Argentina to seize outsourced, scandalized printer

AP News
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Posted: Aug 07, 2012 6:30 PM
Argentina to seize outsourced, scandalized printer

BUENOS AIRES, Argentina (AP) — Argentina announced plans Tuesday for another government takeover, this time expropriating a company that is printing the nation's pesos and is at the center of a criminal case involving the vice president and the tax chief.

President Cristina Fernandez is proposing to expropriate the Company of South American Values.

The takeover, which has been submitted to Congress for approval, would cancel the company's debts, recover its property and convert its employees to government workers.

It also would put the economy minister and mint president in charge of an intervention that could compete with a federal judge's efforts to examine the company's books.

"The state considers recovering the capacity to print the nation's money to be of prime importance," the government statement said.

Judge Ariel Lijo is considering whether to charge Vice President Amado Boudou, tax chief Ricardo Etchegaray and several others with influence peddling, illegal enrichment, tax evasion and money laundering.

A prosecutor recommended the charges after investigating allegations that Boudou and Etchegaray helped steer the company, formerly named Ciccone Calcografica, out of bankruptcy last year and into the control of secret financial interests with close ties to the Fernandez government.

The printer was bought by The Old Fund, a shell company that allegedly doubled as a political slush fund for Boudou and his friends. The printer then got lucrative contracts to print campaign materials as Fernandez ran for re-election with Boudou at her side.

Argentina's president has stood by her Cabinet members despite the scandal, even approving the company's multimillion-dollar contract to print pesos this year.

Boudou has claimed that opposition media and the judiciary invented the scandal. Etchegary said he did nothing wrong when he agreed to give the company 12 years at no real interest rate to cancel $51 million in tax debts.

Tuesday's announcement said Economy Minister Hernan Lorenzino and Mint President Katya Daura, both of whom are close Boudou allies, would lead the intervention, which could give them inside access to the same information the judge has been seeking.

The statement said the judge will be informed of the proposal, but makes no other reference to the criminal investigation.

While Fernandez has enough allies in Congress to push the expropriation through, it remains unclear if any branch of Argentina's government will assert its power to expose the true ownership of the company. The Old Fund is an investment company with only one known employee.

According to investigative reports in the newspapers La Nacion, Clarin and Perfil, The Old Fund's owners remain hidden behind a complex web of shell companies, overseas holdings and fraudulent incorporation papers. The report said it put up millions in cash to take the printer out of bankruptcy and before that was used to finance luxury vacations for Boudou's family and friends.

The government's political opponents rose up quickly Tuesday to criticize the proposal.

"The measure shows its need to cover up a million-dollar case of corruption and the failure of one of the most essential tasks of a government, which is to print money," said Deputy Eduardo Amadeo, a dissident Peronist party member.

Deputy Patricia Bullrich of the Union for All party charged that the seizure is meant to protect Boudou.