Corruption scandals push Milei toward Argentina establishment he vilified

President Javier Milei rode to power vowing to destroy the Argentine political elite he derided as “the caste.” Now, after a string of corruption scandals, he’s turning to one of its most recognisable figures to run his Cabinet.

Diego Santilli, a veteran political operator, is set to take over Tuesday afternoon as the president’s Cabinet chief, days after top Milei ally Manuel Adorni resigned amid deepening allegations of impropriety.

The appointment marks more than a reversal for a President who once cast Santilli as emblematic of a rotten system. It is the clearest sign yet that Milei is trading his outsider crusade for old-fashioned power politics as he tries to steady a government facing political and economic headwinds ahead of elections next year.

“The anti-caste message was already tarnished, and Adorni finished the job,” said Lucas Romero, director of Synopsis, a Buenos Aires political consultancy. “There’s not much point in continuing to push it.”

Milei, a libertarian economist and former television pundit, filled his first Cabinet with an eclectic cast of anti-establishment figures that included a longtime friend as an earlier Cabinet chief and a university professor as foreign minister. Nearly all have since left, with the exception of core members of the economic team and Karina Milei, his sister and closest confidante.

But Adorni’s departure is significant even in those terms. Until his Saturday resignation, the 46-year-old former newspaper columnist and TV commentator had served as the public face of Milei’s crusade against the political class, first as the presidential spokesman and then as Cabinet chief.

He stepped down amid an investigation into real estate purchases and luxury travel that generated accusations of illicit enrichment given his relatively modest public salary. Adorni’s explanation that his apparent riches came from a decade-old Bitcoin bet drew scrutiny from skeptical cryptocurrency investors.

Adorni denied wrongdoing, but the final straw came Friday when local newspaper La Nación reported that he’d spent big on a video game set-up as well.

The Adorni episode followed a string of controversies that had also begun to dent Milei’s image as an anti-corruption crusader, including the President’s promotion of a crypto asset that collapsed within hours of its release last year. The former head of Argentina’s ANDIS disability agency has also faced allegations of participating in a kickback scheme.

Milei stood behind Adorni through it all, even appearing in Congress alongside his entire Cabinet to support his ally in April. It was an expense of vital political capital at a sensitive moment: Milei’s approval fell to 36 percent, the lowest level of his Presidency, in April as Argentines rated corruption their top concern, according to AtlasIntel polling for Bloomberg News.

It has rebounded slightly since. But the Adorni saga has stalled Milei’s ambitious reform agenda in Congress, and while growth exceeded expectations in the first quarter, an uneven recovery has cost hundreds of thousands of jobs and deepened voter concerns about unemployment. Annual inflation has slowed significantly from its peak near 300 percent but remains stuck around 33 percent.

The combination has breathed life into the other part of “the caste” that Milei lambasted: the Peronist opposition, which has begun to sense vulnerability as it prepares for presidential elections in 2027.

Across three decades in politics, Santilli has also faced criticism for living lavishly while on a public salary: Milei called him corrupt and labelled him a “monstrosity” during the 2023 race for Buenos Aires Province governor, in which his preferred candidate faced off against Santilli.

But his ascension from interior minister – a position Milei handed him in November – to Cabinet chief could prove key as Milei seeks to regain momentum, especially if his deal-making muscle in Congress helps breathe life back into the President’s legislative agenda.

It will also pull Milei ever closer to the conservative establishment led by former president Mauricio Macri, with whom Milei forged a loose coalition that has given him a formidable bloc of support in Congress. Milei’s Cabinet is now stocked with Macri-era veterans, including the economy and foreign ministers, trade secretary and Central Bank governor.

In a Monday radio interview, Santilli said he’d spoken to Macri but insisted the government “clearly and unequivocally belongs to Javier Milei.” Still, the closer ties could help Milei forge a similar pact with Macri ahead of next year’s elections, bolstering his position against the still-divided Peronists.

Milei isn’t likely to abandon his outsider story just because he appointed another “professional politician,” said Kezia McKeague, managing director at McLarty Associates, a consulting firm in Washington.

And even with corruption issues at the top of voter concerns, Milei’s ability to deliver on his economic promises may prove more decisive for his presidency than pledges to target the establishment.

“I don’t think voters are going to stop and ask whether he got rid of the political caste,” said Ignacio Labaqui, senior analyst at risk consultancy Medley Global Advisors. “They’re going to vote on the economy and whether they want to go back to the way things were.”