Clean slates – for greenbacks only

If Argentina has not advanced an inch in the transparency rankings in the 17 months of the Javier Milei administration (as ex-president Mauricio Macri pointed out in the heat of City midterm battle), at least two of this week’s main news items may be considered further setbacks in the fight against corruption – very obviously the suspiciously fine-tuned collapse of the ‘ficha limpia’ bill in the Senate in midweek and, rather more subtly, Economy Minister Luis Caputo’s invocation to pump dollars into the economy with no explanation as to their origin required.

What kind of message are the senators sending if they are offering an open door to those convicted for corruption whose candidacy the ficha limpia would have barred? Why go to all the trouble of expelling the dollar-laden Entre Ríos senator Edgardo Kueider as “morally unfit” late last year when he had done nothing to prevent him from tossing his hat into this year’s ring? The two Misiones senators who flipped a tight vote are under intense scrutiny for allowing the Milei government to have its cake and eat it too – thanks to these frequent government allies, the libertarian senators could occupy the moral high ground by voting unanimously this time for the bill while keeping ex-president Cristina Fernández de Kirchner (with an upheld corruption conviction) in the electoral fray as the perfect rival. But perhaps also decisive was the absence of Senator Daniel Bensusán (Peronist-La Pampa). Why stay away when every vote was needed to frustrate the bill? Because had he attended, the Senate would have been tied 36-36 with a possible deciding vote for Vice-President Victoria Villarruel – paradoxically, the opposition to the bill needed to lose in order to win. Every suspicion of a meticulously manipulated result instead of free votes of conscience.

Caputo’s drive to pump dollars into the economy to keep it moving and even growing seems perfect common sense after all his efforts to prick the peso balloon and shrivel that money supply – it might even be seen as a step towards honouring Milei’s almost forgotten campaign promise of dollarisation. It could be argued that his words represent a fresh sense of urgency for a Central Bank reserve accumulation more substantial than the fruit of a massive International Monetary Fund (IMF) loan rather than anything new – the crackdown against printing pesos has long been forcing ordinary citizens to part reluctantly with their dollar savings.

But more importantly, the minister’s indifference to the origin of dollars seems to offer open season for money-laundering simultaneously to the corrupt retaining access to Congress, thus incurring a risk of a return to being grey-listed by the Financial Action Task Force (FATF) watchdog. Less dramatic than the proceeds of drug-trafficking or graft but perhaps more insidious is the green light given by the greenbacks to the informal economy destroying the sustainability of the pension system. And parallel to the question of why the Senate bothered with expelling Kueider, those complying with the conditions of last year’s tax whitewash might ask themselves why they went to all that trouble.

It remains to be seen whether Caputo can coax any more dollars into the economy than he is already forcing with his tight money policies. The old habits of using the peso as a transactional currency and dollars for saving die hard. Also deeply rooted are fears of the tax bureau (whose current acronym is ARCA) and the banking system with a preference for having dollars in the banks under the ground in vaults rather than in deposits. Whether the dollars are at home or abroad or under the mattress is immaterial – the trick is to draw them into the economic system, something not guaranteed by Caputo’s criteria or lack thereof.

This laxity should not be seen as a pragmatic flexibility serving as a welcome counterbalance to an overly restrictive system, however much it might need deregulation in other respects. We have recently seen Marcelo Moretti, the president of San Lorenzo (the favourite football club of the late Pope Francis), shoving wads of banknotes into his pockets while the various husbands of Jésica Cirio (Martín Insaurralde and Elías Piccirillo) keep corruption in the public eye. But indignation is also accompanied by indifference when it comes to public opinion – thus surveys show the staunchly anti-corruption Paula Oliveto of the Coalición Cívica to be almost as out of next weekend’s City race as the nonsense candidates. A black week for removing the stain of corruption with no guarantee against more to come.