Argentina crying over `hired guns'; U.S. political consultants providing financial advice to Argentina are greeted skeptically by observers who question how dedicated they are to clean government

0 Comments | Insight on the News, June 10, 2002 | by Martin Edwin Andersen

Secretary of State Colin Powell's recent warning to a cash-starved Argentina that underlying economic reform is a necessary but insufficient ingredient for sustained economic growth was followed by a stern admonishment. "Argentina" he said, "must also address the underlying political and institutional flaws that encourage excess public-sector borrowing, corruption, politicized judicial systems and a lack of transparency in government activities."

Observers in Buenos Aires were left to wonder whether those warnings on corruption and transparency in government activities might extend to various well-known American political consultants and lobbyists plying their trade along the Rio de la Plata. If past is prologue, these informal U.S. representatives may provide unseemly examples of public rectitude, Powell's pointed warning notwithstanding.

Powell's comments came just weeks after it was revealed that the Argentine government of Eduardo Duhalde, the hapless populist desperate for outside help to patch up his country's tattered reputation for international creditworthiness, had hired a trio of Washington powerhouses as registered agents. One was Alan Stoga, head of Zemi Communications of New York and a protege of Nixon secretary of state Henry Kissinger. Kissinger currently is of interest to Argentine prosecutors for his alleged role in egregious human-rights violations committed in South America during the 1970s (see "Kissinger Had a Hand in `Dirty War,'" Jan. 28).

Aging and ailing Larry Eagleburger, secretary of state in the George H.W. Bush administration and a founding partner in Kissinger's original lobbying firm, Kissinger Associates, also was hired by a Duhalde desperately in need of vigorous defenders. So was Bill Clinton's former deputy treasury secretary, the ubiquitous Stuart Eizenstadt.

The ensuing flap over the hiring of such consultants was just one in a growing series of ironies visited upon angry and weary Argentines. Most of the estimated 20,000 people kidnapped and secretly killed a quarter-century ago by a military junta actively supported by Kissinger came from Duhalde's own Peronist Party. Kissinger's former patron, U.S. banker David Rockefeller, reportedly helped the generals run up Argentina's foreign debt; now Duhalde was turning to two of "Mr. K's" former top lieutenants for financial advice.

As desperation over the economic cataclysm and endless political wrangling grows in Buenos Aires--combined with a perceived lack of sympathy by Washington to the country's plight--local observers recall that the kleptocratic government of Carlos Saul Menem, for whom Duhalde served as vice president, had been hailed by the George H.W. Bush administration and again during the eight years of Bill Clinton. Then, these observers note, U.S. officials turned a blind eye as drug trafficking and money laundering skyrocketed in Argentina. (The difference between Menem and Duhalde, says one critical political observer in Buenos Aires, mirrors that between Vito and Michael Corleone in the movie The Godfather. In Argentina, he added, Menem plays the role of the more modern, but no less unappealing, son.)

The consultant controversy also comes as Latins are wondering just how much bragging rights the gringos legitimately can claim in the post-Enron period to the mantle of clean government. According to a poll of Buenos Aires residents released May 14 by the respected Ricardo Rouvier & Associados public-opinion firm, 56.4 percent of Argentines rejected Powell's assertions, claiming that they were both interventionist and coming from a country "with little moral authority" to make them.

"The Enron scandal," complained Joaquin Estefania in the Spanish newspaper El Pais, "with its creative accounting, revolving door between the political and economic establishments, fraud against stockholders and workers, etc., shows that crony capitalism isn't just the province of emerging or developing countries, as we have been told, but is at the heart of the system itself."

Although the lucrative contracts given to Stoga, Eagleburger and Eizenstadt raised eyebrows in a country experiencing unprecedented economic hardship, they were just the latest in a string of services purchased from high-flying U.S. "hired guns" that in the last decade have traveled to Argentina to do business. The conduct of several of these has not, observers say, suggested the strict adherence to transparency and clean government urged on Argentines by Powell.

Questions about the role played in Buenos Aires by U.S. political consultants, former diplomats and lobbyists grew during the 1990s. This particularly was so after Miami businessman Howard Glicken, a longtime fund-raiser for then-Vice President Al Gore, was indicted and later convicted for violations of U.S. campaign-finance laws, including soliciting a contribution from a foreign national. Glicken, vice chairman for finance of the Democratic National Committee in 1996, was a frequent visitor to Buenos Aires. With U.S. Ambassador James Cheek as his host, Glicken bandied about his ties to Thomas "Mack" McLarty, Clinton's top adviser on Latin America and Kissinger's current business partner.