Why the State Department Finally Confirmed Augusto Pinochet’s Role in International Terrorism
by Peter Kornbluh
Oct. 13, 2015
3 min read
original
In the fall of 1987, Secretary of State George Shultz faced a formidable challenge: to convince President Ronald Reagan that the time had come to jettison his favorite anti-Communist dictator, Gen. Augusto Pinochet, and openly align Washington with the forces of democracy in Chile. In September, Shultz sat down with CIA director William Webster, who briefed him on Pinochet’s direct role in the September 21, 1976, car-bombing in Washington, DC, that took the lives of the leading critic of Chile’s military regime, former Chilean diplomat Orlando Letelier, and his young colleague at the Institute for Policy Studies, Ronni Karpen Moffitt. The CIA had “convincing evidence,” Shultz learned, that “Pinochet personally ordered his intelligence chief to carry out the murders.”
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In a secret report titled “Pinochet and the Letelier-Moffitt Murders: Implications for US Policy,” Shultz made his case to the president. “The CIA has never before drawn and presented its conclusion that such strong evidence exists of [Pinochet’s] leadership role in this act of terrorism,” the Secretary of State informed Reagan. “It is not clear whether we can or would want to consider indicting Pinochet,” Shultz advised. “Nevertheless, this is a blatant example of a chief of state’s direct involvement in an act of state terrorism, one that is particularly disturbing both because it occurred in our capital and since his government is generally considered to be friendly.”
“The only clear case of state-supported terrorism that has occurred in Washington” —George Shultz to Reagan, 1987
Washington could not continue to support a mastermind of what was, before 9/11, “the only clear case of state-supported terrorism that has occurred in Washington, D.C.,” Shultz concluded his argument to President Reagan. “What we now know about Pinochet’s role in these assassinations is of the greatest seriousness and adds further impetus to the need to work toward complete democratization of Chile.”
This dramatic document was among 282 declassified records on the Letelier-Moffitt case that Secretary of State John Kerry turned over—on a ceremonial pen-drive—to Chilean president Michelle Bachelet during a visit to Santiago last week. “It was a surprising gesture,” Letelier’s son, the popular Senator Juan Pablo Letelier, noted in a radio interview in Chile. “I think this practice of declassifying documents is very positive.”
Indeed, Secretary Kerry and the State Department’s Policy Planning Staff deserve significant credit for practicing “declassified diplomacy”—using US documents as diplomatic currency to advance the cause of human rights and redress the dark, interventionist history of US-Chilean relations. The Clinton administration started this unique practice after Pinochet’s arrest in London in 1998, undertaking a special Chile Declassification Project on CIA covert operations in Chile and Pinochet’s repressive 17-year dictatorship. “Such information could assist in encouraging a consensus within Chile on reinvigorating its truth and reconciliation process,” stated an NSC tasker ordering the review and declassification of 23,000 never-seen-before CIA, NSC, Defense, and State Department records that were turned over to Chile’s National Library in the fall of 2000.
The just-released documents on the Letelier-Moffitt case—many carry declassification stamps of October 1, 2015, just days before Kerry’s trip to Santiago—were intended to be released along with those 23,000 records. But after the families of Letelier and Moffitt, along with the Institute for Policy Studies where they worked and my organization, the National Security Archive, pressed the Clinton White House to indict Pinochet as a terrorist, the administration decided to withhold these records as potential evidence in a future prosecution.
Before leaving office, Clinton’s attorney general, Janet Reno, received a recommendation from her Justice Department investigators to indict Pinochet for this act of political terrorism. She left the draft indictment for her successor in the incoming George W. Bush administration, John Ashcroft, to implement. But President Bush never lifted a finger to prosecute Pinochet—even as fighting international terrorism became the central theme of his presidential tenure.
Had the CIA evaluation of the dictator’s role in international terrorism been leaked or declassified, the pressure to bring him to justice—here or in Chile—would have been overwhelming. Instead, Pinochet died in 2006 without ever being prosecuted for the murders of Letelier and Moffitt. Their families, and the public, were left with the worst-case scenario: neither truth nor justice.
Earlier this year (with the support of the National Security Archive) the Chilean government of Michelle Bachelet—herself a victim of Pinochet’s human rights abuses—petitioned the Obama administration to finally release these key records. The State Department was receptive, and mobilized the declassification bureaucracy to locate the missing Letelier papers. Kerry’s trip to Santiago for an international conference on oceanic law provided a target date, and a golden opportunity, to declassify the documents and personally carry them to Chile. Headlines such as “Pinochet Directly Ordered Killing on US Soil of Chilean Diplomat, Papers Reveal” are now circulating around the world.
To be sure, there are key documents in the Letelier-Moffitt case that remain classified. The CIA has yet to declassify its “convincing evidence” on Pinochet’s culpability. Nor has the FBI released its investigative report to Attorney General Reno recommending that Pinochet be prosecuted. But with this model effort of “declassified diplomacy,” the Obama administration has opened a Pandora’s box of evidence—once again proving the power of declassified US documents to provide historical vindication, if not legal accountability.
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MONDAY
1. POPE FRANCIS’ SHUNNING OF ARGENTINA DOESN’T SURPRISE RESIDENTS (The Washington Times)
2. ARGENTINA: HANDOVER FEARS (Financial Times)
3. ARGENTINA’S MACRI COURTS PERONISTS TO SAVE PRESIDENTIAL BID (Reuters News)
4. FACTBOX: ARGENTINA’S PRESIDENTIAL CANDIDATES AND THEIR POLICIES (Reuters News)
5. ARGENTINA PUBLISHES OFFICIAL INFLATION RATE BELOW PRIVATE-SECTOR ESTIMATES IN SEPTEMBER (IHS Global Insight Daily Analysis)
6. WATCHDOG SURPRISES BY REJECTING TELECOM ARGENTINA SALE (Business News Americas)
7. U.S. BIOFUEL MAKERS ASK D.C. CIRCUIT TO BLOCK IMPORTS OF BIODIESEL FOR RFS (Inside EPA Weekly Report)
8. MAR DEL PLATA FILM FEST UNVEILS FULL LINEUP (Hollywood Reporter)
1. POPE FRANCIS’ SHUNNING OF ARGENTINA DOESN’T SURPRISE RESIDENTS (The Washington Times)
By Andre F. Radzischewski
19 October 2015
BUENOS AIRES — He’s been to South Korea, Albania and Israel, spent time in Sri Lanka, Cuba and Bosnia. Just this month, the Vatican confirmed a trip to Mexico is planned for 2016, making it six Latin American countries Pope Francis will have visited — along with the United States — since his pontificate began in March 2013.
But there’s one nation notably missing from his itinerary to date: his native Argentina. It’s an omission that rankles but doesn’t surprise residents here, despite the popularity the pope enjoys and the national pride his surprise selection inspired.
While the Vatican insists the pontiff’s busy schedule dictates his travel schedule, the local Catholic faithful and analysts alike suspect it is Argentina’s complex political situation that is the main reason why the former Cardinal Jorge Bergoglio is steering clear of Buenos Aires, the city in which he was born and one he rarely left before being chosen pope.
And though he has smoothed ties with Argentina’s president, many recall the troubled relationship Cardinal Bergoglio had with Cristina Fernandez and her late husband and predecessor, Nestor Kirchner.
“I think he will come here when this government leaves,” said Martha Vera, a 64-year-old accountant who on a recent Sunday was studying a display detailing the future pope’s rise at Buenos Aires’ Metropolitan Cathedral. “He did not like the things [the Kirchners] said.”
As archbishop, Cardinal Bergoglio often clashed over social issues with his neighbors in the presidential Casa Rosada, which sits just feet away from the cathedral across the capital’s Plaza de Mayo. Tensions escalated, for instance, when Ms. Fernandez legalized same-sex marriage in 2010.
The Argentine president did meet with Francis in Rome in 2013 one day before he was formally inaugurated, the first head of state to meet with the new pope, and Ms. Fernandez also attended the Mass celebrated by Francis during his recent trip to Cuba.
But the president’s imminent departure — the term-limited Ms. Fernandez will leave office Dec. 10 — still does not smooth the way for a papal homecoming because Francis is worried about the bigger picture, said Mariano de Vedia, a commentator with the La Nacion daily and author of two books about the pope.
This year, the highly charged political atmosphere ahead of the Oct. 25 presidential election ruled out a papal visit from the get-go, Mr. de Vedia said. But with Argentina marking the bicentennial of its independence next July, a 2016 trip was long seen as almost certain.
Given that all main candidates vying to succeed Ms. Fernandez have sought to play up their ties to the first Argentinean pope, though, Francis apparently wants to see the electoral dust settle before he ventures onto Argentine soil. “He does not want his figure to be used,” Mr. de Vedia said. “He does not want to be taken advantage of” by whoever wins the election.
Francis also hopes that local leaders will first tackle key concerns of corruption, poverty and a rise in drug trafficking, said Gustavo Vera, a local opposition legislator and close personal friend of the pontiff’s. “Right now Argentina is pretty polarized; there is a lot of division,” Mr. Vera said. “When he comes to Argentina, it will be an inflection point, and he knows that.”
Coming home
Francis’ predecessors displayed none of the same qualms about returning home.
John Paul II made an epochal nine-day return to his native Poland in June 1979, eight months after his election as pope, generating wild enthusiasm and, many say, planting the seeds for the political revolt that would eventually end communist rule.
Now-retired German Pope Benedict XVI marked World Youth Day in Cologne in August 2005, four months after his elevation, and returned a year later for a lengthy, emotional tour of his native Bavaria.
The apparent cancellation of a papal bicentennial visit has caused disappointment in San Miguel de Tucuman, the northern Argentine city where delegates severed ties with Spain in 1816, and which next year will mark the anniversary with a major eucharistic congress.
Still, the Vatican maintains that logistics and protocol — not politics — made the journey impossible. Any trip to Argentina would necessarily include a visit to its neighboring countries in the Southern Cone, said Monsignor Guillermo Karcher, a Vatican protocol official and close Francis confidant.
“It does not just come down to the pope and Argentines’ wishes,” Monsignor Karcher said. “It also depends on the invitations from the Uruguayan and Chilean sides.”
And in the case of Chile, some damage control may in fact be needed, Mr. de Vedia said, as Francis, during his July visit to Bolivia, seemed to side with La Paz in the festering, century-old border dispute between the South American neighbors.
Monsignor Karchner recently told the Buenos Aires Herald an Argentina visit may be possible in 2017, but much of 2016 will be taken up with the duties of a Holy Year in Rome that Francis has declared.
Benedikt Steinschulte, an official at the Pontifical Council for Social Communication, also noted that Benedict XVI did wait six years before making an official state visit to Germany, even as he made more informal stops.
Francis, for his part, has not used opportunities for such “unofficial” trips to come home, even though his July visit to the Paraguayan capital of Asuncion put him a few miles from his home country’s border. But while Argentines may take it as such, his itinerary should not be mistaken for a political statement, Monsignor Karcher insisted.
“Germany and Poland are around the corner” from Rome, he said about Benedict and the German’s predecessor, John Paul II. But the city’s current bishop, Monsignor Karcher said, “can’t just get up, pack his bag and say, ‘Now, I’m going to Argentina.'”
2. ARGENTINA: HANDOVER FEARS (Financial Times)
By Benedict Mander
October 18, 2015
As Cristina Fernández steps down she leaves a slowing economy that will limit her successor’s options
Battered by gale force winds in the treacherous seas around Cape Horn, a crew of pro-government Argentine militants were last month forced to abandon a yacht they had sailed from the far north of the country. They were trying to spark national maritime pride but after a failed rescue attempt, the abandoned La Sanmartiniana — named after South American independence hero José de San Martín — drifted towards the Falklands. Only then, close to the islands Argentina calls Las Malvinas and which it unsuccessfully invaded in a 1982 war with the UK, was it brought to safety.
The irony escaped nobody in Buenos Aires. Critics of President Cristina Fernández de Kirchner saw the near-shipwreck as a metaphor for her government.
Over the past decade, Argentina has enjoyed a commodity price boom that has fuelled annual average economic growth of around 4 per cent. Ms Fernández has been quick to trumpet that success as her own. But as she prepares to exit office — after next Sunday’s presidential election — she will be leaving behind a country in dire economic straits saddled by a yawning fiscal deficit, double-digit inflation and critically low foreign exchange reserves.
“Argentina has run out of road,” says Patrick Esteruelas, senior sovereign analyst at EMSO Partners, an emerging markets asset manager. “It’s not a question of whether there will be an [economic] adjustment or not. The real question is whether the next government moves quickly, or whether the market ends up doing the adjustment for them.”
End of the Fernández reign
Constitutionally barred from running for a third term, many believe Ms Fernández’s departure offers a turning point for Latin America’s third-largest economy. For one it will end 12 years of leftist rule that Ms Fernández shared with her predecessor and deceased husband, Néstor Kirchner, who took power in 2003 as Argentina was reeling from an earlier economic crisis sparked by its $100bn default — at the time the biggest sovereign debt default in history.
Back then, other populist or centre-left leaders — such as Venezuela’s Hugo Chávez and Brazil’s Luiz Inácio Lula da Silva — were also being swept to power across South America. In a stroke of fortune, their rise coincided with a period of booming commodity prices.
Now, however, that boom has ended with tumultuous consequences for some of those most exposed. In Brazil and Venezuela, the successors of both Mr Chávez and Mr Lula da Silva are grappling with unprecedented economic and political crises.
Argentina is not in a comparably parlous state. But there is a broad consensus among the presidential candidates that whoever wins the race will need to move swiftly to untangle a thickening knot of economic problems and prevent a similar crisis in Argentina.
What distinguishes the candidates is the speed with which they promise to fix these problems. For now the race is too close to call, thanks to a voting system that requires the winner of the first round to scoop 45 per cent of the vote, or 40 per cent plus a 10 point lead over the next candidate. Failing that, there will be a run-off, on November 22.
Leading the polls, with around 37 per cent, is Daniel Scioli, 58, the so-called “continuity candidate” backed by Ms Fernández. The governor of Buenos Aires province, and a former vice-president under Kirchner, Mr Scioli has promised only “gradual” change.
His main rival is Mauricio Macri, the centre-right mayor of Buenos Aires, who has committed to restoring the credibility of institutions such as the judiciary, central bank and media — which have come under pressure from the Fernández administration — and to open the door to foreign investment.
Key to the final result, though, may be Sergio Massa, a former cabinet secretary under Ms Fernández who has split from the government. Although he is running a distant third, with 20 per cent, how his support base divides in a second round run-off vote between Mr Scioli and Mr Macri could decide the eventual winner.
“The election remains wide open, with a run-off . . . highly likely,” says Laurence Allan of IHS, the risk consultancy. “Scioli and Macri have vowed to improve the business environment, but Argentina’s serious macroeconomic imbalances will pose major challenges.”
These challenges are daunting though it is not mission impossible. They include tackling a fiscal deficit equivalent to 7 per cent of gross domestic product — currently financed by printing money; inflation that private forecasters estimate at about 20 per cent; an overvalued currency with a soaring black market rate; a fast-disappearing trade surplus; capital controls; and shrinking foreign reserves.
For financial markets, however, the bigger question is whether the new government can settle a long-running $1.3bn dispute with holdout hedge fund creditors, led by US billionaire Paul Singer’s Elliott Management, which has effectively locked Argentina out of capital markets for a decade.
The court case has resulted in Argentina having exceptionally low levels of debt — a plus as most other emerging economies have leveraged themselves up to the gunwales. But it has also made it a financial pariah. Many expect, or at least hope, a settlement could prompt a surge of capital inflows.
“We have been out of the markets for so long that there’s a lot of pent up demand for Argentine assets,” argues Federico Sturzenegger, economic adviser to Mr Macri, who has said he will seek a rapid solution to the holdout saga.
Mr Sturzenegger says one priority is to attract $20bn a year in upstream oil and gas investment to develop Argentina’s largely untapped shale reserves.
Late to the investment party
Others are less confident about the scale of financial interest. Even if there is a settlement, investors are no longer as interested in emerging markets as they were when commodity prices were high and ultra-low western interest rates prompted a search for extra yield. Securing investment in shale has been made all the more difficult by the dramatic fall in oil prices.
“We are arriving late at the party,” cautions Mario Blejer, a former International Monetary Fund economist and now adviser to Mr Scioli, who says he favours reopening talks with holdout creditors but has also been non-committal about how he would approach them — in deference to Ms Fernández, who has refused to negotiate a deal.
To Ms Fernández’s many critics, the end of this unyielding stance will be one of the most welcome changes when she leaves office. Yet despite leading a government that opponents often describe as proud, capricious, heterodox, vengeful and even corrupt, Ms Fernández’s approval rating is close to 50 per cent, which could restrict her successor’s room for manoeuvre.
Supporters say such relatively high ratings are thanks to government policies, which have put Argentina back on the path of prosperity after the crushing debt crisis of 2001.
“Above all, we have recovered the ability to control our own destiny, which we lacked when the country was excessively indebted and subjected to the IMF and financial markets,” says Aldo Ferrer, a prominent economist.
To explain her continuing popularity, backers also point to strong economic growth which peaked at 9.5 per cent in 2010, but fell to 0.5 per cent in 2014, with little improvement expected this year, and generous social programmes. Subsidised energy schemes, for instance, can make the cost of a household’s monthly energy bill equivalent to the price of a cup of coffee. The subsidies, they say, lifted millions out of poverty and reduced inequality, even if they fail to mention how high inflation has since eroded those gains. The Catholic University of Argentina calculates that the number of Argentines living in poverty — defined as someone earning less than $220 per month — rose to 29 per cent in 2014, from a low of 25 per cent in 2011.
Economists working for all of the main presidential candidates warn that the country can no longer afford the current level of subsidies. But her successor could also find themselves restricted by what Agustín D’Attellis, another economist close to the government, identifies as a lasting shift to the left in the prevailing economic doctrine. Indeed, even the market-friendly Mr Macri openly approves of the once-controversial 2012 nationalisation of the oil company, YPF.
But perhaps Ms Fernández’s biggest legacy will be herself. Although she is not running in the elections as a deputy, senator or governor — many speculated she would seek a seat to maintain political immunity in case of possible future corruption charges — few imagine her disappearing from public life altogether.
“The great unknown is whether Cristina is going to play a big role and remain a powerful figure,” says Juan Cruz Díaz of Cefeidas, a political consultancy.
He points out that this is particularly important for Mr Scioli, who has had to court Ms Fernández’s support by accepting one of her closest advisers as a running mate while distancing himself from her in order to attract swing voters. That has made for a delicate balancing act, “but I wouldn’t underestimate Scioli’s [independence],” Mr Díaz adds.
A long fall
A century ago Argentina was one of the most prosperous countries in the world, today it has the dubious distinction of being the only country to have lost its rich nation status.
“Our [recent] history is divided into two halves: Argentina was the country with the fastest rise between 1880 and 1930, and then the country with the most notorious fall,” says Dante Caputo, a foreign minister during the 1980s, who doubts that the next government will significantly alter the current downward trajectory.
On the asset side of the national ledger are some of the world’s largest reserves of shale oil and gas. Argentina also has abundantly fertile plains that have made it the world’s third-biggest exporter of soya — a sector that powered recovery after the 2001 crash. But prices have halved to around $320 per tonne since 2012 although some home the crop can avoid the worst of the end of the commodity super-cycle.
“The world is eating more and it is eating better, and that is a trend that will not be reversed,” says Gustavo Grobocopatel, a prominent Argentine farmer sometimes called “the king of soya”. “That is a great opportunity for Argentina, which is well positioned to benefit.”
But on the liability side of the national balance sheet lies a political class that has seemingly proven itself incapable of delivering long-term stability. High hopes greet each new administration. Yet no government has been able to successfully smooth out the country’s boom-and-bust cycles.
One disgruntled voter, Sonia Benedetti, a 69-year-old housewife, is pessimistic. “Sadly, I don’t think the next president will change this country. We don’t just need a new president, we need a whole new political class. Out with the lot of them!”
Profiles: ‘A wide open race’
The incumbent’s choice
Born into a middle-class family, Daniel Scioli negotiated his kidnapped brother’s ransom and release from leftwing guerrillas when he was just 18. But it was his sporting career that brought him fame. After losing his right arm in a powerboat racing accident in 1989, he went on to win several world championships over the next decade, alongside a business career selling electrical appliances for Electrolux. After being elected to congress in 1997, Néstor Kirchner chose him as his vice-president in 2003. Since 2007 he has been governor of Buenos Aires province, whose 17m population makes it larger than most European countries, as well as the president of the ruling Peronist party from 2010 to 2014.
The challenger
Mauricio Macri, the son of a powerful Italian business magnate, spent a decade running one of Argentina’s most popular football clubs, Boca Juniors, during one of its most successful eras. But he says it was a 12-day kidnapping ordeal at the hands of corrupt police officers in 1991 that convinced him to go into politics. He founded a centre-right political party, and later became a congressman before being elected in 2007 as mayor of Buenos Aires. After launching his presidential bid in 2013, he has seen his support rise dramatically over the past year as he campaigned for reform.
The outsider
Sergio Massa is a dissident Peronist hoping to capitalise on widespread discontent with the government. After being elected in 2007 as mayor of Tigre, a middle-class suburban district north of Buenos Aires, he was briefly Cristina Fernández’s cabinet chief in 2008-09, before splitting from the government. His candidacy has struggled to gain traction despite an impressive victory for his party in 2013 midterms that effectively barred the president from re-election by leaving her without the congressional majority needed to alter the constitution.
3. ARGENTINA’S MACRI COURTS PERONISTS TO SAVE PRESIDENTIAL BID (Reuters News)
By Maximiliano Rizzi and Sarah Marsh
16 October 2015
BUENOS AIRES, Oct 16 (Reuters) – When Mauricio Macri, the conservative opposition challenger in Argentina’s presidential race, unveiled a statue of the late working class hero Juan Peron it signaled a late shift in campaign strategy: a push to attract moderate Peronist voters.
For months, Macri distanced himself from Peronism, the fragmented political movement which has dominated Argentine politics for 70 years, promising to liberalize the economy and stamp out a deep-seated culture of graft and nepotism.
But just days away from the election, the “Let’s Change” alliance leader is under pressure. His support has fallen and he cannot be sure of forcing front-runner Daniel Scioli of the Peronist ruling party into a run-off vote.
Third-placed Sergio Massa has also staged a comeback, weakening Macri’s bid to present himself as the only alternative to the government-backed Scioli in the Oct. 25 vote.
In need of more votes, the 56-year-old Macri has been forced to go head-to-head with Massa, a Peronist who defected from the ruling party two years ago.
“I am not a Peronist but I have social justice in my heart,” Macri said as he unveiled the statue of Peron last week. “I want to invite all Peronists to work with us to create the Argentina we all dream about.”
Peron served three terms as Argentina’s president and earned himself hero status for his fiery nationalism and defense of worker rights in the 1940s.
Since then, Peronism has become an ideological grab bag spanning the communist left to the neoliberal right and it retains a strong hold over Argentines. Peronist parties have won nine of the eleven presidential elections they have contested.
Fulvio Pompeo, a Macri campaign coordinator, said Macri’s priority in this campaign had been to consolidate his support base within his “Let’s Change” alliance following party primaries in August and that “now we have to set about working with as wide a focus as possible”.
Despite his slide in the polls, Macri is still in the hunt for the presidency. He has a good chance of taking second place and, if he can force a second round, Scioli could be vulnerable to a united opposition.
To avoid a runoff, Scioli needs 45 percent of votes, or 40 percent and a 10 point margin over his nearest rival in the first round. A Poliarquia poll this week projected he has between 38.5 to 41 percent support, with Macri on 27.5 to 30 percent and Massa 21 to 23.5 percent.
It is not clear if Massa, who once served as Fernandez’s cabinet chief before splitting with her, would back Macri in a second round and whether that would be enough for him to beat Scioli.
‘OPPORTUNISM’
Some Peronist voters fed up with President Cristina Fernandez’s leftist populism and the ailing economy are listening to Macri.
“Macri understands he can’t win unless he has us thinking Peronists on his side,” said retired head-teacher Mariela Farias, a long-time Peronist militant who will now vote Macri.
Even so, Macri’s late shift in the campaign has lacked concrete policy proposals and also diluted his credentials as the candidate for change, said political analyst Graciela Romer.
“It seems more like electoral opportunism,” she said.
Macri kicked off his campaign promising to free-up Latin America’s third largest economy from capital controls and trade restrictions from his first day in office, to draw in foreign dollars and end double-digit inflation.
In contrast, Scioli plans to maintain Fernandez’s hefty social spending and making only gradual reforms to address the economy’s structural imbalances.
Macri’s support levels fell after a prominent party ally was embroiled in a graft scandal, undermining his promise to end endemic corruption.
He has also had limited success in connecting with the poor . His open-market reforms are a tough sell outside the urban middle class in a country where Peronist leaders have long protected national industry and worker rights.
Macri has rowed back on his criticism of nationalizations under Fernandez, but his opponents play up voter fears that he will put investors’ interests ahead of people’s needs and they mock his recent efforts to woo moderate Peronists.
“‘Let’s Change’ chose its name well, because it spends all its time changing according to what suits most at that moment,” quipped Marcelo Corti, a Massa ally running for Congress.
4. FACTBOX: ARGENTINA’S PRESIDENTIAL CANDIDATES AND THEIR POLICIES (Reuters News)
16 October 2015
BUENOS AIRES (Reuters) – Argentines vote on Oct. 25 for a new president to replace Cristina Fernandez whose two terms have been characterized by generous welfare benefits, state intervention in the economy and a debt default.
The three leading candidates all pledge to lure investment and boost the competitiveness of domestic industries. They differ, however, on the pace and depth of reforms to unwind state controls in Latin America’s No.3 economy.
Daniel Scioli, the ruling Front for Victory’s candidate, is ahead in the presidential race but is not sure of an outright win in the first round and could be vulnerable if it goes to a runoff.
Mauricio Macri, the center-right leader of the opposition PRO party, is running second. In third is Sergio Massa, who defected from the ruling party in 2013 to form the Renewal Front, still under the broad umbrella of the Peronist movement.
Below is a description of these three candidates and summary of their policy proposals:
DANIEL SCIOLI
* Scioli, a 58-year-old former businessman and ex powerboat champion who lost an arm in a crash in 1989, is the two-time governor of Argentina’s most populous province Buenos Aires.
He is a moderate Peronist who praises Fernandez’ leftist populism model but advocates “gradual change” and pro-business solutions to stimulate the sluggish economy.
* Scioli says that settling a legal battle with U.S. hedge funds suing over unpaid debt is not a priority. He says he will negotiate “with tenacity” for a just outcome. Fernandez refused to offer the funds better terms than those handed to creditors who accepted steep writedowns after the 2002 default.
Scioli’s advisors acknowledge a deal is needed to ensure access to international financing and say Scioli would “negotiate in good faith” with holdouts.
* He defends the central bank’s management of the exchange rate and has ruled out a sharp devaluation. He favors gradual reforms toward open markets over shock therapy and rejects spending cuts.
* Scioli has pledged to bring $30 billion in investment per year to Argentina and bring inflation down to single digits within his four-year term.
* He would review quotas and export taxes on grains and soy that have outraged farmers, but has not committed to cuts.
MAURICIO MACRI
* Macri, 56, is mayor of Buenos Aires and leader of the non-Peronist PRO opposition party. He heads the broader “Let’s Change” alliance. Before entering politics, he climbed through the ranks of his father’s holding company and was president of Boca Juniors, one of Argentina’s most popular clubs.
He has campaigned on a platform for change and is favored by financial markets for promising to open up the economy. His opponents slam him as a neoliberal who would neglect the poor.
* Macri criticized the government’s failure to settle with the U.S. “holdout” creditors. A deal would be a priority, his advisors say, although he would haggle hard.
* He promises to begin removing capital controls on day 1 in office, with a view to allowing the peso currency to float freely and lifting restrictions on access to dollars. He would call for central bank president, Alejandro Vanoli, to resign.
* He pledges to bring inflation down to single digits within two years – faster than the other candidates.
* Macri promises to abolish quotas and taxes on wheat and corn exports, and to reduce the 35 percent export tax soybeans.
* He vows to root out corruption from public institutions but his campaign has been dented by graft allegations against a close ally political.
SERGIO MASSA
* Massa is a 43-year-old lawyer and career politician, who pitches himself as a middle way between Scioli’s gradual change and Macri’s shock therapy.
Massa served briefly as Fernandez’s cabinet chief before his defection dealt her a severe blow in the 2013 mid-term elections and scuppered her hopes to rewrite the constitution and stand for a third term.
* Massa has made fighting crime a pillar of his campaign, pledging to deploy the military to fight drug traffickers, create an Anti Drugs Agency and reform the penitentiary.
* Massa says he would return Argentina to global debt markets before negotiating with all holdouts, not just those suing the country, to avoid “extortion”.
* He promises to end currency controls within 100 days in office and haul inflation down to 4-5 percent by the end of a first term.
* He would gradually eliminate export curbs and reduce duties levied on the shipment of grains and soybeans.
* Massa says improving the credibility of government statistics and ensuring the autonomy of the central bank and judiciary are key for restoring investor confidence.
5. ARGENTINA PUBLISHES OFFICIAL INFLATION RATE BELOW PRIVATE-SECTOR ESTIMATES IN SEPTEMBER (IHS Global Insight Daily Analysis)
By Paula Diosquez-Rice
16 October 2015
Inflation rate expectations are on the rise, but we do not expect that to be reflected in the official data in the short term. Click through for more analysis and data.
According to Argentina’s National Statistical Office (Instituto Nacional de Estadística y Censos: INDEC), consumer inflation remained at 1.2% month on month (m/m) and 14.4% year on year (y/y) in September.
The category of other goods and services posted the quickest increase, up by 2.5% m/m, followed by the health and medical services sector, up by 1.6% m/m, and the equipment and household maintenance category, up by 1.5% m/m.
Inflation figures presented by the opposition in Congress point to a rise of 1.92% m/m and 25.9% y/y, contrasting with INDEC’s figures. With regards to inflation expectations for the next 12 months, Torcuato di Tella University reports a rise of 8 percentage points, placing it at 30%, according to the median, while average expected inflation in annual terms rose to 30.7%.
The price control scheme for selected products is expected to continue until early January 2016 thus reducing even more the chances of official data moving closer to private-sector estimates.
Argentina’s economic distortions are a result of the government’s interventionist approach to economic policy. Import barriers, currency exchange controls, wage ceilings, and red tape for companies were aimed at reducing capital flight, but have severely compromised the country’s economic flexibility and, therefore, a readjustment of the productive sector.
An adjustment of the official exchange rate is almost unavoidable for the next government and will prove more difficult than dismantling some of economic distortions currently in place and will be immediately reflected in observed prices even if not in the official inflation data.
6. WATCHDOG SURPRISES BY REJECTING TELECOM ARGENTINA SALE (Business News Americas)
16 October 2015
Argentina’s telecoms regulator Aftic has rejected the acquisition of Sofora Telecomunicaciones’ 68% stake in Telecom Argentina by investment firm Fintech Telecom after a two-year wait for a decision that has raised some suspicions about the political interests that lie behind it.
Aftic said that New York-based Fintech lacked sufficient experience in managing telecoms companies, which is a prerequisite under decrees 62/90 and 764/2000 and that it could not guarantee that Telecom Argentina would function as normal.
In a statement Aftic pointed out that Fintech Telecom LLC was incorporated in Delaware less than a month before Telecom Italia accepted the purchase offer.
“The board considers that [Fintech] is not in a position to operate and take control of Telecom Argentina’s services and infrastructure. Fintech has demonstrated neither experience nor expertise [in the area].”
In November, 2013, Telecom Italia agreed to sell its 68% controlling stake in Sofora Telecomunicaciones for US$960mn. Sofora in turn has a 51% stake in Nortel Inversora, the investment company that holds 55% of Telecom Argentina.
In October last year, Telecom Italia said it had amended the agreement and would only sell a 17% minority interest in Sofora, while awaiting regulatory approval in Argentina for the sale of the whole stake. The new agreement included an option to acquire the other 51% once the sale was approved.
Enrique Carrier, director of consultancy Carrier y Asociados, said in a research note that while it may be true that Fintech does not have experience in the telecoms sector, Telecom Argentina as a company clearly has.
“Telecom Argentina has been operating for 25 years, which would give its management the sufficient knowledge to operate the company,” Carrier said.
The analyst added that the two years that the government had taken to reach a decision was “excessive.”
As is common in Argentina’s telecoms sector, the decision may be politically driven. Last month, Aftic rejected Argentine multimedia giant Clarín’s proposed purchase of a 49% stake in mobile operator Nextel, arguing that such an acquisition requires prior approval from authorities.
However, market observers suspect that the decision was politically motivated due to Clarín’s ongoing seven-year feud with President Cristina Fernández de Kirchner, whose term is due to end when a new government takes office on December 10.
However, the resolution may come as a surprise considering that Mexican businessman David Martínez, head of Fintech, was seen as having a good relationship with President Fernández and supported her in the country’s battle against holdout creditors.
Carrier added that many have speculated that the reason for the long delay in rejecting the sale was due to the fear that Fintech’s purchase was “nothing more than a Trojan Horse” for Grupo Clarín to move into Argentina’s second largest operator via the back door.
The analyst also questioned why the decision was made public just a week before presidential elections are held on October 25 and two months before a new government takes office.
He suggested that Aftic’s decision will be contested in the courts to keep the issue alive and that, given the traditional blurred lines between politics and business in Argentina, some Aftic members might change their minds at a later stage. Aftic’s board will remain unchanged with the change in government.
Aftic’s decision was unanimous, but newspaper The Buenos Aires Herald quoted an Aftic board member as saying that he could change his vote if the investment fund files new evidence that would prove Fintech’s ability to manage a telecoms operator.
7. U.S. BIOFUEL MAKERS ASK D.C. CIRCUIT TO BLOCK IMPORTS OF BIODIESEL FOR RFS (Inside EPA Weekly Report)
By Stuart Parker
16 October 2015
U.S. biodiesel producers are asking a federal appeals court to scrap EPA’s approval of imports of biodiesel from Argentina used as a qualifying renewable biomass fuel under the agency’s renewable fuel standard (RFS), claiming EPA failed to undertake necessary public comment on what they call a flawed tracking system for the biodiesel.
EPA Jan. 27 issued an approval of a tracking system designed to show that biodiesel from Argentina meets the criteria to be considered “renewable biomass” under the renewable fuel standard (RFS). The approval, in the form of a letter to the Argentine Chamber of Biofuels (CARBIO), constitutes a judicial reviewable “final agency action,” says an Oct. 8 opening brief filed in appellate court by the National Biodiesel Board (NBB). The brief is available on InsideEPA.com. See page 2 for details. (Doc. ID: 185601)
NBB, representing U.S. biofuel producers, says the decision approves a flawed system that allows access to the U.S. market for biodiesel produced from Argentinian soybeans, and CARBIO’s tracking system cannot ensure that the imported fuel is truly renewable.
NBB says the decision should have been open to public notice and comment, and is also asking the U.S. Court of Appeals for the District of Columbia Circuit to vacate a separate agency action — a letter from the agency refusing their request to seeking public input on the plan.
Further, NBB says EPA’s approval of what the board sees as an inadequate tracking system alters the underlying RFS regulations governing biodiesel, and reopens them to judicial review. The board therefore also asks for remand of those regulations to EPA to address the shortcomings that allow the imports at issue.
“EPA failed to provide any notice of the CARBIO proposal it purports provides sufficient quality assurance to ensure that soybean oil from Argentina, a country that has seen a rapid expansion of agricultural lands, came from lands that were in production prior to December 19, 2007. Public comments were necessary for the first plan of its kind,” says the brief.
NBB, representing U.S. biofuel producers, says that the CARBIO tracking system relies on the identification of “go areas,” which are shown by satellite imagery to have been agricultural in 2007 and not newly cultivated areas that have been recently cleared of forest. However, it is unclear how CARBIO will define such areas, and EPA lacks the means to check that they are correctly identified, the brief says.
“EPA’s review of the CARBIO proposal was arbitrary and capricious in that it did not comply with its own regulations. There was no explanation or analysis to support the identification of ‘go areas’ as ‘existing agricultural lands,’ to ensure feedstock producers, handlers or importers are in compliance, or to even understand the scope of the program,” the filing says. “Indeed, EPA appears to have handed its authority over to third parties, one of which has clear conflicts of interest,” the group says referring to CARBIO. “Thus, EPA could not have ensured that the CARBIO proposal provides the adequate level of quality assurance in clear contravention of its regulations.”
8. MAR DEL PLATA FILM FEST UNVEILS FULL LINEUP (Hollywood Reporter)
By Agustin Mango
15 October 2015
The only A class festival in Latin America, Mar del Plata announced its main competition line up and special programs Wednesday night in a press conference held in Buenos Aires, led by festival president and veteran filmmaker Jose Martinez Suárez, artistic director Fernando Martin Peña, and Lucrecia Cardoso, head of the country’s Film Institute (INCAA).
Main entries in the festival’s international and LatAm competitions include Mexico, Colombia and Chile’s Oscar bids (Gabriel Ripstein’s 600 miles, Ciro Guerra’s Embrace of the Serpent and Pablo Larrain’s The Club, respectively), Federico Veiroj’s San Sebastian winner The Apostate, Venezuela’s Golden Lion winner at Venice From Afar, and Pablo Agüero’s Eva Doesn’t Sleep, a dream-like take on the fate of Eva Peron’s cadaver after it was kidnapped and hidden in the 1950s, starring Gael Garcia Bernal.
Mar del Plata’s guest list includes Hong Kong’s action kingpin Johnnie To, who will be presenting its musical Office, France’s Arnaud Desplechin (The Golden Days), and US cult director Trent Harris (Beaver Trilogy, recently featured in the Sundance doc Beaver Trilogy Part IV), as well as international distributors, producers and sales agents attending the festival’s new co-production meeting LoboLab.
With film historian Fernando Martin Peña returning to the driver seat for the festival’s 30th anniversary, Mar del Plata’s 380 films program draws heavily from the past, with a world premiere of the definitive restoration of David W. Griffith’s landmark Birth of a Nation, and a new 35mm print of Native Son, the adaptation of Richard Wright’s classic 1940 novel, which was shot in Argentina under director Pierre Chenal, featuring the author himself in the role of Bigger Thomas. At the time of its release in the US, the film was partially censored, causing the near absolute disappearance of its complete version, which only survived in a single and fragile 16mm print.
Hollywood censorship in the 1940s will also be the focus of the Pre-Hays Hollywood section, which will screen films from directors such as Michael Curtiz, Raoul Walsh and George Cukor, made during a short period (1929 to 1934) during which US film production was freed from the studios’ self-imposed censorship following the so-called Production Code established by 1930s US Postmaster General Will H. Hays.
The Mar del Plata International Film Festival runs Oct. 30 – Nov. 9.
The competitions line up is listed below.
International Competition
Eva Doesn’t Sleep (Argentina / France / Spain) – Pablo Agüero
Incident Life (Argentina / Uruguay / France) – Ariel Rotter
Popular Mechanics (Argentina) – Alejandro Agresti
Remember (Canada) – Atom Egoyan
The Club (Chile) – Pablo Larraín
Embrace of the Serpent (Colombia / Venezuela / Argentina) – Ciro Guerra
Koza (Slovakia / Czech Republic) – Ivan Ostrochovský
The Apostate (Spain / France / Uruguay) – Federico Veiroj
O futebol (Spain) – Sergio Oksman
The Island of Wind (Spain) – Manuel Menchón Romero
Tangerine (USA) – Sean Baker
The Measure of a Man (France) – Stéphane Brizé
Latin American competition
Samuray-S (Argentina) – Raúl Perrone
Campo Grande (Brazil / France) – Sandra Kogut
Beyond My Grandfather Allende (Chile / Mexico) – Marcia Tambutti Allende
The Monument Hunter (Chile) – Jerónimo Rodríguez
600 miles (Mexico) – Gabriel Ripstein
What We Never Said (Mexico / Argentina) – Sebastián Sánchez Amunátegui
Evilness (Mexico) – Joshua Gil
Santa Teresa & Other Stories (Mexico / Dominican Republic / USA) – Nelson Carlo de los Santos Arias
I Promise You Anarchy (Mexico / Germany) – Julio Hernández Cordón
Suspended Time (Mexico) – Natalia Bruschtein
From Afar (Venezuela / Mexico) – Lorenzo Vigas
Argentine competition
The Spider’s Lullaby (Argentina) – José Celestino Campusano
Road to La Paz (Argentina / Netherlands / Germany / Qatar) – Francisco Varone
How Most Things Work (Argentina) – Fernando Salem
Docile Bodies (Argentina) – Matías Scarvaci and Diego Gachassin
Easy Ball (Argentina) – Juan Fernández Gebauer and Nicolás Suárez
Hortensia (Argentina) – Diego Lublinsky and Alvaro Urtizberea
Kryptonite (Argentina) – Nicanor Loreti
El Movimiento (Argentina / South Korea) – Benjamin Naishtat
Paula (Argentina / Spain) – Eugenio Canevari
Pequeño diccionario ilustrado de la electricidad (Argentina) – Carolina Rimini and Gustavo Galuppo
The Football Boys (Argentina) – Jorge Leandro Colás
Our Last Tango (Argentina / Germany) – Germán Kral
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