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November 28, 2014
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An appointment in Las Vegas

Businessman Lázaro Báez in Río Gallegos, Argentina.
By James Neilson / As I See it

‘Vulture’ Paul Singer plays hardball with CFK by accusing Báez of squirrelling away millions of state money to Nevada

For sound political reasons, Cristina chose to treat the battle she is waging against the hedge funds as a personal matter. So far, her approach has paid off: her approval rating rose sharply thanks to her willingness to give her many foreign foes a piece of her mind. Channelling Juan Domingo Perón, she put New York judge Thomas Griesa in the role once played by the US ambassador Spruille Braden who, well over half a century ago, became an enduring symbol of Yankee imperialism. In this part of the world at least, it was his ticket to immortality.

For the best known “vulture”, Paul Singer, finding himself upstaged like that may have been a little bit galling. If so, he wasted no time in getting back into the act. By persuading a judge in Nevada to let him look for Argentine assets presumably hidden in the vicinity of Las Vegas, an outrageously garish city devoted to letting gamblers throw their money away that evidently appeals to the Peronist politicians who simply love the place, he did something that could eventually hurt Cristina far more than the “selective” or “partial” default that, under her guidance, the country has stumbled into.

From the vultures’ point of view, hitting Cristina where she is most vulnerable is a smart thing to do. It may not be blackmail, but by looking for what they and a great many other people assume is stolen money they are warning her that she had better take their demands seriously. Should she cave in, they would quickly lose interest in whatever shenanigans she, Néstor and Lázaro Báez might have got up to back home where, they have no need to insinuate, the rules are not the same and nobody bats an eyelid if lots of professional politicians contrive to get rich by mysterious means.

With a cool one and a half billion dollars at stake, it is not that surprising that Singer and his men are playing what their compatriots call hardball, using tactics designed to make Cristina more cooperative. They, and judge Cam Ferenbach, assume that Lázaro squirrelled away many millions of purloined dollars on behalf of Mr and Mrs Kirchner and, as the money belongs by right to the Argentine state, disgruntled creditors should be allowed to get their hands on them.

Though such allegations are still highly speculative, plenty of people in Argentina assume they are based on rather more than wild rumours. There can certainly be no doubt that Báez benefitted greatly from his friendship with Cristina and her late husband, who showered him with the juicy government contracts that enabled him to pile up an enviable fortune. Whether or not he gave the couple kickbacks as reported, sending bags stuffed with huge sums of money from Patagonia to Buenos Aires and then, it is said, to Panama, the Seychelles and, of course, Las Vegas, may be disputed, but things being as they are, it does seem likely enough.

This leaves Cristina in an awkward situation. She already knows that after leaving office at the end of next year, she will be the favourite target of a host of Argentine politicians, lawyers and others who say they want the country to undergo a local version of the “mani pulite” or “clean hands” purge Italy went through about twenty years ago. One result of the upheaval that was caused by a vain attempt to make Italian politicians go straight, was that a former socialist prime minister, Bettino Craxi, fled to Tunisia, where after six years he died.

Unless Cristina’s fellow politicians astonish everybody by deciding it would be better to forgive and forget so she can retire quietly to her Patagonian estate, her own fate could be just as demeaning. Perhaps Elisa Carrió exaggerated slightly when she said the president had salted away ten billion dollars, but even so it will not be easy for her to persuade hostile magistrates that everything she has was acquired without breaking any laws.

As Griesa and Ferenbach have reminded us, people in the North American judicial system take the entire world for their province. They are more than happy to smack a colossal fine on a French bank for helping the Iranians break US sanctions. So if some of Cristina’s money, or that of a front man like Báez, comes within their reach, they will dispose of it as they see fit. That means that should she feel obliged to go into exile rather than face the music at home, as did her fellow progressive Craxi, she would have to be careful to move to a country whose rulers refuse to cooperate with the US authorities. There are still some around, but with the possible exception of Venezuela and Ecuador, they are not the sort she would find very inviting.

Opposition politicians have been reluctant to get involved in the default fracas: Argentines may hold the condor in high esteem, but that does not mean they have a soft spot for less glamorous vultures. If the economy tanks as a result of the fight with Singer and company, they will criticize Cristina harshly for the way she handled the issue; until then, they will continue to bide their time.

Corruption, however, is a very different matter. Should the vultures get hold of hard evidence that Báez has laundered a considerable amount of money and stashed it in dozens of “shell companies” abroad, opposition leaders, journalists and crusading lawyers will make full use of whatever they come up with. Kirchnerite loyalists would then insist that such evidence is tainted because those who came across it have it in for Cristina and therefore are enemies of Argentina, but if the country suffers a full-blown depression like the one in 2002 before, or soon after, she bows out, such arguments would count for little.

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