Tuesday, September 22, 2020

ARGENTINA | 18-11-2017 11:35

What we learned this week: FIFAgate, Freiler, Vandenbroele and DyN

Key stories from the last seven days.


The testimony of former Torneos y Competencias CEO Alejandro Burzaco in New York this week, exposing a local pyramid of corruption related to football and broadcasting, headed by the late Argentine Football Association (AFA) president Julio Grondona within the international FIFAgate scandal, took on an extra edge this week when lawyer Jorge Delhon threw himself in front of a train in Lanús on Tuesday. 

Delhon was one of two men explicitly named by Burzaco in his testimony as being a bribe recipient, the other being Pablo Paladino who co-ordinated programming within the Cristina Fernández de Kirchner administration’s state-funded Fútbol para Todos scheme. 
Both ex-officials were protégés of former Cabinet chief Aníbal Fernández. This story grabbed headlines throughout the week, with allegations emerging right up until press time. 


The Mauricio Macri government looks like it is warming up for another heated battle over law reform, this time regarding the so-called “Forest and Glaciers Protection Law” which has effectively stalled extraction projects in Argentina’s Andes mountains region since 2010. First reported in La Nación, the plan will apparently seek to soften existing restrictions on mining projects by implementing an arbitration process that would seek to strike a balance between environmental protection and economic activity. Environmentalists are enraged. 


Judge Eduardo Freiler was removed from office yesterday morning after the Magistrates Council found him guilty of malfeasance. Freiler was the judge for Buenos Aires City’s Court No. 1 and is the first judge to be removed from office since President Mauricio Macri took office in 2015. He was considered an ally of Fernández de Kirchner.

Others, like Norberto Oyarbide and José Charlin, were forced to quit. The jury voted against Freiler 5-1. Only Diana Conti voted against the move to dismiss Freiler. Separately, Freiler faces corruption allegations, which include the controversial purchase of a small mansion in front of the presidential residence in Olivos. He is accused of using a fake mortgage to pay off almost half the US$2.8 million he paid for a property valued, commercially, at just over US$1 million. 


Lawyer Alejandro Vandenbroele, who had promised to talk in exchange for entry into a witness protection programme, was as good as his word last week, talking for almost 10 hours on Wednesday alone when he told Prosecutor Jorge Di Lello all he knew about the irregular dealings of which former vice-president Amado Boudou stands accused. His testimony centred on the fraudulent purchase of the Ciccone money-printing firm and an allegedly bogus consultancy contract between The Old Fund Company headed by Vandenbroele and the province of Formosa, providing details and documentation in each case. 

The names of Boudou, his lifelong friend and business partner José María Núñez Carmona and six-term Formosa Governor Gildo Insfrán figured prominently in his testimony but others implicated include the banker Jorge Brito and the former AFIP tax bureau chief Ricardo Echegaray – the former for allegedly bankrolling Boudou’s deals via his Banco Macro and the latter for granting Ciccone an excessively generous tax rollover. In return for information on his role as a dummy in Boudou’s operations, Vandenbroele has reportedly been promised that his final prison sentence will be reduced by a third or a half. Boudou was arrested and detained on November 3 in connection with various corruption cases including Ciccone. 


Argentina’s bid to host the next World Expo in 2023 has been successful, meaning the nation will become the first Latin American country to stage the global showcase melding education, innovation and entertainment. The country beat out the United States and Poland to the honour, with decision formally announced on Wednesday in Paris. World Expos focus around a specific theme – this time, it will be “creative industries in digital convergence.” With the expo, Argentina also hopes to “re-establish itself as a gateway to Latin America,” the Foreign Ministry said in a statement added. The government says as many as a quarter of a million people may visit for the event from abroad. 


Wednesday marked the closure of the DyN news agency, as the shutters rolled down for the final time. Photojournalists with their eyes blindfolded raise their cameras outside the National Congress to protest the decision to close the agency.

DyN is the latest in a series of closures of news outlets in Argentina that have left more than 2,000 workers unemployed. 


On Monday, the government sent a 219-page tax reform bill to the Lower House, although its final contents will depend on negotiations with both provincial governors and Congress. The big innovation in the package was a financial levy although many existing taxes were also subjected to changes. 

The new financial tax rate will be five percent on peso transactions and 15 percent in the case of foreign currency, only applying to individual profits in both categories. The tax on corporate earnings is to be reduced from 35 to 25 percent for those companies which reinvest their profits. There will also be changes in indirect taxation, affecting excise more than IVA valueaded taxation (where there will also be rebates for companies which invest as a further incentive). 

Future rates will include 70 percent for cigarettes, 29 percent for spirits and 17 percent for soft drinks containing sugar while mobile telephones will pay five percent instead of the previous four. Apart from the financial levy, the innovations include the taxation of online services such as Netlix and Tinder. There will also be a 15 percent capital gains tax on real estate transactions other than housing.


The federal government has signed a funding deal with 22 of the 23 provinces which will put an end to the provinces’ litigation over undelivered funding and mark a new era in relations between the national government and its provincial counterparts, national Cabinet Chief Marcos Peña told reporters on Thursday at a somewhat jovial press conference at Government House. The provinces agreed to lower income tax and stamp duty by 1.5 percent of Gross Domestic Product over the next five years; implement local tax responsibility laws through 2018; and drop litigation against the federal government to the value of 740 billion pesos in undelivered funding. This included 400 billion pesos owed to the so-called Fondo del conourbano (Greater Buenos Aires fund), a claim to which Buenos Aires province has agreed to abandon in exchange for a 10-percent cut in income tax revenue. For its part, the national government agreed to fund the provinces’ deficits and provide a more stable cash flow from the national coffers. Interior Minister Rogelio Frigerio had met with governors Thursday morning in Buenos Aires in a final session to agree on the terms of the deal. The meeting at the Federal Investment Counsel (CFI) came after a long day of talks on Wednesday in which provincial leaders discussed dropping court cases against the Federal government for undelivered funding. The governors’ concerns have traditionally centred around the implications of any new deal on the income they receive from tax coparticipation arrangements with the federal government. As a next step, the provinces have 30 days to pass legislation in their respective Congresses. San Luis province is the only province not to sign the deal.


The IV Global Conference on the Sustained Eradication of Child Labour was held in Buenos Aires this week, and the government used the occasion to present a new report with some shocking findings. The ‘EANNA’ study, produced by the the Labour Ministry, Unicef, the International Labour Organisation and a host of other NGOs, looked at child labour in Argentina and found that there are more than 700,00 children aged between five and 15 working in the country, equating to around 9.4 percent of all kids in that age range national. Speaking at event, held at La Rural on Thursday, President Mauricio Macri committed his government to eradicating child labour and said the government will push to promote policies that will guarantee social inclusion. “We want our young people to be studying, acquiring skills and being part of this digital world,” he said. The survey’s results prove “we have much work to do,” he added. 

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