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What is the Asset Recovery Decree and Why is it the Latest Political Rift?

Following backlash, the government didn't dismiss congressional negotiation

By | [email protected] | January 23, 2019 9:46pm

jaimePhoto via El Litoral
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The political controversy of this week revolves around the government’s decision to sign a Decree of Necessity and Urgency (DNU) to reform a legal concept, known as asset recovery (extinción de dominio, in Spanish), aimed at recuperating assets unlawfully obtained through crimes related to corruption and drug-trafficking, among others.

In this case, although all political camps claim to agree on the benefits of the concept’s ultimate goal, they have diverging visions of the legal process that this type of cases should transit. This ideological clash can be illustrated by the fact that a bill about the same issue has been stuck in Congress for more than two years, without hope of being passed anytime soon.

For that reason, the Macri administration took unilateral action and passed a law of its own through the always-controversial figure of the DNU. The decision was overwhelmingly rejected by the opposition, with many of its members indicating they would challenge its constitutionality.

Although the government stands by its decision, Interior Minister Rogelio Frigerio showed willingness to discuss the law’s wording in Congress, as long as “there is consensus.” “So far, we have not been able to reach an agreement and Argentina needs this tool to recover what has been stolen. Of course, if Congress wants to turn it into a law, so be it. However, the ball is in the opposition’s court now,” he said.

Interior Minister Rogelio Frigerio. Photo via Alerta Online

Peronist Senator Alfredo Luenzo said that “both the opposition and the government want to give this tool to the judiciary, but we need to ensure that it is cohesive with our legal framework.”

But as negotiations continue, the decree, as long as it is not rejected by two thirds of all lawmakers from both houses on Congress, will still stand. Let’s take a look at what it means, the criticism it received – not only for being a DNU – and the government’s defense.

An asset recovery law was introduced in 2016, following the movie-like event in which the Public Works Secretary during the Kirchner administrations, José López, was caught red-handed throwing bags over the walls of a convent that then turned out to not be such. Presented by the head of the Frente Renovador caucus in the Lower House, Graciela Camaño, the initiative was approved with the support of Cambiemos.

However, the Kirchnerite Unidad Ciudadana and Peronist caucuses in the Senate rejected to discuss the bill for roughly two years. Only in August 2018 did the Upper House pass a bill of its own, which made great changes to the originals. This version was widely rejected by the government and the Frente Renovador, its members arguing that it actually did not change anything from the standing (flawed) legal process. The Lower House could have insisted with the first bill, the causcuses were not able to reach consensus to do so.

Fast forward to January 21st. In a press conference, Macri announced he would sign a DNU to turn the government’s vision of how the asset recovery process should be, into a law: “It is clear that all Argentines make a huge effort to build this country. It cannot be the case that some, taking advantage of that effort, commit crimes. We can’t allow that anymore,” the President said during his announcement.

As mentioned, the government’s decision was criticized for two main reasons. On the one hand, for using a DNU. And on the other, for some of its actual content. In an op-ed published in Infobae, lawyer Natalia Volosin indicated that “there is no necessity and urgency, at least as defined by the Supreme Court’s interpretation of article 99, paragraph 3 of the Constitution.”

“There is only necessity and urgency when exceptional circumstances make it impossible to follow the regular process to enact laws established by the Constitution,” Volosin adds.

This does not seem to be the case. The government argues that it is impossible to pass the law through Congress, but this is because it has failed to garner the opposition’s support.

This justification differs from the exceptional circumstances defined by the Supreme Court in the precedent-setting “Verrochi” case, cited by lawyer Graciana Peñafort in an op-ed for El Destape:  “[There is basis for a DNU when] both houses in Congress cannot convene when there are circumstances that prevent them from doing so, such as natural disasters or wars; or when the situation that requires legislative solutions is so urgent that it has to be solved immediately, in a time period that is incompatible with the regular process to pass laws.”

The two lawyers mentioned also indicated that the Constitution establishes that the Executive Branch cannot legislate on criminal matters, as this ability is exclusive to Congress. Government officials argue that they are not regulating criminal matters, as asset recovery is a civil action, independent from the criminal process.

However, Volosin explained, the government shot itself in the foot by tying the beginning of the asset recovery process to the beginning of criminal actions against the suspect. Namely, that a judge orders a precautionary measure on the assets – for example, that they are seized. Therefore, the processes are not independent.

With regards to the decree’s actual wording, these are the aspects that are being challenged:

  • The fact that the government did not include financial crimes.
  • That the law requires the prosecutor investigating the criminal case to request measures on the assets, even if this judicial official is not involved in the civil case, which would actually recover the assets.
  • It reverses the obligation to prove if the asset was obtained legally or illegally. In her op-ed, Volosin indicates that even though other countries loosened their requirements to determine the origin of the asset, in none the accused has to prove from the very outset that he or she did not commit a crime when facing an asset recovery process.
  • It opens the door to the retroactive application of the law: article 21 of the decree indicates that the office of the attorney general has to make an exhaustive list of all corruption cases once the decree goes into effect. By indicating the statute of limitations in asset recovery cases expires after 20 years since assets are acquired, it looks like the DNU intends to retroactively apply the decree, even though article 7 of the Civil and Commercial law expressly indicates that laws are not retroactive except an indication on the contrary.

This is a key aspect of the decree, as it is practically impossible to ignore that most of those who have been accused of corruption are former Kirchnerite officials. For now, the only high-profile example when unlawfully acquired assets were actually recovered is that of former Transportation Secretary Ricardo Jaime, whose yacht was seized after he was found guilty of a corruption-related crime.

Ricardo Jaime. Photo: Gustavo Amarelle

Many media outlets were quickly to list different assets that belong to former senior officials who are at the center of corruption investigations, speculating with the possibility that they will be seized in the future. At the top of all these lists is, predictably, former President Cristina Kirchner.

However, even if the decree were to be interpreted retroactively, lawyer Silvia Martínez, who provides legal counsel to former Deputy Margarita Stolbizer in the many corruption cases filed against Kirchner, said in an op-ed that it still couldn’t be used against the former President.

The article points out that the judiciary will only seize assets purchased after the date when the alleged crime was committed. “In the Hotesur and Los Sauces cases, the members of the Kirchner family were indicted for unlawful association and money laundering between 2010 and 2015. Most of their assets, however, were purchased before that time period. Therefore, the Kirchners would easily prove that they acquired their assets before the commission of the alleged crimes,” the Martínez adds.

The lawyer goes on to indicate that even if we were to use the cases investigating potential crimes committed since 2003 [when Néstor Kirchner became President] they are protected by the fact that disgraced former Federal Judge Norberto Oyarbide acquitted them in 2009 in a case in which they had been accused of unlawful enrichment. By ruling that the Kirchners did not unlawfully acquired any assets between 2003 and 2009, he shuts the door to any future inquiries concerning that time period.

Beyond whether the tangible assets that can actually be recovered, in the short term, the concept of asset recovery is at the center of the last battle for optics between the government and the different opposition camps. By showing that they took the initiative in the fight against corruption, the government puts the opposition between a rock and a hard place, as the latter’s criticism against the legal aspects of the decree can be spun to make it look like they are protecting their corrupt allies. It is the latest round of a long fight whose winner will be announced in this year’s presidential elections.