VZCZCXYZ0013
PP RUEHWEB

DE RUEHBU #1742/01 3581927
ZNR UUUUU ZZH
P 231927Z DEC 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC PRIORITY 2764
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHRL/AMEMBASSY BERLIN 1171
RUEHCV/AMEMBASSY CARACAS 1916
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEHUNV/USMISSION UNVIE VIENNA 0215
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS BUENOS AIRES 001742 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV KCOR PREL EFIN AR
SUBJECT: ARGENTINES NOT SHOCKED THERE'S CORRUPTION GOING 
ON: MUTED REACTION TO SIEMENS REVELATIONS 
 
REF: BUENOS AIRES 1164 
 
¶1. (SBU) Summary: German company Siemens' December 15 guilty 

plea with the U.S. Department of Justice-Fraud Section, over 

corrupt practices, including payments of bribes to officials 

in previous Argentine governments, has provoked sustained 

attention in the Argentine press but no major reaction from 

government or from the public.  Argentine federal prosecuting 

judge Ariel Lijo, in charge of the Argentine investigation of 

Siemens, contacted DOJ Attorney at post December 22 to 

request assistance, but has no plans to travel to the United 

States.  He said he would travel to Germany to collect 

evidence.  Although the GOA initially was moderately 

concerned that the Siemens plea agreement suggested 

continuing payments to GOA officials through 2007 -- thus 

potentially implicating the 2003-2007 government of President 

Cristina Fernandez de Kirchner's (CFK) husband, Nestor 

Kirchner -- press reports of a December 17 letter from the 

local Siemens affiliate to the GOA denying any payments under 

the Kirchner governments appear to have assuaged that 

concern.  Although the CFK government appears not to have any 

problems with evidence surfacing of Menem-era corruption, it 

may not make too much hay out of this guilty plea for fear of 

eliciting calls for similar degrees of transparency and 

investigation into more recent government deals.  End Summary. 

 

¶2. (SBU) The December 15 announcement of a guilty plea by 

German company Siemens under the U.S. Foreign Corrupt 

Practices Act, as well as revelations from the related case 

in Germany, have attracted sustained press attention in 

Argentina.  The media have drawn obvious conclusions from the 

reports' identification of bribe recipients by initials and 

titles to tag former President Carlos Menem, his Interior 

Minister Carlos Corach, and Immigration Director Hugo Franco 

as recipients of millions of dollars in bribes paid by 

Siemens to win a bloated $1.2 billion 1998 contract to issue 

high-tech national identity cards to all Argentines.  In 

addition, press has focused on the possibility of bribes paid 

to officials in the subsequent de la Rua government, when the 

discredited Siemens contract was renegotiated before 

eventually being rescinded. 

 

¶3. (SBU) The government of President Cristina Feranandez de 

Kirchner (CFK) reportedly took issue at first with the plea 

agreement's language of bribes and other illicit activities 

by Siemens extending from 1998 to 2007, which suggested at 

least illicit activities under the government of CFK's 

husband, former President Nestor Kirchner (NK, 2003-2007). 

USG sources quoted by the local press, however, indicated 

that no government officials in the Nestor Kirchner or 

Cristina Fernandez de Kirchner administrations had been 

implicated.  On December 17, the President of Siemens 

Argentina, Enrique Antonio Genzone, was reported by the press 

(La Nacion, December 18) to have written to CFK Minister of 

Planning Julio de Vido to report that the bribes occurred 

""only under the Menem government,"" or ""not since 2003"" (a 

""clarification"" that contains an apparent contradiction 

regarding the 1999-2001 de la Rua government).  Siemens took 

out a full-page ad in major Argentine newspapers over the 

weekend of December 20 to repeat its statement that neither 

Kirchner government was involved in the corruption. 

 

Requests for Assistance 

----------------------- 

 

¶4. (U) Argentine press have drawn attention to a reported 

provision of the U.S. plea agreement that requires Siemens to 

fully cooperate with foreign governments investigating the 

cases of corruption affecting them.  This was described as an 

""open door"" and an unprecedented opportunity for Argentina to 

investigate local corrupt practices, with some questioning of 

whether the GOA was responding with enough energy to the case. 

 

¶5. (SBU) Embassy has received two GOA approaches about 

possible requests for assistance under our Mutual Legal 

Assistance Treaty (MLAT).  First, officials from the Ministry 

of Justice's Anti-Corruption Office contacted Legat on 

December 19 to request assistance in obtaining the plea 

agreement, and in particular confirmation of the names of 

those referred to by their initials and title as well as 

details on evidence that the bribes were paid.  On December 

22, federal investigating judge Ariel Lijo contacted DOJ 

Attorney at Post to request help in obtaining a certified 

 

copy of the complaint against Siemens and the plea agreement. 

 In addition, he requested help obtaining the German audit of 

Siemens.  DOJ Attorney at Post is working with DOJ 

prosecutors on Lijo's request for the U.S. public documents 

and inquiring regarding the availability, through U.S. 

channels, of the German audit. 

 

Denials 

------- 

 

¶6. (U) After a day of silence, former President Carlos Menem 

issued a denial that he had accepted any bribes, calling the 

allegations ""malicious.""  Officials in the de la Rua 

administration have engaged in a more robust bout of 

finger-pointing, arguing over who was responsible for 

considering a renegotiation of the Siemens contract even 

after official reports of irregularities had been issued by 

the semi-autonomous GAO-equivalent Sindicatura General de la 

Nacion (SIGEN). 

 

A Good Fit with the Kirchner Narrative, But... 

--------------------------------------------- - 

 

¶7. (SBU) Comment:  Generally, the Siemens revelations fit 

well with the Kirchner narrative that former President Carlos 

Menem's march to privatize the economy was a process larded 

with corrupt deals.  The detailed and convincing charges now 

leveled against Menem and his associates offer something more 

concrete than Argentine justice has been able to produce to 

date.  This may also play out in Argentina's favor in the 

realm of investment disputes, given that the CFK government 

has sought to annul the February 2007 ICSID ruling that 

awarded Siemens $217.8 million for the GoA's 2001 

cancellation of the identity card project. (The ICSID 

arbitral panel ruled that the de la Rua government decision 

to rescind the identify card contract was a breach of 

contract under the Argentina-Germany Bilateral Investment 

Treaty.  See reftel for background.) 

 

¶8. (SBU) Comment continued: Still, the CFK administration may 

be reluctant to make too much of the case given widespread 

suspicions that all is not entirely right in the current (and 

previous) government's public licitation processes.  Official 

corruption in Argentina is not the province of one former 

government or one wing of the Peronists, and too much 

attention to the Siemens case, it may be feared, might 

encourage the public to demand even greater and broader 

scrutiny to contracts.  We can't help but note to ourselves 

that the DOJ and SEC pursuit of Siemens (by implicating 

Kirchner opponent Menem rather than a Kirchner official) 

serendipitously undermines the Kirchner assertions of a vast 

USG conspiracy against them. 

WAYNE 


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