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July 24, 2014

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Sunday, June 15, 2014

Judges compete with the refs

Amado Boudou, the first day of the rest of his life?
By Michael Soltys / Senior Editor
Veep Amado Boudou’s court appearance strategically timed just before World Cup

With the World Cup now under way featuring controversy and surprises from the start, who cares about either politics or labour? All those ethical questions about the unpaid social debts underlying the protests in Brazil remain valid but at the end of the day, there’s no arguing with a World Cup, is there?

Yet (as suggested in the editorial on the opposite page) the World Cup does not have to detach us from current events — thus indignation over referees dovetailing into the general cloud of suspicion over FIFA could mesh readily enough with corruption concerns here, highlighted by the Ciccone case centred on Vice-President Amado Boudou whose saga entered its judicial phase last week.

Indeed the political week started with Boudou’s court appearance on Monday (the first day of the rest of his life?) — his testimony turned into a five-hour monologue which would be too much even for this page. Suffice it to say that he centred on the key “follow the money” question in the case of the Ciccone mint company, which he is accused of saving from bankruptcy over its tax arrears in order to place it under his control via dummy owners — the essence of the influence-peddling charges against him.

The encounter between Boudou and Judge Ariel Lijo was reassuring on both sides — Boudou was relatively serene, despite his constant sniping against the judge in preceding days (with the backdrop of the way he removed all levels of the probe right up to the attorney-general 26 months ago) and his loose cannon outbursts only 10 days ago while Lijo kept his focus on this being the Ciccone not the Boudou case, instead of straying into the embezzlement and other parallel charges against the vice-president. After previously changing his tune by lining up the Ciccone family itself among the suspects (as ruled by an appeals court), Lijo accepted Boudou’s stress on the money trail towards the end of the week.

The mere fact of Boudou’s submission to a court summons is a refreshing contrast from this time last year when the judiciary was facing the full fury of a judicial reform offensive aimed at colonizing its recruitment mechanisms and curbing its injunctions, especially litigation against the state. The story was generally portrayed abroad as the historic first of an Argentine vice-president having to answer to accusations of corruption before a judge but it also represents an institutional vindication as much as a scandal.

The main thrust of Boudou’s defence on Monday was to limit his own role to acceding to a “singular” AFIP revenue bureau request for an opinion on the Ciccone tax arrears threatening them with bankruptcy, otherwise pleading ignorance as to the family’s deals. But the rest of the week did not go so well for the vice-president. The Federal Appeals Court upheld the testimony of the Ciccone family while later in the week the AFIP tax bureau official Rafael Resnick Brenner linked Boudou to his old friend and alleged Ciccone proxy, José María Núñez Carmona (from whom the vice-president is frantically trying to distance himself). Another proxy Alejandro Vandenbroele showed up in court but, in contrast to a verbose Boudou, refused to answer questions, merely submitting a terse written statement.

Boudou is not only becoming increasingly isolated from his old friends but (rather more importantly) from his ruling party colleagues — on Monday he pointedly said that he had confined himself to legal and technical aspects with Lijo but that political stuff could follow. On that day the La Cámpora leader José Ottavis broke the youth militant grouping’s general silence by helping to organize a rally in Boudou’s defence but he was perhaps the exception which proves the rule. For reasons best known to herself (inability to admit to a mistake or fear of the man who knows too much or whatever) President Cristina Fernández de Kirchner stands by her next-in-line, placing him in close proximity at the Malvinas Museum inauguration on Tuesday.

Yet it should not be assumed that the political fallout from the Boudou case is limited to the CFK administration. For example, all of the three main presidential hopefuls for next year have common denominators with Boudou — the Renewal Front’s Sergio Massa shares the helm of ANSeS social security administration and some of the banking contacts emerging from the “follow the money” trail, Buenos Aires Governor Daniel Scioli is identified with the Ciccone competitor Boldt and City Mayor Mauricio Macri also faces trial prosecution.

Plenty more to come in the Boudou case but it will be interesting to see what difference it made to start the interrogation just before the World Cup took over rather than the original date of July 15 just after the tournament,

Not too much else to say about the political week. The hot water over Scioli’s participation in the “Democracy and Development” seminar organized by the Clarín Group (including a swipe from Cabinet Chief Jorge Capitanich) was also pretty much hot air which does not affect Scioli’s status as the most viable ruling party candidate for 2015.

Crime never ceases to be a hot issue, even in the midst of a World Cup. Rosario has had a bloodstained year with approximately two murders every three days but there was a new level of shock with the slaying of Superintendent Guillermo Morgans, a top cop against drug-trafficking (even if his killers seemed more like common criminals. Meanwhile in Buenos Aires province the municipal police bill failed to secure legislative approval for the 4th time despite consensus over the basic principles. The problem does not just seem to be deadlock between the Victory Front under Scioli and Massa’s Renewal Front — various mayors of all party stripes seem to be jealous of their powers.

LABOUR ETC. As might be expected during a World Cup, minimal labour news, mostly concerning ongoing collective wage bargaining

(UTA transport workers accepted a 28 percent increase, the teamsters rejected 26 percent, etc.).

The creaking economy was considerably more active. But not on the most expected front — Thursday’s D-Day in the United States regarding their Supreme Court’s decision over whether to intervene in Argentina’s battle with its holdout creditors ended up being “d” for “dud” rather than “debt decision.” Maybe something tomorrow but no point in trying to second-guess something which could soon be reality.

Meanwhile there was a cross-party parliamentary delegation in the United States lobbying the other two branches of government against the holdouts. Although the delegation included deputies from the centre-right PRO and Massa’s Renewal Front, CFK belittled the opposition’s patriotism in her Malvinas Museum speech — she contrasted it with the support given to Argentina against “vulture funds” in those terms by 106 British MPs (which she attributed to the self-interest of a global financial centre defending debt restructuring). She was both right and wrong — the last-minute presence of UNEN deputy Martín Lousteau on the Washington-bound flight greatly broadened the opposition spectrum but he went in a personal capacity (the opposition coalition continues to stick to moral support). But if truth be told, the CFK administration’s recent moves towards orthodoxy will probably do more to influence the final US decision than this delegation’s efforts.

A more important development than this non-story was the cap slapped on interest rates last Tuesday — 33-37 percent (and 41 percent for personal loans). This move was a chronicle foretold. The Central Bank’s decision to double interest rates last summer did yeoman service in taming the post-devaluation crisis but since then the economy has slowed down sharply, also decelerating inflation with it (an official May inflation figure of 1.4 percent was announced on Friday), while Central Bank reserves remain under control as long as soy export greenbacks continue (even if World Cup fans will be taking some 200 million dollars with them to Brazil). There was also widespread disgust among the Kirchnerite left with the multi-billion-dollar profits devaluation gave to the banking sector.

Capping interest rates will undoubtedly spur consumption but will also halt the revival of fixed-term deposits which created an interest in the peso where it had been all dollar. The measure is not only aimed at pumping the economy but against cost-push inflation — just before the announcement, carmakers had joined other companies in refusing to lower their prices, partly for that reason.

Precisely the car industry was at the centre of another item of economic news — the auto pact with Brazil was extended for 12 months (with the ratio in Brazil’s favour being reduced from almost two:one to around four:three).

Finally, the government continues to push energy legislation reforms which makes investing in oil and gas (especially Vaca Muerta shale) more attractive at the expense of provincial prerogatives —governors are reluctant to express their rejection but their agreement is still pending.

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