December, 22 2018 (Buenos Aires Times)
Argentina’s endemic corruption faces its biggest challenge yet, at least since the return of democracy in 1983 after the brutal last military dictatorship. Yet, the so-called ‘notebooks’ corruption case remains deeply divisive – especially as the potential side-effects include a fivepercent contraction in economic output given the potential standstill of major projects, according to Peronist Senator Miguel Ángel Pichetto. Another sticking point is the federal justice system, with sketchy judges like Claudio Bonadio (who is leading the case) and an appeals court that has been extremely favorable to some of the country’s most powerful businessmen. This, added to the implicit support of the Mauricio Macri administration for one of the accused, Techint CEO Paolo Rocca, casts a shroud of doubt over the question of whether this case has the potential to begin to eradicate the cancer of corruption that dominates Argentina, or whether it will end up being just one more example of selective justice.
“The Appeals Court dressed up like Santa Claus and gave a gift to the business community,” read the headline of a piece by La Nación reporter Diego Cabot, the journalist who uncovered the notebooks scandal. Indeed, the court’s decision was to confirm charges against former president Cristina Fernández de Kirchner — who stands accused of heading an illicit association — while reducing the severity of charges levied against 11 businessmen including President Mauricio Macri’s cousin Ángelo Calcaterra and Techint’s Luis Betnaza. As Perfil’s Gustavo Gonzalez anticipated in last Sunday’s print edition, downgrading the offence to graft allows for some sort of probation that includes fines, stricter compliance rules, community service, “and, in particular, no prison time.”
In other words, they would avail the “Rocca doctrine,” which suggests that chief executives and directors who paid bribes were doing so under extreme pressure, meaning pay up or shut down. Victims, not willing participants. The archetypical case of the Rocca doctrine is, of course, Rocca’s, whose Sidor was expropriated by Hugo Chávez in 2009. As Rocca himself explained, the company was valued at US$1.6 billion but Chávez wasn’t budging, so they went to Néstor Kirchner and ultimately settled for US$1.97 billion, US$300 million of which went to the former president. Rocca, of course, denied having any knowledge of the existence of these payments back then.
At issue here is whether Rocca and his colleagues were extorted or if they participated and reaped benefits – which they obviously did. Another question is whether it was possible to work in this environment without engaging in kickbacks and secret payments, an argument made by most who reached a plea bargain with Bonadio and federal prosecutor Carlos Stornelli, and which appears to have been availed by the court.
Indeed, corruption is endemic in Argentina at all levels of society. From paying the government to gain access to a massively lucrative public works project to bribing a cop out of a traffic violation, and even being forced to hand over pesos to organized gangs of trapitos or street car guards who are hooked with the police. And we are all complicit, whether we have benefitted or not, by collectively allowing it to happen instead of speaking up. Corruption, instead of bureaucracy, supposedly makes things more efficient, as cash oils up the Kafka-esque state apparatus. But this is nothing more than an illusion, as short-term gains create longerterm disruptions that are infinitely more costly to everyone, such as an extremely inefficient state and an economic system that disincentives investments that increase productivity (why improve efficiency when whoever pays butters up government officials the best will have the upper hand?).
It’s fair that government officials receive the harshest payments, starting with Cristina if indeed the courts find her guilty (the evidence is overwhelming). Yet, the private sector has to bear its portion of the blame, as many of those involved have become incredibly wealthy while the country deteriorated, and they did it with our money. As the notebooks case uncovered, the kickbacks were generally accounted for in the sobreprecio, or surcharge, that the construction companies agreed to add to their winning bids, and were paid from the anticipated deposits companies received from the State, meaning we all paid for it. Of course, this doesn’t mean that every company owner and CEO is equally responsible – the Lázaro Báez and Cristobal López’s of this world made their fortunes off of their relationship with the Kirchners.
Bonadio’s utilitarian logic, where ends justify the means, is dangerous in that this case promises to set the tone for future investigations into public-private corruption. Lady Justice is blind for a reason, and if Immanuel Kant’s categorical imperative teaches us anything, it’s that having a single, unbreakable reason to do something — duty — allows us to treat every instance fairly. That being said, though, it is clear the notebooks case is adding to an already critical economic situation. By no means should people who are guilty be allowed to walk free, yet the state, and the private sector, need to guarantee that Argentina’s companies remain operative as they are a necessary part of the macroeconomic ecosystem that needs to regain competitiveness in order for the country to prosper.
Argentina is one of the world’s most corrupt countries, coming in 85th out of 180 nations in Transparency International’s 2017 Corruption Perceptions Index, alongside nations like Kosovo, Swaziland, and Kuwait. It is imperative that this process continues, but also that reforms are put in place so that the Judiciary does not respond to political or economic interests, but to the needs of society. It’s clear that the majority of Argentines are tired of impunity which in turn decreases our overall standard of living for the benefit of a select few. Just like the global #MeToo movement, consciousness about climate change, and an acknowledgment of the deep disparity in global wealth, corruption must be addressed head on.