By Anahi Rama and Michael O'Boyle
MEXICO CITY (Reuters) - Mexican President Enrique Pena Nieto on Tuesday vowed to investigate home purchases by himself, his wife and his finance minister from two government contractors, but fell short of demands for an independent probe into perceived corruption.
Pena Nieto named Virgilio Andrade, a former election official, to lead the probe into allegations that he and Finance Minister Luis Videgaray had steered big government contracts towards businessmen who had sold them homes.
However, Pena Nieto and Videgaray insisted they had done nothing wrong under Mexican law and the president's spokesman has already ruled out a mea culpa.
"I am conscious that these accusations have created the appearance of something improper, something that really did not happen," Pena Nieto said.
Pena Nieto's family was ensnared in a scandal after it emerged that his wife was acquiring a multimillion dollar mansion from a subsidiary of Grupo Higa, which was part of a Chinese-led consortium that had won a now-shelved $3.75 billion (2.47 billion pounds) rail contract.
Videgaray also bought a home and received a loan from the contractor. It also emerged that Pena Nieto himself bought a home from another government contractor.
Experts and opposition lawmakers have long argued that Mexico needs to establish independent prosecutors to deal with deeply ingrained corruption.
The scandal has stoked Pena Nieto's deepest crisis. He was already grappling with the fallout of the abduction and apparent massacre of 43 trainee teachers in restive southwest Mexico last year amid spiralling drug gang violence.
Analysts fear that Mexico's political crisis could further undermine implementation of major economic reforms seen as key to helping stem a slide in domestic oil output and bolster growth.
Earlier on Tuesday, Videgaray said he would have declared a conflict of interest on a housing loan from a government contractor if the law required it, and acknowledged he paid less than half the market interest rate on the loan.
Videgaray told the Milenio TV channel in comments published in its newspaper on Tuesday he an interest rate of 5.31 percent on a loan he received from Grupo Higa to buy a home built by the contractor.
The average home loan rate was around 12 percent in 2012, the central bank's website shows.
Pena Nieto announced a series of measures to address possible conflicts of interest in the government, including new reporting responsibilities for federal officials.
He said Mexico needed a new framework to address issues of conflict of interest and appointed Andrade to lead efforts.