The Miami Herald
January 18, 2002

Financial collapse under scrutiny

Police probing cash transfers


 BUENOS AIRES -- Police confiscated documents, computer tapes and surveillance videos Thursday from a dozen banks and companies to investigate whether as much as $27 billion was taken out of Argentina in a convoy of armored trucks last month just days before the country's financial collapse.

 The inquiry came as the peso sank to new lows, Central Bank President Roque Maccarone resigned over a dispute involving monetary policy, and angry protests over unemployment, a banking freeze and poverty continued.

 Argentina suffered an economic breakdown last month, defaulting on $141 billion in foreign debt. Seeking to stem an accelerating flow of money out of the country, the government prohibited bank withdrawals of more than $250 a week.

 Thursday, a judge launched a probe to determine whether banks can't cover deposits because they were tipped off about the freeze and emptied their reserves in advance. Congress impaneled a special commission to investigate the alleged flight of funds.

 Among the companies expected to be searched today: local offices of United and American Airlines.

 In response to this week's violent protests, the government announced it would allow people to make additional bank withdrawals in devalued pesos.

 The investigation into the flight of funds came after a complaint filed Monday by attorney Juan Carlos Iglesias. He says he conducted his own mini-probe after hearing President Eduardo Duhalde speak of a flight of capital that hinted of fraud.


 Iglesias said he learned from contacts in the aviation business that a massive convoy of trucks arrived at the international airport here in late December. Bags of cash
 were allegedly loaded onto jets and flown out. Iglesias filed a criminal complaint against former President Fernando de la Rúa and Maccarone, who reportedly had clashed with Duhalde since the peso's devaluation on Jan. 6.

 ``I feel like the country has been looted,'' Iglesias said. ``I have no doubt it happened. The proof the judge collects will show I am right.''

 Search warrants were issued on airlines, armored truck companies, airports and highway toll offices. Police searched Banco Francés, HSBC Bank and other companies alleged to have participated.

 An HSBC spokeswoman said bank officials had no comment. A Banco Francés source said bank officials had turned over documents, computer tapes -- and customs records showing more cash came into Argentina than left.

 ``If a surveillance camera shows trucks passing, that doesn't mean they saw what was inside,'' said the Banco Francés source, who spoke on condition that he not be identified. ``That truck could be empty or going to pick up money.''

 Duhalde's office said the president had no comment.

 Congressman Carlos Raimundi, a member of the new investigating panel, acknowledged that taking money out of the country is not in itself illegal. The panel, he said, needs to determine whether any public officials are guilty of ``influence trafficking'' by leaking information.

 ``Banks cannot take their money out of the country and at the same time say they cannot cover their deposits,'' Raimundi said. ``Argentina is in a state of crisis. People trusted the word of politicians and economists.''

 Trust is lacking in Argentina, where thousands of union members, businessmen and other citizens have taken to the streets in protest. The government responded by
 giving Argentines more access to their cash, but at values lower than what they deposited.

 The peso, which until two weeks ago was pegged one to one with the dollar, sank to two pesos per dollar Thursday.


 Lack of confidence in the economy could be a key -- and legal -- reason so much money left Argentina last month, Congresswoman Graciela Ocaña said. Ocaña pushed for the congressional panel after witnesses to the alleged convoy showed up at her office, she said.

 ``Maybe this was just the normal result of so much capital leaving the country. So much money was transferred out that at some point, that money had to physically
 leave,'' she said. ``Maybe this is all legal, but we want this abnormal activity investigated.''

 American Airlines spokeswoman Martha Pantin said she was confident the investigation would show the airline did not move any money.

 ``We understand they are checking all the carriers, so it would not surprise us if they are checking us too,'' she said. ``We have not transferred any money. They can
 check our books.''

 United spokeswoman Chris Nardella said the airline is ``working with local authorities.''

                                    © 2002