Andres Oppenheimer

Driver’s diaries of transporting bags of cash help Argentina score historic victory against corruption

A judge wants to strip former President Cristina Fernandez de Kirchner of congressional immunity as senator so that he can order a raid of her home.
A judge wants to strip former President Cristina Fernandez de Kirchner of congressional immunity as senator so that he can order a raid of her home.

Argentina’s biggest victory against corruption in recent memory could have an impact across Latin America. But to make a permanent dent on this problem, countries will have to take much more drastic actions — such as eliminating cash.

To be sure, the “notebooks” scandal that rocked Argentina this week and the country’s unrelated sentencing of former vice president Amado Boudou to almost six years in prison for bribery during the 2007-2015 government of President Cristina Fernandez de Kirchner are historic events. In Argentina, few powerful people have ever gone to prison.

Much like Brazil’s recent Odebrecht scandal, which tainted many key politicians and business people, Argentina’s “notebooks” scandal is massive.

It started earlier this year, when Argentina’s daily La Nación got copies of eight handrwitten notebooks with journals of the driver of a senior government official who was in charge of ties with construction companies during the Kirchner government.

The driver had meticulously written down the details of his boss’s daily activities, including numerous trips to pick up bags full of cash from companies that were awarded government contracts.

Between 2005 and 2015, the bags full of bribe money that the driver transported and logged into his notebooks totaled between $60 million and $160 million, prosecutors say.

The driver, Oscar Centeno, not only specified the names of the companies where he picked up the bags of cash, and the executives who delivered them, he also detailed where he had taken the money. According to his diaries, he made at least 70 deliveries to the apartment of late president Nestor Kirchner and his wife, Cristina, who was president during most of that period.

The newspaper didn’t publish the contents of these notebooks immediately, but turned them over to a judge in order to corroborate the facts and allow the courts to investigate the case. Now, it’s all out, and more than a dozen people — including leading business executives — have been arrested.

At least four executives have already admitted making the payments, and a judge has requested that former president Cristina Fernandez be stripped of her congressional immunity as senator so that he can order a raid into her home. As protected witnesses start to testify, the notebooks are expected to result in even more arrests.

While it has long been common knowledge that the Kirchner governments were corrupt, this is the first time that is have been documented and exposed in such detail. Many Argentines hope that this will be a turning point in the country’s history and that Argentina’s tolerance for corruption has reached its limit.

But for this victory against corruption to last, Argentina and other Latin American countries will have to start using new technologies to gradually eliminate cash, eventually becoming cashless societies, much like northern European countries are doing.

In Sweden, bills and coins now amount to only 2 percent of all money transactions, as more people are using debit cards, e-money transfers and their cellular phones to make payments. There’s so little cash in Sweden, that some beggars on the streets now use cellphone apps to accept money.

What’s more, most major bank branches in Sweden no longer accept cash deposits, because their amounts are too small to justify the cost of guards or security services. The Danish Bankers Association says banks have witnessed a big fall in the number of robberies over the past five years: they hold so little cash, that potential robbers fear leaving empty-handed.

Granted, moving toward a cashless society is much more difficult in Latin America, where there is a huge underground economy, and many poor people are still not connected to the internet.

But Latin American governments should promote electronic transfers and telephone payments, as well as prohibit growing numbers of cash transactions, in order to permanently reduce their endemic bribery problems.

Without cash, the Kirchners would have had a much tougher time collecting kickbacks. Of course, it’s not the only solution, but reducing cash would be a major step to help win the war on corruption.

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