Corruption ‘a Calamity’ in Argentina

The money vanishes from a deputy governor’s toy fund for needy children. A mayor awards a fat contract without bids. The U.S. ambassador accuses a government official of seeking bribes.

Corruption has always been around in Argentina, but usually beneath the surface. Now it is coming into the open, and a recent poll indicated only low wages are a greater public concern.

President Carlos Menem reluctantly declined the gift of a $90,000 Ferrari. He promised to declare his assets publicly and make his aides do the same.

Corruption “is a sickness . . . a cancer . . . a calamity . . . a moral emergency” that undermines confidence in the government, he said Jan. 24 in a nationally broadcast address.

The issue simmered for months. In November, the national tax director said the customs office takes in $1 billion a year less than it should, hinting that customs agents collude with importers and exporters.

Officials of the Public Works Ministry have claimed that private suppliers working with state employees bilk the government of $2 billion a year by delivering shoddy, overpriced merchandise.

Lawsuits against the government were suspended last month after reports that tens of millions of dollars were paid in possibly fraudulent claims. Menem’s legal secretary, Raul Granillo Ocampo, spoke of “connivance between judges and lawyers.”

“The type of corruption found in Argentina differs from Western countries in that it generally is found at all levels,” federal prosecutor Luis Moreno Ocampo said.

“In other countries, you assume 3% ‘grease’ makes the system go,” said the prosecutor, who is investigating fraud at state-owned rail and shipping firms.

“Here, the ‘grease’ is closer to 100%,” he said. “It’s no longer business. It’s complete fraud.”

Nor is it anything new. Argentina has little to show for billions of dollars borrowed by military juntas that ruled in 1976-83. The Central Bank admits losing $67 billion in the 1980s, much of it on questionable loans.

Menem has been forced to address the issue more directly than his predecessors. Aides as well as critics say the problem is so widespread that it affects the country’s well-being.

Politically, it has damaged Menem’s Peronist party.

The Peronist deputy governor of Santa Fe province, Antonio Vanrell, was accused last year of stealing $2 million in public funds set aside to buy toys for the poor. Vanrell hasn’t been seen in public for months and is said to have fled the country.

Another Peronist, Mayor Juan Carlos Rousselot of Moron, a Buenos Aires suburb, was dismissed for awarding a multimillion-dollar sewer contract without public bids. He is suspected of taking a bribe.

Gov. Jose Domato of Tucuman province, also a Peronist, was arrested in early February in connection with a $1.5-million loan granted to a bankrupt sugar mill.

In January, U.S. Ambassador Terence Todman said a “government official” demanded a bribe to allow a U.S. company to import machinery for a $100-million plant under construction.

Menem denied the charge, but removed four ministers, proposed that the Justice Department be upgraded to Cabinet level and appointed a respected career diplomat as ambassador to Washington, replacing a political appointee.

He also accepted the resignation of the man newspapers named as the bribe-seeker Todman did not identify: Emir Yoma, an aide and brother-in-law.