The CFE suspects that a former Peña Nieto official opened a company as an ‘improper payment channel’ in the US

The Whitewater case It is advancing in courts in the United States, where the Mexican state company, the Federal Electricity Commission (CFE), has made two new requests for the presentation of evidence to two companies related to the case. Documents from federal courts in Texas, obtained by EL PAÍS, show the findings of a private investigator in the case against Guillermo Turrent and Javier Gutiérrez. CFE accuses former officials of the Enrique Peña Nieto Administration of awarding multi-million dollar contracts to Whitewater Midstream in violation of the Constitution.

To date, CFE has opened three cases asking the Justice in that country to force companies to deliver information, including correspondence and transactions. The CFE hopes the information confirms its suspicions that the former officials simulated an open tender, misled the Board of Directors to award costly and unnecessary contracts, and concealed their years-long personal relationship with Whitewater executives. The value of the contracts reaches hundreds of millions of dollars.

In Mexico, Turrent and Gutiérrez face open criminal proceedings before the Anti-Corruption Prosecutor of the Attorney General of the Republic (FGR). Gutierrez will have his next hearing in the Whitewater case on August 17. Findings by investigators in the US suggest that Gutiérrez may have played a central role in Whitewater’s dealings.

Three months before becoming deputy director of Modernization at the CFE in 2014, Gutiérrez founded a company in Houston, Texas, called JG Energy Consulting, according to court documents in that city. The address with which he registered this company coincides with the address of one of the founders of Whitewater, Matthew Calhoun. According to public records, this is also the same address that Turrent and Gutiérrez used in 2012 to register a company called Mexico Energy Advisors, which closed a few years later.

“CFE International seeks to use the subpoenas requested here to investigate whether JG Energy served as a conduit for improper payments to Gutiérrez,” says the document that the CFE subsidiary submitted to the court in Texas, which includes US tax returns showing that Gutierrez received more than $250,000 in income between 2015 and 2016.

“While Gutierrez was working with CFE and negotiating the Waha Connector agreements and the precursors to those agreements, he received substantial income through JG Energy. This raises the possibility that JG Energy may have played a role as a conduit for payments to Gutierrez associated with the improper award of the Waha Connector agreements to Whitewater Midstream,” the document says.

The Waha Connector pipeline was the first project negotiated between Whitewater and CFE International. The preliminary agreement between the companies was made on August 12, 2016, days before Gutiérrez asked two of the largest companies in the sector worldwide, Energy Transfer Partners and Kinder Morgan, for a proposal for the same project. A private investigator, who testified in court on behalf of the CFE, said that Gutiérrez “falsely” gave the impression that it was a competitive process before lawyers, since he sent the applications after the contract went to Whitewater. The private investigator has access to internal emails, public documents and private sources. “The Waha Connector pipeline appears to generate no apparent benefit to CFE or CFE International,” he said in his testimony.

An EL PAÍS investigation published last year exposed the links between Turrent, former director of the CFE International subsidiary, and Whitewater executives, Matthew Calhoun and Arlin Travis, with whom he worked in 2001 at the multinational Shell. Their relationship was documented in a case of alleged price gouging by the US energy regulator, the FERC, which is still open.

A second contract signed between CFE International commits the parastatal to buy a high volume of natural gas from Whitewater, between 15% and 20% of Mexico’s daily import demand. In US court documents, CFE claims to have evidence that Turrent and Gutiérrez presented inflated projections of Mexican natural gas demand to obtain approval to award Whitewater such a large contract. These contracts required approval from the CFE and CFE International boards.

“The gas that Whitewater supplies under the South Texas Supply Agreement is often unnecessary excess gas that CFE International must resell. Gutiérrez and Turrent justified this excessive contract before the boards of directors of CFE International and CFE by making misleading representations about the projected demand for Mexican natural gas,” the document says. In addition, the CFE assures that the Whitewater contracts were more expensive than the proposals of other companies with more experience in the sector.

Last month, the Secretary of Energy sent a letter to the regulators of the energy sector in Mexico, asking that private companies in the country be required to buy natural gas from CFE and Pemex, since, by contracts signed during the Peña Nieto Administration , the State has more gas than it can store, transport and convert into electricity. This excess of natural gas results in disbursements by the CFE equivalent to 10,000 million pesos a year, according to the official letter.

In April, EL PAÍS reported that the CFE initiated a request to show evidence to the company Antaeus Group, owned by Calhoun. Since then, the CFE has made similar requests for JG Energy and Travis’ company Arbor Glen. In documents provided to the court to support the request, CFE alleges that Travis worked simultaneously as a consultant for CFE International and Whitewater.

“Evidence indicates that Travis, as a consultant to Arbor Glen, drafted both CFE International’s Request for Proposals for the Waha Supply Agreement and Whitewater Midstream’s final winning bid,” the document says. This “shows that Arbor Glen worked on both sides of the deal.”

Internal emails indicate that, according to the consulting services agreement signed in 2016, the CFE agreed to pay Travis $6,000 for the first 20 hours of work per month. In addition, under the contract, Travis would receive a “success bonus” of between $400,000 and $500,000 for closing a deal, a fee he negotiated directly with Turrent.

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