ID:205821
    Date:2009-05-06 21:41:00
    Origin:09BUENOSAIRES534
    Source:Embassy Buenos Aires
    Classification:CONFIDENTIAL
    Dunno:09BUENOSAIRES428
    Destination: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