Secret Papers Trigger Argentine Scandal: What You Need to Know

(Bloomberg) -- Six months after receiving a treasure trove of secret documents, journalists at La Nacion newspaper published Wednesday the findings of an investigation into more than a decade of alleged corruption under former President Cristina Fernandez de Kirchner and her late husband.

The probe triggered the arrest of 13 former government officials and business leaders, some of them even before the newspaper hit the streets. The judge overseeing the case, Claudio Bonadio, also requested the removal of Kirchner’s congressional immunity. Kirchner is expected in court on Aug. 13 for questioning.

Here’s what you need to know.

How Did This Case Surface

La Nacion journalist Diego Cabot received the documents, including notebooks, bills, photos and videos, in January. He hasn’t said where they came from.

The key documents were eight notebooks kept by Oscar Centeno, a driver for Roberto Baratta, the former deputy secretary for planning. Centeno meticulously kept records of names, bribe amounts, addresses and dates between 2005 and 2015.

Cabot detailed in a first-person narrative how he and his colleagues meticulously investigated the documents and brought the story to light.

Some of the alleged bribes were delivered to Kirchner’s apartment in Buenos Aires and the official presidential residence, Quinta de Olivos, over a 10-year period, he said. Kirchner didn’t respond to Bloomberg’s request for comment.

Baratta was deputy to the former planning minister during Kirchner’s presidency, Julio De Vido, who went to jail last year for defrauding public funds.

Corporate Impact

The case has already hit one company, natural gas provider Albanesi. It canceled a bond sale Wednesday after its chairman, Armando Loson, was among the people arrested. The company announced Thursday that Loson was on a six-month leave.

Albanesi intended to sell as much as $70 million on Thursday in dollar-denominated local bonds with an 18-month maturity. The company’s bonds due in 2023 fell to 79.51 cents on the dollar, down from par earlier last month.

Bonds for multinational construction firm Isolux Corsan also slid Thursday after La Nacion reported that police were searching for the president of the company’s operations in Argentina, Juan Carlos de Goicoechea.

Other business leaders arrested included Carlos Wagner, owner of the construction firm Esuco, Carlos Mundin, head of engineering firm BTU, and Gerardo Ferreyra, vice president of engineering firm Electroingenieria. Esuco, BTU and Electroingenieria didn’t respond to requests for comment.

Political Impact

The biggest question is whether this case would put former President Kirchner behind bars, making it more difficult for her to run again for president in the 2019 election.

So far Kirchner has avoided jail despite being charged by the same judge, Bonadio, for crimes including alleged treason and irregularities in currency futures trading since 2016. The Senate didn’t vote to remove her in December when Bonadio requested them to.

In a broader sense, the case could further fragment the Peronist political movement made up of several parties. Kirchner and her late husband, former President Nestor Kirchner, led Peronisim for 12 years. Since Cristina Kirchner’s departure from the presidency in 2015, Peronists have lacked a clear leader to oppose President Mauricio Macri.

After resounding defeats in the 2015 election and 2017 mid-terms, Peronists appeared to be regaining ground this year. In May they passed a bill through Congress that would limit Macri’s ability to raise prices on utilities. The president vetoed the bill.

--With assistance from Pablo Gonzalez and Carolina Millan.

To contact the reporter on this story: Patrick Gillespie in Buenos Aires at pgillespie29@bloomberg.net

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Walter Brandimarte, Philip Sanders

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