Saturday, June 28, 2014

Argentina: Update--Vice President Charged with Corruption, Illegal Ownership of Ciccone Calcografica

According to Reuters, Argentina's Vice President Amado Boudou was charged on Friday (June 27) with corruption in his dealings with a company that printed the country's currency while he was economy minister in 2010.

The vice president will remain free while awaiting trial in the case along with five other defendants, according to a statement from Argentina's federal court system.

COMMENT: Boudou is accused of secretly purchasing Ciccone Calcografica, a company contracted to print Argentina's peso currency, while serving as the country's top economic policymaker. He denies the charge along with any wrongdoing.

If it can be proven that the Vice President covertly owned Ciccone Calcografica while serving as economy minister in 2010, it will become very difficult for President Fernández to protect him from the Argentine courts. 

Boudou has fulfilled minimal public functions in recent months as the investigation came to light. 

The accusation comes at a sensitive time for Argentina, as the government battles the federal court system in the United States against "holdout" creditors who want full repayment of bonds left over from the country's massive sovereign default in 2002. 

Denounced by Argentina as “vulture funds,” NML and other entities acquired risky Argentine bonds at high interest rates when Buenos Aires defaulted on roughly $100 billion in debt in December 2001, the largest sovereign default in world history, amid a financial meltdown and economic depression. 

Argentina says those potential claims would bring the total owed to the holdouts to some $15 billion, equivalent to half of Argentina’s foreign-exchange reserves, and push the entire nation into a technical  default, which could mean the country's inability to use the US financial system.