THE whiff of scandal surrounding the government of Enrique Peña Nieto is growing stronger. On December 12th Luis Videgaray, the finance minister (pictured), confirmed that he had bought a house on credit from a firm owned by the same government contractor who gave a big mortgage to the president’s wife. He also acknowledged the need for an independent investigation, though he said he had done nothing illegal. “I categorically reiterate that I am absolutely convinced that I have acted honestly and in full compliance with the law," he said in a statement.

In response to a Wall Street Journal investigation, Mr Videgaray said he bought a house for 7.5m pesos ($581,000) in October 2012 from a property company, Bienes Raíces H&G, which gave him a mortgage for 6.9m pesos. He had publicly revealed his ownership of the house, but not the mortgage. This was only included in a footnote to his declaration of assets that was not made public. He said the house was bought while he was out of government and was on market terms, so represented no conflict of interest. He also said he had paid off the loan in January.

However, the revelation will inflame controversy about the relationship between the man at the centre of the transactions, Juan Armando Hinojosa Cantú, owner of H&G, and the highest levels of government. Another of his firms mortgaged a luxury mansion in Mexico City to the president’s wife, which has led to calls for a Congressional probe into a potential conflict of interest. Mr Peña’s office denies the conflict-of-interest allegation.

Mr Hinojosa’s construction firms have won lucrative public contracts both in the State of Mexico, when Mr Peña was governor and Mr Videgaray was the state’s finance minister, and with the federal government since Mr Peña took power in December 2012. One was also part of a Chinese-led team that won a $3.7 billion contract to build a high-speed train. Mr Peña abruptly cancelled the contract a few days before the ownership of his wife’s residence was publicly revealed, saying it had been awarded too hastily.

Acknowledging that there was strong public interest in clarifying these transactions, Mr Videgaray said he would welcome an independent investigation. He speculated that this could be carried out by a body about to be created by Congress called the National Anticorruption System. However, that body is not yet in existence, and could take months to set up. Civic organisations express concern that if Congress has its way, it will be relatively toothless.

This week’s revelations come just as the government must have been hoping it would put the trauma of the last two months, triggered by the disappearance of 43 students in southwestern Mexico, behind it. December 12th is the day of the Virgin of Guadalupe, and usually marks the start of weeks of Christmas and New Year festivities. Amid such uncertainty and controversy, the government—which has launched bold economic reforms but failed to jump-start the economy—has little to celebrate.