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governor faces
arrest. It was reported that an Argentine judge has ordered the arrest
of the governor of the
Corruption scandal in
Argentine senate. An official of the Upper
Chamber have confessed that he distributed
US$ 5 million among senators in 2000 to pass a crucial law fueled by the
then-President Fernando De la Rua. Mario Potaquarto confessed that the
government of Fernando De la Rua paid bribes to a number of Senators to pass
a law that restricted labor rights. The case led to the resignation of the
then vice-president Carlos Chacho Alvarez and sparked a political crisis that
precipitated the end with De la Rua’s rule one and a half year later. (Pravda Federal Police
Chief Fired on Corruption Charges. The Argentine government has fired
its new federal police chief on corruption charges. Justice Minister Gustavo
Beliz said that General Roberto Giacomino, the country’s Police Commissioner,
was removed from his post for awarding over-priced service contracts to
companies linked to his relatives. General Giacomino was named Police
Commissioner only four months ago. His appointment was part of a government
shake-up by President Nestor Kirchner, aimed at stamping out corruption. (VOA
News, Argentina needs a fair shake more than charity. According to the head of the Caritas charity in Argentina, the international community could help Argentina overcome its crippling economic crisis by scrapping the protectionist polices squeezing its exports out of foreign markets. Jorge Casaretto said that the elimination of agricultural subsidies by the European Union would have very positive effects on Argentina’s hard- hit economy. Caritas Argentina is urging political, business and social group leaders to join the World Bank in a national dialogue that addresses the true problems of their beleaguered country, including poverty and corruption. (Northen Light News, September 20, 2002, summary by Sherldine Tomlinson).
LA RIOJA, ARGENTINA: ARGENTINA'S MENEM DENIES BOMB COVER-UP Former Argentine President Carlos Menem denied a report in Monday's New York Times that said Iran paid him $10 million to cover up its suspected involvement in the bombing of a Buenos Aires Jewish center that killed 85 people eight years ago. Menem is running for his Justicialist party nomination in presidential elections scheduled for March 2003. He attributed the timing of the document leak to the Times to "political maneuvering." (Source: CNN.com/World July 22,2002, Summary by: Shatarupa Chaki).
Santiago Del Estero, POLITICIAN'S ANTI-CORRUPTION CRUSADE OFFERS HOPE TO ARGENTINIANS. Elisa Carrió is a devout Roman Catholic legislator nicknamed "La Gorda" ("the fat lady") who is launching a new anti-corruption crusade. According to the polls, Elisa Carrió is now the country's most popular politician. "For every corrupt man there is a hungry child," Carrió has said. Carrió is the leader of the Alternative for a Republic of Equals party bloc. The bloc is expected to have a strong presence in mid-term congressional elections. With a core of 18 disaffected legislators from government coalition parties as well as opposition Peronists, ARE has the ambition to become a major power player after the elections. (Source: Houston Chronicle, October 20, 2001, summary by Pavlidis George).
FORMER PRESIDENT CARLOS MENEM’S FAMILY’S BANK ACCOUNTS FROZEN. Two bank accounts belonging to relatives of Menem have been frozen by a Swiss court. The former President is currently under house arrest on charges of corruption and heading an illegal sale of arms to Ecuador and Croatia during his tenure. According to local press, one of the accounts containing $650,000 belonged to Menem’s former wife, though she has denied the same. Several relatives of the family and former government officials are under imprisonment on charges pertaining to the arms deal, which are currently being investigated.(Financial Times, October 5, 2001, summary by Aruna Balakrishnan).
ACCOUNTABILITY IN ARGENTINA – EDITORIAL The impunity from prosecution enjoyed by the powerful may soon be reversed and Carlos Menem’s indictment may be considered an encouraging advance for legal accountability. The courts will decide, based on evidence rather than political influence, his part in approving and concealing illegal arms sales to Croatia and Ecuador. Over $3 million of Menem’s personal assets have been frozen and although he claims to have been unaware of such diversions, his supporters claim the shipments were endorsed by the United States – a claim denied in Washington. Menem’s administration may claim reduced chronic inflation, deregulation of markets and improving international relations; however, has been accused of pervasive corruption and pardons for convicted former military junta members, and undermining the rule of law in Argentina. (NYT, July 8, 2001, summary by Marg Reynolds).
EX-PRESIDENT ARRESTED IN ARMS CORRUPTION SCANDAL Carlos Menem, former President from 1989 to 1999, stated he was innocent of charges and the victim of political persecution as he was placed under house arrest during an investigation of his involvement in illegal arms sales to Croatia in 1991 and Ecuador in 1995. Under Argentine law, he will face three to ten years house arrest if convicted, as people over seventy years of age may not be imprisoned and many loyal supporters have demonstrated to protest his arrest. Also arrested under Jorge Urso’s investigation are former Menem aides, General Martin Balza, Antonio Erman Gonzalez, and Emir Yoma. The corruption allegations will make it difficult for Menem to campaign for a third presidency in 2003. (CBS News (AP), June 7, 2001, summary by Marg Reynolds). INVESTIGATION
INTO AEROLINA MANAGEMENT. Argentina Courts are investigating allegations of
corruption on the part of several ex chairmen of troubled Argentinian
airline Aerolineas Argentinas. The situation could complicate matters for
Spanish state holding company SEPI, which owns most of Aerolineas and wants
to get rid of its stake. There are also questions about payments to an
intermediary company in exchange for the Argentinian government's giving up
of its 'golden share' in Aerollineas. (El Mundo, June 30, 2001, summary by
Barbara Gray). PERONISTS WON’T HOLD COUNTRY RANSOM OVER MENEM CORRUPTION ARREST Carlos Menem, opposition Peronist Party leader, denied there would be a smear campaign against Fernando de la Rua, President, and Domingo Cavallo, Economy Minister, following Menem’s arrest for alleged illegal arms sales to Croatia and Ecuador. De la Rua stressed the judiciary is acting independently and Mario Cafiero, Peronist congressman, believes it would be a mistake to confuse legal with political issues and that the Party’s future is not dependent upon the former President’s fate. However, Menem supporters have accused Jorge Urso, investigating judge, of persecuting Menem and compared Menem’s house arrest to the exile of Juan Peron, the Party’s legendary founder. (AOL News (Reuters), June 11, 2001, summary by Marg Reynolds).
CORRUPTION HURTS QUEST FOR STABILITY – The following is an excerpt from a letter to the editor of the Miami Herald from David Cole, Buenos Aires. I especially want to second Andres Oppenheimer’s insightful and timely questioning of US resolve to combat money laundering in tax havens. Although the laundering varies from drug money to political slush, many Latin Americans feel the political class is corrupt and undemocratic within their countries. The United States, in supporting the fight against money laundering, must help overcome withholding taxes by the political and business elite of ‘free trade’ as failure to do so will impoverish countries rather than make troubled governments solvent. (Miami Herald, May 16, 2001, summary by Marg Reynolds).
US SENATE PROBE HELPS TAX EVASION FIGHT Domingo Cavallo, Economy Minister, stated a U.S. Senate report on money laundering will provide a useful database to help identify tax evaders and also root out corruption cases. Endemic tax evasion has deprived the government of up to half its possible tax revenues and the involvement of local banks ran to around $10 billion in the last decade. The Senate report investigated the role of American banks in laundering money from crime and graft and interviewed Raul Moneta, disgraced former head of Republica Bank. (AOL News (Reuters), May 13, 2001, summary by Marg Reynolds).
BANKS TO BE PROBED FOR MONEY LAUNDERING A lengthy report prepared by a United State’s Senate panel has caused the Argentine Congress to form a commission to investigate money laundering allegations of the Bahamas-based Federal bank, linked to the collapsed Banco Republica, and the Mercado Abierto, based in the Cayman Islands. Raul Moneta, disgraced former head of Republica and former partner of Citibank in CEI Citicorp Holdings, a local communications group, has been indicted. Elisa Carrio, former deputy, will head the commission of between seven and eleven deputies, including fellow lawmaker, Gustavo Gutierrez. (iWon News (Reuters), May 9, 2001, summary by Marg Reynolds).
EX-MINISTER WARNS AGAINST WITCH HUNT IN ARMS SCANDAL Erman Gonzalez, former Defense Minister, testified before Judge Jorge Urso in regard to allegations of an illegal arms deal between Carlos Menem, former President, and a number of former cabinet ministers in an illegal arms sale to Ecuador and Croatia. Gonzalez is charged with smuggling ammunition and Menem is charged with heading an organization created for criminal purposes. A total of 6,500 tonnes of arms in six Croatian ships left for Yugoslavia between 1991 and 1995; 75 tonnes of weapons were sold to Ecuador. A United Nations embargo on weapons sales was in effect at the time for both Ecuador and Croatia; furthermore, Argentina had been named co-guarantor of peace during the border conflict between Ecuador and Peru. (The Times of India, May 8, 2001, summary by Marg Reynolds).
ARGENTINA: TEN FEMALE POLICE CHARGED WITH FRAUDULENT CLAIMS FOR BREAST IMPLANTS Ten police officers face charges that they fraudulently claimed their breast implants were varicose vein operations and subsequently had the public health system pay for the surgery. Three plastic surgeons are already serving prison terms in the scam and estimates by investigating authorities are than as many as fifty officers have submitted fraudulent claims. (FraudInfo Newsletter, May 2, 2001, summary by Marg Reynolds).
EX-PRESIDENT BLAMES CONSPIRACY IN ARMS CASE Carlos Menem, former President and flamboyant Peronist party leader, has been subpoenaed by Federal Judge Jorge Urso to testify in response to accusations of involvement in illegal arms sales. Menem faces between three and ten years in prison if convicted, but he has denied any knowledge of the accusations. Three top officials of Menem’s administration were indicted for alleged fraud and also be investigated for illicit association.. The high-ranking officials who will be asked to testify are: Antonio Erman Gonzalez, former Defense Minister; Guido De Tella, former Foreign Minister; and Martin Balza, former army chief. Domingo Cavallo, current Economy Minister, has not been subpaenaed, although he served in this post in Menem’s government. (Yahoo News (Reuters), May 1, 2001, summary by Marg Reynolds).
EX-PRESIDENT MENEM ASKED TO TESTIFY ON ARMS SCANDAL Jorge Urso, Federal Judge, has been asked by Carlos Stornello, Prosecutor, to summon Carlos Menem, former President, to testify at an investigation into the illegal sale of weapons to Croatia and Ecuador. The sale of weapons to Panama and Venezuela was authorized by a presidential decree and Menem could be answerable to charges of being deliberately misleading in public documents and being the chief of a criminal association. The weapons ended up in Croatia, at a time when the country was under an international arms embargo, and Ecuador, when the country was involved in a border war with Peru. Martin Balza, former Army Chief-of-Staff; Emir Yoma, former Menem aide; and three former cabinet ministers have been indicted. (Buenos Aires Herald, Apr 26, 2001, summary by Marg Reynolds).
CONGRESSIONAL COMMITTEE URGES DISMISSAL OF CENTRAL BANK CHIEF FOR FAILURE TO HALT MONEY LAUNDERING Government sources and local media believe President Fernando de la Rua will accept the recommendation of a congressional committee on the dismissal of Pedro Pou, Central Bank chief as he has been accused of blindly allowing money laundering within the country. Officials of the International Monetary Fund have urged Domingo Cavallo, Economy Minter, for details of more specific economic growth policies and traders believe Mr. Pou’s sacking would calm the panicky markets and end political sniping between Pou and Cavallo. (Yahoo News (Reuters), Apr 25, 2001, summary by Marg Reynolds).
CENTRAL BANK PRESIDENT TESTIFIES BEFORE COMMITTEE The five-member congressional committee
investigating the alleged money laundering activities, has kept the testimony
of Pedro Pou, Central Bank President, and others secret. In response to last month’s Senate
Committee report citing two Argentine banks’ failure to adequately police
banking activities, the congressional committee will recommend Mr. Pou’s
position as bank president be confirmed or removed. Judge Martin Silva Garreton ruled that the committee may issue
a recommendation to national President Fernando de la Rua on Mr. Pou’s
future, but that the recommendation would not be legally binding. (Buenos Aires Herald, Mar. 15, 2001,
summary by Marg Reynolds). CITIBANK ADMITS MISTAKE ACCEPTING OFFSHORE
DEPOSITS. During a Congressional hearing, Citibank admitted lapses in
their dealings with two Caribbean banks, which were used to launder millions of
dollars from drug trafficking and bribery. After federal officials had
seized nearly $2 million, that M.A. Bank had on deposit with Citibank
in New York., Citibank continued to take deposits from M.A. Bank. Senator
Carl Levin, Democrat of Michigan has been leading a yearlong investigation
into money laundering by American banks. Mr. Levin was harsh on Citibank
officials for their failure to provide Argentine authorities with information
in their files that would have showed who owned Federal Bank, a shell bank
licensed in the Bahamas, that was in fact owned by wealthy Argentines.
Three money-laundering experts told the committee that American banks should
not be permitted to do business with shell banks. (New York Times, March 3,
2001, summary by B. Gray). BUENOS AIRES, Senate
Bribery-Probe Judge Suspended on corruption charges. Carlos Liporaci, federal judge in charge of
a major Senate bribery probe now faces allegations of corruption
himself. He has been suspended and is
being investigated for embezzlement unrelated to the inquiry for assets he
would not have been able to afford on his federal judge's salary which
include a house worth $1.6 million he says he acquired for $600,000. Liporaci has been widely criticised for
freezing the Senate bribes-for-votes inquiry of which he was in charge. The case has considerably damaged
President Fernando de la Rua's image and Former labour minister Alberto
Flamarique and ex-secret service (SIDE) chief Fernando de Santibanes both
resigned after being implicated in the scandal; it is claimed that the
reopening of the case by Liporaci’s future replacement would risk widening a
rift within the ruling Alliance coalition government: Liporaci claims he is a
victim of a campaign to destabilise the Republic in this way. The case he was judging is only one in a
series of recent corruption scandals involving the Argentine establishment.
(Reuters, February 14, 2001, summary by Hema Kotecha).
Buenos Aires, ARGENTINA ORDERS GUARD FOR THREATENED POLITICIAN. Elisa Carrio is a ruling Alliance coalition government deputy who has long denounced corruption in Argentina. On Tuesday, Elisa Carrio gave a television interview in which she said: "We are starting to eliminate the mafia state." After the inerview, she received telephone threats apparently linked to her efforts to combat money laundering. The Argentine government ordered police protection for the popular politician and her family and the Argentine Interior Minister, Federico Storani, said police had mounted a major investigation into the threat: "We have decided to reinforce security measures both at her residence here in Buenos Aires and her home" Storani told reporters. (Source: Reuters, February 6, 2001, summary by Pavlidis George). EX-VICE
PRESIDENT CONDEMNS FRUITLESS CORRUPTION PROBE. Former Vice President Alvarez resigned in October to protest
Federal Judge Carlos Liporaci’s inability to find incriminating evidence to
charge 11 senators in a bribery case.
Liporaci, himself, is being investigated for ‘illicit enrichment’. The corruption probe, in which a
controversial labor reform bill was passed by senators paid by President
Ferdinand de la Rua’s government, has weakened passing of legislation through
Congress. (Yahoo News, Reuters, Dec.
30, 2000, summary by Marg Reynolds)
BUENOS AIRES - Argentine President Fernando de la Rua's popularity has decreased sharply after corruption scandals, which have undermined public confidence in his government. The latest crisis has been triggered by the resignation of his vice-president over Mr. De la Rua's handling of a senate corruption incident and by "promoting people who have associations with crimes". Mr. De la Rua denies that his government bribed senators to pass legislation and trusts the judiciary will clear the executive branch from any wrongdoing. (Washington Post Online, October 12,2000. Summary by Fabian Camacho).
BUENOS AIRES - Seven members of the Argentinian police have been dismissed from their posts for suspected complicity with the escape of two Paraguayan criminals. Fidencio Vega Barrios and Luis Alberto Rojas, alleged assassins of Paraguayan vice president, Luis Maria Argana, escaped Sunday through the main entrance after briefly taking a police officer and other inmates hostage. (CNN in Spanish, September 22, 2000, Summary by Fabian Camacho).
BUENOS AIRES – The bribery scandal in the Argentinian
senate reactivates. Senator Emilio
Cantarero, who according to La Nacion admitted receiving money to vote for
the government’s labor reform bill, has become involved in another similar
political incident. 11 out of 72 senators have been summoned to federal court
in regards to the labor reform bribe.
(CNN in spanish, September 20, summary by Fabian Camacho). LEGISLATOR
IMMUNITY ENDED DUE TO BRIBERY SCANDAL IN SENATE Argentina´s Congress, under
pressure from a bribes-for-votes scandal, voted Thursday to end sweeping
immunity protecting lawmakers, judges and government ministers from
prosecution. The Chamber of Deputies voted 202 to 5 to pass the bill and the
Senate followed with a quick approval, neatly ending a standoff with a
federal judge who last week asked for 11 of the Senate’s 69 members to be
stripped of their immunity from prosecution. The president must sign the bill
for it to become law. The Senate has postponed consideration of the request
by Federal Judge Carlos Liporaci in connection with alleged bribes paid to
pass a government-sponsored labor market law in April. Stripping eight
opposition Peronists and three members of President Fernando de la Rua´s governing
Alliance of their immunity would also end their right to vote in the Senate.
The Peronists were keen to avoid granting the judge´s request because it
would cost them their majority in the chamber. The new law will still not
allow judges to arrest congressmen and government ministers without
authorization from Congress. But it does grant judges the power to
interrogate them as suspects -- allowing Liporaci to investigate the bribes
scandal without any senators losing their seats. ``This
law will mean everyone has to testify. There won´t be anybody, no official in
the country, who will be able to avoid cooperating or testifying before a
judge,´´ said Deputy Elisa Carrio, of the center-left Alliance, who proposed
the bill. She said the bribes-for-votes scandal was an opportunity to clean
up Argentina´s notoriously dirty politics because it had created the impetus
needed to pass her bill. The scandal has dramatically put to the test De la
Rua´s election promise to end the corruption that flourished under Peronist
President Carlos Menem (1989-1999). But De la Rua, who is attending the
Millennium Summit in New York and will be gone until mid-September, has said
he believes Labor Minister Alberto Flamarique and secret service chief
Fernando de Santibanes when they say that they paid no bribes. Liporaci says
he thinks bribes came from state coffers. Interior Minister Federico Storani
said ministers could yet lose their jobs over the scandal. But, speaking in
New York, De la Rua repeated that no resignations were in the cards. Despite
protests from the government that the Senate could not function properly
without first surrendering the immunity of the lawmakers under suspicion, the
chamber met on Wednesday to approve a law to fight tax evasion. Thursday it passed
an economic emergency bill granting the government extra powers to
restructure debt and fire staff. Old political hands, including former
President Raul Alfonsin, have declared themselves shocked by the revelations
that bribes could have been paid in the nation´s Senate. But such
protestations have been met with skepticism. ``Corruption in the Senate? You
don´t say! And only in the Senate? The vast majority of people are convinced
that bribes flow through the veins of our society like red blood cells through
the circulatory system,´´ wrote newspaper La Nacion. AOL News (Reuters),
Sept. 8, 2000 http://www.aol.com ARGENTINA:
PRESIDENT VOWS TO ``CUT TO BONE`` OF CORRUPTION Argentine President Fernando de
la Rua, facing a bribes-for-votes scandal that has rocked the political
establishment, vowed on Saturday to hunt down the guilty from both the
opposition and his own government. Argentina´s biggest political crisis in
years has put to the test De la Rua´s election promise to crack down on the
corruption that flourished during the 10 years of the administration of
former Peronist President Carlos Menem. De la Rua took office last December.
Federal Judge Carlos Liporaci has asked the Senate to strip eight of its
members -- seven from the opposition Peronists -- of congressional immunity
from prosecution in connection with alleged bribes paid to pass
government-sponsored labour legislation. But Liporaci also says he is
convinced the money for the bribes came from the centre-left Alliance
government. Labour Minister Alberto Flamarique and secret service head
Fernando de Santibanes have been forced to publicly deny paying out dirty
money, and De la Rua says he believes them. One of the country´s most
powerful Peronists, Buenos Aires Province Gov. Carlos Ruckauf, called on De
la Rua to go after corrupt lawmakers and government officials alike. ``If
government officials used public money to pay bribes, then they are
murderers, because they are using money which should be used to buy vaccines
or medicine or for employment plans,´´ said Ruckauf as he visited De la Rua´s
official residence on Saturday to sign a fiscal accord. He
asked De la Rua to wield a ``scalpel´´ to slice corruption from the nation´s
institutions. The president replied, ``My hand will not tremble if I have to
cut to the bone and punish anyone who is responsible.´´ Argentina has seen
many corruption scandals over the years but few have shaken the nation´s
institutions like this one, which began with anonymous accusations of bribes
to pass key labour market legislation in April designed to make it cheaper
for companies to hire and fire. Vice President Carlos Alvarez, a left-leaning
anti-corruption hawk little loved by the Peronists and even by many of his
fellow government members, loudly called for an investigation. A
senior Peronist senator then gave a judge the names of three colleagues he
believed were linked to the case, and one senator reportedly confessed taking
bribes to a national newspaper. The Senate will meet in a special session on
Tuesday at which it will reportedly grant the judge´s request to strip the
eight of their immunity from prosecution. Three of the eight have already
voluntarily ceded their congressional protection. Four other senators, none
of them implicated, have said the atmosphere of public distrust generated by
the accusations has made it impossible for them to maintain their seats in
the 69-member chamber. They have offered their resignations to the provincial
legislatures that appointed them. De la Rua has instructed all his ministers
to cooperate fully with the probe. But he has denied rumours that some of
those implicated, including the labour minister, will resign. Pressure on the
government will increase next week, when Liporaci wants to speak to Treasury
Secretary Mario Vicens to see whether official records show evidence that
money was used for bribes. De la Rua will be out of the country for most of
the next two weeks, attending the Millennium Summit in New York and then
travelling to Canada and Asia. To
the surprise of some, international financial markets have not punished
highly indebted Argentina for the scandal although it has threatened to
paralyse the Senate. The government says it will pass key economic legislation
by decree if necessary and foreign traders have apparently decided the
investigation is a healthy step toward cleaning up the nation´s politics. AOL
News (Reuters), Sept. 2, 2000 http://www.aol.com ARGENTINA:
PRESS EYES CORRUPTION SCANDAL The Senate bribes-for-votes corruption scandal
in Argentina has badly shaken the government of President Fernando de la Rua,
particularly in the eyes of the Argentine media. A judge investigating the
scandal said it appeared that government officials bribed senators of the
opposition Peronist party, as well as some of its own senators, to vote for a
controversial labour reform bill earlier this year. Three senators have
already surrendered their immunity from prosecution and four others have
offered to resign their seats after the judge formally asked the Senate to
strip eight legislators of their protection in connection with the alleged
bribes. Nevertheless, Vice-President Carlos Alvarez said he would not rest
until the pay-off allegations had been fully clarified, according to a report
in the Buenos Aires Economico. Deputising for President De la Rua - attending
a South American summit in Brazil - Mr Alvarez pledged to push ahead with the
judicial investigation "regardless of who comes to grief and whatever
the cost may be." The daily La Nacion quoted the president as saying
that any government official found guilty of paying the bribes would
"immediately be removed from office." Not surprisingly, the press
has been having a field day with the case. La Nacion said the purchasing of
Senate votes was said by some to be part of the parliamentary culture. Under
the former government of President Carlos Menem, senators from both the
Peronist and Radical parties allegedly received "delightful personal
favours in exchange for their votes." But this latest scandal was a
"severe crisis which threatens to destabilise the institutions of
Argentine democracy," La Nacion warned. It rejected proposals to declare
any sort of emergency measures, which compromised the democratic system,
recalling the periods of military or authoritarian rule. Another leading
daily, Clarin, called for major revisions to the legislative process, warning
that getting rid of a number of senators would not be enough. It called for
both the government and opposition, as well as the judiciary, to act
"rapidly and transparently" to avoid a "crisis of
confidence" in the democratic system. Clarin said the paralysis of the
Senate would obstruct the work of the government "at a time of economic
difficulties and when the eyes of foreign observers are focused on the
political turbulence in Argentina. (BBC, September 4, 2000
http://news.bbc.co.uk ) ARGENTINA:
THREE SENATORS RESIGN AMID BRIBERY SCANDAL Three Argentinean senators
announced on September 1 that they will resign, with a fourth lawmaker likely
to follow suit, due to the scandal that erupted recently about the bribery
surrounding the passage of labour reform legislation in April. The three to
tender their resignations are Raúl Galván, of the Radical Civic Union, and
Eduardo Menem, brother of former president Carlos Menem, and Jorge Yoma, both
of the Justicialist Party (Peronists) Meanwhile, senator Ramón
"Palito" Ortega, also of the Justicialist Party said he may step
down next week. Three more Justicialist senators agreed to voluntarily
renounce their parliamentary immunity and collaborate with government
investigations of the bribery case, led by federal judge Carlos Liporacci,
according to local news agencies. Argentina´s
justice authorities acknowledged the existence of evidence that bribery
occurred in the Senate last April, leading to the approval of a labour reform
package, which has unleashed the biggest political scandal here since
democracy was restored in 1983. The issue has been at the centre of Argentine
news for the last two weeks and, even before there was any proof of
corruption, nearly 90% of those surveyed in public opinion polls said they
believed bribery had taken place - a percentage that underscores the ill
repute of the Senate here. During the two consecutive terms of former
president Carlos Menem (1989-1999), charges of corruption were a constant.
Not only was the issue the number-one concern of the Argentinean people, but
they accepted as a given that votes were bought and sold in the two houses of
the Parliament. But with the arrival of the Fernando de la Rúa government
last December, there were high expectations that corruption would be wiped
out. The battle now seems more difficult as illegal practices are more
widespread than anticipated and there is apparently a great deal of
complicity among the senators from all political parties. The scandal
exploded when ´La Nación´ newspaper reported a few weeks ago that there was
strong suspicion that millions of dollars had been paid to senators in
exchange for their votes to approve a controversial law that changed the
country´s rules on hiring and employment The president of the Senate, Carlos
Alvarez, an Alianza member who is also the nation´s vice-president, is now
the leader of the campaign to purge the Senate of its corrupt customs.
"We want to show that these practices will no longer be tolerated,
because in a country as impoverished as ours, if politics - which is a tool
for transformation - are spoiled, then it is the market that will ultimately
govern," warned the vice- president. Judge Liporacci said that he has
not ruled out the possibility that private companies may have been behind the
bribery. (Oneworld, September 5, 2000. http://www.oneworld.net ) ARGENTINA:
SENATE BRIBE SCANDAL BLOWS THE WHISTLE ON CORRUPT POLITICS Argentina´s
government put a brave face on a Senate bribe scandal undermining the
country´s credibility and economy, saying it was positive at least that the
whistle had been blown on corrupt politics. In what has become the biggest
political crisis since army revolts a decade ago, senators from the
opposition Peronist Party, which has a majority in the Senate, stand accused
of taking bribes from government officials to pass labor market reforms aimed
at modernizing the economy. Vice-President Carlos Alvarez told reporters
Argentina was "in a very complicated, very bad situation."
"What is under investigation is very serious. According to the judge,
there is little real evidence so far and just a lot of hints," said
Alvarez, whose leftist Frepaso party is junior partner to the centrist
Radicals in the governing Alliance. "But many hidden things going on in
our institutions are coming to light. And it´s good that that should happen
in an Alliance government, despite all it might cost us," he said.
Alvarez has drawn criticism from some senators for giving credibility to an
anonymous "poison fax," which gave the first details of the
scandal, by reading it out to senators. La Nacion newspaper identified a
Peronist senator it said had confessed to taking bribes to one of its
reporters. Sen. Emilio Cantarero then admitted speaking to La Nacion but
denied saying he took dirty money. Peronist whip Sen. Augusto Alasino said
Cantarero would sue the reporter, who testified on Thursday night before
Federal Judge Carlos Liporaci. CLIMATE OF FEAR Some of Argentina´s most
prominent politicians have had to deny they are on a list of three suspect
senators given to Liporaci by Peronist whistle-blower Sen. Antonio Cafiero.
Congress insiders report an atmosphere of fear among legislators that their
names could appear next. "The climate is awful; nobody knows what’ll
happen next or where the anonymous accusations are coming from and everyone’s
afraid of appearing on some list or in some newspaper," said an aide to
a Peronist senator, who asked not to be identified. The lower house of
Congress canceled a session set for Thursday -- a decision that local news
agencies reported was due to the political uncertainty generated by the
crisis. The government says it will pass key economic legislation by decree
if the scandal ends up paralyzing Congress. President Fernando de la Rua,
traveling to Brazil despite the crisis, said: "The main thing is to stop
this climate of hints and gossip ... to avoid dangerous
generalizations." Two Peronist senators who are on Cafiero´s list,
according to some of the contradictory press reports, are Ramon
"Palito" Ortega, a pop star who sought the vice-presidency last
year, and Eduardo Bauza, once chief of staff to Peronist former president
Carlos Menem, who left office in December. "I hope to God the truth is
finally known, not just for the sake of this senator and his family´s honor,
but for the health of the republic," said Ortega, denying any
wrongdoing. "I reject with all my strength any attempt to link me to a
crime and tarnish my honor," Bauza told a news conference He was one of
Menem´s most powerful aides in a decade in office in which Argentina gained
constitutional and economic stability after decades of coups, crises and
economic chaos. But the Menem years were plagued by corruption scandals and
it was an open secret that large sums of money changed hands at all levels of
government. De la Rua and Alvarez won last year´s election by promising to
clean up the corruption. De la Rua said that if any official is implicated
"in any sin, he will be removed without hesitation and handed over to
the courts." (AOL News (Reuters), August 31, 2000 http://www.aol.com ) BUENOS AIRES (Reuters), Bribery Scandal Shakes Argentina’s Senate. Anonymous charges that Peronist senators took cash from government officials have threatened to erupt into Argentina’s biggest political shake-up in years. Judge Carlos Liporaci has asked the senate to strip eight lawmakers of their congressional immunity from prosecution, stating he has “coherent, grave and precise evidence that bribes were paid.” It is alleged the Peronist senators accepted bribes to approve labor market reforms in April.(CNN, September 1,2000, summary by Michelle Little). BUENOS AIRES, Argentina Requests Probe Into Bribe Accusations. Vice President Alvarez has asked the federal court to investigate the anonymous allegations that the labour minister bribed opposition senators into passing a controversial reform. Details regarding the amount of money involved and names of the alleged wrongdoers vary, and no accusers have yet been named. (Reuters, 23 Aug. 2000, Summary by K. Werkhoven ). Argentine cabinet told to cooperate in bribe probe (CNN, 22.8.00, http://www.cnn.com/2000/WORLD/ameri FORMER MINISTER FACES CHARGES IN IRAN TANK DEAL The Anti-Corruption Office yesterday denounced former Menem administration Defence Minister Humberto Romero for illegally attempting to sell Argentine tanks to Iran when it was at war with Iraq. The 60 tanks were supposed to have been sold to Iran through a Panamanian and English firm, and when the deal fell through, Panama slapped a 23 million-peso embargo on Argentina. (Buenos Aires Herald, August 8, 2000 whose website is: http://www.buenosairesherald.com) MOBILE PAYMENTS TO BE MONITORED WORLDWIDE WITH NEW SOFTWARE Nestor, Inc. (OTC: NEST), in conjunction with its alliance partner, ACI Worldwide (Nasdaq: TSAI) announce that Banco Bilbão Vizcaya Argentaria SA (BBVA) and Telefónica Móviles SA of Spain have selected Nestor's PRISM eFraud to detect fraudulent mobile e-commerce transactions. Mario Cantero Brandes is the CEO of MovilPago Money Laundering, A New Software Initiative U.S. SECRETARY OF STATE ALBRIGHT "ENCOURAGED" BY EFFORTS TO COMBAT CORRUPTION Secretary of State Madeleine Albright met with U.S. business leaders in Argentina August 16 for roundtable discussions on ways to expand U.S. trade and investment in Argentina. "This is an exciting and productive time for U.S-Argentine relations and the American business community has an enormous role to play here. U.S. direct investment in Argentina is approaching $16 billion and we remain Argentina´s largest investor. While U.S. investors are clearly doing their part, we all know it takes two to tango, and I am encouraged by President de la Rua´s efforts to combat corruption and to open up previously protected sectors of the economy. This is not just good policy for American business, it is good practice for the people of Argentina," the secretary said at the start of a roundtable discussion in Buenos Aires State Department Washington File, August 16, 2000 Argentine spymaster denies he bribed senators (CNN.com, 24.8.00, http://www.cnn.com/2000/WORLD/americas/08/24/ Headline, 25-AUGUST-2000, Link may not work after a few days. ARGENTINA: ANTI-CORRUPTION OFFICE TO INVESTIGATE CHARGES OF BRIBERY OF SENATORD http://support.casals.com/aaaflash ARGENTINA: INVESTIGATION INTO BRIBERY SCANDAL http://support.casals.com/aaaflash1/busca.asp?ID_AAAControl=2978 Argentine cabinet told to cooperate in bribe probe (CNN, 22.8.00, http://www.cnn.com/2000/WOR ARGENTINA: EMBEZZLEMENT CASE JUDGE SEEKS EX-MINISTER´S FATHER´S FILES Federal Judge Juan José Galeano made an urgent request yesterday to the Lower House for the sworn statement of assets of former Deputy Alvaro Alsogaray - evidence which could incriminate his daughter, former Environment Secretary María Julia Alsogaray who is now charged with embezzling more than a million pesos of state funds. The move seeks to corroborate testimony made this week by the ex-official, who alleged that she received up to 1.4 million pesos from her father as an "inheritance advance." Prosecuting attorneys voiced doubt about the claim, pointing out that María Julia Alsogaray's siblings received no such sum. The probe into the former deputy's assets could be a turning-point in the case against the confidante of ex-President Carlos Menem. Lower House Speaker Rafael Pascual (Radical-City) received the federal judge's petition late yesterday. He made a plea to fellow Alliance deputies, and in particular those of the opposing Justicialist Party, for their swift co-operation in the matter. "I hope the Justicialist Party responds to this because the matter has to do with embezzlement by a Menem-era official," Pascual said, highlighting that party's ties to an administration now plagued with charges of corruption. "For this to move forward, the Justicialists must grant the two-thirds (attendance needed for quorum)," he said. A two-thirds majority vote is needed to transfer the deputy's testimony to Galeano. Pascual proposed a special legislative session for Wednesday or Thursday of next week. The former environment secretary appeared twice in court this week for preliminary questioning in the corruption case. She claims she never inappropriately diverted state funds. (DYN). Buenos Aires Herald, August 12, 2000 http://www.buenosairesherald.com/ bilking Argentine government: Six American citizen, including John Bartholomew, President of MTB Bank of NY, former executives of a metal refining company were charged with bilking Argentine government of $130 million in unjustified export incentivesween Sept 1992 to April 1996. Argentine company Casa Piana sold gold coins to Handy and Harman at a cost 10% above the actual value. The overpayments were covered by fraudulent invoices. (NYT, Mar 8, 2K, p. B6). LANDMARK COURT RULING CONDEMNS ``ILLEGITIMATE`` DEBT, CITES IMF An unprecedented judicial ruling from the Argentine courts has condemned the illegitimate origins of a substantial portion of external debt amassed during the military period from 1976 to 1983. The marathon lawsuit was originally brought before the courts in 1982 by the campaigning academic, Alejandro Olmos who sadly died early this year before the final ruling. Between 1976 and 1983, Argentina´s debt rose from $7.5 billion to $43.5 billion, yet these new loans were of no benefit to ordinary people in Argentina. ´The clearly arbitrary conduct of those most responsible for the nation’s politics and economy in those periods analyzed has been made apparent during the course of the lawsuit´, concluded judge Jorge Ballestero. The loans were part of ´a damaging economic policy that forced [Argentina] on its knees through various methods ... and which tended to benefit and support private companies - national and foreign - to the detriment of society and state companies...´ The ruling throws down the gauntlet to Argentina´s lawmakers to investigate the origin of the loans. According to Ballestero there should be ´no impediment [to prevent] the Congress of the Nation evaluating the consequences of the court´s proceedings in order to determine the eventual political responsibility corresponding to each one of the actors in the events which led to Argentina’s phenomenal external indebtedness.´ Adding their voice to the judicial demand for an investigation, at least 5,000 people gathered outside the congressional building in Buenos Aires on 26 July to demonstrate. The demonstration was led by delegates of the Forum on External Debt (FORDEX) along with members of Argentina’s main general workers union, the CGT. Despite this significant pressure on Congress, there has been a mute response. This is partly because congress is currently in recess, but also because key congressional leaders, allied to the government are fearful of upsetting relations with multilateral institutions who will be in the spotlight if the investigation progresses. The ruling specifically cites responsibility within the international financial system. This includes multilateral institutions such as the IMF. Ballestero noted that ´the existence of an explicit link between external debt, the inflow of short-term foreign capital, high interest rates in the internal market and the corresponding sacrifice of the national budget since 1976 could not pass unnoticed among the IMF authorities who were supervising the economic negotiations.´ The issue is set to be taken up by a congressional finance committee. The Jubilee 2000 parliamentarian commission led by MP Mario Cariefo has also called for a ´public audience´ on debt to be held, inviting members of civil society along with key economic officials. Two prominent politicians invited include the current Economy Minister Jorge Luis Machinea and Domingo Cavallo, who held the same posts in the early years of ex-president Carlos Menem. Both men also held key economic posts during the military period and would be subject to investigation, should it proceed. Consequent investigations are also likely to highlight the responsibility of the international banks that dealt out the loans. Oil price increases in the late 1970s produced high levels of liquidity in the banks and were perceived as a threat to the stability of the financial system. The banks´ response? To offer loans to ´developing´ nations, regardless of their end destination. In this way, Argentina´s illegitimate rulers were able to use their control of the country to successfully apply for exorbitant bogus loans (that were unaccounted for in the Central Bank records). Banks involved in offering loans to the regime included prominent British banks found on every high street, such as Barclays and Lloyds. In all some 30 British financial institutions leapt at the chance to peddle loans on Argentina in that period. For Olmos´ son, Alejandro Olmos Ganoa, ´the judge´s ruling is an important landmark, because for the first time in the world, a court has exhaustively analysed...how external debt was amassed´ as well as ´its terrible consequences on the national economy.´ It will also certainly strengthen arguments for cancellation of illegitimate debt built up under dictatorships in other countries such as Haiti, Bangladesh and former Republic of Zaire. Latin American Daily Newsletter, August 10, 2000 Edgardo Buscaglia article on the Wall Street journal Op Ed, Feb 11, 2000 discusses swelling underground economy and its harm.
The Index of Economic Freedom (by Driscoll-Holmes-Kirkpatrick) for 2001 places Argentina in the “Mostly Free” category with a rank of 29 (Ranks range from 1 for Hong Kong to 155 for North Korea, Wall Street Journal, Nov. 1, 2000). H. D. Vinod’s trimmed correlation analysis indicates that countries free from economic regulation are less corrupt. After allowing for some exceptions by 20% trimming, the correlation is near 0.9. |
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