Niembro case (Argentina): Buenos Aires Mayor Mauricio Macri had similar arrangements w/ other firms
A report published by journalist Werner Pertot in local news daily Página/12 revealed that the methodology Mayor Mauricio Macri used to award Fernando Niembro's shell company, La Usina Productions, with 21 million pesos ($2.3 million) in municipal contracts for ads benefiting Macri, is common practice in his administration.
Two firms awarded 24 direct contracts for sidewalk repairs by the city have no employees registered and are listed at the AFIP revenue agency as small businesses with a monthly income of less than 15,000 pesos ($1,600) - while earning 47 million pesos ($5 million) by way of municipal contracts in the past five months alone.
These new cases involve two companies, Derby Eland SA and EcomLat SA, with no background in public works or even registered employees; but which are apparently associated and one of whose owners has a digital marketing company whose sole client is Macri.
Macri is currently running for president on the right-wing "Let's Change" ticket.
Macri privatized and outsourced numerous public services previously managed directly by the city, and by 2013 over $500 million in contracts was awarded annually. A survey of municipal contracts conducted by City Legislator (councilperson) Julieta Costa Díaz found that of all contracts signed by Macri in 2014, 69% were done on a no-bid basis.
The two firms named in the Pertot report, Derby Eland and EcomLat, are domiciled in residential addresses on Vuelta de Obligado Street, four blocks from each other.
Derby Eland SA was registered in 2013 as a residential refurbishment contractor - but no employees registered with the AFIP. The firm invoiced about 20 million pesos ($2.1 million) in three months in sidewalk repair contracts and by selling mobile applications to the city. Its owner, Héctor Santander, is listed in AFIP records as a monotributista - a self-employed small business owner earning within the lowest tax bracket, less than 15,000 pesos ($1,600) a month. Santander and his brother, Gustavo, own Santabros SA, a marketing firm whose chief client is Macri.
Ecomlat SA, owned by Alejandro Monti, was established in 2006 as a military contractor providing "machines, tools and special metallurgical items, optical and precision equipment, and other products required by the armed and security forces with the exception of arms and explosives." But in 2013 - the same year Derby Eland was established - EcomLat changed its stated rubric to "repair and enhancement of public works" and began receiving direct municipal contracts almost simultaneously with Derby Eland. Like Santander, Monti also filed as a monotributista and has no employees registered with the AFIP. His firm received the remaining 27 million pesos ($2.9 million) referenced in the investigation.
Costa Díaz also reported that tenders for these companies came in batches of four for 1,999,948 pesos ($210,000) each - structured to evade municipal no-bid limits of 2 million pesos per contract. "These two companies systematically placed winner and runner-up in the 24 contracts awarded between them since February," she said. The pattern of batches continued until July, and of the 47 million pesos awarded in total none of the contracts exceeded the figure above (52 pesos below the no-bid limit).
"There has been a move explicitly prohibited by law which is the splitting of contracts that have the same object," concludes Costa Díaz.
Macri has also come under fire for padded sanitation contracts (which cost Buenos Aires twice as much as Madrid) and for skyrocketing spending on publicity, which reached 1.2 billion pesos ($130 million) in FY 2015. This figure is three times what was spent by the national government (which governs 15 times more people), and three times what was budgeted for public school and hospital infrastructure and maintenance (of which the city typically spends two-thirds or less).
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