As corruption probe grows in Argentina, Macri allies feel the heat.
Last edited Tue Jun 28, 2016, 12:48 PM - Edit history (1)
A judicial probe of possible corruption during Argentina’s previous administration is also threatening the new one as some of President Mauricio Macri’s own allies face investigation.
Macri took office in December from his leftist predecessor, Cristina Fernández de Kirchner, pledging to root out corruption as well as to implement market-friendly economic reforms. Investigations have already led to the arrest of a Kirchner ally (contractor Lázaro Báez) and landed the former president in court for questioning. But now questions are also being asked of some close to Macri.
IECSA, a construction firm run by his cousin Ángelo Calcaterra and part of the Macri family empire, is one of nearly 100 companies in Argentina being investigated as part of Brazil’s growing “Operation Car Wash” scandal. The Car Wash probe has focused on kickbacks and other irregularities in bloated contracts at Brazilian state oil giant Petrobras.
Macri has also come under fire awarding IECSA a number of large public contracts and for failing to disclose numerous offshore accounts uncovered in April by the Panama Papers scandal.
The Macri administration, which defunded the federal anti-money laundering bureau (UIF) and appointed a hard-line supporter (Laura Alonso) as head of the Anti-Corruption Office (OA), is instead pushing to investigate corruption under Kirchner. They have encouraged whistle blowers to come forward; but not so in the case of JP Morgan whistle blower Hernán Arbizu, who sought extradition to the United States on June 16 in order to testify in a massive tax evasion case involving JP Morgan and among others Macri's Finance Minister, Alfonso Prat-Gay.
K money and M money
Argentine media spent considerable time airing corruption allegations during President Cristina Fernández de Kirchner's second term (2011-15). The Kirchners' business relationship with contractor Lázaro Báez was the centerpiece of the much publicized “K Money Trail,” a term coined by anchorman Jorge Lanata during his stint at the TN cable news channel owned by the Clarín Media Group - which was at odds with Kirchner over a bill signed in 2009 that would have limited their near-monopoly over Argentine media.
Prosecutors are probing a complex web of cases linked to Báez. He was arrested in April for questioning after some $5 million was allegedly deposited in his son’s bank account, and news on June 14 that the Kirchner-era official who approved bidding for federal public works, José López, attempted to hide $9 million on church grounds added a dramatic new twist to the case.
Associates of Macri, including IECSA, also have Báez connections however - notably a partnership IECSA formed in recent years with Báez’s Austral Construction in a failed attempt to collude for public works bids. IECSA also had numerous large bids approved by López, and in fact grew to become Argentina's third largest contractor (Austral Construction was, despite Báez's relationship to the Kirchners, only the 36th largest). Also caught in the Báez probe is a Macri Federal Intelligence official, Silvia Majdalani, who is now being investigated for money laundering.
Macri’s cousin, Ángelo Calcaterra, attempted to sell his IECSA shares following these revelations.
The dollar futures case, based on Macri's allegation that his predecessor's Central Bank authorities sold $17 billion of dollar future contracts at below market rates during her last year in power, has similarly backfired.
The case began losing momentum when Judge Claudio Bonadío, a close Macri ally, summoned former Economy Minister Axel Kicillof in April only to have Kicillof inform him that the Argentine Central Bank cannot offer dollar futures contracts in New York (as Macri suggested they do) due to both Central Bank and SEC rules. The case imploded politically when it was revealed that numerous Macri officials and associates - including Macri's Central Bank President, Federico Sturzenegger, and Macri's own father - bought dollar futures worth millions, and themselves profited (at a cost of $4 billion to the Central Bank) when Macri ordered the peso devalued by 40% on December 17.
A similar case of conflict of interest has ensnared Energy Minister Juan José Aranguren, whose offices were raided on June 9 on charges that his decisions to deregulate household gas rates and to import natural gas from Chile - rather than from Bolivia, which is 56% cheaper - were tailored to benefit his former employer, Shell Argentina. Aranguren was CEO of Shell Argentina from 2003 to 2015, and according to his own financial disclosure statement still holds shares worth $1.1 million.
Laura Alonso, the Macri loyalist whose job it is to investigate current officials implicated in corruption (a total of 22), calls the cases “complicated.” Her alleged stonewalling led Kirchnerist lawmakers to file a complaint against her on June 9 for complicity.
The cases against Kirchner-era officials meanwhile continue to move forward in the courts, particularly Judge Bonadío's. Yet, there are political risks. “They went looking for the K money road,” Cristina Kirchner told a crowd of supporters last April; “but they found the M money road instead.”
At: http://www.buenosairesherald.com/article/214069/as-corruption-probe-grows-macri-allies-feel-the-heat
And: http://buenosairesherald.com/article/215893/laura-alonso%E2%80%99s-office-investigating-other-21-officials-%E2%80%94-but-no-sanctions-yet