This week Argentina appealed to the UN General Assembly to push through the Multilateral Legal Framework for Sovereign Debt Restructuring, which is being touted as a means to allow poor countries to avoid creditors and establish an international mechanism for paying off their default loans.
Unfortunately, Hector Timerman, Argentina’s foreign minister is simply using and abusing the G-77, the UN’s poorest countries (plus China), to provide cover for Argentina’s continuous violation of a recent U.S. court decision reaffirming his country’s legal obligation to pay its creditors.
In 1994, a truck loaded with hundreds of kilograms of explosives was used to ram the AMIA Jewish Center in Buenos Aires. Eighty-five people were killed and hundreds wounded. Iranian and Hezbollah crime was clear, yet the Argentinean investigation dragged on for twenty years without a single indictment of the Iranian culprits but created the “Truth Commission” to paper over the attack. The real purpose of the Truth Commission was an appalling secret deal, which has since fallen apart, to swap Iranian oil for Argentinian grain and possibly arms.
On May 15, 2014, judges in the First Court of the Federal Chamber of Argentina upheld an injunction filed by the Argentinian Jewish community. The court ruled that the Memorandum of Understanding as unconstitutional and commanded President Fernandez not to implement the agreement. The ruling further ordered the Courts to reaffirm extradition orders against suspected Iranian officials, and instructed Interpol to re-examine arrest warrants for former Iranian president Ali Rafsanjani, former Foreign Minister Ali Akbar Velayati and Hadi Soleimanpour, all suspected of having perpetrated the bombing.
It gets worse. On January 18, Argentinian prosecutor Alberto Nisman was found dead in his flat the night before he was supposed to testify. As they say, “the fish rots from the head.” Cristina Fernandez, widow of the previous president, Nestor Kirchner, is the main culprit in the Iran/Hezbollah cover-up. She is also the mastermind of her country’s debt payment evasion scheme. Fernandez is aided and abetted by her two top ministers: Timerman and Axel Kicillof, Argentina’s leftist Minister of Economy.
In the early 1900s, Argentina had a living standard on the par with that of the U.S., but its economy was ransacked by a succession of leftist governments. Things got worse under General Juan Peron, a rabble rousing populist, who ruled in the 1950s with his glamorous but unstable wife, Evita.
While Timerman is busy presenting his country to the world wrapped in a pauper’s sackcloth, Kicillof is engaged in expropriating any energy companies that have make the mistake of getting too close. This is exactly what he did with YDF, a subsidiary of Spain’s Repsol.
Hans Humes, co-chairman of the group of Argentine bondholders which wound up suing through the U.S. court system in an attempt to get Argentina to pay its debts, has written that he never before encountered representatives of a country who were more duplicitous, arrogant or prone to demonizing their counterparts on the other side of the negotiating table more. “The Kirchners… are obsessed with political control over economic rationality.”
According to the World Bank, Fernandez-Kicillof stewardship of the Argentinian economy led to stagnation in 2013, a decline of 1.5 percent in 2014, and is on track to crash with a projected 2.6 percent decline in 2015. No wonder: spooked by the refusal to pay off creditors, foreigners are now refusing to lend to Buenos Aires. Meanwhile the tax and spend fiesta nevertheless continues. In 2014, public revenue grew 43 percent, but public spending grew by 48 percent.
So the Fernandez regime not only stiffs creditors and expropriates energy companies. It trades blood for oil, aids and abets terrorists, and possibly eliminates those who are trying to expose it.
Enough is enough. The U.S. intelligence community should investigate the death of Alberto Nisman and the role the Fernandez administration and its top officials played in the obstruction of justice in the AMIA case. The UN should approve establishment of state bankruptcy courts following private sector bankruptcy proceedings, not enable malicious and systematic debt evasion by hugging irresponsible borrowers.
Ariel Cohen, LLB, PhD, is director for the Center for Energy, Natural Resources and Geopolitics at the Institute for the Analysis of Global Security.