⚖️ Mexican Legal Frameworks
Federal Penal Code
- Artículo 223 – Peculado (Embezzlement): Public officials who divert public funds for unauthorized purposes commit peculado. Directing funds to an NGO they themselves created fits this definition.
- Artículo 214 – Abuso de autoridad (Abuse of authority): Using official power to benefit a private entity (like their own NGO) can be prosecuted.
- Artículo 222 – Cohecho (Bribery): If funds are exchanged for political or personal benefit, this article applies.
- Ley General de Responsabilidades Administrativas (LGRA)
- Conflicto de interés: Politicians setting up and funding their own NGO is a textbook conflict of interest.
- Uso indebido de recursos públicos: Misuse of public resources is explicitly prohibited.
- Faltas graves de corruption: Includes diversion of resources, illicit enrichment, and improper contracting.
🌐 International & European Frameworks
FATF (Financial Action Task Force) Recommendations
NGOs are considered “at risk” for misuse in money laundering and terrorist financing. Routing funds abroad through a ghost NGO violates transparency and beneficial ownership disclosure requirements.
- United Nations Convention Against Corruption (UNCAC)
- Mexico and EU states are signatories. Articles on embezzlement, misappropriation, and diversion of property apply when public officials misuse funds.
- OECD Anti-Bribery Convention
- Criminalizes corruption involving public officials, including schemes that disguise financial flows through NGOs.
- EU Anti-Money Laundering Directives (AMLD 4, 5, 6)
- Require transparency in cross-border transfers and beneficial ownership of NGOs. A Mexican-registered NGO paying out in Europe without disclosure could breach these directives.
- European Anti-Fraud Office (OLAF)
- Investigates misuse of funds entering the EU. Even if the origin is Mexican, once funds are in Europe, OLAF can act if fraud or laundering is suspected.
📌 Similar Cases & Precedents
Mexico: Several scandals have involved “phantom NGOs” (ONGs fantasma) receiving public funds without real operations. For example, investigations by Animal Político and Mexicanos Contra la Corrupción exposed diversion of millions through fake NGOs.
Europe: OLAF has investigated NGOs misusing EU environmental and humanitarian funds, often for lobbying or private enrichment.
Global: FATF reports highlight NGOs as common laundering vehicles, especially when they present themselves as local but operate internationally.
✅ Summary
- In Mexico, this could be prosecuted as peculado (embezzlement), abuso de autoridad, and conflicto de interés.
- In Europe, it raises red flags under AML directives and could trigger OLAF investigations Internationally, it violates FATF standards and UNCAC provisions on corruption and diversion of public funds.