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### Viewing cable 06MEXICO2711, MEXICAN CONGRESS DEMONSTRATES INDEPENDENCE, NOT

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06MEXICO2711 | 2006-05-20 00:39 | 2011-04-05 00:30 | CONFIDENTIAL | Embassy Mexico
Appears in these articles: http://wikileaks.jornada.com.mx/notas/rumbo-a-los-pinos-felipe-calderon-ofrecio-a-eu-ser-un-socio-mas-activo/

`

    VZCZCXYZ0004
    RR RUEHWEB

    DE RUEHME #2711/01 1400039
    ZNY CCCCC ZZH
    R 200039Z MAY 06
    FM AMEMBASSY MEXICO
    TO RUEHC/SECSTATE WASHDC 0914
    INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
    RUEHCV/AMEMBASSY CARACAS 1179
    RHEHNSC/NSC WASHDC

` `

    64799
    2006-05-20 00:39:00
    06MEXICO2711
    Embassy Mexico
    CONFIDENTIAL
    06MEXICO149|06MEXICO1716|06MEXICO2367
    VZCZCXYZ0004
    RR RUEHWEB

    DE RUEHME #2711/01 1400039
    ZNY CCCCC ZZH
    R 200039Z MAY 06
    FM AMEMBASSY MEXICO
    TO RUEHC/SECSTATE WASHDC 0914
    INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
    RUEHCV/AMEMBASSY CARACAS 1179
    RHEHNSC/NSC WASHDC

    TAGS: PGOV PINR PREL MX
    C O N F I D E N T I A L MEXICO 002711

    SIPDIS

    SIPDIS

    E.O. 12958: DECL: 05/11/2016
    TAGS: PGOV PINR PREL MX
    SUBJECT: MEXICAN CONGRESS DEMONSTRATES INDEPENDENCE, NOT
    EFFICIENCY
    REF: A. A) MEXICO 1716 AND PREVIOUS B) MEXICO 149
         ¶B. C) MEXICO 2367 AND PREVIOUS

    Classified By: POLITICAL MINISTER-COUNSELOR LESLIE A. BASSETT, REASONS:
     1.4(B/D).

    ¶1. (C)  SUMMARY:  The final session of the 59th Congress
    ended on April 28, with the modest results that have become
    its hallmark under a divided government.  Some, including
    Eduardo Perez Motta, head of the Federal Competition
    Commission (CFC) believe that the new competitiveness law
    will become the most significant law passed as time
    progresses and its effects are visible while others have been
    caught in the hype of the Radio and Television Law.  The
    Congress also passed bills to strengthen the protection of
    personal information, to regulate Mexico's enormous private
    security industry.  Opposition members of Congress continued
    to show strong interest in monitoring the Fox
    Administration's stewardship of foreign policy, a legislative
    prerogative that has gained significance in the era of
    divided government.  Unlike in the days of one party rule,
    legislators themselves now generate the great majority of
    legislative initiatives, with bills introduced by the
    executive becoming an increasingly small minority.  And while
    approximately 75% of the bills introduced by President Fox
    were approved, these were primarily relatively minor bills;
    the Congress approved virtually none of the pending
    structural reforms that formed the basis of President Fox's
    program of government and that both the PAN and PRI agree are
    necessary.  END SUMMARY.

    Law Strengthens CFC Powers to International Standards
    --------------------------------------------- --------

    ¶2. (U) Despite significant opposition to proposed changes to
    the competition law, CFC negotiated an agreement with the CCE
    (Mexican Business Coordination Council, an umbrella group of
    trade associations).  This agreement became the basis for the
    new law passed April 25 in the Chamber of Deputies and April
    27 by the Senate.  The law is expected to be signed by
    President Fox and published in the near future (upcoming
    septel).  The new law puts the CFC's authority on par with
    similar organizations in other countries, and allows the CFC
    to emit rulings over other regulatory agencies in Mexico,
    thus strengthening the relationship between the judiciary and
    the CFC.  Although companies will still be able to appeal
    rulings, the time and cost involved will increase.

    ¶3.  (SBU) CFC President Eduardo Perez Motta told Econ
    Minscouns and Econoff in a May 11 meeting that he believes
    the law will have significant long term effects including a
    decline in the number of appeals filed.  He predicts Telmex
    and other private monopolies will have to change their
    business practices to avoid the penalties imposed by the new
    law.  Sanctions under the law can be as high as 1,500,000
    times the minimum salary in Mexico City or ten percent of the
    annual revenue of a company.  Public monopolies, such as
    PEMEX and CFE (Federal Electric Commission) will also be
    regulated under the new competition law. Although they cannot
    be divided or sold, the law allows them to be sanctioned for
    acting as a monopoly in areas that are not of strategic
    importance (such as PEMEX's actions in gas distribution
    according to Perez Motta).

    Law on Radio and Television Steals the Show
    -------------------------------------------

    ¶4.  (SBU) The Federal Law on Radio and Television ("media
    law") was the most controversial bill enacted during the
    current session.  The media law, reportedly drafted largely
    by media giant Televisa, will give the Federal Communications
    Commission (COFETEL) regulatory and oversight authority over
    broadcasting issues.  However it also provides, inter alia,
    that broadcasting frequencies henceforth will be allocated by
    public auction rather than by discretionary concession.  Much
    of the controversy surrounding the law is that Congress, in
    its effort to quickly pass the legislation, left several
    loopholes and grey areas leading many to question how parts
    of the new law will be interpreted, applied, and enforced in
    the future.  One question is whether existing broadcasters
    will be able to keep and utilize  highly valuable digital
    spectrum freed up by Mexico,s digitalization process.
    Current broadcasters could have a significant advantage over
    new market entrants and competitors who have to pay for their
    spectrum.  In addition, bidders will not have to wait for an
    opinion from CFC before submitting their bids in order to
    prevent media concentration.  Given this, and the prohibition
    on foreign investment, dominant companies will have a
    distinct advantage in winning tenders.

    ¶5.  (SBU) While we have already reported in detail on the
    substance of the law (ref A), a closer examination of the
    circumstances of its passage sheds light on the influence
    wielded in the Congress by powerful private interests.
    Although the average bill spends approximately six months in
    each house of Congress before winning approval, the media law
    was unanimously approved by the lower house last December in
    only 10 days (ref B).  Although there was lively debate in
    the Senate, the bill passed  on March 30 by a two-to-one
    margin primarily due to sponsoring Senators, promises to
    close the gaps with a follow-up bill which never passed.
    Weeks later, a group of 47 senators submitted a petition  to
    the Supreme Court of Justice asking the court to find the law
    unconstitutional.   Many Deputies and Senators only became
    aware of the details of the legislation after its passage
    provoked strong public outcry; PAN Senators Cesar Juaregui
    and Jesus Galvan told poloff they suspected that many of
    their colleagues had not even read the complicated bill
    before voting on it while many Deputies publicly admitted
    that they hadn,t read it.  Juaregui intimated that the party
    leadership sought to push the legislation through as quickly
    as possible to minimize opposition.

    Politics Over Principle
    -----------------------

    ¶6.  (C) In fact, Senator Juaregui said that his party's
    support for the law -- and presumably that of the PRI -- was
    based largely on the fear that Televisa would carry through
    on its implied threat to accord poor campaign coverage to
    those opposing the law.  Describing the law as a dirty trick
    ("porqueria"), Juaregui claimed that when PAN legislators had
    blocked quorum during a scheduled debate on the law, Televisa
    pulled all of Felipe Calderon's advertisements from the air
    that very same night, in a clear signal of how it would react
    should the bill not pass.  Juaregui noted that he was one of
    the few members of his party who in the end withstood
    pressure from the party leadership and voted his conscience,
    against the law.  In retribution, Juaregui alleges the PAN
    leadership removed him, a high-ranking member of his party's
    legislative faction, from the party's electoral list for the
    Chamber of Deputies in the July 2 election.  Juaregui further
    claimed that President Fox himself was among those in the PAN
    who insisted that the party's legislative faction vote in
    favor of the bill, for fear of the electoral consequences of
    their failure to do so.

    Hints of Economic Nationalism
    -----------------------------

    ¶7.  (SBU) Perhaps not surprising in an election year, a
    number of bills were introduced that were redolent of
    economic nationalism.  For example, the Senate passed a bill
    that would give Mexicans preference over foreigners in
    certain bids for public contracts; it also passed a bill that
    would further restrict foreign investment which was later
    rejected by committee in the lower house.  Both bills can be
    brought up during the new session in September, but
    significant changes would be needed to the proposed foreign
    investment legislation since the lower house committee filed
    an official rejection to the proposed legislation. Bills
    seeking to strengthen state control over energy resources
    were also introduced.

    Other Legislative Advances...and Setbacks
    -----------------------------------------

    ¶8.  (SBU) PRI Senator Carlos Chaurand, one of the Senate's
    three vice presidents, told us that aside from the media law,
    he considered Congress's other major accomplishments this
    session to include (i) a law regulating private security
    companies, (ii) legislation protecting personal information
    (still in committee at the lower house), (iii) legislation
    strengthening guarantees of gender equality, and (iv)
    legislation seeking to strengthen Mexico's law on
    competition.

    ¶9.  (SBU) Notwithstanding these modest achievements, Chuarand
    conceded that this final session of the 59th Congress had
    made no progress on the fundamental structural reforms that
    had been a cornerstone of the Fox Administration's
    legislative program, including fiscal reform, labor reform,
    justice sector and public security reform, and key energy
    sector reforms, to name but the most prominent.  Moreover,
    the session left several significant loose ends:  a law on
    federalism, seeking to return more federal revenues to the
    states, was passed by the Senate but remains pending in the
    lower house.  Meanwhile, a highly controversial bill on drugs
    also remains in limbo (ref C).  Although it has been passed
    by both houses of Congress, President Fox has indicated he

    has reservations about the bill, particularly the provision
    that effectively decriminalizes possession of small
    quantities of drugs for personal use.

    Senate Continues to Press Its Foreign Policy Prerogatives
    --------------------------------------------- ------------

    ¶10.  (SBU)  As one would expect in era of divided government,
    the Congress sought to enforce the Senate's constitutional
    right to "analyze" the Fox Administration's foreign policy.
    For example, the Chamber of Deputies approved a bill
    requiring Senate approval for any decision by the President
    to amend, modify, terminate or withdraw reservations of
    international treaties.  The Senate showed a particular
    interest in monitoring the GOM's conduct of U.S.-Mexican
    relations: it requested Foreign Secretary Derbez to testify
    on the results of the March 2006 Cancun summit and on the
    Partnership for Security and Prosperity.  The Senate
    considered a number of measures related to migration,
    approving a document entitled "Mexico Facing the Phenomena of
    Immigration" which for the first time recognized Mexico's
    "shared responsibility" for the problem of migration.  Both
    houses of Congress enacted resolutions expressing support for
    migrants demonstrating in the U.S.

    A Look at Legislative Trends
    ----------------------------

    ¶11.  (U) Analyzing the just-concluded legislative session, a
    recent article in Reforma identified several key trends:

    -- (U) Recent legislative sessions have witnessed a huge
    growth in the number of bills introduced by legislators, as
    opposed to by the executive.  Whereas legislation initiated
    by the President accounted for 22% of all legislation
    introduced into the 56th Congress (1994-96), the last session
    in which the PRI enjoyed an absolute majority, legislation
    introduced by the executive branch in the 59th Congress
    accounted for less than 2% of all legislation introduced.
    The overall number of bills introduced rose dramatically from
    250 in the 56th Congress to 2388 in the 59th Congress.

    -- (SBU) In absolute terms, the number of bills introduced by
    the Fox Administration declined one third from the first
    congressional session of its sexenio (2000-03), in which it
    introduced 63 bills, to the second session of its sexenio
    (2003-06), in which it introduced 42 bills.  Strikingly, the
    Administration submitted no bills whatsoever in last fall's
    session, suggesting either that it had run out of new
    initiatives, or that it had given up on a divided Congress
    suffering from gridlock.

    -- (U) Given the explosion in the number of bills introduced,
    the percentage of bills passed into law declined from 43% in
    the 56th Congress to 21% in the 59th Congress.  Nevertheless,
    in absolute terms, the number of bills approved increased
    nearly five-fold from the 56th to the 59th Congress, from 108
    to 513.

    -- (U) The percentage of bills initiated by the executive
    that were passed into law declined from 97% in the days of
    PRI hegemony to 75% in the most recent session.  However,
    while a strong majority of Fox's initiatives were enacted,
    these largely consisted of routine measures; as noted major
    reform bills remain pending.

    Comment:

    ¶12.  (C)  While some have suggested a special session of
    congress could still convene to finish outstanding business,
    electoral realities make it highly unlikely.  The lack of
    legislative progress made in Congress over this sexenio is
    perhaps most tellingly conveyed by the almost frantic public
    service ads being run by both the Chamber of Deputies and the
    Senate, assuring Mexicans that the Congress is working for
    them.  One of the questions most frequently asked of the
    current crop of presidential aspirants -- how will you work
    with Congress?  This will be one of the fundamental
    challenges of the incoming Administration.

    Visit Mexico City's Classified Web Site at
    http://www.state.sgov.gov/p/wha/mexicocity

    KELLY

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