VZCZCXYZ0019
OO RUEHWEB

DE RUEHBU #0534/01 1262141
ZNY CCCCC ZZH
O 062141Z MAY 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3671
INFO RUCNMER/MERCOSUR COLLECTIVE
RHMFISS/DEPT OF JUSTICE WASHINGTON DC
RHMCSUU/FBI WASHINGTON DC

C O N F I D E N T I A L BUENOS AIRES 000534 
 
SIPDIS 
 
E.O. 12958: DECL: 05/06/2029 
TAGS: PGOV KCOR KDEM PHUM KFRD SNAR ASEC AR
SUBJECT: (C) ARGENTINA: RECENT UNSETTLING DEVELOPMENTS 
POINT TO FRAYING ANTI-CORRUPTION FRAMEWORK 
 
REF: BUENOS AIRES 0428 

 

Classified By: CDA Tom Kelly for reasons 1.4 (b) & (d). 

 

¶1. (C) Summary:  Recent moves by the Government of Argentina 

(GoA) undermine the independence and efficacy of Argentine 

agencies with jurisdiction over corruption cases.  In early 

March, Manuel Garrido, Argentina's chief prosecutor for 

corrupton cases resigned, claiming frustration over 

perceived limitations placed on his authorities by Prosecutor 

General Esteban Righi.  From late 2008 through February 2009, 

the head of the National Auditor General's Office (AGN), 

Leandro Despouy, spoke out publicly against what he, the 

press and the opposition characterized as GoA attempts to 

limit his purview.  Both Garrido and Despouy have 

investigated and publicly reported findings implicating 

irregularities by Kirchner officials and allies.  President 

Kirchner appointed a family friend, Julio Vitobello, to head 

the Anticorruption Office (OA) and another ally, Carlos 

Pacios, to replace Vitobello in the National Comptroller,s 

Office (SIGEN).  In the Kirchners' home province of Santa 

Cruz, a Kirchner niece is in charge of the ""investigation"" 

into questionable land deals involving the Kirchners and 

their circle. These developments point to a weak and 

emasculated institutional framework in Argentina's 

intermittent attempts to combat public corruption.  End 

Summary 

 

GARRIDO'S RESIGNATION 

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

 

¶2. (U) In mid-March, Argentina's top District Attorney in the 

National Prosecutor's Office for Administrative 

Investigations (FIA), Manuel Garrido, resigned from the FIA 

after five years as its head.  Garrido, opposition 

politicians, respected NGOs, local press, and blogs 

criticized the GoA's treatment of Garrido and characterized 

the forced resignation as a loss in Argentina's fight against 

corruption.  Garrido claimed his resignation stemmed from 

Prosecutor General Esteban Righi's promulgation of Resolution 

147/08 in early November 2008, which reduced the FIA's 

powers.  The FIA was created by law to investigate potential 

criminal activity of national public officials.  Righi's 

resolution establishes that the FIA would no longer have a 

direct role in cases that did not initiate with a criminal 

complaint by the FIA, reflecting a restrictive interpretation 

of the FIA's legal authorities and effectively constricting 

Garrido's ability to intervene in cases against public 

officials. 

 

¶3. (U) Garrido sharply criticized Righi's measure, warning 

that the FIA would cease to exist as an independent and 

specialized entity to prosecute crimes committed by public 

officials and requesting Congressional action.  Garrido 

further suggested that the lack of a specialized, independent 

body investigating public corruption went against Argentina's 

duties as a signatory to the United Nations Convention 

Against Corruption.  Righi retorted that Garrido should 

abstain from ""self-promoting campaigns"" regarding his role in 

the fight against corruption. 

 

¶4. (SBU) Garrido had distinguished himself as the prosecutor 

who filed or advanced the most high-level corruption cases 

implicating administration officials.  Garrido had an 

important role in the following cases: the alleged 

manipulation of the National Statistical Agency (INDEC) by 

Secretary of Internal Commerce Guillermo Moreno; the Skanska 

corruption allegations; the bag of money found in the office 

of then-Economy Minister Felisa Miceli; the alleged illicit 

enrichment of Nestor Kirchner and, separately, of the former 

debt negotiator Daniel Marx; the overpricing of public works 

contracts; the installation of electricity cables in southern 

Argentina by Electroingenieria, a company with close ties to 

the Kirchners which employs the son of Planning Minister De 

Vido; the management of official GOA advertising by Press 

Secretary Enrique Albistur; train repairs by Transport 

Secretary Ricardo Jaime; and the decision process for 

granting highway concessions.  Press reports noted, however, 

that although Garrido had launched over a hundred 

investigations in five years (compared to four investigations 

in nine years by his predecessor), he had not obtained any 

convictions during his tenure. 

 

A CHORUS OF COMPLAINTS 

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

 

¶5. (U) In announcing his resignation, Garrido complained he 

had suffered ""infinite difficulties, setbacks, and trip-ups 

and inexpressible episodes of resistance, administrative and 

structural deficiencies.""  Garrido told newspaper ""La Nacion"" 

 

he was convinced that Argentina offered impunity to 

corruption.  His resignation letter was reportedly a long 

attack on Righi's resolution and the harm it produced to the 

authorities of the FIA and to anticorruption efforts in 

general.  In his conclusion, Garrido asserted that, while 

corruption is common to all countries, Argentine corruption 

regrettably sets itself apart in its impunity and the lack of 

commitment to confront it. 

 

¶6. (U) From the opposition, Radical Party (UCR) Senate leader 

Ernesto Sanz, the vice president of the Council of 

Magistrates, sought to call attention to Garrido's 

resignation.  UCR National Deputy and bloc leader Oscar Aguad 

claimed Garrido was mistreated and cornered by the 

administration for being one of the few with the courage to 

challenge its power.  Civic Coalition National Deputy and 

bloc leader Adrian Perez also joined the criticism, 

explaining the resignation as a consequence of the 

administration,s deliberate policies to weaken and destroy 

the country,s institutions of control.  Center-right PRO 

National Deputy Esteban Bullrich accused the administration 

of obstructing corruption investigations. 

 

¶7. (U) Laura Alonso and Delia Rubio, of the NGO Citizen Power 

(Poder Ciudadano), said the resignation was a setback in the 

fight against corruption.  Similarly, the Center for the 

Investigation and Prevention of Economic Criminality (CIPCE) 

denounced Garrido's resignation as an additional indicator of 

Righi's unwillingness to investigate economic crimes.  CIPCE 

claimed ""the judicial system systematically fails in its 

mission to clarify the penal responsibility of the 

businesspeople and officials involved in such acts.  And, 

clearly, the Ministry of Public Prosecution has the primary 

responsibility for this situation."" 

 

THE DEFENSE 

----------- 

 

¶8. (U) Righi denied all of the accusations against him and 

said he would have preferred for Garrido to remain in his 

position.  At the same time, Righi accused Garrido of 

damaging the reputation of the Prosecutor General's office by 

filing highly publicized but poorly documented, premature 

criminal complaints.  Righi said he had not limited Garrido's 

authorities. 

 

PARTING SHOTS 

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

 

¶9. (U) Before he left, Garrido filed several more criminal 

complaints implicating GOA officials.  One accuses Claudio 

Uberti, the former toll road regulator who was fired in the 

""Valijagate"" scandal, and Jorge Simeonoff in the Planning 

Ministry of administrative irregularities and presumed 

collusion with the highway construction firm Coviares in 

contract negotiations.  The other two cases accuse the 

Executive Branch of irregularities in the management of 

campaign financing -- specifically regarding the broadcasting 

of political events on a private cable network using public 

funds -- and presumed irregularities and in another highway 

concession with the firm Caminos del Valle SA.  Garrido 

presented the campaign finance complaint to the National 

Electoral Chamber.  Garrido also filed a criminal complaint 

alleging overpricing in an electricity cabling project run by 

Electroingenieria, a company with close ties to the Kirchner 

administration. 

 

TRANSPARENCY UNDER ATTACK 

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

 

¶10. (SBU) The Argentine National Accounting Office (AGN) is 

at the center of a second set of debates about independent 

voices in the Argentine government structure.  The press gave 

prominent coverage to a shouting match at a public meeting in 

February of the AGN's governing board.  The Congress set up 

the AGN to be headed by someone, currently Leandro Despouy, 

named by the opposition to audit the GOA.   At the February 

meeting, Despouy thwarted efforts by Kirchner allies to limit 

his authority in setting the agenda for the AGN and impede 

publication of the agency's reports.  Despouy noted that not 

a single AGN report had been refuted in seven years, but 

warned the AGN was at risk of losing its credibility as had, 

he claimed, the GOA's controversial statistics agency 

(INDEC).  He identified the AGN report on overpricing in a 

public works project awarded to Electroingenieria as the 

leading factor prompting the GOA's move against him.  The 

report was posted to the AGN website on December 3, 2008, 

after being approved and signed by all seven General Auditors 

in Resolution 199/08-AGN and being submitted to Congress, but 

it was removed in January when the GOA denied its existence 

 

and content.  On February 10, ""Clarin"" published an editorial 

piece by Despouy in which he defended the AGN's record and 

called attention to the administration's attack on 

transparency as represented by its attempt to limit the 

publication of AGN reports.  The AGN report on 

Electroingenieria was reposted online and remained available 

as of early May 2009. 

 

KIRCHNERIST ALLIES ATOP SIGEN AND ANTICORRUPTION OFFICE 

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

 

¶11. (SBU) President Kirchner in January transferred Julio 

Vitobello, head of the National Comptroller's Office (SIGEN), 

to take over as head of the Anti-Corruption Office (OA) in 

place of Abel Fleitas Ortiz de Rozas, who died in December. 

The OA falls under the Ministry of Justice and has 

jurisdiction to investigate any use of state funds. 

Vitobello was brought into the Kirchner administration by 

former Cabinet Chief Alberto Fernandez.  From 2000 to 2003 he 

served in the Buenos Aires city legislature for the Peronist 

Party (PJ) and from 1993 to 1997 he served as chief of staff 

to the Interior Secretary.  ""La Nacion"" said Vitobello had 

opened the lowest number of investigations ever during his 

2008 tenure at the head of SIGEN, part of a chorus of 

accusations that Vitobello as head of the OA would not 

fulfill his mandate to investigate official corruption 

proactively and effectively.  Vitobello is reported to be 

close to the Kirchners and joins in weekend soccer games 

organized by former president Nestor Kirchner at the Olivos 

presidential residence.  Vitobello was replaced in SIGEN by 

the former adjunct Comptroller General, Carlos Pacios, 

another official reported to be close to the Kirchners and 

former Cabinet Chief Alberto Fernandez. 

 

REAL ESTATE GAMES: ALL IN THE FAMILY 

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

 

¶12. (U) In the Kirchners' home province of Santa Cruz, the 

investigation of a case against members of the administration 

and thir allies in the business sector remains stalled.  The 

case focuses on the preferential sale of large properties to 

approximately 50 top administration officials, including the 

Kirchners, and pro-administration businesspeople during the 

final years of the tenure of Nestor Mendez, the mayor of El 

Calafate from 1995 to 2007.  The investigation is in the 

hands of prosecutor Natalia Mercado, who is the daughter of 

Minister of Social Development Alicia Kirchner and niece of 

former president Nestor Kirchner.  The case began with a 

formal complaint filed by local UCR leader and former mayoral 

candidate Alvaro de Lamadrid and it focuses on the purchase 

of municipal land by the Kirchners and close associates, 

including Rudy Ulloa, Lazaro Baez, Carlos Sancho, Fulvio 

Madaro, Natalia Mercado herself, Romina Mercado, Julio Ciurca 

and Ricardo Etchegaray.  Nestor Kirchner reportedly re-sold 

two hectares (20,000 square meters) to a Chilean investment 

group for US$2 million -- forty times what he paid after less 

than two years.  Lamadrid also alleges that the municipality 

promotes a public works policy designed to benefit these VIP 

landowners.  Mendez is at the center of the case, accused of 

abuse of authority and influence trafficking.  Now a 

provincial congressional deputy for the Victory Front (FPV) 

party, Mendez insists the sales were legit. 

 

COMMENT 

------- 

 

¶13. (C) Argentina's corruption scandals frequently make a big 

splash at the outset, only to dissipate into oblivion due to 

the languid pace of the ""investigations"" and the endless 

juridical ping-pong to which they are submitted.  According 

to the local NGO Center for the Study and Prevention of 

Economic Crimes, corruption cases in Argentina took 14 years, 

on average, to be resolved and only 15 out of 750 cases tried 

resulted in convictions (see also Ref B).  At the FIA, 

Garrido kept up a frenetic level of activity in launching 

over 100 investigations, but he did not obtain a single 

conviction in over five years.  At the AGN, Despouy gets high 

marks for maintaining high standards of integrity, but 

questions persist as to the AGN's efficacy and impact.  At 

the OA, Vitobello's cozy chumminess with the Kirchners 

suggests a conflict of interest, as does the court decision 

in Santa Cruz to have the Kirchners' niece investigate 

questionable land deals.  Glaring weaknesses in key 

components of Argentina's anti-corruption architecture point 

to an emasculated institutional framework incapable of 

providing needed checks and balances.  For these and other 

reasons, Transparency International again named Argentina in 

mid-April among nine countries in the region that failed to 

implement established anticorruption practices. 

 

KELLY 


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