Jan 30, 2012

Mexico Politics: Veracruz PGR requests the return of seized 25 million pesos

Mexico has a large "informal economy," up to 40% of the total, which is composed of street vendors and small enterprizes that operate outside the formal structure. In the formal economy, where businesses are registered with the government, taxes are paid and, in return, government social benefits such as health care are provided to employees. In the informal, cash economy, these taxes are avoided. By far, this Veracruz transaction is the biggest "informal" transaction we have heard of. 

CNN Mexico: "Two officials of the government of Veracruz who were carrying 25 million pesos in cash were arrested by Federal Police last Friday at the airport in Toluca, as confirmed by the Ministry of Finance of the state government. The federal Attorney General's Office (PGR) seized the cash, so on Monday the government of Veracruz reported that it is requesting the return of those funds.

According to the state government, the money was to be used to pay for "various events to be held in coming months," referring to the three busiest festivals in Veracruz already in process of being organized. This Tuesday the celebration of Candelaria Tlacotalpan begins, February 14 is the Veracruz Carnival and on March 17 is the Tajin Summit Conference. The state expects two and a half million tourists to attend the three festivals.

In the statement, the government said that the names of "collaborators" arrested are Said Zepeda and Miguel Morales, who were commissioned to carry the millions in cash. Both have been released. The 25 million "was sent to Mexico City" for hiring artists, assembly of scenery and production of promotional materials, said the finance secretary of the government of Veracruz, Tomas Ruiz Gonzalez. Of the total amount, two million would go to La Candelaria, 15 million for Carnival and eight million for the Tajin Summit.

In the statement the state authorities do not explain why these resources were sent in cash and not through a bank transaction. Tomas Ruiz explained that the transaction was justified according to the Financial Code of the State of Veracruz. However, he said the state government "will review the legal procedures to avoid such situations." "No crime was committed by the transportation of cash amounts, whose origin and destination are fully accredited by the appropriate authority," says the official announcement." Spanish original

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