Increasingly desperate for hard currency to pay its bills, Argentina's government has announced a tax amnesty in a bid to attract undeclared money into the formal economy.
With economic growth slowing and inflation fuelling talk of devaluation and a flight from the local peso, officials are eyeing the large sums banked offshore or hidden in cash at home by Argentinians seeking protection against the recurrent crises that have pockmarked the country’s history.
Congress must approve the measures announced this week which will see people allowed to buy a local bond without declaring where the money came from.
With the economic boom of the last decade over the government has been forced into increasingly unorthodox measures to raise cash as it remains shut out of capital markets following 2001’s debt default.
But the amnesty comes amidst the latest corruption scandal to hit Argentinian president Cristina Kirchner and the opposition warns it could be used to launder millions looted from public coffers by officials in recent years.
Money laundering
The government says public officials and people being investigated for money laundering will not be able to avail of the amnesty but did not provide details on how their relatives and associates would be excluded from taking part.
Opposition leader Elisa Carrió said the tax amnesty was designed to “legitimise” the fortune of the Kirchner family and construction magnate Lázaro Báez, whom she accused of being a frontman who manages the Kirchners’ illicit assets.
Last month one of Argentina’s most respected journalists, Jorge Lanata, played videos on his weekly television programme in which associates of Mr Báez told how they smuggled tens of millions of euros in cash out of the country on private jets.
Mr Báez was a lowly official in a provincial bank when he became friendly with Ms Kirchner’s husband, former president Néstor Kirchner, when he was still governor for the Patagonian province of Santa Cruz.
Since then he has built a fortune said to be worth almost €4 billion, largely thanks to winning public works contracts from Kirchner administrations for his construction firm. One of the men filmed said Mr Kirchner was the author of Mr Báez’s scheme.
Foreign currency
Mr Báez dined with the Kirchners the night before Néstor died in 2010 and paid for his large mausoleum in his home town of Rio Gallegos.
On Sunday Mr Lanata followed up his accusation with a programme featuring an interview with Mr Kirchner’s former secretary. In it Miriam Quiroga described how, when president, Mr Kirchner would send bags full of foreign currency from his office in the Casa Rosada to his houses in Santa Cruz.
She said he had large vaults built into his various homes to hold the cash and even received gold ingots from mining companies which benefitted from his government’s decisions.
In 2011, after Ms Kirchner fired her from her government job, Ms Quiroga revealed she had been Mr Kirchner’s lover. In her interview with Mr Lanata, Ms Quiroga said Ms Kirchner knew of her husband’s illegal business dealings: “I can assure you she was aware of everything.”
A judge has ordered a public prosecutor to investigate the allegations.
Ms Kirchner has dismissed them as politically motivated in what is a crucial midterm election year. She also said anyone betting on a devaluation of the peso “will have to wait until there is another government”.
