High corruption in Argentina

There are few things as disheartening for a society as elevated levels of impunity for apparently unjust acts that have been brought to the public domain. It generates a sense that if those in charge of reprimanding violations of the supposedly omniscient moral structure are turning a blind eye, then following the rules becomes disadvantageous. By making it foolish not to break the rules, it leads to a deterioration of the moral fibre that ultimately becomes socially fatal and inevitably leads to crisis. Indeed, this is the traditional view of the fall of the Roman Empire, where the loss of the traditional virtues – the mos maiorum or customs of the ancestors – led to Romans indulging in excess luxury, prioritising self-interest and corruption, ultimately becoming decadent. Moral decay begat political instability and military decline, public finances became bloated and in the end social cohesion broke down.

Two years into Javier Milei’s Presidency, there is a growing sense of impunity that is by no means his sole responsibility, even if he and sister Karina Milei appear to be personally benefitting, along with a large and growing number of associates. It is reminiscent of moments of high corruption such as those seen in the latter Kirchnerite years, acts of which are currently being revisited by the oral trial in the ‘Cuadernos’ corruption notebooks scandal that has accused ex-president Cristina Fernández de Kirchner of leading an illicit association, and those from the Carlos Menem era. Both situations ended catastrophically for Argentina: the end of convertibility, with the end of convertibility generating a social implosion in 2001-2002, while the after-effects of the Kirchnerite populist boom blew up in Mauricio Macri’s face in 2018.

It is difficult to pin the blame for endemic corruption on any single actor, much less so a political outsider who came into office with a mandate to eradicate the “caste” that lives off the tit of the state. As an anarcho-capitalist, Milei could even be seen as indifferent to corruption to a certain extent, given that the first act of theft is the existence of the state itself, under his worldview. As highlighted by Gustavo González in a column for Perfil, the President has claimed that tax evaders are heroes – his own sworn testimony of net worth appears to indicate widespread omissions, unless he wasn’t truly the successful economist and public speaker he claims to be. Milei even admires mobster Al Capone. It is difficult to imagine that this is the profile of an anti-corruption crusader.

At the same time – and as he’s said so before – Milei reached the Casa Rosada accompanied only by Karina and his dogs, including the late Conan, with whom he apparently still communicates. Being forced to populate thousands of official posts with whoever was available, his government was initially seen as amateurish and inefficient. Such an approach spills over into the realm of corruption, where the different schemes that have recently surfaced in journalistic and legal investigations point to a level of aloofness that can only be explained by a combination of inexperience and perceived impunity.

The mechanism by which the ANDIS national disability agency was defrauded emerged after the leak of a series of audios attributed to Milei’s former personal lawyer, Diego Spagnuolo. The man put in charge of the agency appears to have complained about being left out of the alleged bribery and kickbacks scheme utilised in the purchase of medications. Karina Milei and the Menems – cousins Martín and Eduardo ‘Lule’ Menem – were skimming off three percent, he claimed. The laboratories, personified by the Suizo Argentina firm of the Kovalivker clan, were taking their cut too. And poor Spagnuolo was only getting scraps

In recent weeks, the emergence of Miguel Ángel Calvete as an off-the-books operator in charge of organising the whole scheme, intermediating between both public officials and the pharma companies, took the graphic nature of the situation to another level, as explained in last week’s column. Yet there are suspicions that Calvete was thrust into the scene to “cover up” for Karina and the Menems, who have somehow managed to fly below the radar in the past few weeks. Indeed, prosecutor Franco Picardi has shown haste with a case of high political impact, but there are questionings as to how far he is willing to go with Karina, the presidential chief-of-staff, and her inner circle. Picardi will have to work even harder to prove he is impartial.

Yet, the ANDIS graft scandal directly ties in with the main case of the week, so to speak. At the centre is Claudio ‘Chiqui’ Tapia, the president of the Argentine Football Association (AFA) who finds himself in the eye of the storm for apparent manipulations on the sporting front that benefit his friends (and his club). Chiqui’s impunity at AFA is in part connected to his status as the President who brought Argentina the World Cup that Lionel Messi needed to cement his legendary status. On the sidelines though, off the pitch, is a giant business web in which Chiqui is alleged to have spread his multiple tentacles, together with sidekick and fellow AFA official Pablo Toviggino.

The duo appear to be linked to one of the lines of investigation at ANDIS through Sur Finanzas, a financial firm of explosive growth in recent years that sponsors the Argentina’s top-flight football league and multiple teams including Racing Club, Banfield, Atlanta, and Barracas Central, which is run by Tapia and his family. Sur Finanzas was involved in operations used to launder the dirty funds that came out of the ANDIS scheme. It is owned by Ariel Vallejo, who in just a few years went from having a single office with three employees in Southern Buenos Aires to multiple registered companies in Miami and a black Ferrari California, as La Nación reported. It is currently under investigation by the tax authority (DGI) for suspected money laundering and tax evasion for suspicious transactions potentially totalling as much as 800 billion pesos. The firm has been under suspicion since at least 2021 for shady dealings to avoid currency controls during the Alberto Fernández Presidency, many of which are associated with Sergio Massa’s days in the Economy Ministry and the “King of the Blue,” Elias Piccirillo, another figure previously covered in these columns. Vallejo and Chiqui are very close, and the former’s influence in the world of Argentine football has grown hand in hand with the latter’s powerful grip over it.

These endemic chains of corruption appear widespread. From the Milei siblings’ involvement in the ‘$LIBRA’ crypto-scandal to the revelations of the multiple cases involving Fernández de Kirchner showing the alleged flow of millions of dollars in cash to the Olivos presidential residence and to her apartment in Recoleta during her time in office. Then there’s the various firms tied to the Menem clan and Leonardo Scatturice with juicy government contracts, both revealed by investigations by Rodis Recalt in Noticias. And José Luis Espert’s financing by suspected drug-trafficker Fred Machado. And the multiple accusations against Mauricio Macri and his extended family, including questions over projects such as Correo Argentino, the Parques Eólicos windfarms, Paseo del Bajo underpass and the “Causa Peajes,” to name a few.

For now, it seems that only Kirchnerite corruption is being seriously reprimanded by the Judiciary, which itself is the subject of high suspicion. Impunity, in the long run, breeds further norm-breaking and leads to a normalisation of crime. Society will tolerate it if the economic situation improves, but only for so long. Even the Roman Empire came to an end.