A report on the government of President Cristina Fernandez de Kirchner looks at three scandals involving corruption, money laundering, and precursor chemical trafficking, all of which point to Argentina’s expanding role in the transnational drug trade.
In an International Assessment and Strategy Center (IASC) report entitled “Through the Looking Glass” (pdf), Senior Fellow Douglas Farah examines three scandals involving the Fernandez de Kirchner administration that illustrate what he terms a “diminishing rule of law” in Argentina.
The first of these scandals centers on former anti-drug chief Jose Ramon Granero, who has been accused of facilitating the importation of massive quantities of ephedrine, a substance used in the production of methamphetamine. Between 2004 and 2008 — a period during which Granero served as the head of the anti-drug agency for all but one year — Argentina imported 48 tons of ephedrine, of which only eight tons were needed to meet the legitimate needs of the pharmaceutical industry. The rest, according to the report, ended up in the hands of criminal groups, including Mexico’s Sinaloa Cartel and Colombia’s Oficina de Envigado.
Although President Kirchner has tried to keep her distance from the scandal, Farah argues that there are several factors linking her administration to both Granero and the pharmaceutical companies implicated in wrongdoing.
According to the report, Granero’s private secretary Miguel Zacarias — who reportedly managed ephedrine imports on Granero’s behalf — has ties to the Kirchner family. Two of Zacarias’ brothers have served as high-level officials for either Cristina Kirchner or her husband Nestor, who served as president from 2003 to 2007. Another brother, Maximo Zacarias, has been accused of importing 1,000 kilos of ephedrine for Mario Segovia, a convicted drug trafficker who ran a methamphetamine laboratory for the Sinaloa Cartel.
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In addition, the pharmaceutical companies that imported a large portion of the ephedrine were major contributors to President Cristina Kirchner’s campaign. According to Farah, these companies donated $1.5 million to her 2007 presidential bid — a figure that represents close to a third of the campaign’s declared donations.
Farah argues that President Kirchner’s failure to cooperate with investigators also raises red flags. The President’s Office has refused to turn over phone records requested by the judge overseeing the Granero case. The judge in question has also accused the government of attempting to block the investigation by filing different motions related to the case in different jurisdictions.
In a separate scandal, Kirchner has been implicated in some shady financial dealings requested by the judge Lazaro Baez, a financial associate and close friend of the Kirchners. Prosecutors say that in 2011 alone, Baez moved at least $65 million out of Argentina into accounts overseas, in countries known for being fiscal paradises. In the report, Farah said the money in question appeared to be part of the president’s “shadowy personal fortune,” which inexplicably increased from $1.6 million to a declared $21 million during her administration and that of her late husband.
As with the ephedrine case, Kirchner appears to have meddled with the Baez probe, according to Farah. Six months after the judge overseeing the case submitted the results of his investigation, he was fired by Argentina’s Attorney General, who is reportedly close to the president. Around the same time, Kirchner launched an initiative dubbed “Legitimate Justice,” calling for more involvement from the executive branch in judicial proceedings.
Farah’s report also notes that Argentina’s vice president, Amado Boudou, has been indicted for his alleged participation in a business scheme involving a shell company created to win government contacts. According to The Wall Street Journal, Boudou is the first sitting vice president in Argentina’s history to be charged with a criminal offense.
InSight Crime Analysis
The scandals highlighted in the report raise serious questions about the Kirchner administration’s respect for the law and willingness to tackle corruption — especially in relation to drug trafficking and money laundering. Although Fernandez de Kirchner has not been formally accused of any criminal activity, her apparent attempts to interfere in judicial proceedings are a troubling indication that she is willing to go to great lengths to protect her allies — and possibly herself.
As Farah argues, the scandals are especially worrying in the context of Argentina’s deteriorating security situation. In recent years, the country’s sizeable domestic market for cocaine and role as a drug transit point have attracted foreign drug trafficking organizations and spurred the development of local criminal groups. Mexico’s Sinaloa Cartel, Italy’s ‘Ndrangheta mafia, and Colombian criminal organizations are all believed to have permanent presence in Argentina. In addition, fighting among local groups for control of the drug trade has led to spikes in homicides in some areas of the country.
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Argentina has extremely lax controls on chemical imports, making it a major producer and importer of precursor chemicals — like ephedrine — used for methamphetamine production. This has turned the country into a major supplier to the Sinaloa Cartel and other criminal groups.
Without a government committed to upholding the law and investigating cases involving drug trafficking and money laundering — even if they implicate individuals close to the administration — Argentina’s situation, as Farah argues, is likely to continue deteriorating.