Argentina’s new leadership carries old baggage of corruption and conspiracy allegations

On Dec. 3, former Argentinian President Cristina Fernandez de Kirchner found herself in a Buenos Aires courtroom defending herself against charges that she had diverted $1.2 billion in public funds. The very next week, she was inaugurated as the nation’s vice president, occupying a seat of power that, for now, likely gives her immunity from prosecution.

The juxtaposition highlights that the new leadership of Argentina takes office with a lot of old baggage. It’s baggage that contains both economic and moral peril for the South American country, as well as danger for its tenuous relationship with the United States. U.S.-Argentine ties sank to new lows during Kirchner’s prior two terms as president, and the resuscitation that began under her one-term successor, Mauricio Macri,was far from complete.

The case in which she testified at the beginning of the month is only one of the many corruption allegations she faces. Equally as serious is a federal judge’s preliminary charge that a memorandum of understanding the Kirchner government signed with Iran in 2013 was an attempt to cover up the role Iranian officials allegedly played in planning Argentina’s deadliest terror attack – the 1994 bombing of the AMIA Jewish community center that killed 85 people and injured hundreds more. Kirchner denies the charges.

The MOU was believed to be part of a plot by Kirchner to protect Argentina’s access to oil and perhaps receive other benefits from Iran in exchange for allowing “red notices” issued by Interpol to be dropped; in other words, the perpetrators would no longer be subject to wanted notices to locate and provisionally arrest them when they travel internationally.

On Jan. 18, 2015, the day before the special prosecutor for the AMIA investigation, Alberto Nisman, was due to present his findings of Kirchner’s alleged cover-up in Congress, he was found brutally murdered in his apartment. The MOU was never acted upon both because an Argentine court found it unconstitutional and because Iran saw their goals were not going to be achieved.

The charges against Kirchner for this episode included “treason against the homeland,” punishable by up to 25 years in prison. But there is now serious doubt that the case will go to trial.

Kirchner’s rap sheet on corruption may be one reason she decided not to run at the top of the ticket in the recent elections, but rather to campaign with Alberto Fernandez (no relation) in the uppermost spot. Moreover, Fernandez inhabiting the senior role was the much safer option as it increased their chances of being elected. But it’s clear that Kirchner, who carries the mantle of Argentina’s left-wing Peronist movement, is the charismatic power source now occupying the Casa Rosada.

When Macri originally took over from her at the end of 2015, he sought to improve an economy that was in very bad shape. He reached a settlement with creditors, lifted currency controls and floated the peso. But it wasn’t enough to reverse high poverty and inflation levels to give him the popular support to keep him in power.

At the same time, Macri tried to improve ties with the West by strengthening intelligence ties and voiding the memorandum of understanding with Iran. It had called for a joint Iranian-Argentine investigation of the Jewish center bombing — despite the fact that Nisman had provided evidence that it was Iran’s most senior officials who planned and ordered the attack.

Macri also went a step further by launching a proper investigation into Nisman’s death, one that determined the prosecutor was in fact assassinated for investigating the AMIA bombing (and didn’t commit suicide, as Kirchner’s government was initially quick to claim after his body was discovered). On July 18, 2019, the 25th anniversary of the AMIA bombing, Macri’s government formally declared Hezbollah – which had executed the bombing as Iran’s proxy – a terrorist entity.

As part of the shift back to the more Iran-friendly Kirchner leadership, there were reports that Argentina’s new administration would weaken the Hezbollah designation by declaring only its so-called “military-wing” a terrorist entity.

Perhaps because of Fernandez’s sober realization of the help he will need from the U.S. on the economic challenges that lie ahead, Argentina’s new foreign minister announced last week that the government will not in fact weaken the Hezbollah designation. Yet the message has been sent that Hezbolllah can likely count on weak, if any, enforcement against its activities in the region.

Fernandez is well aware that sliding back on major national security issues such as the terrorism and illicit finance issues on which the Macri government worked closely with the United States will only hamper his ability to achieve any economic improvements, and that the same conditions of deepening recession, massive debt, rampant inflation and poverty levels that sank Macri could sink him as well if he doesn’t deliver results.

Fernandez understands he requires American support at the International Monetary Fund to renegotiate its $57 billion bailout from 2018 – the largest in IMF history — on more favorable terms.

But the U.S. will not necessarily be an easy sell. President Donald Trump placed a congratulatory call after the new government was elected, but that didn’t stop him from proposing steel and aluminum tariffs on Argentina. To his credit, Fernandez did not exhibit the public outrage that may have happened if Kirchner was at the helm, weakening Buenos Aires’ position.

Kirchner is known for her signature, conspiratorial rants. In one occurrence, she attacked our think tank as being part of a “global modus operandi” that “generates international political operations of any type, shape and color.” But this hasn’t won her points in the U.S. For Argentines “who wonder why their country has become an isolated and bankrupt backwater that has to look to Tehran for friendship,” a 2015 Washington Post editorial commented, they have their answer: “Their president has just demonstrated, again, what the quality and character of the country’s leadership have been for the past seven years.”

The U.S. should signal to Argentina that it will not support its bailout if it backtracks on the Macri government’s counterterrorism efforts. This includes holding Iranian officials accountable for the AMIA bombing, including maintaining Interpol’s red notices.

Argentina’s newly installed vice president may have temporarily evaded judicial punishment. Only time will tell if she is held to account for her alleged corruption, and whether Nisman’s case ever receives the justice it deserves. Both will in large measure be determined by whether Fernandez is able to assert the kind of leadership that the people of Argentina need if they are to wake up to brighter futures. So far, there is little reason to think that will happen.