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The dark cloud of corruption hangs over the Kirchner clan

By Tony Pagliaro

18.03.06 | Prior to suddenly becoming President of Argentina -with only 22% of total votes cast- Néstor Kirchner was the obscure Governor of the Province of Santa Cruz, deep in Patagonia. Santa Cruz is a large state with a small population of slightly over 200.000 people. It easily became Kirchner’s personal feud. The recipe used is a simple and straight forward one. Everybody has either a public employment or a second public job. This “strategy” works as subsidies do, no body wants to lose gifts paid by and received from the State budget.

For years it has been said that no public work contract was ever awarded in the jurisdiction of Santa Cruz had the respective contractor not previously agreed to pay a “kick-back” to the local political “elite”, i.e. to the Kirchners themselves or to their local straw-men and cronies.

When Néstor Kirchner unexpectedly became Argentina’s president -in 2003- and the Kirchners therefore moved to Buenos Aires, Mr. Sergio Acevedo became Governor of Santa Cruz. Notwithstanding, Mr. Carlos Kirchner (brother of the President) was “suggested” -from the top- as his Minister of Public Works and, certainly, was appointed as such. Thus the public works contracts area remained very “close” to the Kirchners eyes (and pockets and purses).

In mid 2004, Acevedo (concerned with the situation) tried to replace Kirchner’s brother, forcing him out of his provincial cabinet, but immediately a strong and unequivocal “warning” came down from Buenos Aires, and Acevedo decided that Carlos Kirchner’s resignation was -then- not his priority.

Out of the blue, however, Sergio Acevedo has just resigned. He is not any longer the Governor of Santa Cruz. What happened? According to the weekly “Noticias”, Acevedo refused to pay back 30 million US Dollars to the Kirchners. Said monies had been “generated” by recent public works “awards”. He clearly decided he did not want to be part of a growing “tsunami” of corrupt deals that now surround the Kirchners, which, according to Elisa Carrió (the leader of the opposition party known as “ARI”), are run by Kirchner’s federal Minister of Planning and Public Works, Mr. Julio De Vido, a professional architect . Santa Cruz, with only 200.000 inhabitants, has a budget of 1.480 million dollars; federal funds to finance public works for an additional amount of 600 million dollars; and savings of about 500 million dollars, invested between Switzerland and Santa Cruz. These last funds where recently investigated by a federal court for alleged corruption (commissions paid) in its “placement” abroad. The then acting federal judge declared that he had no jurisdiction over the issue and sent the case to be dealt with by the Santa Cruz judiciary. A judge in Santa Cruz has now closed the investigation. He is none other than Néstor Kirchner’s nephew and -curiously- he did not find any reason whatsoever to “excuse” himself from handling this hot case. With these amounts of money at stake, the chances for corruption in the Santa Cruz public works environment are definitely high.

While all this is happening one cannot avoid thinking about (1) the recent resignation of the former Argentine Minister of Economy, Roberto Lavagna, just after he publicly talked about a growing problem he defined as the manipulation of public works contracts and a pattern of price “overcharging” connected to them; and (2) the sales of Argentina’s public bonds to Venezuela, which has generated a chain of “resales” trough “loyal” Venezuelan banking channels that apparently have produced some fat and striking “price differentials”. Somebody is definitely milking all this. At some point, sooner or latter, truth will be known.

The new Governor of Santa Cruz is, by the way, Carlos Sancho. As expected, he has close and obvious connections with President Néstor Kirchner. Sancho is the owner of the “real estate” firm where Máximo Kirchner, the only male son of Argentina’s President, “works”. A family feud, of course.

As it has always been the case since populist Juan Domingo Perón created the political “movement” known as “Peronism”, its political structures are constantly flooded by all sorts of corruption accusations. And unfortunately events seem to confirm that the corruption issue has become a gigantic challenge for Argentina. Even more, a political bomb that has already begun to tick.

In the meantime, Cristina Kirchner, the President’s powerful wife, moves around the country showing-off, dressed up in expensive dresses and “tailleurs” made up only with “soft” colors. Her image, however, is not a “soft” one, at all. A smart manipulator herself, she is expected to become Argentina´s next President. Provided the Kirchner clan survive (through manipulation and intimidation) the corruption accusations, which are the new hurdles that confront them.

Post-scriptum: As you may have guessed, dear reader, the first “political” measure taken by Governor Sancho was a salary increase, across-the-board of 100 US Dollars, per head. Everybody happy and applauding.

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