Espert's dirty financing

Scandalous accusations of a drug-trafficker financing José Luis Espert’s 2019 unsuccessful presidential candidacy date back several years, but have come to the forefront. New documents show a US$200,000 payment, providing evidence of funding that had only been rumoured up until now. 

Espert is currently headlining the Milei administration’s campaign efforts in the upcoming national midterms, leading the ruling party’s candidate list in the all-important Buenos Aires Province. But he’s also been unable or unwilling to publicly deny receiving the US$200,000 payment, his defence amounting to accusing Kirchnerism of orchestrating a media operation against him. Yet the documentation corroborating the payment comes from an investigation being carried out by US prosecutors for the Eastern District of Texas, in which Argentine national Federico Andrés ‘Fred’ Machado is accused of “various federal violations related to a complex international drug-trafficking conspiracy” including, “conspiracy to manufacture and distribute cocaine, conspiracy to commit money-laundering, conspiracy to commit wire fraud, conspiracy to commit export violations, and conspiracy to commit federal registration violations involving aircraft.” The documents were published by Claudio Mardones in Perfil and have sparked an outcry both within and outside the libertarian ranks, all of whom are asking for Espert’s head. The economist, however, counts on the full support of the pack leader, President Javier Milei.

Multiple sources who played a part in Espert’s 2019 run confirm he had a working relationship with Machado, who is now being held under house arrest in Viedma, the capital city of the Patagonian province of Río Negro, as he awaits a final decision from the Supreme Court on an extradition request to the United States. The two met in 2019 at the behest of Infobae owner Daniel Hadad and Sergio Mastropietro, according to a source who was present at the meeting, during which Machado offered financial and logistical support for what was an austere presidential campaign. Espert was given access to private aircraft in order to ensure travel across multiple provinces and a vehicle, a Jeep Cherokee SUV. He also received financial support that went undeclared, according to the official finances of the political party he “borrowed” to run, Unite. Argentina’s electoral justice officials later rejected Unite’s accounting, indicating that supporting documentation was insufficient or lacking.

While Espert claims he only met Machado a handful of times, his former campaign public relations lead, Clara Montero Barré, told Perfil the accused drug-trafficker was one of the few financial backers Espert had at the time, if not the only one. He was present and had a role in the campaign, a claim backed by several reports that verify Machado was physically present on multiple occasions and events, including flights and a series of meetings at vice-presidential candidate Luis Rosales’ apartment in Buenos Aires. He also tried to recruit famous journalist Marcelo Longobardi to run as Espert’s vice-presidential candidate, according to information that was confirmed by both Longobardi and Montero Barré, who tried to organise a meeting between them in New York City.

At the time, Espert was at the forefront of a new wave of libertarians that included an up-and-coming Javier Milei. Both were economists with an aggressive anti-system platform that represented societal angst built up after decades of political and economic decrepitude. They despised Kirchnerism but were disillusioned with Mauricio Macri’s botched 2015-2019 Presidency. The coronavirus pandemic and ensuing lockdowns added fuel to the fire of the libertarian movement, propelling Milei from loudmouth TV panelist to national deputy in 2021 and later to the top seat in 2023. The two libertarian rockstars had a falling apart in 2021, after Espert had recruited Milei to run for national deputy in Buenos Aires City. In an interview with Alejandro Fantino, Milei said that Espert offered him US$300,000 in cash to withdraw his candidacy in order to favour then-Buenos Aires City mayor Horacio Rodríguez Larreta’s candidates, leading to Milei’s disillusionment and a subsequent break with Espert. Once the libertarian became president, he pardoned his old friend and supported him in a bid to head the Budget Committee in Congress and the national deputies list in Buenos Aires Province.

The timing of the renewed accusation and the revealing of incriminating documents should be no surprise. The Milei administration is in the heat of an existential battle in the context of the upcoming national midterm elections. While they were initially expecting a “purple tide” that would consolidate La Libertad Avanza as a hegemonic political coalition, instead Milei and his team have been hit by a perfect storm, as the economy has stalled and substantial pressure hit the peso-dollar exchange rate. At the same time, a series of public scandals have surfaced including presumed corruption at the ANDIS national disability agency, where former agency boss Diego Spagnuolo incriminated Presidential Chief-of-Staff Karina Milei and her closest associates, Martín Menem and Eduardo ‘Lule’ Menem. Before that, the Milei siblings had been tarred by the fall-out of the ‘$LIBRA’ crypto-scandal. Now, they are being forced to defend Espert’s apparent ties with drug-traffickers.

President Milei is a self-proclaimed “expert in economic growth both with and without money,” who built his political capital by promising to eradicate the “caste” and its spurious economic benefits. Failing to contain the economy while indulging in the elixirs of corruption emerges as a potent “anti-libertarian” potion ahead of a consequential election they’ve framed as a “do or die” moment. As mentioned previously in this column, Milei and his “iron triangle” – it is also composed of Sister Karina and controversial political advisor Santiago Caputo – fumbled the electoral and political strategy, ultimately raising the bar of last month’s local elections in Buenos Aires Province which resulted in a humbling defeat. They gave Governor Axel Kicillof an unexpected major political victory, just as he’s battling it out with Cristina Fernández de Kirchner over control of the Peronist space. At the same time, they had apparently subjugated Mauricio Macri and his cousin Jorge, the current mayor of Buenos Aires City, and seemed en route to fully absorbing PRO. Now, in something of a volteface, Milei has asked Macri for political support and many are speculating over some sort of cabinet intervention after the election. Vice-President Victoria Villaruel had been moving her pieces in case the political situation turned into a full-blown crisis, with the support of some sectors of the military, a plan that could be forced onto the backburner.

The fact that ramped-up accusations against Espert are politically timed doesn’t make them any less true. At the same time, the controversial economist was a political novice back in 2019 and Machado wasn’t formally accused of being part of a drug-trafficking ring until two years later — he did, however, have some history with dodgy dealings, including securing a plane for the Juliá brothers, who were ultimately incarcerated in Spain for trafficking nearly a ton of cocaine and deals with Lázaro Báez. The problem is that Espert hasn’t been able to defend himself from an accusation that has been ongoing for several years and has now blown up in his face in the middle of the campaign. He also seems to be taking a page from the Milei siblings and their reaction to the $LIBRA scandal, accusing the opposition of mounting a smear campaign while ignoring the actual accusations.

As an anarcho-libertarian, Milei could even justify the $LIBRA scam by claiming that he was just doing business and those who got scammed are fair victims of the casino-like market for memecoins. In Espert’s case, his silence seems to suggest there is more to his relationship with Machado than we currently know.