Argentina’s former president Nestor Kirchner purchased two million US dollars just a few days after the collapse of Lehman Brothers in September 2008 which triggered the current world downturn and when the government of President Cristina Fernandez de Kirchner (his wife) was under extreme pressure to devalue the currency.
The information was revealed, with documents, over the weekend by Buenos Aires media following on tips of outgoing Central Bank president Martin Perez Redrado who lost his ongoing battle with the Kirchner administration to remain in the bank.
Although a legal operation, the only requisite is to record the name of the person or institution, Mr. Kirchner was and is as his wife calls him the “First Citizen” and therefore with access to “inside information” or “privileged information”.
According to Economy Minister Amado Boudou who was given the task of containing damage, at the time the administration of Mrs. Kirchner was under strong pressure from local industry and exporters to devalue the Argentine currency because the country’s main trade partner Brazil had felt the full impact of the world financial crisis.
In a few weeks the strong Brazilian Real tumbled from 1.75 to the US dollar to 2.25, thus reducing the country’s import capacity.
To counter the impact the proposal was to let the US dollar in Argentina zoom from 3.40 pesos to possibly 4.50 or even better 5.00 pesos.
Pérez Redrado in his farewell statement said he resisted the “devaluation pressures”, while Boudou admitting the First Citizen had effectively purchased 2 million US dollars, “it was Mrs. Kirchner who refused to let the Argentine peso collapse”.
Anyhow the disclosure was a good opportunity for Argentine opposition to point out the “immorality” of Mr. Kirchner and his taking advantage of inside information.
“It is time he trusted more in his wife than in Mr. Obama”, was one of the main darts.
The fact is that in those hectic September/October 08 days the US dollar in Argentina jumped from 3.25 pesos to 3.39 and ended the year at 3.42 pesos. So even without a devaluation of the peso Mr. Kirchner managed an interesting windfall.
But Central Bank data also showed some names that are considered “friends of the ruling couple”, among which the notorious teamster Hugo Moyano (political ally of the Kirchners) who through three different union organizations purchased 6 million USD; Juan Carlos Relats, Kirchner’s associate in the hotel business in Santa Cruz province figures with four million. Anyhow the list is long; it has over 200 names, companies and individuals totalling 1.68 billion and 474 million US dollars respectively.
The companies list includes provincial governments, financial institutions, pension funds and even football teams.
However 2008 was also the year when the declared assets of the Kirchner’ couple jumped from 27.8 million pesos (approx 8.4 million USD) to 44 million pesos (approximately 13 million USD).
A court investigation into possible illicit enrichment by the Kirchners was shelved by a federal judge who is known to be “vulnerable” to pressures.
Apparently the Kirchners have most of their money in long term deposits in US dollars. The current exchange rate is 3.85 pesos to the US dollar.