Southern Exposure

Desde as Entranhas dos Labirintos Latinos.

Wednesday, December 17, 2003

Argentina: Explosives Lost & Found, Both Chemical And Political

Last Thursday, people still mostly unidentified stole 700kg of high explosives from a mine operation in the southern state Neuquén. You can do a lot with 700 kg of that stuff, up to an including leveling pretty much an entire city block. Needless to say, everybody was quite worried, as hypothesis from mass jailbreaks to terrorism were put forward. To general relief, the explosives (although not the equipment that had been stolen with them) were found ditched in a nearby canal last Monday by some kids. Police suspects that the thieves were after all not very sophisticated, and lacking the capability to move the explosives out of the zone, were forced to leave them behind.

President Kirchner is now the pro-tempore President of the Mercosur (much as Berlusconi chairs the EU at the moment). His "inaguration speech" at Montevideo, Uruguay, was nonetheless mostly directed at the IMF, saying that he would "resist pressures", making a veiled reference towards the IMF's delaying of its approval of Argentina's fiscal goals. There is a game of "hot potato" going on between Argentina and its creditors. Whoever ends up holding -being forced to fully pay or selling by a pittance- is something that will heavily influence the issuing of soberan debt elsewhere. Unless somebody blows up something, I think that this negotiation will be Argentina's top story in international media.

But the story of the week is without doubt the "coimas en el Senado" ("bribes in the Senate"). A bit of background:

Once upon a time -April 2000, to be exact- an Alliance of Radicals (remember, Radicals in Argentina are left-centrist, Liberals are in the right) and the left-of-left-of-center front FREPASO had won the elections following the two Menem presidencies. Fernando de la Rua was president, Carlos "Cacho" Alvarez was his VP, and honesty and sobriety were the Government's watchwords.

Enter the IMF. Both the Fund and local business wanted a law "flexibilizing" working conditions, making easier and cheaper to hire or fire people, and diminishing the power of unions. Unions in Argentina -with strong ties to both the Justicialist Party and, as of late, with leftist organizations- are quite strong, and there's even a number of labor rights written into the Constitution itself. Businessmen argued that the high costs involved were squashing profits and rising unemployment, and as the IMF was backing everything, the Administration felt that this was a law that they wanted to pass. The problem was that it was a hugely unpopular law, and there was, let's say, strong resistance in Congress (remember that De La Rua didn't have a majority of his own in the Senate).

To cut a long story short, the law was eventually passed by the Senate, and today, although only partially implemented, is still a factor shaping work relationships in the country. There were, in any case, multiple accusations of bribery to the members of the Senate, and apparently protesting De La Rua's slow hand to look into matters, Vicepresident Alvarez quit his post. There were some investigations, reports, etc, but eventually the thing, and later De La Rua's presidency, died down anyway.

About three years later, that is, a couple of weeks ago, former Senate Secretary Mario Pontaquatro told the magazine TXT that he, in fact, had delivered a $5 million bribe (U$D 5 million at then-current rates) to a number of Senators, at the bequest of De La Rua. The funds had come from the discretionary funds of the SIDE (Servicio de Inteligencia del Estado, State's Intelligence Service), an intelligence budget under very little supervision, and often suspected of being used to finance all kinds of illegal activities, and Pontaquatro gave a detailed account of the story.

As it stands now, the scandal is shaping up big. Pontaquatro has given a judge a list with the names of the allegedly bribed Senators, and former President De La Rua, along with other people involved, has been forbidden to leave the country. Both the media and the government are expressing lots of interest in this case, and it's not outside the realm of the possible that De La Rua or former Senators could spend some time in jail for this.

Not as shocking, or as useful, as the revelations would have been before or just after the law was voted, but I'll take what I can.

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