MercoPress. South Atlantic News Agency

Argentina: “Mothers on the March Again in Argentina—Into Scandal”

Building houses for the poor with government funds

The Wall Street Journal in an article credited to Matt Moffett, tells the story of how the respected human rights group, Mothers of Plaza de Mayo and close ally of Argentine president Cristina Fernandez de Kirchner are embroiled in a controversy over misused funds.

BUENOS AIRES, Argentina—When one of Latin America's most storied human-rights groups tried to transform itself into a big builder of low-income housing here, scandal quickly followed.

The program's chief administrator began to flaunt his country estate, yachts, planes and a Ferrari sports car as allegations arose over irregularities in how the Mothers of the Plaza de Mayo—renowned for their fight against Argentina's military dictatorship in the 1970s and more recently as a pillar of support for President Cristina Kirchner—used millions of dollars in public funds.

The controversy centers on 53-year-old Sergio Schoklender, until last month the top aide to the group's leader, Hebe de Bonafini.

In the 1980s, Mr. Schoklender and his brother, Pablo, who had a lesser role with the Mothers, earned notoriety in a different way when they were convicted of murdering their parents in a case that riveted the nation. Now, Mrs. de Bonafini—herself known for her virulent anti-Americanism—has broken with the Schoklenders, whom she called “swindlers and traitors.”

The Schoklenders are under investigation by the Federal Justice Ministry and by Argentina's Congress over suspicions they misappropriated part of an estimated $150 million to $300 million in public funds the Kirchner government transferred to the Mothers to build low-income housing. The program has been plagued by cost overruns and delays, while the Argentine press has reported that Sergio Schoklender has spent lavishly on luxury items.

Neither Mrs. de Bonafini nor Sergio Schoklender could be reached to comment. But Mr. Schoklender denied any wrongdoing in interviews with the Argentine press and said the allegations are part of a campaign to sully the reputation of the Mothers and Mrs. Kirchner's government.

In an interview with the Buenos Aires daily Clarin, Sergio Schoklender also seemed to deflect responsibility toward Mrs. de Bonafini. “I'm the manager clearly, but the leadership and the presidency of the board of directors is Hebe's,” he said.

A judge issued an order barring the Schoklenders from leaving the country and teams of police investigators have been seen searching the offices where they worked. The Schoklenders and several associates are being probed for money laundering, fraud and racketeering, prosecutors say.

The Mothers gained world-wide attention in the 1970s when its white-head-scarf-wearing members defied Argentina's military dictatorship by marching around Buenos Aires' central plaza every Thursday to protest the “disappearances” of their children by security forces. They eventually helped to galvanize opposition to the brutal dictatorship, which was found to have kidnapped and killed between 10,000 and 30,000 people.

The scandal has political overtones ahead of the presidential election in October because Mrs. Kirchner, who is expected to run again, has frequently appeared in public with the Mothers as part of an energetic human-rights agenda. In return, Mrs. de Bonafini has vociferously backed Mrs. Kirchner in political battles against farmers and big media groups, though critics say she squanders the group's moral authority by taking on such a partisan role.

In 1981, Sergio and Pablo Schoklender, then 23 and 20, respectively, were arrested after their parents' badly beaten bodies were found stuffed in a trunk of a car. The brothers initially confessed to the crimes—in which a steel bar had been used to bludgeon their parents—but later recanted. Their lawyer argued that the killings might have been the work of a shadowy hit squad that was somehow connected to the Schoklenders' father's work as an intermediary for government arms purchases. But the brothers were convicted and received life sentences. Under Argentine law, they were eligible for early release. Sergio got out in 1995 and Pablo in 2001.

While participating in a prison rehabilitation program, Sergio Schoklender met Mrs. de Bonafini, and developed a close relationship with her. Some Argentine psychologists who have written about the case in recent days have suggested that the Schoklenders took on the role of surrogate sons to Mrs. de Bonafini, replacing the two sons who had gone missing at the government's hands.

The focus of the current investigation centers on Meldorek SA, a building contractor the Mothers have used on an ambitious government funded housing program, known as “Sueños Compartidos,” or Shared Dreams. In recent weeks, there have been revelations in the press that the company has a yacht and two airplanes registered to it. Sergio Schoklender told Clarin that he had no financial interest in Meldorek. But corporate registry subsequently revealed that he owns 90% of the company.

Meldorek's performance as a home builder has also been the target of complaints in the Argentine press and in Congress. Gustavo Ferrari, a congressman for a dissident faction of the ruling Peronist party in Buenos Aires province, said during a committee hearing that the Mothers had grown to be the second-largest home builder in Argentina, but he added that Meldorek was billing the equivalent of about $40,000 for a house that other contractors built for $25,000. Meldorek has been working in the province of Chaco for more than a year, but has finished only 18 of 500 houses it has said it would build, officials there complained. Meanwhile, a foundation run by the Mothers has bounced a series of checks related to the housing program.

Sergio Schoklender raised further suspicions over his account of his purchase of a 19-room country estate through a shell company. He told Argentine reporters that he had donated the estate to the government of Buenos Aires province for use as a drug treatment center. But the provincial government said that while such an arrangement was discussed, it had never been concluded.

Mrs. Kirchner's government has taken pains to shift suspicions away from Mrs. de Bonafini, asserting that the brothers are to blame for any irregularities. Interior Minister Florencio Randazzo said that Sergio Schoklender “could have defrauded” the Mothers. He said “in no way should doubts be sowed about an organization that is the pride of the world.”

Mrs. de Bonafini is a polarizing figure due to her strong political views. Some of the mothers split with her group in the 1980s to form a separate human-rights organization. And Mrs. de Bonafini has faced criticism for her embrace of authoritarian leaders like Fidel Castro and Hugo Chávez, as well as her strident anti-Americanism. After the fall of the Twin Towers on 9-11, Mrs. de Bonafini said, ”I felt happiness. I'm not going to be a hypocrite. It didn't hurt me at all”.