Former President of Argentina, Cristina Elisabet Fernández de Kirchner, was indicted over allegations that she oversaw irregularities in the central bank’s sale of U.S. dollars in the futures market during her administration. The transactions in the case involved between $5 billion and $17 billion, according to court papers published by Argentina’s Judicial Information Center (CIJ), dw.com reported. Her administration was accused of corruption throughout her two terms in office. Here is a background on the downfall of Argentina from SOF contributor “G.”
The fourth wealthiest country in the world
It was 1945; the Allied armies, led by the United States and its powerful industrial capability, had crushed the German/ Japanese machine. Argentina allegedly had been neutral throughout the conflict, and declared war on Germany only two days before its surrender. The reason for doing so was to seize all German assets in Argentina. Why this happened is still a mystery. Two theories have been devised over the years, neither of them fully proven.
The first theory speaks about Argentina’s then President Juan Domingo Peron, a fascist trained in Italy in the early years of Mussolini’s dictatorship. His presidency greatly resembled the fascist regimes then in place in Germany and Italy. Basically, he was protecting his real ally’s assets by seizing them, thus preventing the triumphant powers from doing the same thing.
The second theory speaks more about trade and economic gains. Argentina’s ties with the United Kingdom had been very strong since the end of the 19th century. During the conflict, the UK needed raw material and grain in large quantities. Argentina was the perfect supplier of both. By remaining “neutral,” Argentine vessels could cross the Atlantic without being afraid of the U-boats.
Both theories have their merits, and which one is the actual truth is not relevant to this article. The point is that, by the end of the conflict, Argentina had become the fourth richest country in the world. This was greatest opportunity in Argentine’s history, one that could have put the country in the international group of very wealthy of nations. Peron’s plans were different; he applied the fascist theory of nationalizing everything, gave money away under any pretext to gain votes and prosecuted anyone who was against him. While doing that, Peron gave away all the wealth accumulated over the war years, leaving the country’s economy at its lowest level in the entire 20th century. Argentina would never recover from period; the corruption left by Peron was a cancer that has spread throughout Argentine society with devastating effects ever since.
Peron’s dictatorship lasted until 1955, when a military coup overthrew him. Like many dictators before and after him, Peron fled immediately after the coup and left all his followers behind. He escaped to another fascist country, ruled by yet another dictator—Paraguayan President Alfredo Stroessner. During his escape, the military generals then in power had the opportunity to kill him by sinking the Paraguayan vessel he was on board; but they hesitated, and Peron made the run for it. From Paraguay, he left for Spain, where he lived for 18 years while preparing his return.
Peron’s party was banned over those years, and with their leader in exile, the legend was born. The leader was a martyr and his exile was outrageous. His followers was determined to bring him back, something not very easy to achieve, with a powerful military in country that was not afraid of overthrowing any president whom they not consider suitable to the country’s and their needs.
Peron was very clever and dangerous man. He devised a plan that in the ‘70s was not very difficult to implement. There were guerrilla movements all over the world, and some of them were facing and holding their own against super powers. So why not create another one? This is when the guerrilla movement called Montoneros was born. They were so loyal to their leader that their first major strike was to kidnap and kill the general who led the revolution against Peron in 1955.
An old saying states that no military plan survives its first contact with the enemy. This plan was no exception. First of all, a second guerrilla movement called Ejercito Revolucionario del Pueblo (ERP) emerged at nearly the same time but, instead of being sponsored by Peron, they were inspired by China and the Viet Cong. This was a setback in Peron’s plans to return to Argentina, since apart from his own army and the regular Argentine Army, there was a third party that hated them both. Peron had to deal with that, and in doing so, when he died, he left the country in the middle of a civil war.
In 1973, then-President de facto General Alejandro Lanusse called for presidential elections, forbidding Peron to run for presidency but allowing the Peronist party to submit candidates for the first time in 18 years. The Peronist ticket was Hector Campora for President and Vicente Solano Lima for Vice President. Campora was a leftist with strong links with the guerrilla movements. Why Peron chose him was a mystery soon to be revealed.
As expected, the Peronists won the elections with a large margin. On the same day they assumed office, they opened the jails where the guerrillas were kept and resigned immediately after, calling for a new election where Peron would be the star. It is very important to note here, that the guerrillas were in jail and convicted for crimes of all sorts, by civilian juries all over the country. They were also in a special area of the prisons, not mixed with the general population. The prisoner release was so chaotic that more that 300 criminals also left the jails along with them, and it took months to re capture them all.
In the coming elections, Peron, along with his wife as vice president, was elected by an overwhelming majority. He had the power again, but he was old and sick with just a few more months ahead of him. His dilemma was that he had guerrillas running freely all over the country, attacking the military and law enforcement, plus another gang not controlled by him namely the ERP. In the middle of all this, the guerrillas, who wanted to have all the power within the party, began to conduct attacks on the traditional Peronist party, formed by mainly by all the unions.
Peron decided not to turn his back on their traditional followers, and in a public speech given in Plaza de Mayo where the house of Government is located, he insulted the guerrillas and told them to “hit the road.” Was he ever wrong! The guerrillas left the square, leaving a void of one third of its surface and declared war on Peron and everybody else not part of their ranks. This was May of 1974. On July 1st, Peron passed away, leaving his wife Eva in charge of the presidency and the country falling apart.
To cut a long story short, guerrilla activity increased exponentially. The government, without its leader and with a weak and inexperienced vice president in office, was absolutely incapable of dealing with the increasing threat. At their peak, 15,000 guerrillas were in the front lines, with Montoneros hitting all across the country and ERP controlling one-third of a northern province. It was at this dark hour that Italo Luder, Chairman of the Congress, in exercise of the presidency in the absence of Eva Peron, signed a decree ordering the military to “annihilate the guerrilla” activities. This is probably the most controversial aspect of the so-called dirty war. According to this decree, the order to wipe out the guerrillas for good came from the legitimate government, making the order a legal one. The term annihilation in a military sense is a broad concept that, in certain circumstances and against an enemy that does not follow the Geneva Conventions, sometimes requires an answer in kind.
The Civil War
Finally, in 1976, and with federal institutions incapable of providing any meaningful response to anything, Mrs. Peron was overthrown by yet another military coup, which this time was not keen to be gentle. Respecting Mrs. Peron’s presidential status, everybody else was subject to prosecution and repression. A long war followed, with excesses on both sides, ending in 1979 with the defeat of the guerrillas and a sense of relief in the majority of the population.
The generals that conducted the whole process in a triumvirate, which changed four times in the following years, lost credibility among the general population due to their poor management of the economy. To regain sympathy, they went for a national cause, and went to war against the UK in 1982 over the Falkland Islands.
Disregarding the motivation of the Argentine population, the miscalculated war against one of NATO’s strongest nations ended up in a disaster that forced the military out of the government, a call for elections in 1983, and the lack of negotiation for immunity in exchange of the returned power. These factors led to the immediate trial of all the juntas’ leaders, once the new president, belonging to the traditional Partido Radical, assumed office.
Back to Democracy
The return to democracy went through three phases. Phase one was to defend the recently recovered democracy. Phase two was to deal with the economy and the hyperinflation left by the first democratic government. Phase three was supposed to be the launching of the country again to put it back in the same condition it was at the end of WWII. The ‘90s, with a Peronist president who had a capitalist mind and brilliant management of internal and foreign affairs, put Argentina very close to phase three, but an increased level of corruption at all levels led to loss of credibility in the administration and worse, the best opportunity Argentina ever had since the end of its golden years.
In 2001, with another Partido Radical president in office, the Argentine economy collapsed, and the government, made a decision that would mark the country for many years to come. It declared a default and seizure of all deposits held in public and private banks. The fury of the population was raised to levels not seen since the ‘70s; in the end, the president resigned and a left void that peaked when the country had three presidents in one day.
At this stage it is very important to stress that in all of its economic crises since the fascist presidency of Peron, Argentina’s vast natural resources were the guarantee with the international community. Nobody ever questioned the ability of Argentina to honor its debts, in spite of the gravity of its economic problems. This time alarms started to ring in all the world economic organizations. Argentina in default could trigger a catastrophic chain reaction all across Latin America.
In the wake of this serious situation, the leaders of the two major parties agreed to call for presidential elections. The elections took place in 2003, giving former President Carlos Menem 33 percent of the votes, against Nestor Kirchner’s 22 percent. Nestor Kirchner was at the time governor of Santa Cruz, one of Argentina’s southern provinces. An obscure individual, unknown to the majority of the population, he was Nestor Dualde’s candidate. Mr. Dualde, who was interim president at the time, was confident that with Kirchner in office, he could retain control of the government. Kirchner had other plans.
The Dark Decade
Grandson of a pawn shark and with the same attitude toward making gain at the expense of the weak, Kirchner made good use of his ambitions to gain control of the country in the first 12 months of his administration.
Using communist techniques to control a society, together with a Peron-like ability to use people to serve his own purposes, Kirchner raised the flag of human rights. He launched a witch hunt of former military personnel who had fought the guerrillas and beat them in the ’70s, putting heroes and torturers in the same bag and bringing them to trial. Life sentences came by the dozens. Unlike what happened before 1973, the convicted military leaders were put in ordinary jails mixed with the general population. Parallel to these excesses, Kirchner began to build up his own private army, the hordes called piqueteros, which he personally dispatched to occupy factories, gas stations and other facilities of international companies that were not useful to his administration.
In order to build this army, he needed three things; money, weapons and middle ranks to control the masses. He began by directing the piqueteros to occupy every facility belonging to foreign companies and former state companies privatized by previous governments, calling for massive demonstrations where people were paid to attend and spreading out money by the way of subsidies. Using the excuse of domestic violence, he introduced a phony arms exchange, whereby citizens handed over their legal weapons in exchange for money. The weapons were supposed to be incinerated, but in fact only the useless were. All semi-automatic weapons were kept to arm Kirchner’s private army, i.e., the piqueteros. In order to force people to hand over their weapons, all licenses to carry weapons were revoked under ridiculous excuses, leaving the population with permits to have their weapons unloaded and use them for hunting and target shooting only.
The piqueteros grew under the flag of the subsidies. In two years more than 4,000 permits to carry weapons were given to them without even having a license to possess them. The army was on its way. In the north, unknown characters allied with the government began to receive substantial amounts of money to train their factions of the main army. In the meantime, the index of criminality began to raise, with the perpetrators knowing that the population was incapable of defending itself without the risk of going to jail for abuse of self defense. In fact, this amendment in the defense law made it nearly impossible for a normal citizen to defend himself against an attack by a criminal, whereas the criminal would hardly stay in jail for more than a few days. Even more, if the criminal was under 18 years of age, he could not be prosecuted at all, even in case of first degree murder.
The general population started to show a feature unthinkable in a country with high density of weapons in their hands; nobody questioned anything, in spite of clear violations of the Constitution. This lack of character was perfect for a wannabe dictator.
Kirchner’s plan was to put his wife in office after his first term 2003–07, then come back and alternate with her nearly forever. When she was lawfully elected in 2007 and started her first term, a conflict with the farming industry almost blew up the couple’s plans. A tax that was unacceptable for the farmers prompted massive protests, with 1 million people demonstrating when the law was voted and did not pass. At the time, it was apparent the she would have to resign, but she did not. Instead, negotiations with the farmers in the following months saved her presidency. Everything was back on track and going the couple’s way.
As with all military plans, there are factors that cannot be foreseen, in this case, Nestor’s passing in 2010. The government trembled and the general consensus was that she was not going to be able to hold power without her husband at her side. She proved everybody wrong. Instead of backing off, she doubled the bet, and went to seek help in the fiercest part of her acolytes, the former guerrillas and their descendants. These guys were still looking for revenge and eager to become millionaires.
They began to work for her re-election, which she obtained in 2011 with 52 percent of the vote. In the wake of the euphoria that followed, when the results began to be published, one of her “soldiers” launched the phrase that has since become their motto: “Now we go after everything.”
That is what they did. Private system after private system, company after company and business after business succumbed to nationalization. The fever and the appetite were for taking over profitable businesses, especially those of medium size, whose owners were incapable of withstanding the blitzkrieg. Commies were put in all key positions of the government and the congress to secure the flanks of the main thrust—the private millionaire business carried out by the president and her inner circle. These Taliban-thinking guys were part of a movement called La Campora, after the excuse of a president that resigned to clear Peron’s path to a new period after 18 years of exile.
This tribute to one of the worst presidents in Argentine history was nearly ironic, since these guys never intended to hand over anything to anybody. Whoever stood in their way received “visits” from the IRS or (the “money laundering” unit), in order to give them a very clear message that facing La Campora was not a good idea.
Time went by, and Argentina’s economy was more and more like a communist one. Like in the Soviet Union, millions without voice witnessed a few becoming richer and richer at their expense and making mockery of the legal system, the Constitution and everything a democracy stands for. But again, people did not say anything. The Kirchner machine kept moving forward.
With the economy almost completely in their hands, criminals running freely in the streets robbing and killing people at their pleasure, inflation going higher and higher, and government officials telling the population that they were hallucinating when they complained about insecurity, came 2013, a year of Congressional elections. The government received a major blow when the results left them with empty hands. But their ambition was intact and taking advantage of the polarization of the opposition parties. They could still handle votes by sitting in their benches and voting the laws sent by the president, or leaving them empty and frustrating the sessions when the laws were not going their way.
The foreign front found the administration negotiating with the most troublesome countries in the world. The last, and perhaps most dangerous, was a negotiation with Iran to waive the international capture demand, against several Iranian diplomats that were in Argentina at the time of the bombings against the Israeli embassy and a Jewish social association. The Iranians must have been after Argentina’s 9 percent world reserves of uranium. With the change in Iran’s government, the deal was not sanctioned by the Iranian parliament, saving Argentina from yet another international embarrassment. In another fiasco, the foreign minister personally led the embargo of an American C5 under the allegations that it was used to smuggle military equipment. The plane was part of a joint military exercise sanctioned by both governments. Since the incident, there have been very few contacts between both militaries. This foreign policy has isolated the country to unprecedented levels in nearly the entire international community.
With this situation in the country and presidential elections in 2015, when according to the Constitution, Kirchner is not allowed to run for re-election, the future is dark. These are the main reasons:
– Cristina Kirchner is too wealthy to want more than she has. At 60 years of age, she has made a fortune that is comparable with those of the monarchs of Europe.
– The few people of their inner circle have more money than they can count. One of the emblematic cases is Lazaro Baez, who was cashier at a bank in 2003 and now is one of the wealthiest men in the country. He even owns 252,000 hectares of land bought with money coming from questionable contracts for construction projects signed with the Kirchners. He is also partner of Kirchner in several real estate investments, especially in the southern part of Argentina. He is now under investigation for money laundering, both locally and overseas.
– The level of impunity they have enjoyed thus far will come back to bite in their faces once they leave the administration, unless they flee the country. So staying without a shield of some kind is completely out of the question.
– The international community in general and the Western world in particular see the Kirchner years as the worst of Argentina in two centuries.
– After the outrageous seizure of international companies and their subsequent illegal nationalization by the government, the international community is no longer seeing Argentina as a reliable country. In fact, nobody has invested in Argentina in years, except for the local entrepreneurs close to the government.
– The social conflict created by the Kirchners, plus the level of insecurity ravaging the country, with assassinations and violent crimes all over the territory, as well as the drug industry that grew in the shadow of this government and now produces tons of all sorts of drugs, with a surprising level of Colombians now living on Argentine territory, has the majority of the population living in fear.
– The desires of the majority have no echo in the government. In principle, this could lead to believe that it could work against any candidate selected by Kirchner for the 2015 elections, but in fact this could be a strategy to attack in case the odds turn against them.
– The paramilitary army created by Nestor Kirchner between 2003–2005, and the one controlled by Milagro Sala in the north, could well be activated in case La Campora decides not to turn over the power in the event of losing the elections in 2015. If this scenario materializes, there will be very few resources to stop them. The military is no longer an effective fighting force, and to make things worse, the new chief of staff of the Army is aligned with the government, in exchange of protection for alleged crimes committed by him during the last military government. Law enforcement has succumbed to the same fate of the other military forces, and the population has never been in such a weak position to defend itself against any enemy, foreign or domestic. What would happen then is a great question mark, since the only help could come from overseas, and it is very unlikely that anybody would care about the fate of Argentina, as long as the grain and meat keep flowing out of the country.
– Venezuela, Kirchner’s staunch ally, can supply weapons in case of a conflict by creating a kind of Ho Chi Minh trail along the Amazonas, from Venezuela to Bolivia and then to the Bolivian/ Argentine border, which in this case is Jujuy, the province under Milagro Sala’s control. Coincidence? Never believe in them. The supply of AKs will be guaranteed by the Maduro dictatorship, which is a mirror to what would happen in Argentina under Kirchner and her gang of thugs, if the situation would be reversed. Again, it is worth stressing that it is unlikely that anyone would come to prevent that from happening
– Organizations like “Madres de Plaza de Mayo,”—created to find missing people during the years of the last military government—turned, with the sponsorship of the government, into profit-making organizations that have scammed millions of dollars of state-provided funds by misappropriating those funds under the pretext of building dwelling houses. The program, called “Shared Dreams,” resulted in a scandal in that only with government intervention into the investigating DA’s and intervening judges prevented the “Madres” from going to criminal courts. When and if the current government leaves office, those investigations are likely to be re-opened. It is unlikely that the “Madres” will allow that gently.
– The opposition parties are still weak and scattered. Buying congressmen and representatives in the past has been a regular practice of the administration and La Campora. Until there is one figure who without political background and with the people’s support could summon the back up of all parties, no president not belonging to the Kirchner root will be able to put the situation back together.
What is going to happen then? Only time will tell if the transition will be peaceful or not. Even in the best case scenario, the current administration will have to negotiate for their personal immunity after handing over the government. In the years to come, hard work will need to be done to convince serious foreign investors to return to Argentina. Even if they are persuaded, the catastrophe left behind by this administration will consume one or two generations.
It is still necessary to take into account that Latin America is America’s back yard. With Russia expanding its influence again and China looking for soft ground to put their money, America must face the possibility of losing one of the richest countries in the region. The Argentines ought to deal with their own problems and not rely on foreign interventions to sort them out; but in order to prevent the potential chaos that a domestic conflict can have in the entire region, some sort of aid must be needed before undesirable countries see an opportunity to put a foot in a traditional ally’s door.