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Scandal grows around Argentine vice president

By Michael Warren

Associated Press

Published: Saturday, June 2 2012 11:35 p.m. MDT

Amado Boudou

Associated Press

BUENOS AIRES, Argentina — Argentine President Cristina Fernandez's second-in-command is known as a fun-loving, guitar-playing renegade who wore a leather jacket to their Election Day victory bash. Amado Boudou still leads a new generation of politicians preparing to run the country, but scandal now dims his youthful glow.

The 48-year-old vice president is accused of steering a $55 million contract for printing the nation's money to secret partners through a shadowy shell company used to fund pleasure trips for his friends and family.

Boudou claims the media and judiciary invented the scandal, saying "there's a devious plan to try to find a connection to people that I don't have."

But opponents say attempts have been made to cover it up, revealing a culture of impunity. The affair is feeding anxieties about a government that seems to be running out of room to stabilize the economy and keep businesses from bailing out of the country.

Prosecutors said they found sufficient evidence to pursue illegal enrichment, money-laundering and influence-peddling charges against Boudou, his girlfriend, his best friend and a mysterious lawyer who allegedly worked for years as his proxy in secretive business deals. An investigative judge is considering criminal charges that could lead to a lifetime ban from public office.

Argentine justice usually moves slowly, however, and Boudou's complaints succeeded in ousting a trio of respected court officials who were building the case against him. Impeachment isn't likely either, since Fernandez has firm control of Congress.

The seeming impotence of courts and the Congress has left it to the media to expose wrongdoing — and hardly a day has gone by this year without another suggestion of close ties between Boudou and The Old Fund, a holding company with secret ownership that the vice president claims to have no relationship with.

Some Latin American governments have made high-profile moves against corruption. Chile takes bids on contracts worth $150 or more through a transparent online procurement system. Brazil's president, Dilma Rousseff, has forced out seven of her ministers because of corruption allegations, rarely waiting for an official inquiry.

Fernandez hasn't commented, but neither has she dropped Boudou, who had seemed an obvious choice to succeed her in 2015. The trouble is, he didn't act alone: The leaders of Argentina's tax agency, central bank and mint also endorsed some of the key decisions that landed him in court.

Now lawmakers are calling it a Nixonian cover-up, raising what-did-she-know-and-when-did-she-know-it questions about the president's June 2011 choice of Boudou as her running mate. According to court documents and congressional declarations, the influence-peddling would have happened six months earlier, when Boudou used his power as economy minister to help The Old Fund take a struggling printer, Ciccone Calcografica, out of bankruptcy.

The maneuver pre-empted takeover efforts by another printing company, Boldt, which has ties to provincial casinos and Boudou's would-be rival for the presidency, Buenos Aires province Gov. Daniel Scioli.

The Old Fund put up $579,000 in unexplained cash to win control of Ciccone, and Boudou and tax agency chief Ricardo Etchegaray gave the company 12 years to cancel its $51 million in tax debts.

"As economy minister, I didn't take any action to favor Ciccone," Boudou insisted. "All I did was answer a letter from (the tax agency) to take care of the company. That's what we do in this government, take care of Argentine businesses."

Renamed Compania de Valores Sudamericana, the printer quickly made millions generating Fernandez-Boudou campaign materials, and the presidents of the mint and central bank pushed ahead with plans to have the company print 500 million 100-peso notes. The bank note, now worth $22 at official exchange rates and $17 on the black market, is Argentina's largest denomination and is sorely needed in the inflationary economy.

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