Vacant Lots and High Profits: Corruption in Argentina’s Presidential Dynasty?

Presidential inauguration of Cristina Fernandez with late husband and former President Nestor Kirchner

The Fernandez-Kirchner Dynasty has become quite wealthy while governing Argentina since 2003.  In 2008 alone, their fortune jumped from around $17 million pesos to more than $32 million.  Much of those gains could be attributed to the creation of two new hotels in El Calafate and the sale of 16 properties in the province of Santa Cruz.  After the passing of her husband: former President Nestor Kirchner, President Cristina Fernandez’s fortunes now total US$ 8.6 million.  Her net worth actually declined during the inheritance, due to money received by her two children Maximo and Florencia.

Despite her diligent submission of income to the anticorruption office, the state of many properties owned by the family has raised suspicions.  Nestor Kirchner originally purchased the Santa Cruz property several years ago for US$150,000 and then reportedly sold the holding to Chilean group Cencosud for US$ 2.4 million, which planned to build a supermarket on the land.  Four years later, the plot is still vacant and the company’s president, Horst Paulmann, acknowledges he has yet to begin planning any development on the property.

Land sold to Chilean firm Cencosud for US$ 2.4 million

Meanwhile, two blocks away Alicia Kirchner, Nestor’s sister owns another plot of land.  Alicia claims that she originally purchased the property for US$ 11,000.  If she had sold the property at the same price per square meter as her brother did to the Chilean company, then she would receive about US$ 200,000.  However, the actual market value of the land stands at US$ 80,000.

Though she purchased the property around the same time as her brother, she waited until last month to declare the holdings, after her daughter became the prosecutor responsible for such cases.  Conveniently enough, daughters are prohibited by law to prosecute their mothers.  Alicia is also a cabinet member in Cristina Fernandez’s government.

Alicia Kirchner announces properties to government

These suspicions of fraud are not new in Argentina.  Former president Carlos Menem (1989-1990) is charged with illegally selling arms to Ecuador and Croatia, in addition to siphoning millions from a number of contracts with foreign companies during a slew of privatizations.  In one incident, he received US$2 million in bribes from Siemens, in exchange for a contract to print the country’s national ID cards and passports.

While no charges have been brought against the current president, it would not be surprising if similar allegations begin to surface after she departs from office.  Both Menem and the Kirchners governed during times of economic transition.  Menem presided over an era of privatization and Fernandez and her late husband oversaw the re-nationalization of many firms.  With so many assets changing hands, it is not hard for money to get lost in the process – conveniently laundered as profits in a property sale.

To enjoy truly enjoy political corruption in style, sip on this spicy watermelon margarita.

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