Post date : 11.12.2014 1:01 pm
Two months ago, ATFA member NML Capital subpoenaed an Argentine official named Guido Forcieri, who until very recently was the former Executive Director for Argentina, Bolivia, Chile, Paraguay, Peru and Uruguay at the World Bank. NML Capital’s subpoena sought information to assist in tracing assets of Argentina in an effort to satisfy NML’s $1.7 billion in judgments against the country.
At first, NML’s counsel was informed by Forcieri’s counsel that the information requested by subpoena may implicate Forceri’s Fifth Amendment privilege against self-incrimination. Forcieri subsequently agreed to a confidential interview with NML’s counsel, Dechert, in which he promised to be completely candid in his answers. Unfortunately, Forcieri appears to have been neither entirely truthful nor forthcoming in his responses to the questions. As a result, NML sought to prevent Forcieri from leaving the country until he complied with the subpoena. The judge denied this motion, but confirmed that NML is entitled to continue to seek Forcieri’s testimony.
Who is Forcieri? Forcieri is widely known to be a close associate of both the Kirchners and of troubled Vice President Amado Boudou. Forcieri and Boudou were recently indicted by Argentine courts for their involvement in the illegal takeover of Ciccone Calcografica. (For more background, see: http://factcheckargentina.org/followthemoney/#ciccone-calcografica). In his indictment, Forcieri is alleged to have assisted Boudou in placing Ciccone under the control of his business partners, which constitutes an abuse of power as a public official.
A brief NML submitted to the court on November 4 detailed Forcieri’s relationship with Boudou and the Ciccone scandal,
“Forcieri is closely tied to Boudou, having been appointed by Boudou to positions of increasing prominence as Boudou rose through the ranks of Argentine government—including serving as Boudou’s chief of staff while Boudou was Minister of the Economy in Argentina. According to Forcieri’s indictment, he played a critical role in the elaborate Ciccone takeover scheme orchestrated by Boudou. The indictment asserts that Forcieri gave the orders to deny credit to Argentina’s national mint, derailing its year and a half long efforts to purchase its own printing equipment and become self-sufficient, thereby steering business to Ciccone.”
“…At the time the scheme was implemented, Boudou was the Minister of the Economy in Argentina and Forcieri was his chief of staff. According to the report accompanying Boudou’s indictment, Forcieri acted on Boudou’s behalf and attended meetings related to the Ciccone takeover. Forcieri has vigorously resisted efforts to provide testimony in Argentina regarding Boudou’s indictment— repeatedly seeking to delay providing a witness statement based on the claim that his presence was required in the United States to work on matters related to Argentina’s (non-existent) negotiations with creditors. His refusal to come to Argentina to give testimony resulted in threats of his arrest in Argentina. On September 5, 2014, an Argentine court indicted Forcieri for his role in Boudou’s takeover scheme.”
Should Argentine courts rule that Boudou illegally seized control of the Ciccone printing company, then the state is entitled to confiscate any profits, funds or other property involved in the scheme. Any funds or property would then be potentially available to help satisfy NML’s unpaid judgments and claims against Argentina.
Boudou is also under investigation for his possible involvement in other illegal schemes. Some media reports put the count of lawsuits arising out of Boudou’s conduct while serving in government at a grand total of 54. And many of the alleged incidents took place while Forcieri reported directly to Boudou.
One of these investigations charges Boudou—and Forcieri—with illicit enrichment from various corporate entities in which they each held a financial stake. Boudou and Forcieri are apparently partners in several companies that are under investigation and similar to the Ciccone case, are alleged to have profited from transactions involving businesses that they were responsible for regulating.
Yet another case involving Boudou alleges that he provided information to various trading firms in order to enable them to benefit from Argentina’s public debt swap in 2010. The firms then used that information to increase their stakes in holdings of defaulted debt on the cheap, before the public was aware of the new swap. Argentine investigators are working to determine whether Boudou profited from this insider trading himself.
So, what happened when Dechert interviewed Forcieri? We’ll let another NML brief explain…
“During our interview, Mr. Forcieri said he was totally unaware of the fact that Gramercy had acquired these ICSID claims (in advance the settlement) while he was the World Bank representative, and denied having any knowledge about this event before he was informed of the fact during the interview. He claimed to be unaware that Gramercy had acquired two of the ICSID claims, despite the fact that he said President Kirchner instructed him that one of his most important obligations as the Argentine World Bank representative was to settle Argentina’s cases before the World Bank so that the country could receive loans from the organization.
But Forcieri’s dancing around the truth didn’t stop there.
“Mr. Forcieri stated during the October 30 Interview that he had not followed Argentina’s 2010 sovereign debt exchange and knew little about it because Hernan Lorenzino, who was the Secretary of Finance, and not Boudou, oversaw the exchange. This also struck NML as incredibly implausible, given that the 2010 debt exchange was arguably the most significant matter overseen by the Argentine Ministry of the Economy at that time, and that Lorenzino reported directly to Boudou—for whom Mr. Forcieri served as chief of staff at the Ministry of the Economy while the 2010 debt exchange was going on.”
Strange, isn’t it? Or should we say convenient?
Forcieri also founded three businesses—called Petro de la Costa, Action Media, and Rock Argentina—with another longtime accomplice of Boudou’s, Juan Carlos Lopez. These have been identified by Argentine investigators and journalists as likely channels for money laundering by or for Boudou. When asked about these entities in the interview with NML’s counsel, Forcieri provided information that was blatantly inconsistent with media reports regarding his monetary interest in the companies.
When NML’s counsel determined that Forcieri had not been truthful in the interview and had therefore not fulfilled his obligations under the subpoena, it called Forcieri’s counsel and demanded a second meeting. Forcieri’s counsel stated that Forcieri would neither provide any additional information to NML, nor correct or clarify any of the responses he had given during the interview.
Forcieri’s counsel submitted an email to Dechert stating that, “A public proceeding to compel Mr. Forcieri’s deposition on the eve of his return to Argentina, particularly where he has already submitted to a voluntary interview and would assert his Fifth Amendment privilege in a deposition, serves no purpose but to cause him embarrassment and annoyance.” [Emphasis added.]
Forcieri’s insistence on pleading the Fifth raises the question: What is Forcieri hiding? What information does he have that would be self-incriminating?
Forcieri has reportedly skipped town, but he faces another barrage of investigations in Argentina. We don’t know whether Forcieri will return to the United States to face questions from NML, but we do know that Argentina’s creditors will continue to seek assets to enforce their lawful judgments, and that this search will continue to turn up information about Boudou and Forcieri’s alleged misdeeds.