Cry for Cristina

Former Argentine president Cristina Fernández Kirchner may be in big trouble. On April 13, she will come before a federal judge to answer questions in a currency manipulation probe, part of multiple investigations that have already resulted in the arrest of two of her close friends and business partners. Cristina’s woes are partly masked by the Panama Papers, which disclosed a company registered in the name of President Mauricio Macri’s father. According to initial reports, the company earned no money, was declared to the Argentine tax authorities, and Macri was not a shareholder, so the damage to him is likely to be superficial.

Multiple allegations against Kirchner, however, may stick. Her dollar-selling scheme was an effort to prop up the Argentine peso. It involved selling derivatives based on the future sales of the Central Banks dollar reserves at below-market value, resulting in substantial losses for the Central Bank. The only bright spot for Cristina is that she is being accused merely of horrible monetary policy, not fraud. Not so lucky are two other former officials, Alejandro Vanoli, formerly of the Argentine central bank, and ex-economy minister Axel Kicillof. Both are suspected of personally benefiting from the disastrous deal.

Cristina was already off to a bad year. Since leaving office in December, her influence within the Peronist party has been eradicated. She lobbied hard against Macri’s February 29 deal with the defaulted Argentine bond “hold-outs” (or “vultures” as she preferred to call international creditors) but was snubbed by prominent members of her own party. “No one pressures me,” said Miguel Pichetto, head of the Peronist Senate caucus. “We can’t put up with a policy that is a continuation of what Néstor and Cristina Kirchner did,” he added.

In the end, the Argentine Senate approved the deal on March 31 with a 54-16 vote. The abandonment of the Kirchners’ middle-finger policies towards foreign creditors is more than just an affront to Cristina; it may presage the rupture of the Peronist party itself. According to one party insider: “The case of the holdouts will be a dividing of the waters in Peronism.”

Her year may get much worse. In addition to the currency scheme, Fernández Kirchner and her late husband Nestor have been closely linked to money-laundering deals involving a phantom hotel syndicate and inflated real estate deals in Patagonia, and massive government overpayments for used trains from Spain.

She eventually may find herself in legal peril because of her connection to Lazáro Báez, a longtime friend and bag man for both Nestor and Cristina. Báez, who used to control all public works projects in the Kirchner’s home province of Santa Cruz, was arrested on April 5, almost two years after an investigative television report placed him at the center of numerous bribery schemes, complete with allegations of “bags of money” being personally delivered to the Kirchners’ home. Asked whether the Báez investigation could lead to Cristina Kirchner, the prosecutor said “we’re not ruling out any lines of inquiry, or the name of any other person.”

Even if Fernández Kirchner manages to dodge prosecution, clear her name, and regain influence, her descent is still a rapid and humiliating fall from the pinnacles of power (which, unfortunately, describes most Argentine political transitions). In 2007, when she ran to succeed her husband as president, the comparisons to another political power couple with presidential ambitions were inevitable. Like Hillary, Cristina met her husband in college, became a lawyer, served as first lady during economic boom times, and later was elected to senate. Cristina enjoyed these comparisons and at the time predicted that Hillary would be elected U.S. president. After Cristina’s victory, one seasoned Argentine political observer noted that her “model is not Evita. Her model is Hillary.” Now, like Hillary, her popularity has fallen and she is under investigation. No doubt, a similarity perhaps best left unsaid by both women.

Photo Credit: Charly Diaz Azcue/CON