When Public Money Disappears

When Public Money Disappears: 

Example Case in Simple Terms

Picture this: politicians promise to spend public money to protect animals in Querétaro. They set up what looks like a local charity, but in reality it’s just a fake organization they control. Instead of helping animals, the money is quietly sent overseas to Europe. On the surface everything looks official, but behind the scenes the funds are being siphoned away. This kind of scheme shows how easily public resources can be misused — and why it’s so important for citizens and whistleblowers to speak up when they see something suspicious.

Situation Overview

• Politicians in Querétaro created a ghost NGO years ago.

• Public funds intended for animal protection are diverted to this NGO.

• The NGO appears Mexican but operates in Europe, where funds and donations are paid out.

• This undermines local animal welfare and raises corruption and money laundering concerns.

Key Issues Identified

• Governance & Accountability: Politicians funding their own shell NGO = conflict of interest.

• Impact on Animal Protection: Local animals and genuine NGOs lose support.

• Cross-Border Financial Risks: Funds routed abroad without transparency → possible laundering/tax evasion.

• Ethical & Political Implications: Misrepresentation erodes trust in government and NGOs.

Legal Frameworks Potentially Breached

Legal Frameworks Mexico

• Código Penal Federal

• Art. 223 – Peculado (embezzlement of public funds).

• Art. 214 – Abuso de autoridad (abuse of authority).

• Art. 222 – Cohecho (bribery).

• Ley General de Responsabilidades Administrativas (LGRA)

• Conflict of interest.

• Misuse of public resources.

• Serious corruption offenses (diversion of resources, illicit enrichment).

Legal Frameworks International / EU

• FATF Recommendations: NGOs flagged as vulnerable to laundering.

• UNCAC (Art. 33): Protection of whistleblowers; prohibition of diversion of public funds.

• OECD Anti-Bribery Convention: Criminalizes corruption involving public officials.

• EU AML Directives (4–6): Require transparency in cross-border NGO transfers.

• OLAF (EU Anti-Fraud Office): Investigates misuse of funds entering Europe.

Informant Protection Requirements

• Confidentiality & Anonymity: Identities must be safeguarded.

• Non-Retaliation: Legal prohibition of dismissal, harassment, or intimidation.

• Secure Reporting Channels: Independent hotlines and anti-corruption agencies.

• Practical Measures: Physical protection, employment safeguards, psychological and financial support.

Informant Protection: Institutions in Mexico

• Secretaría de la Función Pública (SFP) – administrative oversight.

• Fiscalía General de la República (FGR) – criminal prosecution.

• Sistema Nacional Anticorrupción (SNA) – coordination.

• INAI – confidentiality and data protection.

• SEGOB Protection Mechanism – security for high-risk informants.

Red Flags in This Case

• Politicians created and control the NGO.

• Funds diverted abroad without transparency.

• NGO misrepresents itself as local while operating in Europe.

• Citizens misled about the true destination of public resources.

✅ Summary:

This case combines domestic corruption (peculado, conflict of interest) with international financial law breaches (AML, fraud, misrepresentation). Protecting informants is legally mandated under Mexican law and UNCAC, with multiple institutions responsible for ensuring safety and confidentiality.