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FTR #835 Tangled Web: Overview of the AMIA Bombing Investigation

Dave Emory’s entire life­time of work is avail­able on a flash dri­ve that can be obtained here. The new dri­ve is a 32-giga­byte dri­ve that is cur­rent as of the pro­grams and arti­cles post­ed by 12/19/2014. The new dri­ve (avail­able for a tax-deductible con­tri­bu­tion of $65.00 or more) con­tains FTR #827.  (The pre­vi­ous flash dri­ve was cur­rent through the end of May of 2012 and con­tained FTR #748.)

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This pro­gram was record­ed in one, 60-minute seg­ment.

Intro­duc­tion: With the recent shoot­ing death of Argen­tine pros­e­cu­tor Alber­to Nis­man, the com­plex events woven in, and around, the 7/18/1994 bomb­ing of the AMIA Jew­ish cul­tur­al cen­ter in Buenos Aires has come back into pub­lic view. Ini­tial­ly described as a “sui­cide,” Nis­man­’s death came after he was mov­ing to indict Argenti­na’s pres­i­dent Kirch­n­er for cov­er­ing-up the attack.

In this pro­gram, we detail some of the deep pol­i­tics sur­round­ing the AMIA attack, prepara­to­ry to a dis­cus­sion of devel­op­ments in the inves­ti­ga­tion of Nis­man­’s death in FTR #836.

The dizzy­ing melange of indi­vid­u­als, insti­tu­tions and events con­nect­ed to the AMIA bomb­ing involves: sev­er­al peo­ple linked to for­mer Argen­tin­ian pres­i­dent Car­los Men­em; indi­vid­u­als linked to the Iran-Con­tra scan­dal; neo-Nazi ele­ments in Argenti­na; inves­ti­ga­tions into fugi­tive Nazi war crim­i­nals; the res­ig­na­tions of two jus­tice min­is­ters involved in the AMIA inves­ti­ga­tion; the sus­pi­cious deaths of numer­ous indi­vid­u­als linked to one or anoth­er of the ele­ments fig­ur­ing in sev­er­al relat­ed inves­ti­ga­tions; evi­den­tiary trib­u­taries link­ing the AMIA bomb­ing to the Okla­homa City Bomb­ing, the bomb­ing of Pan Am flight 103 over Locker­bie, Scot­land and the Achille Lau­ro hijack­ing in 1985.

Recap­ping mate­r­i­al from FTR #5 (record­ed in August of 1996), the pro­gram exam­ines the pos­si­ble role of Syr­i­an ter­ror­ist, weapons deal­er and drug smug­gler Monz­er Al-Kas­sar in the AMIA bomb­ing, as well as the bomb­ing of the Israeli embassy in Argenti­na two years ear­li­er. Al-Kas­sar was a pri­ma­ry oper­a­tive func­tion­ing on behalf of George Bush, Oliv­er North and com­pa­ny in the Iran-Con­tra Scan­dal. In addi­tion to Al Kassar’s pos­si­ble role in the bomb­ings, the broad­cast touch­es on the prob­a­ble involve­ment of Argen­tine secu­ri­ty forces in the attacks, as well as pos­si­ble ret­ri­bu­tion against inves­ti­ga­tors pur­su­ing leads in the case.

Next, the pro­gram repris­es infor­ma­tion from FTR #109 (record­ed on 9/2/1998). At the time that Oliv­er North had him on the White House pay­roll and was using him to ship weapons to the Con­tra gueril­las in Nicaragua as well as to the Ira­ni­ans, Al-Kas­sar was import­ing 20 % of the hero­in that came to the Unit­ed States (accord­ing to the DEA). Al-Kas­sar has appar­ent­ly fig­ured promi­nent­ly in numer­ous ter­ror­ist inci­dents, some as he was work­ing for North’s “counter-ter­ror” oper­a­tions for the Rea­gan White House.  The dis­cus­sion high­lights his con­nec­tions to the late Alfre­do Yabran, a Mafia-like wheel­er deal­er who (like Al-Kas­sar) had strong con­nec­tions to the gov­ern­ment of Argenti­na. Argen­tine pres­i­dent Car­los Men­em, Yabran and Al-Kas­sar are all from the same town in Syr­ia. In addi­tion, the pro­gram con­tains infor­ma­tion about inter­na­tion­al con­nec­tions to the AMIA bomb­ing (one of the bomb­ings Al-Kas­sar was alleged­ly involved with), as well as the mys­te­ri­ous “sui­cide” of Yabran.

Pro­gram High­lights Include: Review of the fact that AMIA housed records of Nazi war crim­i­nals who fled to Argenti­na; the sus­pi­cious deaths of two wit­ness­es against Al-Kas­sar in the Achille Lau­ro hijack­ing; the kid­nap­ping of the fam­i­ly of anoth­er of the wit­ness­es against Al-Kas­sar in the Achille Lau­ro affair; links of Alfre­do Yabran to the explo­sives Al-Kas­sar alleged­ly brought into Argenti­na for the AMIA bomb­ing; the role of for­mer Syr­i­an intel­li­gence offi­cer Ibrahim al Ibrahim to the AMIA affair; Ibrahim al Ibrahim’s mar­riage to Car­los Men­em’s for­mer sis­ter-in-law; the res­ig­na­tions of two dif­fer­ent Argen­tin­ian jus­tice min­is­ters dur­ing the course of the AMIA inves­ti­ga­tion (read: “cov­er-up”); par­tic­i­pa­tion by Argen­tine secu­ri­ty offi­cers in a stolen vehi­cle ring (one of the vehi­cles was appar­ent­ly used in the AMIA bomb­ing); the affil­i­a­tion of Argen­tine secu­ri­ty per­son­nel involved at the oper­a­tional lev­el in the bomb­ing with Tom Met­zger’s White Aryan Resis­tance; the death of Men­em’s son in a heli­copter crash (the day after Men­em agreed to extra­dite SS offi­cer Erich Priebke to Italy); an attack on Men­em’s broth­er as the Al-Kas­sar/AMIA con­tro­ver­sy was brew­ing; review of Al-Kas­sar’s oper­a­tions for Oliv­er North, includ­ing his use of arms firms linked to the ODESSA net­work.

1. Repris­ing infor­ma­tion from FTR #5 (record­ed in August of 1996), we note Swiss alle­ga­tions that Al-Kas­sar may have brought the explo­sives used in the AMIA bomb­ing into Argenti­na. (“Syr­i­an Linked to Bomb­ings” [Jew­ish Tele­graph­ic Agency]; North­ern Cal­i­for­nia Jew­ish Bul­letin; 6/21/1996.)

2. Next, we note the res­ig­na­tion of the Argen­tine Jus­tice Min­is­ter Rodol­fo Bar­ra. Dur­ing the course of the AMIA “inves­ti­ga­tion,” he was dis­cov­ered to have worked for a neo-Nazi orga­ni­za­tion in Argenti­na. (Argen­tine Quits: Neo-Nazi Past” [Los Ange­les Times]; San Fran­cis­co Chron­i­cle; 7/12/1996.)

3. The day after Bar­ra’s res­ig­na­tion was announced, Men­em’s broth­er was attacked. Men­em’s son was killed in the crash of a heli­copter the day after Men­em agreed to extra­dite SS offi­cer Erich Priebke to Italy to stand tri­al in the Adrea­tine Caves mas­sacre. (“Attack on Pres­i­den­t’s Broth­er Con­founds Uneasy Argenti­na” by Sebas­t­ian Rotel­la; The Los Ange­les Times; 7/13/1996.)

4. Mem­bers of the Argen­tine police were arrest­ed for involve­ment in a stolen vehi­cle ring. One of the vehi­cles was appar­ent­ly used in the AMIA bomb­ing. (“Argen­tine Police Held in Bomb­ing” [Reuters]; San Fran­cis­co Exam­in­er; 7/14/1996.)

5. Repris­ing infor­ma­tion from FTR #109 (record­ed on 9/2/1998), the pro­gram notes Al-Kas­sar’s role as an Argen­tine gov­ern­ment weapons traf­fick­er. (“Al-Kas­sar to Come to Argenti­na in August”; Clar­in; 7/19/1998.)

6. Review­ing the cov­er-up of Al-Kas­sar’s involve­ment in the Achille Lau­ro hijack­ing, the pro­gram notes the mur­der of Moustapha Nassi­ni, a wit­ness against Al-Kas­sar, this after Nassini’s fam­i­ly was kid­napped. Anoth­er wit­ness against Al-Kassar–Ismail Jalil–allegedly “com­mit­ted sui­cide.” Yet anoth­er wit­ness Abu Mer­shed, changed his tes­ti­mo­ny after his fam­i­ly was kid­napped. Alfre­do Yabran–in charge of the ware­hous­es where Al-Kas­sar’s explo­sives for the AMIA bomb­ing were alleged­ly stored–“committed sui­cide,” as well. Anoth­er Jus­tice Minister–Elias Jassan–resigned after it was dis­cov­ered that he had logged 102 phone calls to Monz­er Al-Kas­sar. It should be not­ed that Al-Kas­sar obtained his Argen­tine pass­port in record time, with the assis­tance of Ami­ra Yoma–the sis­ter of Car­los Men­em’s ex-wife (who was mar­ried to Ibrahim al Ibrahim.) (“Wit­ness Against Al-Kas­sar Assas­si­nat­ed”; Clar­in; 6/21/1998.)

7. Recall that Yabran con­trolled the ware­hous­es in which Al-Kas­sar’s explo­sives were stored, prepara­to­ry to the AMIA bomb­ing. An asso­ciate of Al-Kassar’s–Srian intel­li­gence offi­cer Ibrahim al Ibrahim–was a key cus­toms offi­cer at the Argen­tine air­port at which Yabran oper­at­ed and through which the explo­sives for the AMIA bomb­ing alleged­ly tran­sit­ed. Ibrahim was mar­ried to Ami­ra Yoma, the sis­ter of Men­em’s ex-wife. Ami­ra Yoma, her sis­ter Zule­ma (Men­em’s wife), Men­em him­self and Al-Kas­sar were all from the tiny city of Yabrud, Syr­ia. (“Gov­ern­ment Wor­ried About Vis­it of Al-Kas­sar;” Clar­in; 8/2/1998.)

8. Anoth­er fig­ure involved with the Iran-Con­tra scandal–former Argen­tin­ian intel­li­gence offi­cer Leonar­do Sanchez-Reisse–gave tes­ti­mo­ny about the AMIA bomb­ing. Sanchez-Reisse alleged­ly trained the Con­tra gueril­las and was also deeply involved with the anti-Cas­tro Cuban milieu that fig­ured in the Iran-Con­tra affair, as well as fig­ur­ing in the milieu of the World Anti-Com­mu­nist League. Sanchez-Reisse also claimed to have links to both the CIA and DEA. (“For­mer Spy Released from Jail After 34 Days;” Clar­in; 8/9/1998.)

9. Flesh­ing out infor­ma­tion about Sanchez-Reisse, the pro­gram fea­tures infor­ma­tion from Cocaine Pol­i­tics by Peter Dale Scott and Jonathan Mar­shall.

10. The dis­cus­sion con­cludes with the FBI’s find­ing that Argen­tin­ian police impli­cat­ed in the oper­a­tional phase of the AMIA bomb­ing belonged to Tom Met­zger’s White Aryan Resis­tance, to which Tim­o­th­ery McVeigh alleged­ly belonged. (“AMIA Bomb Plot­ters’ Con­nec­tion;” La Nacion; 7/27/1997.)

 

Discussion

4 comments for “FTR #835 Tangled Web: Overview of the AMIA Bombing Investigation”

  1. Inter­est­ing how Imad Mugh­niyeh was assas­si­nat­ed just one month after the Inter­pol red notice was final­ly issued for this AMIA bomb­ing.

    http://information.iran911case.com/Exhibit_10.pdf

    Posted by adam | September 15, 2016, 6:17 am
  2. This Monz­er al-Kass­er lived in Mar­bel­la where this Adnan Khashog­gi owned a moun­tain. If i am right in that, might we infer some con­nec­tion? If true that would be the third sus­pi­cious tie-in I know of between Khashog­gi and Hizbul­lah.

    Posted by adam | September 15, 2016, 6:20 am
  3. Javier Milei is obvi­ous­ly a nut­ty char­ac­ters. That’s not a smear. It’s a core part of his polit­i­cal brand, and prob­a­bly a non-insignif­i­cant ele­ment to his elec­toral vic­to­ry dur­ing a year when the Argen­tin­ian pub­lic appar­ent­ly want­ed to ‘turn over the apple cart’. And as we’ve seen, that nut­ty per­sona also serves as a kind of hap­py face cov­er­ing up the real­i­ty that Milei rep­re­sents a far right move­ment with seri­ous plans to reengi­neer Argen­tin­ian soci­ety. A real­i­ty that Milei did­n’t real­ly try very hard to hide. He picked a run­ning mate, Vic­to­ria Vil­laru­el, who open­ly sup­ports Argenti­na’s mil­i­tary dic­ta­tor­ship, after all. Milei was basi­cal­ly run­ning as a ‘far right, but nut­ty and fun far right’ can­di­date. And won.

    And that brings us to anoth­er alarm­ing­ly nut­ty aspect of Milei’s polit­i­cal per­sona: he’s such a mas­sive self-pro­claimed Judeophile that he was open­ly talk­ing about con­vert­ing to Judaism dur­ing the cam­paign. He also claims to be a huge sup­port­er of the state of Israel. And since win­ning, he’s already attend­ed two Jew­ish themed events, includ­ing a trip to Rab­bi Men­achem Mendel Schneer­son­’s grave in New York City as part of his first trip abroad as Argenti­na’s pres­i­dent-elect. This is a good time to recall how the move­ment Schneer­son found­ed, Chabad Lubav­itch, has a num­ber of promi­nent fig­ures who end­ed up as part of the whole #TrumpRus­sia intrigue, includ­ing Felix Sater and Lev Leviev.

    This week’s trip was­n’t Milei’s first trip to Schneer­son­’s bur­ial site. He also vis­it­ed the site in July while cam­paign­ing. Notably, that was the same month that Milei and Vil­laru­el were the only two Argen­tine law­mak­ers to vote against a bill that would make July 18, the date of the 1994 AMIA Jew­ish cen­ter bomb­ing, a nation­al day of mourn­ing. It was such an out­rage to Argenti­na’s Jew­ish com­mu­ni­ty that there was an angry inci­dent involv­ing Milei and a group of fam­i­lies of the AMIA vic­tims. Milei lat­er attempt­ed to change his vote.

    So Argenti­na’s new self-pro­claimed far right Judeophile pres­i­dent elect and his dic­ta­tor­ship-lov­ing vice pres­i­dent elect were the ONLY two law­mak­ers who refused to hon­or the mem­o­ries of the AMIA bomb­ing. But that did­n’t stop Milei from his trips to Schneer­son­’s grave or talk of reli­gious con­ver­sion. Which is why we have to ask: is this some sort of elab­o­rate polit­i­cal trolling on dis­play? What are we to make of Argenti­na’s new far right wannabe Jew­ish pres­i­dent:

    Jew­ish Tele­graph Agency

    Argentina’s pres­i­dent-elect, Javier Milei, vis­its Lubav­itch­er rabbi’s grave to offer thanks for his sur­prise vic­to­ry

    By Juan Melamed Novem­ber 27, 2023 5:20 pm

    (JTA) — For his first trip abroad since being elect­ed pres­i­dent of Argenti­na last week, Javier Milei picked an aus­pi­cious des­ti­na­tion: the tomb of the Lubav­itch­er rebbe in Queens, New York.

    The site is a fre­quent pil­grim­age loca­tion for Jews and oth­ers who believe there is spe­cial spir­i­tu­al sig­nif­i­cance to prayers made at the bur­ial place of Rab­bi Men­achem Mendel Schneer­son, the last leader of the Chabad-Lubav­itch move­ment.

    Milei is Catholic, but his admi­ra­tion for and engage­ment with Judaism runs deep. He stud­ies with a rab­bi in Buenos Aires, has quot­ed Torah pas­sages in ral­lies and walked out on stage for a cam­paign event to a record­ing of a sho­far. He has said he wish­es to con­vert to Judaism but does not see Shab­bat obser­vance as com­pat­i­ble with run­ning his coun­try.

    He last vis­it­ed the rabbi’s grave, known as the Ohel, in July dur­ing his cam­paign.

    “I am going to be thank­ful because when I last vis­it­ed this place, I asked for courage, wis­dom and tem­per­ance: wis­dom to sep­a­rate good from bad, courage to choose good, tem­per­ance to main­tain myself in the posi­tion I have,” Milei told the TV news chan­nel LaNa­cion on Sun­day night.

    “Also to accept the will of the Cre­ator,” he added. “The Cre­ator put me in a place of max­i­mum respon­si­bil­i­ty so I am going to thank and try to be up to the task.”

    The trip to the grave was Milei’s sec­ond Jew­ish event since the far-right “anar­cho-cap­i­tal­ist” was elect­ed in a runoff Nov. 19. On Sat­ur­day night, he par­tic­i­pat­ed in a hav­dalah cer­e­mo­ny to mark the end of Shab­bat in Once, a Jew­ish neigh­bor­hood of Buenos Aires, where he received bless­ings from the Kab­bal­is­tic rab­bi David Hana­nia Pin­to.

    ...

    Anoth­er Argen­tinean Jew­ish busi­ness­man accom­pa­nied him to the rabbi’s grave. Eduar­do Elsz­tain is chair­man and chief exec­u­tive of IRSA, Argentina’s largest real estate com­pa­ny, which man­ages the largest shop­ping malls in Buenos Aires. Elsz­tain, a pro­tege of the Jew­ish financier George Soros, has also sup­port­ed Chabad social pro­grams and Jew­ish youth-relat­ed projects in Argenti­na.

    Milei is sched­uled to be inau­gu­rat­ed Dec. 10. He has said he wants his first inter­na­tion­al trip as pres­i­dent to be to Israel, where he has vowed to move Argentina’s embassy from Tel Aviv to Jerusalem.

    ———–

    “Argentina’s pres­i­dent-elect, Javier Milei, vis­its Lubav­itch­er rabbi’s grave to offer thanks for his sur­prise vic­to­ry” by Juan Melamed; Jew­ish Tele­graph Agency; 11/27/2023

    “The site is a fre­quent pil­grim­age loca­tion for Jews and oth­ers who believe there is spe­cial spir­i­tu­al sig­nif­i­cance to prayers made at the bur­ial place of Rab­bi Men­achem Mendel Schneer­son, the last leader of the Chabad-Lubav­itch move­ment.”

    The bur­ial site of Rab­bi Men­achem Mendel Schneer­son: It’s quite a some­what bizarre choice for the non-Jew­ish Milei’s first trip abroad since his elec­tion. All the more bizarre giv­en his pro­fessed inter­est in con­vert­ing to Judaism. Nor is it his first trip to Schneer­son­’s bur­ial site this year. Bizarre Judeophile dis­plays are clear­ly part of Milei’s pub­lic polit­i­cal brand­ing:

    ...
    Milei is Catholic, but his admi­ra­tion for and engage­ment with Judaism runs deep. He stud­ies with a rab­bi in Buenos Aires, has quot­ed Torah pas­sages in ral­lies and walked out on stage for a cam­paign event to a record­ing of a sho­far. He has said he wish­es to con­vert to Judaism but does not see Shab­bat obser­vance as com­pat­i­ble with run­ning his coun­try.

    He last vis­it­ed the rabbi’s grave, known as the Ohel, in July dur­ing his cam­paign.

    “I am going to be thank­ful because when I last vis­it­ed this place, I asked for courage, wis­dom and tem­per­ance: wis­dom to sep­a­rate good from bad, courage to choose good, tem­per­ance to main­tain myself in the posi­tion I have,” Milei told the TV news chan­nel LaNa­cion on Sun­day night.

    “Also to accept the will of the Cre­ator,” he added. “The Cre­ator put me in a place of max­i­mum respon­si­bil­i­ty so I am going to thank and try to be up to the task.”

    The trip to the grave was Milei’s sec­ond Jew­ish event since the far-right “anar­cho-cap­i­tal­ist” was elect­ed in a runoff Nov. 19. On Sat­ur­day night, he par­tic­i­pat­ed in a hav­dalah cer­e­mo­ny to mark the end of Shab­bat in Once, a Jew­ish neigh­bor­hood of Buenos Aires, where he received bless­ings from the Kab­bal­is­tic rab­bi David Hana­nia Pin­to.
    ...

    A trip to Schneer­son­’s grave in July and then against as his first trip abroad as Pres­i­dent-elect. Is this all like some sort of elab­o­rate polit­i­cal trolling going on? It does­n’t appear to be received as trolling by the Jew­ish com­mu­ni­ty. And yet, as the fol­low­ing arti­cle points out, July was­n’t just the month of he vis­it­ed Schneer­son­’s bur­ial as a can­di­date. July was also the month when Milei and his run­ning mate, Vic­to­ria Vil­laru­el, were the only two Argen­tine law­mak­ers to vote against a bill that would make July 18, the date of the 1994 AMIA Jew­ish cen­ter bomb­ing, a nation­al day of mourn­ing. It was such an out­rage to Argenti­na’s Jew­ish com­mu­ni­ty that there was an inci­dent involv­ing Milei and a group of fam­i­lies of the AMIA vic­tims:

    Jew­ish Tele­graph Agency

    Argentina’s shock­ing pri­ma­ry win­ner could become the country’s first Jew­ish pres­i­dent

    By Juan Melamed and Gabe Fried­man August 16, 2023 4:47 pm

    BUENOS AIRES (JTA) — Argenti­na has nev­er had a Jew­ish pres­i­dent. But that con­cept could move a step clos­er to real­i­ty after a gen­er­al elec­tion in Octo­ber.

    That’s because on Sun­day, the lead­ing vote-get­ter in nation­al pri­ma­ry elec­tions was Javier Milei, a lib­er­tar­i­an who wants to con­vert Argentina’s cur­ren­cy to the U.S. dol­lar and has made head­lines for con­tro­ver­sial com­ments on hot-but­ton top­ics rang­ing from cli­mate change to sex edu­ca­tion.

    He also wants to con­vert to Judaism.

    In an inter­view with Spain’s El Pais last month, Milei said he is con­sid­er­ing con­ver­sion. One of the obsta­cles get­ting in the way: observ­ing Shab­bat.

    “If I’m pres­i­dent and it’s Shab­bat, what do I do? Am I going to dis­con­nect from the coun­try from Fri­day to Sat­ur­day? There are some issues that would make [the reli­gion] incom­pat­i­ble. The rab­bi who helps me study says that I should read the Torah from the point of view of eco­nom­ic analy­sis,” he said.

    Milei, a 52-year-old econ­o­mist who was raised Catholic and who leads the two-year-old La Lib­er­tad Avan­za (Free­dom Advances) par­ty, stud­ies Jew­ish top­ics reg­u­lar­ly with Rab­bi Shi­mon Axel Wah­nish, who heads ACILBA, an Argen­tine-Moroc­can Jew­ish com­mu­ni­ty based in Buenos Aires.

    “He is a per­son I love very much, whom I con­sult reg­u­lar­ly,” Milei said in an inter­view with Radio Jai, a Jew­ish radio sta­tion that broad­casts from Buenos Aires. “These are dis­cus­sions that sud­den­ly can take two or three hours and that for me are very grat­i­fy­ing and help me grow a lot and under­stand sit­u­a­tions in a much deep­er way.”

    ...

    In pub­lic appear­ances, Milei often quotes Torah pas­sages. He walked out on stage for a cam­paign event at an are­na in Buenos Aires ear­li­er this month to a record­ing of a sho­far, the ram’s horn blown on Rosh Hashanah.

    SUENA EL SHOFAR pic.twitter.com/cggV3tjgbS— San­ti­a­go Oría (@Santiago_Oria) August 8, 2023

    He has vis­it­ed the Buenos Aires Holo­caust Muse­um and last July trav­eled to New York, where vis­it­ed the grave of the Lubav­itch­er Rebbe Men­achem Mendel Schneer­son, the influ­en­tial for­mer spir­i­tu­al leader of the Chabad-Lubav­itch move­ment.

    El Ohel de todos... pic.twitter.com/qrGSUfrC4p— Rafi Taw­il (@TawilRafi) July 15, 2023

    Milei and his vice pres­i­den­tial can­di­date, Vic­to­ria Vil­laru­el, were the only two Argen­tine law­mak­ers to vote against a bill that would make July 18, the date of the 1994 AMIA Jew­ish cen­ter bomb­ing, a nation­al day of mourn­ing. A group of fam­i­lies of vic­tims of the attack shout­ed at Milei at this year’s com­mem­o­ra­tion cer­e­mo­ny for the inci­dent that killed 85 peo­ple.

    After sharp crit­i­cism, Milei tried to change his vote, but his request was denied by the pres­i­dent of the Cham­ber of Deputies.

    Milei is staunch­ly pro-Israel and has said that his “two great allies are the Unit­ed States and Israel.” If elect­ed, he has vowed to move the Argen­tine embassy from Tel Aviv to Jerusalem — and make his first for­eign trip as pres­i­dent to Israell, where he said he would “delve deep­er into his stud­ies of the Torah, Tal­mud, and oth­er Jew­ish scrip­tures,” accord­ing to local news out­let La Nacion.

    Milei also has sev­er­al mas­tiff dogs, at least two of them named for Jew­ish econ­o­mists: Mil­ton, for Nobel Prize win­ner Mil­ton Fried­man, and Mur­ray, for Mur­ray Roth­bard — who is often called the father of anar­cho-cap­i­tal­ism, which advo­cates for state­less soci­eties.

    ———-

    “Argentina’s shock­ing pri­ma­ry win­ner could become the country’s first Jew­ish pres­i­dent” by Juan Melamed and Gabe Fried­man; Jew­ish Tele­graph Agency; 08/16/2023

    “In an inter­view with Spain’s El Pais last month, Milei said he is con­sid­er­ing con­ver­sion. One of the obsta­cles get­ting in the way: observ­ing Shab­bat.”

    Con­vert­ing to Judaism was lit­er­al­ly part of his polit­i­cal cam­paign antics. Antics that worked. Is this some sort of dead­panned polit­i­cal com­e­dy? Or is he seri­ous? He’s such a goofy char­ac­ter it’s hard to assess his seri­ous­ness:

    ...
    Milei, a 52-year-old econ­o­mist who was raised Catholic and who leads the two-year-old La Lib­er­tad Avan­za (Free­dom Advances) par­ty, stud­ies Jew­ish top­ics reg­u­lar­ly with Rab­bi Shi­mon Axel Wah­nish, who heads ACILBA, an Argen­tine-Moroc­can Jew­ish com­mu­ni­ty based in Buenos Aires.

    “He is a per­son I love very much, whom I con­sult reg­u­lar­ly,” Milei said in an inter­view with Radio Jai, a Jew­ish radio sta­tion that broad­casts from Buenos Aires. “These are dis­cus­sions that sud­den­ly can take two or three hours and that for me are very grat­i­fy­ing and help me grow a lot and under­stand sit­u­a­tions in a much deep­er way.”

    ...

    In pub­lic appear­ances, Milei often quotes Torah pas­sages. He walked out on stage for a cam­paign event at an are­na in Buenos Aires ear­li­er this month to a record­ing of a sho­far, the ram’s horn blown on Rosh Hashanah.

    ...

    He has vis­it­ed the Buenos Aires Holo­caust Muse­um and last July trav­eled to New York, where vis­it­ed the grave of the Lubav­itch­er Rebbe Men­achem Mendel Schneer­son, the influ­en­tial for­mer spir­i­tu­al leader of the Chabad-Lubav­itch move­ment.

    ...

    Milei is staunch­ly pro-Israel and has said that his “two great allies are the Unit­ed States and Israel.” If elect­ed, he has vowed to move the Argen­tine embassy from Tel Aviv to Jerusalem — and make his first for­eign trip as pres­i­dent to Israell, where he said he would “delve deep­er into his stud­ies of the Torah, Tal­mud, and oth­er Jew­ish scrip­tures,” accord­ing to local news out­let La Nacion.
    ...

    And yet, despite his pro­fessed love of Israel and the Jew­ish peo­ple, Milei and his run­ning mate, Vic­to­ria Vil­laru­el, were the only two Argen­tine law­mak­ers to vote against a bill that would make July 18, the date of the 1994 AMIA Jew­ish cen­ter bomb­ing, a nation­al day of mourn­ing. Keep in mind that July was the same month he made his first trip to Schneer­son­’s bur­ial site. Again, is this trolling?

    ...
    Milei and his vice pres­i­den­tial can­di­date, Vic­to­ria Vil­laru­el, were the only two Argen­tine law­mak­ers to vote against a bill that would make July 18, the date of the 1994 AMIA Jew­ish cen­ter bomb­ing, a nation­al day of mourn­ing. A group of fam­i­lies of vic­tims of the attack shout­ed at Milei at this year’s com­mem­o­ra­tion cer­e­mo­ny for the inci­dent that killed 85 peo­ple.

    After sharp crit­i­cism, Milei tried to change his vote, but his request was denied by the pres­i­dent of the Cham­ber of Deputies.
    ...

    So will Milei even­tu­al­ly go through with a con­ver­sion? It’s not hard to imag­ine at this point. Con­vert­ing to Judaism would syn­er­gize quite well with the nut­ty antics that seem to define his polit­i­cal brand of being sil­ly and over-the-top to please the rab­ble. Because boy would that be sil­ly if Argenti­na’s new fas­cist pres­i­dent actu­al­ly went through with it. It would be dark­ly omi­nous too, espe­cial­ly for Argenti­na’s Jew­ish com­mu­ni­ty. But also sil­ly, and that’s appar­ent­ly what counts, polit­i­cal­ly speak­ing. For now. At least until the con­se­quences of all this fas­cist trolling silli­ness can no longer be ignored. Or, many cas­es, reversed. An incred­i­bly dark joke is unfold­ing in Argenti­na. Don’t cry for Argenti­na. But don’t laugh either.

    Posted by Pterrafractyl | November 28, 2023, 5:53 pm
  4. One of the most depress­ing aspects of the con­tem­po­rary his­to­ry of eco­nom­ic “shock doc­trine” has long been how non-shock­ing it now is to dis­cov­er these dis­cred­it­ed eco­nom­ic the­o­ries embraced over and over by the most pow­er­ful insti­tu­tions on the plan­et. It’s despair induc­ing. Kind of like how bash­ing one’s head against a brick wall repeat­ed­ly in the hopes of bash­ing it down would be despair induc­ing. Painful­ly and harm­ful­ly so. But it keeps hap­pen­ing.

    This time it’s Argenti­na. Again. The new ‘anar­chocap­i­tal­ist’ gov­ern­ment of Javier Milei is already exe­cut­ing its plan for sta­bi­liz­ing Argenti­na’s econ­o­my. It’s exact­ly the kind of insane doomed plan we should expect by now: aus­ter­i­ty for the mass­es and bailouts for the wealthy and large cor­po­ra­tions.

    But it isn’t just the ill-advised poli­cies that should sound famil­iar. It turns out the fig­ure Milei tapped to exe­cute this plan, Econ­o­my Min­is­ter Luis Caputo, is arguably more cul­pa­ble for Argenti­na’s cur­rent fis­cal woes than any­one else. How so? Well, it was Caputo who served in mul­ti­ple key role in the admin­is­tra­tion of con­ser­v­a­tive pres­i­dent Mauri­cia Macro from 2015–2019. First, Macro appoint­ed Caputo, a friend since child­hood, to the role of sec­re­tary of finance. Then finance min­is­ter. And final­ly as cen­tral bank gov­er­nor. Caputo had more influ­ence over Argenti­na’s econ­o­my dur­ing this peri­od than vir­tu­al­ly any­one else. And it hap­pens to have been the peri­od when the seeds for today’s infla­tion cri­sis was sown. Between 2016 and 2018, Argentina’s for­eign debt grew from 17.7% of GDP to 41.8%, with gross debt in for­eign cur­ren­cy almost dou­bling, from 36.3% of GDP to 65.8%. In 2018, as Caputo was serv­ing as cen­tral bank gov­er­nor, the Macri gov­ern­ment request­ed and received the largest IMF ‘bailout’ in the fund’s his­to­ry. With no cap­i­tal con­trols in place, the ‘bailout’ mon­ey effec­tive­ly sub­si­dized the flight of cap­i­tal out of Argenti­na by the nation’s elites. By the end of Macri’s term, infla­tion, which was around 15% in late 2015, was over 50%. And here’s Caputo, back as the new Econ­o­my Min­is­ter.

    Anoth­er Macri admin­is­tra­tion alum end­ed up as Milei’s choice to be the new head of Argenti­na’s Cen­tral Bank — which isn’t being dis­solved, after all, despite Milei’s cam­paign pledges. San­ti­a­go Bausili served as Macri’s under sec­re­tary of finance and lat­er as sec­re­tary of finance. Bausili was, until recent­ly, a part­ner in Caputo’s invest­ment fund.

    But there’s anoth­er rather note­wor­thy shared tie between Caputo and Bausili: bot spent years work­ing at JP Mor­gan and than Deutsch Bank. Con­tro­ver­sial­ly, Bausili actu­al­ly received a share pack­age with $170,000 from Deutsch Bank at the same time he was work­ing as a pub­lic ser­vant for Macri. Pub­lic duties that includ­ed help­ing the gov­ern­ment issue debt denom­i­nat­ed in for­eign cur­ren­cies. It turns up Deutsche Bank played a role in help­ing to bring the for­eign debt bonds to mar­ket in 2016 and 2017. Deutsche Bank charges the sec­ond high­est fees among the banks play­ing these roles. In 2021, Bausili was accused of con­flicts of inter­est over these deal­ings with Deutsche Bank. Bausili was charged, but suc­cess­ful­ly appealed. The offi­cial inves­ti­ga­tion con­tin­ued, with the case against Bausili being reopened in Sep­tem­ber of 2022. But one day before being sworn in as the hew head of the cen­tral bank, the Buenos Aires Fed­er­al Cham­ber (the low­er house of the par­lia­ment) blocked the pros­e­cu­tion.

    It’s like a dark­er sequel to a dark com­e­dy, except the only ones laugh­ing are the elites about to pull off the same giant scam on the pub­lic once again:

    Naked Cap­i­tal­ism

    Who Is Luis Caputo, Argentina’s New Econ­o­my Min­is­ter (Who Is Already Mak­ing the Econ­o­my Scream)?

    Post­ed on Decem­ber 15, 2023 by Nick Cor­bish­ley

    Meet the new boss, same as the old.

    In Span­ish, as in Eng­lish, the word “kaput,” tak­en from the Ger­man “kaputt”, means done for, knack­ered, wiped out. The sur­name of Argentina’s new Econ­o­my Min­is­ter, Luis “Toto” Caputo, is sim­i­lar, just with a “c” instead of a “k” and end­ing in “o”, which is prob­a­bly fit­ting giv­en that his first dose of eco­nom­ic shock ther­a­py — includ­ing a 54% deval­u­a­tion of the Argen­tine peso, to bring the offi­cial exchange rate clos­er to the infor­mal “blue” one; a halt on all pub­lic works; the freez­ing of pub­lic sec­tor salaries; a sharp rise in tax­es, and the elim­i­na­tion of many pub­lic sub­si­dies — could wipe out what remains of Argentina’s frag­ile econ­o­my.

    Pre­dictably, the pack­age of mea­sures places the lion’s share of the bur­den on the already buck­ling shoul­ders of Argentina’s mid­dle and work­ing class­es while the so-called polit­i­cal and eco­nom­ic caste — whom Milei vowed to elim­i­nate dur­ing his elec­tion cam­paign — will emerge either large­ly unscathed or even wealth­i­er. In fact, as I will explain lat­er, Argentina’s cen­tral bank, also under new (and old) man­age­ment, has pre­pared what many are call­ing a gen­er­ous bailout of some of the country’s largest import­ing com­pa­nies.

    ...

    Who is Caputo?

    Caputo is a life-long friend of for­mer Pres­i­dent Mauri­cio Macri, whose gov­ern­ment (2015–19), with Caputo’s help, did more harm to Argentina’s econ­o­my than any oth­er since Car­los Menem’s dis­as­trous ten-year tenure in the 1990’s.

    Caputo began his career as an invest­ment banker, first as chief of trad­ing for Latin Amer­i­ca at JP Mor­gan Chase (1994–8) before slot­ting into a sim­i­lar role at Deutsche Bank (1998–2003). He was lat­er appoint­ed chair­man of Deutsche Bank’s Argen­tine sub­sidiary. In more recent years, he has man­aged his own invest­ment fund and sat on the board of an Argen­tine ener­gy com­pa­ny.

    But what inter­ests us most in this instance is Caputo’s brief peri­od in the pub­lic sec­tor, which began in 2015. First, Macri appoint­ed his old school chum as sec­re­tary of finance, only to bump him up to finance min­is­ter and even­tu­al­ly cen­tral bank gov­er­nor, all in the space of just three years. Dur­ing that time, Caputo held more sway over Argentina’s econ­o­my than just about any­body else in a gov­ern­ment posi­tion. And it was dur­ing that time that the seeds of Argentina’s cur­rent cri­sis, includ­ing its out-of-con­trol infla­tion, were sown.

    First, the gov­ern­ment offered to pay off the vul­ture funds that had bought, for cents on the US dol­lar, the bonds of the invest­ment funds that had refused to accept pre­vi­ous write-downs of Argentina’s debt, in 2005 and 2010. They includ­ed US bil­lion­aire Paul Singer’s Elliot Man­age­ment. The government’s goal was to return to inter­na­tion­al debt mar­kets so as to access cheap­er (for­eign-denom­i­nat­ed) debt, which it then gorged on with reck­less aban­don.

    Between 2016 and 2018 Argentina’s for­eign debt mush­roomed from 17.7% of GDP to 41.8% and gross debt in for­eign cur­ren­cy almost dou­bled, from 36.3% of GDP to 65.8%. Infla­tion also surged, from around 15% in late 2015 to over 50% by the end of Macri’s term. Even the Span­ish-lan­guage Wikipedia page for Caputo includes a sec­tion doc­u­ment­ing the myr­i­ad irreg­u­lar­i­ties and poten­tial fraud involved in the set­tle­ment reached with the hold­outs (trans­la­tion my own).

    In 2016, the pros­e­cu­tor Fed­eri­co Del­ga­do called for an inves­ti­ga­tion of the State’s pay­ment to the hold­outs, through a doc­u­ment in which he demon­strat­ed pos­si­ble legal and pro­ce­dur­al irreg­u­lar­i­ties in the indebt­ed­ness and pay­ment, and declared that the $16.5 bil­lion debt the admin­is­tra­tion took on to write off the $12.5 bil­lion “owed” to the bond­hold­ers was “the fin­ish­ing touch to a gigan­tic scam against the nation­al State.”

    A year lat­er, the Amer­i­can jour­nal­ist Greg Palast gave an inter­view in which he stat­ed that Paul Singer financed Mauri­cio Macri’s pres­i­den­tial cam­paign with $2.5 mil­lion, thus ensur­ing an expo­nen­tial prof­it on his law­suit against Argenti­na. In this manoeu­vre and in the deal the Macri gov­ern­ment would reach with the fund, Singer obtained prof­its of 10,000%. Asked about his rela­tion­ship with Paul Singer, Macri declared that he did not know him and that he was not aware that he had made a con­tri­bu­tion to his cam­paign.

    But it is what hap­pened next, when Caputo was cen­tral bank gov­er­nor, that set the stage for Argentina’s cur­rent woes. In 2018, with elec­tions loom­ing, infla­tion surg­ing and Argentina’s debt sit­u­a­tion once again spi­ralling out of con­trol, the Macri gov­ern­ment asked the IMF for a $57 bil­lion bailout, the largest in the fund’s his­to­ry, of which $44 bil­lion would be dis­bursed.

    As Michael Hud­son recount­ed in an inter­view with the Real News Net­work, which we cross-post­ed here, since Argentina’s 2001 bailout, which was almost entire­ly used to enable cap­i­tal flight, rank-and-file staff at the IMF had adopt­ed a slo­gan : “no more Argenti­nas!” But the Fund’s senior ranks, led at the time by Pres­i­dent Chris­tine Lagarde, now at the helm of the Euro­pean Cen­tral Bank, ignored that hard-earned les­son, or per­haps just didn’t care. After all, Macri’s admin­is­tra­tion was exact­ly the kind of gov­ern­ment the IMF likes to do busi­ness with.

    The money,or at least most of it, was quick­ly dis­bursed though, once again, it didn’t last long in the coun­try. In the absence of cap­i­tal con­trols, Argentina’s oli­garchy sim­ply took their share and sent it aboard. Once again, an IMF bailout had been used to sub­sidise cap­i­tal flight so that Argentina’s wealth­i­est busi­ness­es and cit­i­zens could yank their mon­ey out of the coun­try before the cur­ren­cy col­lapsed — all on the government’s tab.

    ...

    Inci­den­tal­ly, Milei’s choice for cen­tral bank chief, San­ti­a­go Bausili, was until recent­ly a part­ner in Caputo’s invest­ment fund. Like Caputo, he worked for JP Mor­gan , for 11 years, before join­ing Deutsche Bank, for anoth­er eight. He also worked under Caputo in the Macri gov­ern­ment, first as under sec­re­tary of finance and lat­er as sec­re­tary of finance.

    Most con­tro­ver­sial­ly, Bausili received a sig­nif­i­cant share pack­age worth $180,000 from his for­mer employ­er, Deutsche Bank, at the same time as he was ful­fill­ing his duties as a pub­lic ser­vant. Those duties alleged­ly includ­ed help­ing the gov­ern­ment issue for­eign debt bonds as part of the agree­ment reached with the over­seas vul­ture funds. As luck would have it, Deutsche Bank would end up charg­ing the sec­ond high­est fees for help­ing to place the for­eign debt bonds issued by the Macri gov­ern­ment between 2016 and 2017, as Pági­na 12 reports.

    In 2021, Bausili was accused of con­flicts of inter­est in his inter­ac­tions with Deutsche Bank dur­ing his time in gov­ern­ment. The judge in the case, Sebastián Casanel­lo, con­clud­ed that the evi­dence pre­sent­ed had demon­strat­ed “Bausili’s detach­ment from the high stan­dards of ethics and trans­paren­cy that his role required of him,” adding that all of the actions tak­en by Bausili in that peri­od “were pro­hib­it­ed by law.” Four months after Bausili’s pros­e­cu­tion, an appeals court over­turned the rul­ing.

    Casanel­lo con­tin­ued his inves­ti­ga­tion, how­ev­er, accu­mu­lat­ing more evi­dence against Bausili. In Sep­tem­ber 2022, he insist­ed on reopen­ing the case. But this Tues­day, one day before Bausili was con­firmed as the next head of the cen­tral bank, the Buenos Aires Fed­er­al Cham­ber once again blocked the pros­e­cu­tion.

    Par­al­lels with “Fujishock”

    Caputo’s new eco­nom­ic reform pack­age has drawn par­al­lels with the neolib­er­al reforms enact­ed by Peru’s for­mer Pres­i­dent (and long-term inmate of Bar­badil­lo prison) Alber­to Fuji­mori dur­ing his first term in office, known as “Fujishock”. As even Wikipedia notes, Fujimori’s eco­nom­ic pro­gram “bore lit­tle resem­blance to his cam­paign plat­form and was more dras­tic than any­thing [his rival can­di­date], Mario Var­gas Llosa, had pro­posed.” What fol­lowed was “eco­nom­ic agony” (again, Wikipedia’s words) as “elec­tric­i­ty costs quin­tu­pled, water prices rose eight­fold, and gaso­line prices rose 3000%.” Even­tu­al­ly, the econ­o­my sta­bilised.

    It will be a sim­i­lar sto­ry for Argenti­na — a coun­try that has, for a host of rea­sons, been in a near-con­stant state of cri­sis for most of its his­to­ry, as Jef­frey Sachs said in a recent inter­view with The Duranbut with one key dif­fer­ence: the Argen­tine econ­o­my is unlike­ly to sta­bilise any time soon; in fact, it could well col­lapse once again.

    ...

    In a com­plete depar­ture from the lib­er­tar­i­an ideals he espoused as a TV pun­dit before becom­ing a politi­cian, Milei has also pro­posed a three per­cent­age-point increase on prac­ti­cal­ly all exports, from 12% to 15%. As Reuters reports, the gov­ern­ment “is des­per­ate for funds, espe­cial­ly for­eign cur­ren­cy, with the grains sec­tor the dom­i­nant dri­ver of exports.” The gov­ern­ment has also hiked import tax­es from 7% to 17.5%, which will also fuel fur­ther infla­tion, and is con­sid­er­ing reim­pos­ing income tax on strug­gling fam­i­lies.

    These reforms will unleash much high­er infla­tion for at least the months to come, as the Milei gov­ern­ment itself has admit­ted, while rip­ping away all of the social pro­tec­tions that have allowed peo­ple on mod­est incomes to eke out an exis­tence. This is in a coun­try where the pover­ty rate is already above 40%, affect­ing 18.6 mil­lion Argen­tini­ans. As NC has report­ed before, this kind of aus­ter­i­ty lit­er­al­ly kills, through des­per­a­tion, sui­cide and lack of access to basic health ser­vices.

    IMF Sup­port

    Even so, the IMF was light­en­ing-quick to approve Caputo’s raft of mea­sures. In fact, it is prob­a­bly safe to assume that the Fund pro­vid­ed some input on the draft­ing of the mea­sures. As the Argen­tine finan­cial jour­nal­ist Ale­jan­dro Bercovich notes, what we are see­ing is a clas­sic IMF pack­age: “The aim is to gen­er­ate reces­sion, reduce imports in order to accu­mu­late dol­lars and thus con­tin­ue ser­vic­ing the debt owed to the Fund and low­er infla­tion by cool­ing demand.”

    The punch­line from the IMF’s state­ment (empha­sis my own):

    “These strong ini­tial actions aim to sig­nif­i­cant­ly improve pub­lic finances in a way that pro­tects the most vul­ner­a­ble in soci­ety and to strength­en the exchange rate regime.”

    Of course, the IMF has a long, sto­ried his­to­ry of get­ting things bad­ly wrong, espe­cial­ly wrt Argenti­na. In March 2018, for exam­ple, the-then man­ag­ing direc­tor Lagarde described the first two years of [Macri’s] reforms as “amaz­ing”.

    To its cred­it, the Fund’s research arm has in recent years churned out stud­ies con­firm­ing that both aus­ter­i­ty and high­ly mobile cap­i­tal increase inequal­i­ty, mak­ing life much more dif­fi­cul­ty for the most vul­ner­a­ble in soci­ety, and that inequal­i­ty is a drag on growth, which does noth­ing but hin­der a strug­gling government’s abil­i­ty to pay back its debts. Unfor­tu­nate­ly, none of this appears to have informed the fund’s pol­i­cy mak­ing.

    Last­ly, in anoth­er dark blast from the past, the Milei government’s eco­nom­ic reform pack­age appears to include a pub­lic bailout of pri­vate sec­tor debts. Again, not what you’d expect from a self-pro­claimed “anar­cho-cap­i­tal­ist”. From Izquier­da Diario (machine trans­lat­ed):

    The Cen­tral Bank will go into debt for a sum of up to US$30 bil­lion to res­cue the pri­vate debt of import­ing com­pa­nies. It will issue Bonds for the Recon­struc­tion of a Free Argenti­na (BOPREAL) that importers of goods and ser­vices will be able to access in pesos, which will then be set­tled in 2027 in dol­lars. After announc­ing a finan­cial war plan that will destroy salaries and pen­sions, Caputo endors­es this scan­dalous debt pack­age…

    The debt of importers with for­eign sup­pli­ers, which gen­er­al­ly hov­ered around $30 bil­lion in recent years, surged to almost $58 bil­lion in 2023, as a result of a for­eign cur­ren­cy short­age caused by [Argentina’s his­toric] drought. This led the cen­tral bank to delay or reduce the deliv­ery of for­eign cur­ren­cy, caus­ing a sharp rise in non-pay­ment to sup­pli­ers. Now, the new head of the cen­tral bank wants to “resolve” this issue by sell­ing this new bond to importers so that they can pay off their debts. It is a lia­bil­i­ty that will pre­serve its val­ue in dol­lars while gen­er­at­ing returns [of up to 5% per year] until 2027. Of all the pos­si­ble solu­tions to the prob­lem of ris­ing pri­vate debt, the cen­tral bank chose the worst: its con­ver­sion into pub­lic debt.

    ...

    ———-

    “Who Is Luis Caputo, Argentina’s New Econ­o­my Min­is­ter (Who Is Already Mak­ing the Econ­o­my Scream)?” by Nick Cor­bish­ley; Naked Cap­i­tal­ism; 12/15/2023

    “Pre­dictably, the pack­age of mea­sures places the lion’s share of the bur­den on the already buck­ling shoul­ders of Argentina’s mid­dle and work­ing class­es while the so-called polit­i­cal and eco­nom­ic caste — whom Milei vowed to elim­i­nate dur­ing his elec­tion cam­paign — will emerge either large­ly unscathed or even wealth­i­er. In fact, as I will explain lat­er, Argentina’s cen­tral bank, also under new (and old) man­age­ment, has pre­pared what many are call­ing a gen­er­ous bailout of some of the country’s largest import­ing com­pa­nies.

    Wel­come to Argenti­na’s grand new exper­i­ment in anar­chocap­i­tal­ism. A new exper­i­ment that is turn­ing out to have an awful­ly large num­ber of par­al­lels to the same IMF-led bailouts that got Argenti­na into this posi­tion in the first place. Start­ing with Luis Caputo, the child­hood friend of for­mer con­ser­v­a­tive pres­i­dent Mauri­cio Macri who end­ed up Macri’s cen­tral bank gov­er­nor dur­ing the 2016–2018 peri­od when Argenti­na’s for­eign debt blew up from 17.7% of GDP to 41.8%, gross debt in for­eign cur­ren­cy almost dou­bled from 36.3% of GDP to 65.8%, and infla­tion jumped from 15% to over 50%, sow­ing the seeds of the cur­rent cri­sis:

    ...
    Caputo is a life-long friend of for­mer Pres­i­dent Mauri­cio Macri, whose gov­ern­ment (2015–19), with Caputo’s help, did more harm to Argentina’s econ­o­my than any oth­er since Car­los Menem’s dis­as­trous ten-year tenure in the 1990’s.

    ...

    But what inter­ests us most in this instance is Caputo’s brief peri­od in the pub­lic sec­tor, which began in 2015. First, Macri appoint­ed his old school chum as sec­re­tary of finance, only to bump him up to finance min­is­ter and even­tu­al­ly cen­tral bank gov­er­nor, all in the space of just three years. Dur­ing that time, Caputo held more sway over Argentina’s econ­o­my than just about any­body else in a gov­ern­ment posi­tion. And it was dur­ing that time that the seeds of Argentina’s cur­rent cri­sis, includ­ing its out-of-con­trol infla­tion, were sown.

    ...

    First, the gov­ern­ment offered to pay off the vul­ture funds that had bought, for cents on the US dol­lar, the bonds of the invest­ment funds that had refused to accept pre­vi­ous write-downs of Argentina’s debt, in 2005 and 2010. They includ­ed US bil­lion­aire Paul Singer’s Elliot Man­age­ment. The government’s goal was to return to inter­na­tion­al debt mar­kets so as to access cheap­er (for­eign-denom­i­nat­ed) debt, which it then gorged on with reck­less aban­don.

    Between 2016 and 2018 Argentina’s for­eign debt mush­roomed from 17.7% of GDP to 41.8% and gross debt in for­eign cur­ren­cy almost dou­bled, from 36.3% of GDP to 65.8%. Infla­tion also surged, from around 15% in late 2015 to over 50% by the end of Macri’s term. Even the Span­ish-lan­guage Wikipedia page for Caputo includes a sec­tion doc­u­ment­ing the myr­i­ad irreg­u­lar­i­ties and poten­tial fraud involved in the set­tle­ment reached with the hold­outs (trans­la­tion my own).

    In 2016, the pros­e­cu­tor Fed­eri­co Del­ga­do called for an inves­ti­ga­tion of the State’s pay­ment to the hold­outs, through a doc­u­ment in which he demon­strat­ed pos­si­ble legal and pro­ce­dur­al irreg­u­lar­i­ties in the indebt­ed­ness and pay­ment, and declared that the $16.5 bil­lion debt the admin­is­tra­tion took on to write off the $12.5 bil­lion “owed” to the bond­hold­ers was “the fin­ish­ing touch to a gigan­tic scam against the nation­al State.”

    A year lat­er, the Amer­i­can jour­nal­ist Greg Palast gave an inter­view in which he stat­ed that Paul Singer financed Mauri­cio Macri’s pres­i­den­tial cam­paign with $2.5 mil­lion, thus ensur­ing an expo­nen­tial prof­it on his law­suit against Argenti­na. In this manoeu­vre and in the deal the Macri gov­ern­ment would reach with the fund, Singer obtained prof­its of 10,000%. Asked about his rela­tion­ship with Paul Singer, Macri declared that he did not know him and that he was not aware that he had made a con­tri­bu­tion to his cam­paign.

    ...

    But it was­n’t just the dete­ri­o­ra­tion of Argenti­na’s finances under Caputo’s term as cen­tral bank gov­er­nor that end­ed up doom­ing Argenti­na’s econ­o­my. There was also the result­ing IMF ‘bailout’. It was the largest in the IMF’s his­to­ry. And effec­tive­ly a sub­sidy for flight cap­i­tal. A cyn­i­cal bailout for Argenti­na’s elites at the long-term cost of the rest of the pop­u­lace:

    ...
    But it is what hap­pened next, when Caputo was cen­tral bank gov­er­nor, that set the stage for Argentina’s cur­rent woes. In 2018, with elec­tions loom­ing, infla­tion surg­ing and Argentina’s debt sit­u­a­tion once again spi­ralling out of con­trol, the Macri gov­ern­ment asked the IMF for a $57 bil­lion bailout, the largest in the fund’s his­to­ry, of which $44 bil­lion would be dis­bursed.

    As Michael Hud­son recount­ed in an inter­view with the Real News Net­work, which we cross-post­ed here, since Argentina’s 2001 bailout, which was almost entire­ly used to enable cap­i­tal flight, rank-and-file staff at the IMF had adopt­ed a slo­gan : “no more Argenti­nas!” But the Fund’s senior ranks, led at the time by Pres­i­dent Chris­tine Lagarde, now at the helm of the Euro­pean Cen­tral Bank, ignored that hard-earned les­son, or per­haps just didn’t care. After all, Macri’s admin­is­tra­tion was exact­ly the kind of gov­ern­ment the IMF likes to do busi­ness with.

    The money,or at least most of it, was quick­ly dis­bursed though, once again, it didn’t last long in the coun­try. In the absence of cap­i­tal con­trols, Argentina’s oli­garchy sim­ply took their share and sent it aboard. Once again, an IMF bailout had been used to sub­sidise cap­i­tal flight so that Argentina’s wealth­i­est busi­ness­es and cit­i­zens could yank their mon­ey out of the coun­try before the cur­ren­cy col­lapsed — all on the government’s tab.
    ...

    Flash for­ward to today, and we have a new IMF ‘bailout’ being arranged by Caputo that appears to be a repeat of all the pre­vi­ous mis­takes. In oth­er words, don’t be shocked if Argenti­na ends up need­ing anoth­er bailout in a few years thanks to this new ‘bailout’. Like before:

    ...
    Caputo’s new eco­nom­ic reform pack­age has drawn par­al­lels with the neolib­er­al reforms enact­ed by Peru’s for­mer Pres­i­dent (and long-term inmate of Bar­badil­lo prison) Alber­to Fuji­mori dur­ing his first term in office, known as “Fujishock”. As even Wikipedia notes, Fujimori’s eco­nom­ic pro­gram “bore lit­tle resem­blance to his cam­paign plat­form and was more dras­tic than any­thing [his rival can­di­date], Mario Var­gas Llosa, had pro­posed.” What fol­lowed was “eco­nom­ic agony” (again, Wikipedia’s words) as “elec­tric­i­ty costs quin­tu­pled, water prices rose eight­fold, and gaso­line prices rose 3000%.” Even­tu­al­ly, the econ­o­my sta­bilised.

    It will be a sim­i­lar sto­ry for Argenti­na — a coun­try that has, for a host of rea­sons, been in a near-con­stant state of cri­sis for most of its his­to­ry, as Jef­frey Sachs said in a recent inter­view with The Duranbut with one key dif­fer­ence: the Argen­tine econ­o­my is unlike­ly to sta­bilise any time soon; in fact, it could well col­lapse once again.

    ...

    Even so, the IMF was light­en­ing-quick to approve Caputo’s raft of mea­sures. In fact, it is prob­a­bly safe to assume that the Fund pro­vid­ed some input on the draft­ing of the mea­sures. As the Argen­tine finan­cial jour­nal­ist Ale­jan­dro Bercovich notes, what we are see­ing is a clas­sic IMF pack­age: “The aim is to gen­er­ate reces­sion, reduce imports in order to accu­mu­late dol­lars and thus con­tin­ue ser­vic­ing the debt owed to the Fund and low­er infla­tion by cool­ing demand.”

    The punch­line from the IMF’s state­ment (empha­sis my own):

    “These strong ini­tial actions aim to sig­nif­i­cant­ly improve pub­lic finances in a way that pro­tects the most vul­ner­a­ble in soci­ety and to strength­en the exchange rate regime.”

    Of course, the IMF has a long, sto­ried his­to­ry of get­ting things bad­ly wrong, espe­cial­ly wrt Argenti­na. In March 2018, for exam­ple, the-then man­ag­ing direc­tor Lagarde described the first two years of [Macri’s] reforms as “amaz­ing”.

    To its cred­it, the Fund’s research arm has in recent years churned out stud­ies con­firm­ing that both aus­ter­i­ty and high­ly mobile cap­i­tal increase inequal­i­ty, mak­ing life much more dif­fi­cul­ty for the most vul­ner­a­ble in soci­ety, and that inequal­i­ty is a drag on growth, which does noth­ing but hin­der a strug­gling government’s abil­i­ty to pay back its debts. Unfor­tu­nate­ly, none of this appears to have informed the fund’s pol­i­cy mak­ing.

    ...

    Final­ly, note the very inter­est­ing finan­cial pedi­gree of both Caputo and per­son tapped to fill Caputo’s old role as the head of the cen­tral bank, San­ti­a­go Bausili: Both Caputo and Bausili spent years work­ing at JP Mor­gan and then Deutsche Bank. Inter­est­ing details giv­en the his­toric con­text of the major roles played by both banks in South Amer­i­ca, made all the more inter­est­ing by Bausil­i’s ques­tion­able inter­ac­tions with Deutsche Bank dur­ing his time in gov­ern­ment:

    ...
    Caputo began his career as an invest­ment banker, first as chief of trad­ing for Latin Amer­i­ca at JP Mor­gan Chase (1994–8) before slot­ting into a sim­i­lar role at Deutsche Bank (1998–2003). He was lat­er appoint­ed chair­man of Deutsche Bank’s Argen­tine sub­sidiary. In more recent years, he has man­aged his own invest­ment fund and sat on the board of an Argen­tine ener­gy com­pa­ny.

    ...

    Inci­den­tal­ly, Milei’s choice for cen­tral bank chief, San­ti­a­go Bausili, was until recent­ly a part­ner in Caputo’s invest­ment fund. Like Caputo, he worked for JP Mor­gan , for 11 years, before join­ing Deutsche Bank, for anoth­er eight. He also worked under Caputo in the Macri gov­ern­ment, first as under sec­re­tary of finance and lat­er as sec­re­tary of finance.

    Most con­tro­ver­sial­ly, Bausili received a sig­nif­i­cant share pack­age worth $180,000 from his for­mer employ­er, Deutsche Bank, at the same time as he was ful­fill­ing his duties as a pub­lic ser­vant. Those duties alleged­ly includ­ed help­ing the gov­ern­ment issue for­eign debt bonds as part of the agree­ment reached with the over­seas vul­ture funds. As luck would have it, Deutsche Bank would end up charg­ing the sec­ond high­est fees for help­ing to place the for­eign debt bonds issued by the Macri gov­ern­ment between 2016 and 2017, as Pági­na 12 reports.

    In 2021, Bausili was accused of con­flicts of inter­est in his inter­ac­tions with Deutsche Bank dur­ing his time in gov­ern­ment. The judge in the case, Sebastián Casanel­lo, con­clud­ed that the evi­dence pre­sent­ed had demon­strat­ed “Bausili’s detach­ment from the high stan­dards of ethics and trans­paren­cy that his role required of him,” adding that all of the actions tak­en by Bausili in that peri­od “were pro­hib­it­ed by law.” Four months after Bausili’s pros­e­cu­tion, an appeals court over­turned the rul­ing.

    Casanel­lo con­tin­ued his inves­ti­ga­tion, how­ev­er, accu­mu­lat­ing more evi­dence against Bausili. In Sep­tem­ber 2022, he insist­ed on reopen­ing the case. But this Tues­day, one day before Bausili was con­firmed as the next head of the cen­tral bank, the Buenos Aires Fed­er­al Cham­ber once again blocked the pros­e­cu­tion.
    ...

    We can’t say Argenti­na has­n’t been warned. But this is the choice vot­ers made, damn the con­se­quences. Aus­ter­i­ty for the mass­es and bailouts for the well con­nect­ed. Time will tell as to what kind of extra spe­cial deals Caputo’s friends in finance man­age to secure as the chaos plays out. But it’s pret­ty clear that Argenti­na is in store for a repeat of the kind of gross mis­man­age­ment that land­ed the coun­try into this sit­u­a­tion in the first place. Except pre­sum­ably worse this time. Worse for the mass­es, at least. Prob­a­bly bet­ter for Deutsche Bank.

    Posted by Pterrafractyl | December 25, 2023, 4:39 pm

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