Opposition backtracks on probe
Despite earlier promises to vote in favour, many choose to abstain in the Lower House
The approval of a bicameral congressional inquiry into tax evasion received almost no opposition support early yesterday morning — an about-face for some lawmakers who had initially said that they would support the probe into undeclared accounts in Switzerland.
The PRO caucus as a whole voted against the congressional inquiry along with isolated Radical (UCR) lawmakers. The final vote was 135 in favour, 29 against and 53 abstentions.
During debate in the Lower House, Radical lawmakers argued that the bicameral committee’s focus on tax evasion and not on money-laundering meant that they could not give it their full support.
The proposed bicameral committee has as its mandate the “investigation into the methodologies of a scheme implemented to facilitate the opening of accounts abroad by economic agents that pay tax in Argentina and administer them and hide their existence with the objective of evading taxes of said agents and generating the outflow of capital as a result.”
FpV lawmaker Roberto Feletti, one of the sponsors of the bill, said Congress should “examine the systemic behaviour of tax evasion, capital fight and simultaneous requests for belt-tightening in the economy. Foreign banks, far from meeting their role of facilitating Argentine exports or assisting foreign companies in the country, have set a network through their branches that facilitate that behaviour.”
UCR lawmaker Ricardo Buryaile, one of the 53 lawmakers who abstained noted that while “we said that we were going to vote in favour of this bill and that it was our objective to investigate capital flight and money-laundering in Argentina,” the proposed commission “is inconsistent in light of what it seeks to achieve.”
Buryaile, and other members of the opposition, particularly criticized the bill for failing to mention “the responsibility of the Financial Information Unit (UIF),” which is the state’s anti-money-laundering watchdog that is led by José Sbatella.
Buryaile and fellow UCR lawmaker Víctor Maldonado had said they would vote in favour of creating the commission and asked that it be granted “enough tools” to investigate the case. Both lawmakers described the HSBC scheme as “harmful” for the country and said those politicians who have undeclared accounts should be banned as candidates.
“It’s an important issue — as long as the investigation is carried out against all sectors. The government must fight against corruption, no matter where it originates,” Maldonado said only days before the vote but before the matter had been discussed in committee. “We are going to vote in favour of the bill as we welcome anything the Congress can do to investigate this issue.” Maldonado was absent from the vote on the bicameral commission yesterday. High-profile Radical lawmakers such as Eduardo Costa and José Cano voted against the proposal.
The only PRO lawmaker to speak in the Lower House was Patricia Bullrich, who said that her caucus “will not propose the establishment of any commissions with an expanded mandate nor the creation of any investigative commissions because we do not want to be part of a crude, cheap and low-quality initiative that clearly seeks to cover up what cannot be covered up.”
Bullrich implied that investigating this type of money laundering takes time away from investigating powerful political leaders.
“If you take a look, the only objective that this has is to attempt to say to society that here, in this Argentina, everybody is corrupt and in that way cover-up the investigation that is reaching where it must: the head,” she said.
That position clashed with the comments made by PRO lawmaker Federico Sturzenegger after the proposal for the congressional investigation was first put forward.
“AFIP has the obligation to carry out a proper investigation of the Swiss accounts case. We were the first ones to ask for this so we will back the idea to create a commission,” Sturzenegger said. “We don’t question the government’s proposal, we’re just asking that it be done seriously. The law is clear about these issues.”
Both Sturzenegger and Bullrich, along with all of the other PRO lawmakers present at the time when votes were taken, voted against the measure.
Lawmakers from the Civic Coalition and Renewal Front also expressed their general approval for a congressional inquiry but elected to abstain on account of what they felt was the insufficient scope for the committee.
Senate to weigh-in
The commission is a response to a list announced by the AFIP tax bureau of about 4,040 undeclared Swiss bank accounts that were provided by French tax authorities months ago.
The list contains several high-profile names, including lawmaker Alfonso Prat Gay and executives of HSBC and the Clarín Group.
A person close to the investigation has leaked a partial list of the names to the press but it did not include more than 100 names — meaning that the identity of more than 3,000 account holders remains a mystery. Prat Gay has since denied that he has any undeclared bank accounts in Switzerland.
AFIP tax bureau chief Ricardo Echegaray used his monthly news conference to announce fiscal revenue to point the finger at the judiciary for slowing down the investigation into the evasion that is estimated could have cost state coffers as much as 60 billion pesos.
The bicameral commission, which will be required to issue a report 90 days after it is established, will have the authotrity to request information from the public and private sector on priority basis and will not be subject to financial and banking secrecy rules, or confidentiality agreements applicable to the subject under review. The commission will also be granted theauthority to appeal before the courts if it’s work is impeded.
The bill will be subject to commission review in the Senate on Tuesday, and it is likely that it will receive full congressional approval on December 17.
