Cabinet Chief Marcos Peña. Photo via La Nación

After five days of radio silence, the Macri administration has come out to address the controversy generated over the settlement reached by the Government and the Correo Argentino (Argentine Post Office) company owned by President Macri’s father, Franco. The prosecutor in charge of overseeing the deal, Gabriela Boquín, says the agreement would effectively write-off a debt to the company that could amount to AR $70 billion.

In a press conference held today, Cabinet Chief Marcos Peña and Communications Minister, Oscar Aguad, were quick to deny that the case presented a conflict of interest. But, at the same time, they announced they will request the State’s auditing entity (AGN) to produce a report on how fair the deal is for taxpayers.

“This is a discussion that concerns the courts and has been going on for several years, since 2002. After 12 years of not doing anything, the Ministry of Communications worked on an agreement to finish this argument that clearly harmed the State by not being resolved,” Peña said.

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.

If the report is finally issued, it will be as part of an internal investigation that began as a result of an official request from a prosecutor Sergio Rodríguez. The investigation will be led by Treasury Prosecutor Carlos Balbín.

Besides reviewing the deal as a whole, the investigation is setting out to clarify whether the officials who signed the negotiation contract really had the authority to do so and, should this be the case, assign blame and recommend sanctions.

At the same time, Rodríguez filed criminal charges against the government officials involved because he believes that, should prosecutor Boquín’s arguments end up being proven true, a legal argument that the States was defrauded could make its way through the courts.

Boquín. Photo via Cronista
Boquín. Photo via Cronista

The Anti-Corruption office, led by former Cambiemos Deputy Laura Alonso, also kicked-off an independent investigation with the same goal. “I only completely trust myself, I can’t say the same about any other official,” said Alonso when consulted on the issue. “It would have been healthy” for the Communications Ministry to run the agreement by the Casa Rosada before making the decision, she added.

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 contracted 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 of this, Boquín interprets that today the debt would equal to 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.