Fact Check: Argentina

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Argentina Loses Again in the U.S. Supreme Court; La Nacion reports on Cleary Gottlieb’s billings

Yesterday, the US Supreme Court batted down yet another delaying tactic by the government of Argentina – an attempt to challenge for the second time in the Supreme Court an arbitration award of $185 million in favor of British Gas that the Supreme Court reinstated in a decision in March, 2014.

This time Argentina sought Supreme Court review of the arbitration award on a new basis – alleged arbitrator bias. The Court refused to hear the case.

It should come as no surprise that Argentina has refused to pay British Gas, given the country’s track record of ignoring its bills.

But what’s more interesting about this case is that it was ever appealed in the first place.  This was a complete long shot with little chance of success, but Argentina’s lawyers at Cleary Gottlieb filed it anyway.

Speaking of Cleary, yesterday, La Nacion reported that the law firm has billed more than $400 million in fees to Argentina over the past decade, with its lead partner Jonathan Blackman charging $1,000/hour.

Experts have speculated on Cleary’s litigation strategies and on the quality of its advice to Argentina, including its recommendation that Argentina default on its debt, which is causing economic harm to the client.  Of late, Cleary’s advice to its clients – not just Argentina – has been put to the test. This summer, the American Lawyer published an article that might shed some light on the matter.  The story reported on a “litigation slump” for Cleary and. reviewed a string of recent high profile losses by Cleary for its clients – including Argentina, Russia, and Google.

Last summer, Cleary was exposed for giving unusual advice to its client when the press revealed in to be “Law Firm 1” in the U.S. Justice Department investigation of BNP Paribas.  According to these reports, Cleary advised BNP Paribas that it might escape U.S. penalties if it routed Sudanese transactions through an unaffiliated U.S. bank.

While pointing these things out may seem gratuitous to some of our readers, we think it is important to continue raising questions about the role of Cleary and any responsibility it has in delaying a resolution and facilitating the toxic environment that exists between Argentina and its creditors.  These creditors have tried time and again to negotiate a settlement with Argentina’s leaders, only to be blocked at every turn.  Default and evasion has not been a good strategy for Argentina’s people, nor has it worked in the courtroom.  Law firms for both sides should be facilitators for dialogue and resolution, and Cleary needs to play its part.

President Kirchner Takes on Nancy Soderberg

Last Friday, just as trick or treating was getting underway here in the United States, news hit that President Kirchner sent a bizarre five-page missive to President Obama threatening “serious consequences” for the bilateral relationship between the United States and Argentina if ATFA co-chair Nancy Soderberg was named to a post that she has actually held since 2011.

The condescending tone of President Kirchner’s letter sent via Twitter to the U.S. President might have best been illustrated by her sarcastic remark that she hoped it was all just a case of mistaken identity.  Whatever Kirchner’s intent, the letter is the best example we have seen of how debased Argentine foreign policy has become since Argentina’s Foreign Minister Hector Timerman threatened U.S. envoy Kevin Sullivan back in September.

Cristina didn’t stop with her objections over Soderberg’s appointment, either.  She went on to accuse the United States of arming Mexican drug gangs, which was in line with her suspicions expressed in the U.N. that the U.S. was arming the terrorists in ISIS and claim that the videos showing the murder of American and British citizens appeared to be Hollywood productions.  She also accused Soderberg of somehow inventing the very widely reported worries about the influence of drug-trafficking on Argentine government security forces and local governments.  In reality, the fears about a “narco-state” were not raised by Soderberg, but by elected officials in Argentina.

We’ve noted that the letter about Nancy Soderberg set off almost universal derision on social media in Argentina.  Journalists, economists, academics, people of all ages, expressed their embarrassment over their President’s latest tirade.  A columnist for Clarin newspaper, the political humorist Alejandro Borensztein, mixed satire with a sense of exasperation over the impact on the country’s image, and the disconnect between its President and the daily reality of life in the country:

 “And the truth is that we can’t continue living in an altered state every damn day as has been happening. Talk to her, make her see reason, explain to her that the end is still a year away, that we’re all very sorry that she has lost the elections and has no re-election … but after 2015 we will need to keep eating and she can’t break all dishes before she goes.”

 Borensztein, like many other Argentines, also raised a central contradiction in Cristina’s letter about Nancy Soderberg.  After years of ranting about safeguarding Argentina’s sovereignty, the Argentine President had the temerity to demand her own veto of U.S. President or Congressional appointments on domestic U.S. advisory boards.  All the while, Cristina has appointed scores of people with very public, aggressive hatred for the United States – its government, its way of life and its people – to positions in her own Cabinet.

Kirchner governments have given millions of pesos in public funds to Hebe de Bonafini, the head of the Mothers of the Plaza de Mayo, who said shortly after the 9/11 attacks on New York and Washington in 2001 that she was “very happy” to hear of the attacks and the murder of thousands of innocent Americans was justified.  She said she was “content” to learn that that the U.S. had been attacked, and it “didn’t hurt me one bit”.   (Is it the same Hebe de Bonifini, President Kirchner?  Or is it just a case of homonyms?)

Luis D’Elia, a former Cabinet member who is seated in the front row at Cristina’s Casa Rosada speeches, is a well-known anti-Semite who blames Americans and Jews for all of the woes of humanity and openly supports the terrorist group Hezbollah and the Iranian government.  Much of the government-owned and government-funded media publish a relentless volume of hateful, anti-American tirades on a regular basis.   One newspaper in particular, Pagina/12, whose publishers have gotten hundreds of millions of pesos from Kirchner governments, ran a racist cartoon of President Obama, captioned “Obama the Waiter”.  The October 25 article it accompanied was, apparently, the source of President Kirchner’s letter to Obama about Soderberg.  So none of these questions that the Argentine President has raised are to be seriously considered, given the amazing hypocrisy built into the letter itself.

Nancy Soderberg has expertise on a range of issues, including providing private sector input into the declassification of documents at the National Archives.  Soderberg is not a “government official” but a private sector representative on an advisory panel.  And by the way, the National Archives are not, as President Kirchner seems to think, at the White House.  (Perhaps Argentina’s hapless and isolated Ambassador Cecilia Nahon should consult a map and pass this information along to Axel.)

Nancy Soderberg has been a thoughtful advocate for Argentina to settle with its creditors.  All of Soderberg’s written and public statements have been consistent – she has reminded President Kirchner that her own government has committed in writing to honor the rulings of U.S. courts—courts her government willingly ceded jurisdiction to. There is no question that this is the real reason why President Kirchner writes letters, sends out angry tweets, and gives astonishing televised speeches about dark, imaginary conspiracies.  She doesn’t like to be reminded of the commitments she’s made.  But no matter.

ATFA’s message remains the same to President Kirchner:  there is still time to sit down, negotiate, settle with your creditors, and end this conflict that never needed to begin.

 

Fact Check Argentina Announces “Follow the Money” Player Card Series – Download Yours Today!

Today, Fact Check Argentina launched a new section to our site — Follow the Money.  This new page will serve our readers by providing information and updates on the ongoing investigations into the individuals that have been reported as facilitating corruption and illicit money laundering in Argentina.

As a bonus for readers, we will be issuing a new series of  “Money Trail Player Cards.”  In the coming weeks—and as we uncover more information—we will release collectible player cards to help you keep track of the various people and organizations involved in money laundering schemes and shady financial transactions in Argentine.

Today’s initial release of six player cards includes some of the biggest stars on the Argentine corruption circuit:

– Construction magnate and Kirchner confidante Lázaro Báez
– Vice President Amado Boudou
– Argentine businessman and Baez Associate Ernesto Clarens
– Shell corporation king and South Florida businessman Cristóbal López
– Panamanian law firm Mossack Fonseca
– Former Argentine World Bank Representative Guido Forcieri

 Each player card is loaded with facts and career highlights on both the front and reverse sides:

Boudou FrontBoudou Back

For example, did you know that Lázaro Báez gave Néstor Kirchner privileged financial information about political rivals and, not coincidentally, Báez’s companies were awarded 70% of all highway outlays in Santa Cruz from 2009 to 2013?

And here’s a “fun fact”: Ernesto Clarens, an Argentine businessman with a decades-long relationship to both the Kirchners and Báez, has a Sea Ray 350 Sundancer boat docked in Florida.  This kind of boat normally goes for $500,000 or more!

But readers, we need you!  Some of the cards need pictures, and we’re always on the lookout for new documents and intelligence that comes to us from readers like you.  Please use the ATFA tipline to share documents, information, and also your ideas about who should be in the next edition of player cards!

New infographics

We’ve noted the great deal of interest and discussion on social media about Lázaro Báez’s money trail, so we have added two additional ATFA info graphics to our “Follow the Money” page.

Yesterday we released a map of business locations of the Panamanian law firm, Mossack Fonseca, which has set up at least 123 shell companies owned by Lázaro Báez.  Check out yesterday’s post on Mossack Fonseca to learn more about what the public record has to say about these characters.

infographic-temp-lg Mossack Fonseca Map_d7_English

What’s in a Rate Score?

Finally, you will note that every player has an ATFA “rat score”.  How do we compute the rat score, and who are the highest scorers?  You’ll need to log onto www.factcheckargentina.org/FollowtheMoney to find out for yourself.

Mossack Fonseca: A Key Player in the Báez Money Trail

The Panamanian law firm Mossack Fonseca has erected an intricate global network of shell companies that Argentine prosecutors say have been at the service of Lázaro Báez. This network relies on shell companies in Nevada, nominally controlled by shell companies in the Seychelles, set up at the request of lawyers around the world who ultimately work for the Panamanian headquarters. Argentine investigations have linked millions of dollars worth of tangible assets to this network, which spans four continents.

MF English Photo

En Español

Mossack Fonseca’s role in Argentine corruption and the Lázaro Báez network was discussed indirectly in a report filed by prosecutor José María Campagnoli in May 2013. What Campagnoli did not discuss, but what subsequent investigations have proven, is that Mossack Fonseca was responsible for setting these companies up and integrating them into an elaborate shell company network across at least four continents.

Campagnoli named roughly 120 Nevada firms as belonging to the Báez network, identified multiple South American acquisitions, and seized their assets in Argentina. These assets included ownership stakes in investment funds, properties in luxury high-rise condo buildings, and shopping centers, among others. All of these Nevada shell companies were set up by a single registered agent: MF Corporate Services, an apparent subsidiary of Mossack Fonseca specializing in the creation of Nevada shell companies.

All of the Nevada shell companies tied to Báez in the Campagnoli investigation either are or were controlled by a single shell company in Seychelles: Aldyne Ltd, which appeared on the Nevada Secretary of State filings for these companies as the manager. (Following the Báez scandal’s eruption in April 2013, many of the firms subsequently shut down or changed their board’s composition.) In virtually all of the cases, Aldyne was the sole board member. Aldyne lists as its address Mossack Fonseca’s offices in Seychelles. The vast majority of these companies were capitalized via a $10,000 payment by another Seychelles shell company operating out of Mossack Fonseca’s offices: Gairns Ltd.

Many of the Nevada companies were founded at the request of Mossack Fonseca employees working in one of the firm’s dozens of foreign offices. These foreign Mossack Fonseca employees would presumably be in closer contact with the ultimate client, and therefore with the Báez network. One such example is in Uruguay, where the lawyer Juan Pedro Damiani worked with Mossack Fonseca’s Montevideo branch and with MF Corporate Services to found a handful of Nevada firms linked to the Báez network.

Similarly, many of the Nevada shells were founded at the request of the Mossack Fonseca office in Lugano, Switzerland, a popular money-laundering center in the Italian-speaking region of the country. Many of these shells were created with sister companies also based Lugano. The Lugano branch of these shell companies always listed as its address the local office of Mossack Fonseca. Lugano has already popped up in the Báez scandal as the home of Helvetic Services Group, the Báez front company that he used to move $65 million in sovereign bonds in 2012 and 2013. According to Google Maps, only 700 meters separate the local offices of Mossack Fonseca and Helvetic.

Mossack Fonseca was founded in 1977 by Jurgen Mossack, a German expat, and Ramón Fonseca, an author and a prominent Panamanian politician. The firm operates around the world, with a special emphasis on financial paradises like the British Virgin Islands, the Isle of Man, and Anguilla. It also has offices and subsidiaries in the US, in Wyoming, Miami, and Las Vegas.

While its website lists a number of core areas, the firm is perhaps best known for setting up shell companies that hide the beneficial ownership of the shell’s assets. It has founded many thousands of shell companies in Panama alone, and has presumably done the same in other jurisdictions where it operates.

The firm’s skill in setting up shells is particularly useful for anyone seeking to hide the location of assets obtained through illicit activities. Not surprisingly, it has reportedly been a popular choice for corrupt politicians and their cronies moving assets. The firm’s shell companies have popped up in multiple Latin American corruption cases, as well as in investigations allegedly belonging to Bashar al-Assad and Muammar Gaddafi.

 

Mossack Fonseca: A Key Player in the Báez Money Trail

The Panamanian law firm Mossack Fonseca has erected an intricate global network of shell companies that Argentine prosecutors say have been at the service of Lázaro Báez. This network relies on shell companies in Nevada, nominally controlled by shell companies in the Seychelles, set up at the request of lawyers around the world who ultimately work for the Panamanian headquarters. Argentine investigations have linked millions of dollars worth of tangible assets to this network, which spans four continents.

MF English Photo

En Español

Mossack Fonseca’s role in Argentine corruption and the Lázaro Báez network was discussed indirectly in a report filed by prosecutor José María Campagnoli in May 2013. What Campagnoli did not discuss, but what subsequent investigations have proven, is that Mossack Fonseca was responsible for setting these companies up and integrating them into an elaborate shell company network across at least four continents.

Campagnoli named roughly 120 Nevada firms as belonging to the Báez network, identified multiple South American acquisitions, and seized their assets in Argentina. These assets included ownership stakes in investment funds, properties in luxury high-rise condo buildings, and shopping centers, among others. All of these Nevada shell companies were set up by a single registered agent: MF Corporate Services, an apparent subsidiary of Mossack Fonseca specializing in the creation of Nevada shell companies.

All of the Nevada shell companies tied to Báez in the Campagnoli investigation either are or were controlled by a single shell company in Seychelles: Aldyne Ltd, which appeared on the Nevada Secretary of State filings for these companies as the manager. (Following the Báez scandal’s eruption in April 2013, many of the firms subsequently shut down or changed their board’s composition.) In virtually all of the cases, Aldyne was the sole board member. Aldyne lists as its address Mossack Fonseca’s offices in Seychelles. The vast majority of these companies were capitalized via a $10,000 payment by another Seychelles shell company operating out of Mossack Fonseca’s offices: Gairns Ltd.

Many of the Nevada companies were founded at the request of Mossack Fonseca employees working in one of the firm’s dozens of foreign offices. These foreign Mossack Fonseca employees would presumably be in closer contact with the ultimate client, and therefore with the Báez network. One such example is in Uruguay, where the lawyer Juan Pedro Damiani worked with Mossack Fonseca’s Montevideo branch and with MF Corporate Services to found a handful of Nevada firms linked to the Báez network.

Similarly, many of the Nevada shells were founded at the request of the Mossack Fonseca office in Lugano, Switzerland, a popular money-laundering center in the Italian-speaking region of the country. Many of these shells were created with sister companies also based Lugano. The Lugano branch of these shell companies always listed as its address the local office of Mossack Fonseca. Lugano has already popped up in the Báez scandal as the home of Helvetic Services Group, the Báez front company that he used to move $65 million in sovereign bonds in 2012 and 2013. According to Google Maps, only 700 meters separate the local offices of Mossack Fonseca and Helvetic.

Mossack Fonseca was founded in 1977 by Jurgen Mossack, a German expat, and Ramón Fonseca, an author and a prominent Panamanian politician. The firm operates around the world, with a special emphasis on financial paradises like the British Virgin Islands, the Isle of Man, and Anguilla. It also has offices and subsidiaries in the US, in Wyoming, Miami, and Las Vegas.

While its website lists a number of core areas, the firm is perhaps best known for setting up shell companies that hide the beneficial ownership of the shell’s assets. It has founded many thousands of shell companies in Panama alone, and has presumably done the same in other jurisdictions where it operates.

The firm’s skill in setting up shells is particularly useful for anyone seeking to hide the location of assets obtained through illicit activities. Not surprisingly, it has reportedly been a popular choice for corrupt politicians and their cronies moving assets. The firm’s shell companies have popped up in multiple Latin American corruption cases, as well as in investigations allegedly belonging to Bashar al-Assad and Muammar Gaddafi.

 

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