Over the weekend, Mexico’s Internal Revenue Service (SAT) rescinded tax permits for more than 100 NGOs, terminating their ability to receive donations and qualify for tax exemptions. Many have a path to restoring their NGO status, but around a dozen were liquidated outright for failing to comply with fiscal rules. These moves form part of a broad crackdown on waste and foreign interference in Mexico by the ruling left-wing Morena party under President Claudia Sheinbaum and her predecessor Andrés Manuel López Obrador (AMLO).
The Mexican opposition and its allies in the international press have decried these actions as proof of the country’s alleged “democratic backsliding.” In reality, opposition-aligned NGOs like Mexicanos Contra La Corrupción y la Impunidad (MCCI) form part of an artificial civil society complex that was funded, in part, by the now defunct USAID. Upon assuming office in 2018, one of AMLO’s first initiatives was to restore state control over functions that previous governments had devolved to NGOs and private companies. His administration slashed over $300 million of state support for NGOs and reclassified all contractors as state employees, effectively ending their role in government.
Since 2013, Mexico’s Anti-Money Laundering Statutehas required NGOs that receive more than $7,000 in donations to reveal the identities of individual donors; those that receive over $15,000 must report individual transactions to authorities. These restrictions were geared towards combating organized crime amid the country’s ongoing drug war. Before Morena came to power, the country’s tax authority exercised loose oversight of foreign funding for NGOs, much as it allowed corporations and the wealthy to skirt their tax obligations.
AMLO’s and Sheinbaum’s crackdowns on tax evasion and strict enforcement of NGO regulations have prompted figures like MCCI founder Claudio X. González to accuse Morena of running a “narcodictatorship.” This claim has been picked up north of the border by Republicans and many liberals, despite the fact that the Washington-aligned PRI and PAN governments that preceded Morena are known to have had deep cartel ties. But the average Mexican will tell you that the cartels are only one powerful interest group exerting a corrupting influence on the nation’s politics, and foreign-backed NGOs are another.