Federal Prosecutor Juan Pedro Zoni has formally accused President Mauricio Macri of acting against the State’s interests in the agreement his administration signed with “Correo Argentino” (Argentine Post Office) company owned by his father, Franco. The prosecutor also pressed charges against Communications Minister Oscar Aguad and the Ministry’s Director of Legal Affairs, Juan Carlos Mocoroa. It will be up to Federal Judge Ariel Lijo to decide whether there are sufficient grounds to continue with the investigation.
Zoni took the criminal accusation filed by a group of lawmakers part of Nuevo Encuentro (New Encounter — which is affiliated with Victory Front Party) to the judge. They went to the courts last week after the prosecutor in charge of overseeing the deal, Gabriela Boquín, claimed that the Government signed a unfavorable agreement, which would effectively write-off a debt to the company that could amount to AR $70 billion.
Zoni agreed with both the lawmakers and Boquín. In his official request, he argued that “it is necessary to investigate the State’s change in legal strategy within this ‘Creditors’ call, as it agreed to an abusive proposal which would mean a fiscal harm.”
“At the same time, it was signed by an official who wasn’t authorized to do so,” Zoni added.
The Macri administration, through Cabinet Chief Marcos Peña, denied that the case presented a conflict of interest and announced that they would request the State’s auditing entity (AGN) to produce a report on how fair the deal is for taxpayers.
However, shortly after the press conference, AGN head, Oscar Lamberto, said the entity will not review the agreement: “We are not the ones they should go to. They have the Sindicatura General de La Nación [which could be translated as the General Office of the Comptroller] for that,” he added. The Government has yet to announce whether they will turn to this entity to get the report they want.
What’s The Case About, Again?
The case surfaced last week after Prosecutor Boquín challenged the agreement signed between the Macri administration and the Correo Argentino company to settle a debt the latter had with the state since 2001.
The agreement allowed the company to pay its debt of AR $296 million over 15 years with a 7 percent annual interest rate, and to cancel half of the amount left to pay — AR $148 million — in the last two years of the payment plan. Boquín argued that this actually meant the State would write-off 98.2 percent of the actual debt the company had. Why? Boquín says that because the debt was issued during the Convertibility Program, when an Argentine Peso was worth the same as an American Dollar, it should be multiplied by the exchange rate at the moment the deal was signed: about AR $16.
As a result, Boquín interprets that today the debt would equal around AR $4,706 million. Subtracting the debt the group offered to pay, plus interest, the final amount of debt the Macri administration would be pardoning amounts to AR $4.6 billion.
Using the same methodology, Baquín projected the sum to 2033, when the group would make its last payment. And according to her calculations, the debt at the time would amount to AR $70,163 million.