Corruption, long a Latin American plague, may provoke action in Argentina

January 20, 1991|By Chicago Tribune

BUENOS AIRES, Argentina -- For weeks now, tales of corruption have been falling from the pages of newspapers here like the rains that have flooded this city as summer approaches.

A prominent labor leader admitted steering lucrative union business to lawyers and accountants in return for cash because "it's very difficult making money working." In another case, the government is suspected of paying $1 billion in fraudulent claims to state employees and others in lawsuits fixed by lawyers and judges.

Officials admitted in August that the country's government-owned banks lost $10 billion in the 1980s, in part from bad loans to politically connected Argentines.

And the head of the customs service resigned in November after a top government official said the agency loses $1 billion annually because of inefficient and corrupt practices. The former administrator, who denied wrongdoing, committed suicide early in December.

"We're going to be inflexible against those who are corrupt. We're going to take the bull by the horns and end this," President Carlos Menem, who has repeatedly criticized corruption, said last month.

Then a Ferrari worth $250,000 appeared on the president's driveway -- a gift from an Italian motorcycle company that reportedly has Argentine business connections. Surely Mr. Menem was going to donate the car to a needy organization, suggested Bernardo Neudstadt, Argentina's most popular television commentator.

"It's mine, mine. It was given to me. How can I give it back?" Mr. Menem responded.

The president's action speaks volumes about the moral ambiguity that has allowed corruption to flourish in Argentina and much of South America.

In Chile, armed forces chief and former dictator Augusto Pinochet recently purged nearly two dozen officers -- five of them generals -- after investigators uncovered links between the military and a host of crimes, including bank fraud and murder.

Diplomats and U.S. Drug Enforcement Agency officials say corruption is rampant among politicians, police and military officers in South America's three major cocaine-trafficking dTC countries: Peru, Colombia and Bolivia. Diplomats describe Paraguay as a smugglers' paradise where top officials make huge profits from illegal importing of luxury items and other schemes.

But in Argentina, at least, things may be changing -- slowly. After weeks of seesawing, Mr. Menem bowed to public pressure and agreed to donate the car to the state, although he said he would drive it as long as he remained president.

And some Argentines seem less willing to tolerate corruption: At least three towns staged protests this year against corrupt police departments.

In the northern provincial capital of Catamarca, thousands of people have marched weekly to protest what they believe is a police cover-up of the September rape and murder of a young girl by the son of a powerful local politician.

Mr. Menem has proposed laws increasing the penalties for corruption and announced a government restructuring designed in part to reduce the incentive for bribes. He has said Argentina cannot modernize and prosper without eliminating the shady deals.

"Argentina used to be a country of workers. Now we are a country of speculators," said Eduardo Bauza, a presidential adviser and a two-time Cabinet minister.

Officials say corruption long has been a problem in Argentina, where political instability and a weak judicial system have made cutting corners, pulling strings and theft easy.

But the problem became more acute in the 1980s as Argentina's economy went from boom to bust, causing a rapid deterioration in public services and a sharp drop in wages. Many Argentines now say payoffs and connections are the only way to get the bureaucracy to work.

According to a Gallup Poll completed in May, 87 percent of 111 business leaders questioned said most or some businesses bribe officials to get favors. In another Gallup survey taken two weeks ago, 80 percent of the respondents said officials use their positions to enrich themselves illegally.

To get a telephone installed usually takes six years, or a $3,000 bribe. Argentines can wait in lines an entire day to get a driver's license renewed, or slip the clerk a few bucks and get instant service.

Locals say these sorts of payoffs are so common that they are an accepted way of life. And officials who receive the bribes say their salaries are so low they need the money to survive.

Argentines joke about staying off the roads at the end of each month because police have spent their paychecks and are looking to extort a few bucks from motorists. Police make about $300 a month, as do building inspectors, tax auditors and most other government workers.

Moreover, government regulations are so byzantine -- and nonsensical -- that paying a bribe is often the only option, Argentines say. One businessman said if he paid his income tax according to the law, he would shell out 185 percent of his annual income.

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