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In December 2009, demonstrators in Chiapas protested against the killing of anti-mining activist Mariano Abarca Roblero, who demanded the closing of Blackfire’s mine.

The RCMP has raided the office of a Canadian mining company in Calgary alleging in an affidavit that the company funnelled bribes into the personal bank account of a small-town Mexican mayor to ensure protection from anti-mining protesters.

On July 20, a team of Mounties executed a search warrant on the office of Blackfire Exploration Ltd., a privately owned junior whose operations in the southern Mexican state of Chiapas have been embattled since 2009, when a vocal opponent of its barite mine was murdered in a drive-by shooting.

The company has not been charged with a crime and says it is co-operating fully with the RCMP investigation, which is part of a broader effort by the Mounties to enforce Canada's Corruption of Foreign Public Officials Act – the law that forbids the payment of bribes abroad.

In a sworn statement in support of the search warrant application, Constable Terri Lynn Batycki alleges the company illegally paid a local mayor, Julio Cesar Velazquez Calderon, about $19,300 (CDN) "to keep the peace and prevent local members of the community from taking up arms against the mine."

When the mayor's requests became more exorbitant and sleazy – including demands for airline tickets and a "sexual night" with one-time Playboy model Niurka Marcos – the company complained to the state government that they were being extorted, Constable Batycki alleges.

In a statement, Blackfire said it never knowingly paid bribes to anyone. The company, which began mining in Mexico in 2008, explained that it was under the impression that the thousands of dollars it transferred were for the benefit of the citizens of the small town of Chicomuselo, destined for its fair and other public works.

"When we became aware that funds were possibly used for other purposes, we took immediate steps to stop payments..." the statement said. "We expressed our deep concern that contributions intended for the public were not being used accordingly."

Relying on the company's banking records, which were obtained through judicially approved production orders, as well as documents from Mexico, Constable Batycki alleges that Blackfire's Mexican subsidiary regularly transferred payments, month-by-month, directly into Mayor Calderon's personal bank account.

However, it was not allegations of bribery that first brought Blackfire under the glare of public scrutiny. In 2009, when the mayor stopped supporting the mine, protesters took over the site. By November, tensions were high, and three men – a Blackfire employee, as well as a former employee, and one-time contractor – were arrested for the shooting death of anti-mining activist Mariano Abarca Roblero.

Mr. Abarca's murder is not being investigated by the Mounties and Blackfire has condemned his killing, but his slaying prompted several social justice organizations, such as MiningWatch Canada, to travel to Mexico and encourage the RCMP to probe allegations of corruption.

Alexandra Wrage, whose non-profit company TRACE International provides training to companies and lobbyists on how to comply with anti-bribery laws, said that the allegations about Mayor Calderon's escalating needs fit a classic pattern.

"As soon as you mark yourself as a company that's willing to play along, the demands usually increase both in number and in value – and in this case, outrageousness," Ms. Wrage said. "Once you're in bed with these guys, you lose control of the situation very quickly."

The investigation is one of more than 20 that the RCMP has said is being probed by its anti-corruption units, which were launched in 2008. In June, Calgary-based Niko Resources paid a $9.5-million fine after pleading guilty to bribing a Bangladeshi energy minister with a luxury SUV, as well as a trip to Calgary, New York and Chicago.

Pierre Gratton, the president and chief executive officer of the Mining Association of Canada, said his members support the law. He stressed that Blackfire was not a member.

He said he did not believe that bribery is a big problem for the industry, but added: "If there are companies running afoul of the law then the government should deal with the companies if they get caught."

With a report from Andy Hoffman

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