occupied the house that was named “The Grey House.” Documents obtained by MCCI reveal that on that exact same date, coincidentally a subsidiary of Baker Hughes in the United States signed a contract with Pemex Procurement International (PPI), in their headquarters in Houston.

The unpublished documents reveal that in the following two months (between August 23 and October 23, 2019), PPI assigned seven other contracts to subsidiaries of Baker Hughes, which all together add up to 1 million 94 thousand dollars, equivalent to 20 million pesos. This amount is different to the contracts that had been revealed in 2022 by MCCI.

The assigning and signing of the new contracts was done in the United States, at the time when the owner of “The Grey House” was Keith Schilling; who was on of the presidents of Baker Hughes in Canada, and at the same time, Commercial and Sales Director in Houston, where the headquarters of Pemex Procurement International (PPI) is located, as revealed by the same executive in his LinkedIn profile.

In February of last year, after MCCI and LatinUS published the report on “The Grey House,” Baker Hughes denied that the division of its company in the United States –that had been led by Schilling– had had business dealings with Pemex.

“Mexico is not included in the North American region of Baker Hughes. Internally, the sales and operations in Mexico are organized within a separate entity named Latin America and South America” reported the company in a public statement on February 22, 2022.

Bob Perez, President of Baker Hughes in Mexico and Latin America discarded that there would be a conflict of interests by the fact that one of their executives (Schilling) may have been the owner of the house where the president’s son lived in.

“During his tenure in Baker Hughes, he (Schilling) worked under our North American group, and within Baker Hughes, Mexico is not under the North American group; Mexico is under our Latin American group,” he stated that same day.

Nevertheless, the new documents obtained by MCCI contradict the version of the company. In reviewing more than 200 files, it was found that Pemex Procurement International not only assigned and signed contracts in 2019 with the North American division of Baker Hughes, but they continued to do so in the following years.

During the review, it was found that between 2019 and 2021, PPI signed in Houston with Baker Hughes and its subsidiaries at least 11 contracts in an amount that surpasses 29 million (US) dollars, which is equivalent to around 600 million Mexican Pesos.

This information is partial, since Pemex has not acceded to reveal all the contracts of PPI.

A year ago, on January 27, 2022, MCCI and LatinUS published that in the second half of 2019 and part of 2020, the oldest son of the president (of Mexico) occupied a residence in an exclusive neighborhood in Oak Estates, on the Northside of Houston, which had as a peculiar characteristic a swimming pool that was 23 meters long.

The residence was owned by Keith Schilling, a high level executive of Baker Hughes, a company that at that time had contracts with the Government of Mexico, for 66 million (US) dollars, and that in the following three months was after the house was occupied, it attained contracts for 414 million (US) dollars more.

The case was reported to authorities both in Mexico and the United States, and both the Government (of Mexico), as well as the company and those involved, denied there was a conflict of interests.

Baker Hughes denied that its North America division had business dealing with Mexico.

From that disclaimer, MCCI requested via transparency petitions, a copy of the contracts assigned by PPI, the Pemex subsidiary in the United States, whose president is Carmelina Esquer, daughter of the Chief of Staff of the president (of Mexico), Alejandro Esquer.

Nevertheless, Carmelina Esquer –who also relocated to Houston– hid PPI’s contracts, as informed by MCCI on the past May 17.

MCCI presented a legal recourse challenging the denial (for the disclosure of the information), and Mexico’s Access to Information National Institute (Instituto Nacional de Acceso a la Información or INAI), solved that there was not a legal basis to hide the contracts, and therefore provide a public version of the documents.

Pemex has complied partially with the INAI’s orders, for in the past october it disclosed in a very meager way copies of the 200 contracts, out of the more than 500 reported, which have been issued by PPI within the current six year tenure (of the Government of Mexico).

Out of the 200 contracts disclosed, MCCI identified 11 corresponding to Baker Hughes subsidiaries, and 8 of them were issued between august and october 2019; period during which the oldest son of the president (of Mexico) occupied Schilling’s residence in Houston.

Five of the contracts issued by Pemex International in 2019, for the purchasing of parts, resources and repairs, supplies and repairs were issued in August and October 2019 to Dresser LLC, a subsidiary of Baker Hughes.

One of the contracts with Dresser LLC was signed on August 16, 2019; the same date in which the president (of Mexico)’s daughter in law has stated that she rented the house in Houston, at a cost of 5 thousand 600 (US) dollars per month (approximately 112 thousand Mexican Pesos).

Uno de los contratos con Dresser LLC fue firmado el 16 de agosto de 2019, el mismo día que la nuera del presidente ha dicho que rentó la casa en Houston a un precio de 5 mil 600 dólares mensuales (alrededor de 112 mil pesos).

Also, in 2019 PPI assigned three other contracts to Bently Nevada LLC, which in its website mentions that it is a Baker Hughes company.

In the contracts there is a description of the products and services paid by Dresser and Bently Nevada were for the areas of Pemex Transformación Industrial; among them, the refineries of Miguel Hidalgo, in Tula Hidalgo (Mexico), Lazaro Cardenas in Cadereyta, Nuevo Leon (Mexico), Ing. Antonio Dovalí Jaime, in Salina Cruz, Oaxaca (Mexico), as well as an intermediate distillate hydrodesulfurization plant.

In the partial information that was turned into MCCI, two contracts were assigned on July 23, 2021 to two subsidiaries of Baker Hughes, for 28 million (US) dollars.