Las Am��_��_ricas

One Philosophy, Infinite Rip-Offs

Popping into Argentina recently, we were surprised to note the collective hostility that prevailed at Ezeiza International Airport in Buenos Aires. When a sleek white man with pricey luggage attempted to jump the line at customs and access the special VIP chute for diplomats, a jeering crowd sent him to the back of the room to wait his goddamn turn. Name calling, shouting, and shoving broke out. The motive behind this display soon became apparent: Two days prior a member of the diplomatic team sent by the International Monetary Fund (IMF) to determine whether the Argentine government had fired and starved enough of its people to be eligible for another shot of international credit turned out to be the former Finance Minister of Peru, wanted in Lima on corruption charges. Anyone showing up since with even a whiff of official importance about him was in for rough treatment.

Yes indeed. This was a hell of a stunt for the IMF, which is already fairly unpopular throughout Latin America. Apparently, the Argentine police had been tipped off about the arriving felon: On the morning of February 13, they were waiting for Sr. Jorge Baca Campodónico, head of variously, the Central Bank, the Tax Administration, and the National Treasury of Peru during the term of Alberto Fujimori. The former Peruvian president himself is now in exile in Japan, on the lam for charges of corruption, human rights abuse, and very poor judgment in his choice of friends. While working for Fujimori, Baca Campodónico had helped himself to millions in public funds and cooperated in the summary disposal of everyone who got in his way. When that deal imploded, he apparently split for Washington to escape criminal proceedings and sign onto the payroll of the IMF. So here he was in Buenos Aires on his next gig: Passing judgment on Argentine economic performance for the IMF.

In an unexpected variation from his itinerary, he did not head for the Sheraton with the rest of his team, but was instead rudely escorted to the downtown holding tank for the Unit of Anti-Terrorist Investigations at the request of the Peruvian government, which has filed a petition to extradite him. As a staff member of the IMF, Baca Campodónico immediately claimed diplomatic immunity, to which, like most of the other things he’s got, he was not entitled.

Two days later, however, he was released on bond of US$7,650, and he repaired to the Sheraton as originally planned. Phone calls to the virtually non-existent IMF press office did not result in information as to whether the IMF paid the ransom or Jorge himself coughed up. In any case, he’s out on an infinitesimal bond and awaiting extradition to Lima; the IMF has declared that immunity does not cover him for crimes committed prior to entering its employ. This is fair enough: the IMF cannot be responsible for absolutely everything that has gone wrong in Latin America. Nevertheless, the Fund was standing by their man, as much as politically possible. IMF reps told La Nacion, the Buenos Aires daily newspaper, that they heard the news of the arrest with “consternation:” They described Baca Campodónico as “a man of great integrity—a jewel.” But somehow, this particular Peruvian gem has a flaw or two if you look at it closely: It’s been convicted in absentia of corruption, illicit association, obstruction of justice, and fraud.

Interestingly, this was not the first time that Baca Campodónico was scooped up in an immigration net. It had happened before when he entered the United States in Miami last May on his way back to Washington with another IMF squad, but in that case, his diplomatic passport got him off. Nonetheless, the word is that this recent caper in Buenos Aires may be the last for him at the IMF. The Personnel Division is getting tired of springing him from assorted Departments of Justice every time he travels. In other words, compulsive larceny is quite okay with the IMF, but repeated bureaucratic inconvenience is not.

Jorge is just the sort of guy who highlights everything that’s wrong with the way a kleptocratic little clique runs Latin America. Used to be, these people and their corporate creations confined their activities to their national boundaries, but it seems that, just like everything else, they’ve globalized themselves. As soon as Jorge’s career ran aground in Lima, he seamlessly moved on to international finance circles, expecting to be protected there by the diplomatic shield. Like many of his class, Jorge has all the credentials necessary to ooze fluidly from government to finance to corporate boardroom to think tank: a doctorate from MIT, private sector credentials from a multinational corporation, close personal connections with high-visibility presidential crooks such as Fujimori and Carlos Menem, and various intellectual affiliations, both in and out of Washington. And it’s not surprising that he would sign onto the IMF, either. He must feel quite at home there, in fact, after blathering away at the annual meetings in his Finance Ministerial capacity for some years as he contracted the hundreds of millions in debt that he, Fujimori, and spy network chief and hit man, Vladimiro Montesinos, would later steal.

We do not mean to embellish or judge harshly, but these guys did not do a lot for your average Peruvian. Between 1990 and 2001 the Fujimori government sold more than 220 public enterprises to the private sector for a total of about $9.2 billion. Curiously, about $2 billion in sales expenses were then deducted—we’re guessing that this includes the broker’s fee, the title search, the termite inspection, the radon test and the like. This stuff really added up—to more than one quarter of the value of the assets. But then—of the remaining $7 billion, only $4.4 billion actually wound up in the Treasury. You might have expected this, with Jorge and Fujimori handling the checkbook. A Peruvian congressional commission investigating the deals reported that the malfeasance included collusion, favoritism, undervaluing of properties, contract manipulation, unwarranted tax breaks, and insider dealing. One economist who worked on the investigation estimated that as much as $5 billion left the country for accounts in Switzerland or the Cayman Islands.

Stealing five billion is a lot to get away with, and Jorge may not altogether escape. He remains in Buenos Aires awaiting extradition, where he is closely watched because he’s a flight risk. You have got to keep your eye on a guy like this. If you don’t, he’s apt to slip off to an airline office and get himself a ticket to some IMF outpost where the immigration folks sell cheap. But this kind of crime cuts two ways: It’s not just the people who took the money who are the problem. It’s also the people who paid it. Because whatever they paid to the likes of Jorge, they expected to wring back out of the general public one way or another. Plus interest and profit. With the help of the IMF.

In the capitals of Free World nations, when sold-out academics, the subaltern intelligentsia, and political wipeouts gather over fine wine and meatballs to elaborate preposterous explanations for the horrors of the last 10 years in Latin America, this ugly fact does not often come up so crudely. In the wake of the in absentia trials of Fujimori and Baca Campodónico, another well-known Peruvian, Mario Vargas Llosa, held forth about this “dreadful situation” at the International Freedom Foundation in Madrid, a partially-owned subsidiary of the libertarian Cato Institute. In the course of his remarks, he never once mentioned the responsible corporate parties. Instead, he lamented the fact that Fujimori’s regrettable history on privatization now prevented the Peruvian government from continuing the same sell-off policies for public assets. Specifically, he mentioned a 2002 uprising in the highlands province of Arequipa that stopped the government from selling the province’s electric utilities to Belgium’s Tractebel. “The reforms undertaken (by Fujimori) have been, at bottom, not liberal but a caricature of liberal reform. We know that, but it is not known to the misinformed public—a good number of whom are locked in a fierce battle for mere survival.” As a matter of fact.

Knee-deep in his own pontifications, Mr. Vargas Llosa neglected to mention that Tractebel was a party to a number of corrupt privatization deals in Peru during the past ten years when these caricatures of liberal reforms were enacted and was implicated in a $10 million bribe for Fujimori. Fortunately for them, the profoundly misinformed and ignorant lumpen do know this and apparently are in no mood to put up with any more of it.

Vargas Llosa went on to explain to his audience that one of the primary explanations for Latin America’s failure to “develop” is its lack of culture—by which he meant the lack of “a tool fundamental to the ability of men and women to make sound decisions in their personal lives, in their family lives, in their professional lives and above all, in politics when the time comes to make a decision.” Well, maybe so, but it looks like the people who took to the streets in Arequipa knew enough about Tractebel to make an informed decision when the time came. Mr. Vargas Llosa’s remarks were nevertheless greeted by a polite round of applause from the august members of the International Freedom Foundation, who then presumably freshened their drinks and posed for photos. If we ourselves were truly venal and base, we might suspect that Mr. Vargas Llosa either owns shares of Tractebel or has finally flipped over completely into that weird little dream world he once only wrote about.

So while Mr. Baca Campodónico, for whom the world has suddenly become all too real, cools his heels in Buenos Aires awaiting a free trip back to Lima, Tractebel goes about its business buying politicians, utilities, and large hunks of the national patrimony. (Currently, one of its more abhorrent activities in Peru involves shoving a natural gas pipeline through the Amazon to Bolivia. We don’t even want to think about how many Jorges are lined up for a piece of that action.) And Mr. Vargas Llosa goes right on shilling for the operation, while bemoaning the lack of judgment manifest by the uncultured masses, who had the poor taste and bad manners to pitch Tractebel out of Arequipa. He’s not discouraged by a couple of setbacks, and neither is Tractebel, which prides itself on “one philosophy— infinite solutions.” This sounds dangerously single-minded, but the company has good reason for thinking it will get its way—it’s backed up by the IMF, which has an agreement with Peru obliging the government to sell off or concession its assets as part of its program of “sound macroeconomic policy” and “decentralization.” So whether Mr. Baca Campodónico is part of the party or not, the sell-off and the rip-off rolls right on.

Gabriela Bocagrande is a writer in Washington, D.C.

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