When former Argentine official José López was caught last week throwing $9 million over the wall of a Buenos Aires convent he instantly became the latest picaresque figure thrown up by South America’s long struggle against corruption.
The country’s former public works secretary, López was a key figure in the administrations of Néstor and Cristina Kirchner, the Peronist power couple who ruled from 2003 until last year. His job was to manage more than €9 billion destined for public works projects which are the centre of a growing investigation into corruption during her family’s years in power.
López joins in prison Lázaro Báez, the former bank teller who became a multimillionaire businessman after meeting Néstor Kirchner and transforming himself into the politician’s go-to builder.
The speed with which authorities are closing in on the Kirchner circle has been a blow to Cristina. Following López’s arrest, several members of her Peronist Victory Front faction in congress defected. The investigations have the potential to undermine her remaining influence – and immunity.
Weakness
These scandals also highlight the weakness of Argentina’s anti-graft authorities. In a repeat of history, the Kirchner circle is only being properly investigated now Cristina has left office, despite ample evidence of corruption for years. A real sign of progress will be when sitting officials are held accountable.
The contrast with Brazil is striking. Last week interim president Michel Temer lost his third minister after just over a month in office, the latest casualty of the inexorable investigation into corruption at state oil giant Petrobras. The new zeal of Brazilian prosecutors in investigating sitting officials has already helped lead to the suspension of president Dilma Rousseff, the naming of other leading politicians at the centre of power and the jailing of co-conspirators.
With more potentially devastating testimony expected from the jailed owner of Brazil’s biggest construction company to come, its potential to wash away the political class that has governed the country for the past three decades is real. Unfortunately for voters, no viable political force is in the wings. And the economic cost of this determination to hold power accountable is devastating.
State of calamity
On Friday Rio de Janeiro declared a state of calamity 49 days before the Olympics. The state government is broke, in part because Rio’s oil industry has been paralysed by the Petrobras investigation. In all, companies making up around 14 per cent of Brazil’s GDP are under investigation. This has resulted in most being cut off from financing. Many have declared bankruptcy. Tens of thousands have been laid off.
Many Argentines wish their prosecutors would show some of Brazil’s zeal and not wait until politicians left office before being holding them to law. But as its top trading partner, Brazil’s crisis has had a major impact on Argentina’s economy. This serves as a reminder that holding officeholders to account after decades comes at a heavy cost. The willingness of civic society to pay it is now currently being tested in Brazil.
