Corruption Accusations Fly in Mexico's Final Presidential Debate

(Bloomberg) -- Mexico’s presidential candidates traded corruption accusations in a third and final debate that is unlikely to erode the front-runner position of leftist Andres Manuel Lopez Obrador ahead of the July 1 vote.

Lopez Obrador’s top two rivals painted the former Mexico City mayor as someone who has favored friends for government infrastructure contracts and whose ideas about economic self-sufficiency have failed. Meanwhile, Lopez Obrador suggested that his challengers are part of a corruption epidemic, "a cancer destroying Mexico," that only he can cure.

With backing from 51 percent of voters, Lopez Obrador enjoys roughly double the support of Ricardo Anaya, candidate of the nation’s conservative party, and of Jose Antonio Meade, a former finance minister to President Enrique Pena Nieto, according to Bloomberg’s Poll Tracker. While Anaya performed well on Tuesday, Lopez Obrador has maintained the solid lead that he built ahead of the first debate in April.

"It all seemed to be a game of who is more or less corrupt," said Valeria Moy, director of the think tank "Mexico, Como Vamos" and an economist at the nation’s Autonomous Institute of Technology, a private university. "In that regard, AMLO seems to be made of Teflon" because accusations haven’t stuck to him, she said.

During the debate late on Tuesday, Lopez Obrador said that he plans to solve Mexico’s economic problems by ending graft, which he estimates at as much as 500 billion pesos ($24 billion) annually. He promised to use those savings to boost social spending without raising taxes or taking on more debt.

Mexico is currently renegotiating the North American Free Trade Agreement after Donald Trump’s threat to withdraw, and Lopez Obrador said that, if the deal ends, it wouldn’t be a fatal blow because the nation has many strengths.

Anaya accused Lopez Obrador of favoritism that benefited a firm he says is the candidate’s preferred government contractor. Lopez Obrador retorted that he’s not corrupt like Anaya.

Meade attacked Anaya after the emergence of a video last week suggesting that he received elicit campaign contributions from businessmen who expected favors. Anaya has repeatedly denied any wrongdoing. Anaya said Meade is implicated in a corruption scandal involving construction giant Odebrecht that has helped bring down governments in Peru and Brazil.

Some of Lopez Obrador’s proposals have alarmed investors, including his pledges to consider canceling the construction of a $13 billion new airport for Mexico City and to examine oil-exploration and production contracts for signs of graft. He’s a long-time opponent of the energy-industry opening passed under Pena Nieto.

Mexican assets have been battered as the election draws closer. This month, the peso is down the second-most among 24 emerging market currencies tracked by Bloomberg, while credit risk, as reflected in default swaps, is the highest since Trump’s inauguration.

Still, part of Lopez Obrador’s popularity is explained by voter disillusion with insufficient economic and social progress in two decades of PRI and PAN rule and since Nafta took effect in 1994. Record homicides and rising public perception of corruption under the PRI have added to his appeal.

"Lopez Obrador goes to the debates basically to defend his advantage, and he did it again," said Carlos Bravo, a political scientist at Mexico City’s Center for Economic Research and Teaching, said on Tuesday night. "He has been able to capture the social outrage and place himself within a historical trajectory of Mexico, which the other candidates haven’t been able to do. For many people, he represents hope."

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