GRalINt/POL-Argentine corruption: business as usual?

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Argentine corruption: business as usual?


Apr 22, 2013, by Jude Webber


Corruption is a popular spectator sport in Argentina – at least to judge by the TV ratings of a show by the country’s most prominent investigative journalist.



Jorge Lanata has for the past two Sundays run videotaped conversations with a financier and an accountant and revealed documents purporting to show that a businessman, Lázaro Báez, was a front-man and partner of former president Néstor Kirchner, the late husband of incumbent Cristina Fernández, and that the financiers were involved in illegally funnelling money out of Argentina. The second show in the series, aired on April 21, had record ratings.

The government has not come out and denied the allegations directly, but at least one prominent pro-government legislator has dismissed them and the financier and accountant have gone on other television shows and changed their story, saying they had lied to Lanata.

Corruption is widely considered something engrained in Argentina – there have been precious few top-level convictions, and there is a sense that public officials are untouchable. According to one poll 70 per cent of respondents believed the allegations but only 14 per cent considered convictions would follow.

The sense of official impunity – at a time when the government is pushing through judicial reforms that it says will “democratise” the system – was one of the major complaints at nationwide demonstrations on April 18. The protests saw tens of thousands of pot-banging citizens, gathered by social media rather than a party or leader, coming out in Argentina’s major cities to express their anger against the government.

As far as corruption is concerned, it seems not a day goes by at the moment without some new allegation or incident.

Monday was the turn of Ralph Lauren, the US fashion group, which paid $1.6m to US authorities, and left the country, in order to settle allegations that it bribed customs officials $568,000 in cash between 2005 and 2009 and gave three different government officials gifts of perfume, dresses and handbags valued at as much as $14,000.

No one was available in the president’s office to comment on the allegations. The company “investigated, self-reported, co-operated fully with the authorities, conducted a worldwide risk assessment and implemented a series of remedial measures, including enhanced compliance programs and training”, said Tom Hanusik, a lawyer for Ralph Lauren, as reported by the FT.

Also on Monday, La Nación newspaper reported that Brazilian plane maker Embraer was investigating allegations of bribery payments in Argentina. But Embraer refuted that in a statement:


Regarding the information published in the Argentine press, involving the name of Embraer, the Company categorically denies the accusations of any irregularity in the process of the sale of airplanes to Austral Líneas Aéreas. The Company regrets the fact that it was not contacted by the authors of the news articles and, therefore, did not have an opportunity to refute the untruths that were published.



A spokesman said the company had reported an investigation to the US SEC in 2011 and had recently expanded the three countries in that original remit to five, but which countries have been involved and details have not been disclosed.

Argentina might be like a juicy political soap opera, but will corruption hurt the president, popularly known as CFK for her initials (Cristina Fernández de Kirchner)? No, is the short answer from Daniel Kerner of Eurasia, a consultancy.

In a note to clients, he wrote:


Corruption allegations will probably not damage CFK. New corruption allegations that a businessman with close ties to the administration (Lazaro Baez) has generated ample media coverage. The issue has brought corruption back to the spotlight and will probably continue to dominate headlines. However, the corruption scandal is unlikely to have a major political impact other than reinforcing discontent among opposition voters. There have been numerous corruption accusations against the government in the past, and they usually die down. Thus, while they clearly don’t help the government, unless the accusations (more) directly touch President Cristina Fernandez de Kirchner or one of her main advisors, this will not develop into a political crisis.



Business as usual then?



Source: www.blogs.ft.com