Argentina: Macri Cancels Controversial Forgiveness of Father’s Debt

Argentina: Macri Cancels Controversial Forgiveness of Father’s Debt
  1. Argentina: Macri Cancels Controversial Forgiveness of Father’s Debt
    BUENOS AIRES, Argentina – In response to the overwhelming public response and anger to his executive order that forgave his father’s $4.5 billion debt to the Argentine State, President Mauricio Macri said that he has annulled the decree. Last week, Macri signed the order in the midst of an economy heavily slowed by a drop…

BUENOS AIRES, Argentina – In response to the overwhelming public response and anger to his executive order that forgave his father’s $4.5 billion debt to the Argentine State, President Mauricio Macri said that he has annulled the decree.

Last week, Macri signed the order in the midst of an economy heavily slowed by a drop in industrial production, rising inflation, an increase in joblessness, a rise in poverty and growing divide between rich and poor.

The conservative politician, who assumed power in December of 2015, has been embroiled in controversies involving his father before.

Macri appeared last year on the list in the Panama Papers as a director of several undeclared companies, but denied any wrongdoing or involvement in illegal offshore accounts or shell companies established in the Macri name.

He said that any companies linked to him actually belong to his billionaire father Franco Macri and that he only has a collateral interest in those companies and does not receive any compensation.

Last week, he and his father (and his father’s holding group SocMa) were back in the public eye after he signed the executive order forgiving the company’s debt.

In the 1990s, SocMa, whose main industries included construction, real estate, automotive production, waste collection and other services, branched out and purchased the national mail service known as ENCoTel (and later ENCoTeSA).

The company was privatized in 1997 by then-President Carlos Menem and purchased by SocMa, who then renamed it Correo Argentino. In a short time, SocMa mismanaged the company and began accruing debt as early as 1999. After mass layoffs, the company had stopped paying its tens of thousands of employees by July of 2001.

Prior to privatization, ENCoTeSA had over 20,500 employees and no public debt. By 2001, however, SocMa had cut the workforce to less than 13,000 which led to them being overworked, a situation compounded by the fact that the company eventually stopped paying its employees. The company went from being debt-free to virtual bankruptcy, which resulted in necessary monetary aid from the government.

In 2003, Néstor Kirchner assumed the presidency and terminated the 30-year concession contract with SocMa. He then nationalized the company, naming it the Official Mail Services of the Republic of Argentina but he kept Correo Argentino as its trademarked name. In its first year of functioning under State control, Correo Argentino registered a profit and has managed to stay successful since then in competition with several smaller, private companies.

When SocMa left Correo Argentino in ruins in 2001, it owed a debt of over $300 million to the national government as the peso was pegged to the dollar. SocMa, which was still worth billions, offered only to pay off a small fraction of the outstanding debt; this meant that the taxpayers would have to pay the remainder and Kirchner rejected this notion. Thus, the debt, transferred in bonds to Macri’s four children, remained unpaid.

With the peso not being pegged to the dollar since 2002, the value of the debt, when coupled with inflation and the new exchange rate, has climbed to just under $4.5 billion.

In a release recently made available to the public, it was revealed that Macri had received a proposal through his Communications Ministry (responsible for the mail service) in June of 2016 that essentially sought forgiveness for a whopping 99.16 percent of the debt owed by SocMa, the company now known as Grupo Macri.

When this first proposal was rejected, a second proposal of 98.82 percent debt forgiveness was received. Only the tiny remaining segment of 1.18 percent was still to be paid off but not until 2033 and under very lucrative interest rates.

On February 8, the day of Macri’s birthday, the State officially accepted the proposal and Macri signed the executive order ratifying the agreement. Macri’s predecessor and political opposite, Cristina Fernández de Kirchner (2007-2015), said that Macri had “gifted himself and his family $4.5 billion of public funds on his birthday.”

What followed was a hefty dose of public outrage and polls that showed that nearly 65 percent of Argentines believed that Macri’s order amounted to an impeachable offense of corruption. In addition, leading prosecutors and opposition political groups and organizations were actively seeking for investigations to be opened into the agreement.

Gabriela Boquín, the head prosecutor of the National Chamber of Commercial Appeals, asked the Attorney General’s Office for Administrative Investigations (PIA) to look into the act as it “puts private interests over the interests of the Argentine public.” The law says that “no public official with a relationship with a company can accept …

  1. US secretary of state in Mexico to calm tensions - World
    02.23 / 00:21
    Trump has outraged Mexico by vowing to build a wall along the border to keep out migrants, whom he branded rapists and criminals during his presidential…
  2. Mexico gov't rejects new U.S. immigration rules - World
    02.23 / 00:06
    Mexican government on Wednesday rejected tightened immigration regulations by the new U.S. administration that could see waves of undocumented migrants come in across its…
  3. Pyongyang claims death of DPRK citizen 'conspiratorial racket' by S. Korea - World
    02.23 / 00:06
    The Democratic People's Republic of Korea (DPRK) on Thursday said the death of a DPRK citizen at Kuala Lumpur last week was an "anti-DPRK conspiratorial racket" launched by South…
  4. China, Italy pursue innovation - World
    02.22 / 23:57
    Scientific and cultural innovation plans were major highlights of the 13 cooperative documents signed by China and Italy on Wednesday, which analysts said showcases a shared pursuit of new economic engines to offset downward…
  5. US Supreme Court blocks death sentence over racial bias - World
    02.22 / 23:16
    The US Supreme Court on Wednesday (Jan 22) offered at least a temporary reprieve to a Texas death row inmate, agreeing that racial bias affected his sentence after a psychologist testified he was more likely to commit future crimes because he is…
  6. Age and Disability Capacity Programme (ADCAP) - News
    02.22 / 23:04
    (c) U Myo Thame/HelpAge International Daw in Myanmar is unable to see or hear  Age and Disability Capacity Programme (ADCAP) is a three-year programme aiming to ensure that older people and those with disabilities can access emergency support in times of disaster through …
  7. IT and Facilities Assistant 2017 - News
    02.22 / 23:04
    IT and Facilities Assistant   ·        Up to £27,000 depending on skills and experience ·        Competitive pension contribution and other benefits ·        Scope for flexible working, including working from home ·        Opportunity to work for a leading organisation working with and …
  8. Regional Resource Development Manager, Thailand (open to international and national candidates) - News
    02.22 / 23:04
    • Competitive package (employer pension contribution and other benefits) • 2 year fixed term with possible extension • Opportunity to work for a leading humanitarian charity The organisation HelpAge International's vision is a world where older people fulfil their poten…
  9. Stolen Nazi concentration camp gate returned to Dachau - World
    02.22 / 23:02
    The wrought iron gate to the Nazis’ Dachau concentration camp that was stolen two years ago, prompting an international outcry, has been returned to the German memorial site. (Representational Image) The wrought iron gate to the Nazis’ Dachau concentration camp that was stolen two years ago, prompting an international outcry, has been returned to the German memorial site. The gate, bearing the slogan…
  10. Trump expected to submit budget blueprint on March 14 - World
    02.22 / 23:02
    Capitol Hill Republicans said Wednesday that the White House is planning to submit President Donald Trump’s budget plan to Congress in mid-March. GOP aides say the plan is due on March 14. They’re expecting Trump’s blueprint to contain fewer details than is typical since it’s a new administration and Office of Management and Budget Director Mick Mulvaney was only confirmed last week. The…
  11. EU delegation slams crackdown on NGOs - World
    02.22 / 23:02
    A European parliamentary delegation on Wednesday slammed the government for “blocking” activities of NGOs working on human rights. “We, as Europeans, some of the member states, give money to NGOs for working on human rights. We do not understand that some authorities in some countries block activities of those working on human rights,’’ said European Parliament Member Cristian Dan Prede while responding to the iss…
  12. IMF chief Christine Lagarde ‘reassured’ after talks with Trump’s team - World
    02.22 / 23:02
    International Monetary Fund chief Christine Lagarde (Source: AP Photo/File) IMF chief Christine Lagarde has said that she had been reassured by her first meetings with members of the new administration of US President Donald Trump, whose economic programme has caused global jitters. Lagarde singled out “some very positive discussions” with US Treasury Secretary Steven Mnuchin. “I have had…
  13. Security breach at Kennedy Airport unnerves some travellers - World
    02.22 / 23:02
    A breach that allowed 11 people to walk through an unattended security checkpoint lane at one of the nation’s busiest airports has some travelers scratching their heads about how this could happen even with the enhanced security measures put in place after the September 11 terror attacks. The incident Monday at New York’s Kennedy Airport is being investigated by the Transportation Security…
  14. Mohammad Space Centre tasked with Mars 2117 project - World
    02.22 / 23:02
    Centre will prepare a 100-year plan for project’s i…
  15. Hamdan opens Zabeel Healthcare Centre - World
    02.22 / 23:02
    Praises Dubai Health Authority programmes and…
  16. 3D artists begin work at City Walk - World
    02.22 / 23:02
    Week-long festival to start on March 1; 25 artists shortlisted for Dubai Canvas 3D Art…
  17. Le Pen aide charged in fake jobs scandal - World
    02.22 / 23:02
    French poll rival Macron hails turning point in campaign after winning support of key…
  18. US gymnastics doctor on 22 sex assault charges - World
    02.22 / 23:02
    Lawrence Nassar allegedly abused girls under 13 during time working with national gymnastics…
  19. IMF chief ‘reassured’ after talks with Trump’s team - World
    02.22 / 22:58
    "I have had several meetings with officials of his administration in the economic and financial domains and the meetings I had are quite reassuring and comforting," the International Monetary Fund head yesterday told German television ARD during a visit to…
  20. Cyprus peace talks called off amid mounting war of words - World
    02.22 / 22:53
    A planned meeting between rival Cypriot leaders scheduled for Thursday has been called off as a war of words over a nationalist commemoration in Greek Cypriot schools threatens reunification…