Let's apply the law : it's time to put an end to official lip service.

Finance Secretary Francisco Gil Diaz may believe his own words when, in a letter to the Financial Times, he stated Mexico has modern securities laws and applies them rigorously. I am not sure anybody else believes this.

The FT recently ran a story ridiculing Mexico's record in this regard, using as its main example billionaire Ricardo Salinas Pliego. The owner of TV Azteca, Unefon and Elektra is under investigation by U.S. authorities over a nifty operation involving cellular operator Unefon's debt.

Together with fellow gazillionaire Moises Saba, Salinas Pliego bought Unefon's debt at a knockdown price just a short while before the company received a windfall from selling frequency that enabled it to pay the debt in full. He personally netted US$109 million from the operation, a sum many would argue he should have shared with his sheep-like shareholders. The question is did he know this windfall was coming? He says he didn't. But neither did he tell anyone he had bought the debt and then sold it on.

This was in 2003. We would never have known about it but for the Sarbanes-Oxley Act passed in the United States following the recent financial scandals there. His own lawyers handed over details of the operation, fearful they would be liable if they didn't.

It is now 14 months since this became public knowledge and so far the Mexicans have done nothing about it despite proceedings in the United States that could lead to a fine and being barred from serving on the board of any listed company.

Just three months ago, the National Banking and Securities Commission (CNBV) here started its own investigation. This is what Gil Diaz is defending.

Nobody is holding their breath or expects Salinas Pliego to have his belt and shoelaces taken from him before being cast into a dungeon. And that's a pity. I am not saying that he should go to jail, but what saddens me is that he is untouchable.

If anyone wants to understand why the free market reforms of the last 15 years have come to very little for most people while making a few robber barons wealthy, this is a good example of how Mexico works. From telecoms to cement to bread, the establishment has shown over and over again that it will protect its own--especially from competition, but often from legal proceedings as well.

How many bankers went to jail after the 1995 crisis when shady dealings came to light at every bank the government was forced to take over? And we're still paying the US$100 billion-plus bill on that one.

This is oligarchic behavior. Gil Diaz defends the laws, but most of us are tired of hearing how "the law will be applied down to the last letter." We'd rather hear about how it has been applied.

There is much rhetoric about how the government's main priority is the poor, but it ends up doing little for them beyond minimal handouts. It occurred to me the other day that, while Mexico was happy under Nafta to protect industries like oil and telecoms, it has thrown farmers to the wolves.

I had never thought about it like that, but now it seems they may have a point. It would be easier to defend government policies if there was any kind of fairness to them.

For example, the one thing missing from the finance secretary's letter was a single example of someone being charged and convicted under the financial laws.

But then maybe there's just no insider trading on the Mexican stock market and the billionaires that run the companies are assiduously looking out for their minority shareholders.

John Moody has spent 10 years covering Mexico for a variety of international news organizations. He now works as a freelance consultant in the private sector and for NGOs. He can be reached at john.moody@mac.com