By Dave Graham

 

MEXICO CITY (Reuters) - Mired in allegations of corruption, Mexico's ruling Institutional Revolutionary Party (PRI) has thrown its weight behind an untainted outsider in a bid to clean up its image and hang on to the presidency in elections next July.

 

But having never been a member of the party, former finance minister and PRI presidential hopeful Jose Antonio Meade faces a delicate balancing act persuading undecided voters he will cut out graft without alienating the grassroots support he needs to win.

 

It is proving to be a tough job.

 

The awkward symbiosis limits Meade's ability to play to the strengths that PRI grandees hope will overcome the accusations of embezzlement, fraud and vote buying that have plagued the party under President Enrique Pena Nieto.

 

Reliant on the PRI machinery to deliver votes, Meade must wrap himself in the party banner, while distancing his campaign from the failures of the outgoing government he also represents.

"He's between a rock and a hard place," said Andres Rozental, a former deputy Mexican foreign minister.

Pena Nieto is constitutionally barred from re-election, and the centrist PRI will not formally elect its candidate until Feb. 18. However, the party has lined up behind Meade, who held various cabinet posts across two opposing administrations before announcing his run late last month.

Meade, a technocrat with a sharp command of the minutiae of the economy, launched his campaign for the PRI candidacy in a straw sombrero festooned with red and green streamers in the poor southern town of San Juan Chamula on Dec. 14.

Meade acknowledged Pena Nieto in his speech, which called for a "secure and just Mexico." But he did not detail policies or directly address corruption. Like the president, he has said graft must be attacked by strengthening institutions.

In subsequent outings to rally the PRI faithful, he has continued to frame his vision in general terms - prompting expressions of dismay by some of his supporters.

"It's a typical PRI campaign," said one pro-Meade lawmaker, shaking his head, and speaking on condition of anonymity.

CORRUPTION CONUNDRUM

Polls show Meade has plenty of work to do.

A survey by polling firm Parametria published on Dec. 19 put him 11 percentage points behind leftist front-runner Andres Manuel Lopez Obrador, a former Mexico City mayor who has spent years railing against corruption and inequality.

Another survey, by pollster Mitofsky, showed this month that 57.4 percent of voters reject the PRI, up nearly seven points from October, and 17 points more than any other party.

In December 2011, the same point in the previous campaign, the PRI had a lead of about 17 points and only one in five voters rejected the party, according to Mitofsky data.

Serving in the cabinet for almost seven years running, Meade has sold himself as irreproachably honest and the safest pair of hands for the economy, painting Lopez Obrador and conservative rival Ricardo Anaya as risky bets for Mexico's stability.

However, his time in government has left the 48-year-old with a problematic legacy to defend.

Gang violence has worsened in the past couple of years, with murders hitting a record high in 2017. [L1N1ON0EQ]

Meanwhile the economy is growing at barely 2 percent annually, less than half the rate the government first targeted, inflation is near a 16-year high and the peso has depreciated by more than 34 percent against the dollar under Pena Nieto.

A study by the Pew Research Center in September identified crime and corruption as the top concerns for Mexicans.

As standard-bearer for an unpopular government, Meade has to present more compelling solutions to those problems than his rivals, said one senior official backing him.

"It was one of this government's biggest mistakes not to see the damage that corruption could do to its reputation," said the official, who also spoke on condition of anonymity.

The official said he believed Meade's policies could become clearer once he is formally invested as PRI candidate.

Meade's campaign did not reply to requests for comment.

Another government official closely following the campaign said that while Meade could recognize failings in the PRI, he could not be expected to attack the party. "You can't take the PRI's core vote for granted," the official said.

With some PRI governors, lawmakers and Pena Nieto facing allegations of corruption, it could be "suicidal" for Meade to push a tough line on graft, said Juan Pardinas, general director of the Mexican Institute for Competitiveness, a think tank.

"How could you (take) a strong stance against corruption, being the PRI candidate?," he asked. "It's like (taking) a strong stance against racism at a Ku Klux Klan rally."

(Reporting by Dave Graham; Editing by Steve Orlofsky)