Looking Backward to Move Forward: The Re-Opening of the Troubling de la Rúa Case

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Argentina has long been a nation of political and economic upheaval, and the recent summoning of ex-president Fernando de la Rúa before a tribunal to respond to his role in the violence accompanying riots in the Plaza de Mayo in December of 2001 served to reopen old wounds. During the recession of 2001, tens of thousands of protestors took to the streets of Buenos Aires in response to de la Rúa’s fiscal policies, which resulted in fierce demonstrations that caused 5 deaths and 107 injuries. De la Rúa eventually was acquitted of any wrongdoing in proceedings in October of 2007, but the investigation was reopened on October 7th of this year by federal judge Claudio Bonadio. To understand the motivation behind the latest call for the presentation of de la Rúa it is necessary to first examine the broad issues of his tenure in office and the reasons behind the riots.

The 1990s: A Return to Prosperity

The story of de la Rúa’s meteoric ascension to power and his subsequent fall from grace began during his predecessor’s administration in the early 1990s, which was at the time a period of presumed prosperity for Argentina. Under President Carlos Menem and his superstar Economy Minister Domingo Cavallo, new policies, such as pegging the peso to the dollar, were implemented that everyone had assumed effectively ended inflation, which had reached 5,000% by 1989. However, Cavallo’s sterling success was short-lived and utterly superficial. Tight budget control and massive layoffs caused by privatization shook the economy and resulted in a sharp spurt of unemployment, despite the facade of economic expansion.

Menem’s proclamations of economic success failed to account for the fact that all of his policies worked disproportionately in favor of the rich, perpetuating the nation’s endemic unequal distribution of wealth. Rampant corruption within the Menem government was a problem of the highest magnitude, not least in his Supreme Court, which he stacked with his political cronies. The last straw for Menem occurred in 1995: the Mexican Crisis and resulting Tequila Effect caused unemployment to skyrocket and consumer confidence to plummet, as the sudden and drastic devaluation of the Mexican peso created a ripple effect across the continent. The resulting inflation revealed the inherent flaws in Cavallo’s policies and the vast dimensions of Menem’s corruption. Over the next few years the economy began to recover, however it was too slow to appease voters. De la Rúa was able to win the 1999 elections by a comfortable margin thanks to a prevailing national sentiment of progress and reform, attitudes that were propagated by his political affiliation with La Alianza.

La Alianza was a coalition consisting of several left-leaning parties and movements, including the Radical Civil Union and The Front for a Country in Solidarity, as well as various smaller groups. The coalition basically sprang from the popular demand to halt menemismo and render the government more transparent. Its combination of progressive, center-left and populist view points was seen as a necessary step away from Menem’s neoliberal administration that had run the economy into the ground, curtailing inflation at the price of rising unemployment. De la Rúa ran on a platform that promised economic expansion and open, honest government. However, after winning the election, these ideals, most notably those of social justice, were essentially abandoned by both the president and his cabinet, except by the very popular vice presidential candidate, Carlos “Chacho” Alvarez.

The Turn of the Millenium: A Perfect Political Storm

De la Rúa was plagued by controversies throughout his two-year and increasingly tattered presidency, as seen through the eyes of the public. First and foremost was the Senate bribery scandal, wherein Argentine members of the Senate, from a variety of political affiliations, were irrefutably proven to have accepted bribes in order to expedite the passage of an anti-labor reform law. This represented a blatant return to Menem-era politics and economics, where the rich reaped the benefits of the exploitation of the system. In protest of the Alianza’s ineptitude and inadequate response to a series of lapses in public rectitude and scandals, Vice President Carlos “Chacho” Alvarez resigned, shaking the president’s already-fragile administration to its core. Alvarez’s resignation was seen as an act of understanding political character while de la Rúa’s unwillingness to fight against corruption was perceived as personal weakness, complaisance, or at worst, an admission of collusion.

If a crippling political scandal was not enough, the economy under de la Rúa was officially in a state of crisis. Faced with an enormous public debt, de la Rúa and newly re-appointed Economy Minister Cavallo invoked austere measures such as slashing state salaries and seizing pension funds. Cavallo also implemented corralitos, or withdrawal restrictions, to curtail capital flight and halt bank run. A subsequent rise in interest rates rapidly caused a severe recession and devaluation, which in December of 2001 resulted in unemployment reaching almost a 20% figure and a deficit of $132 billion (mainly to bond holders). Argentina was on the verge of the worst sovereign debt default in history.

Under the rallying cry ¡Que se vayan todos! (“Out with them all!”), cacerolazos (protests involving citizens banging pots and pans) of tens of thousands of outraged people broke out onto the streets of Buenos Aires, prompting President de la Rúa to declare a state of siege, suspending constitutional rights and equipping the government with extensive powers to quell any and all violence. In addition to the deaths and injuries in the capital city, nationwide, the death toll rapidly moved to 12, and almost 300 were reported wounded. In the face of widespread public outrage, de la Rúa resigned from office on December 21st, 2001.

Transistion of Power, Transfer of Responsibility

Eduardo Duhalde, the governor of Buenos Aires, succeeded de la Ruá, after the latter’s hasty departure. In his months as interim president he officially confirmed Argentina’s default on the public debt and terminated the dollar-peso peg. Politically speaking, he essentially served as nothing more than a bookend to the de la Rúa administration, especially when compared to the government of Néstor Kirchner, a virtually unknown Peronist senator from Santa Cruz who won the 2003 elections by default when Menem withdrew from the race.

Kirchner quickly made a name for himself by prioritizing government transparency, specifically by taking an uncharacteristically hard line with Supreme Court judges and cabinet members thought to be corrupt. Kirchner also implemented new economic policies that, although severe and extremely controversial, significantly improved the country’s shattered financial structures. These measures included drastically cutting access to foreign bond holdings abroad in an effort to achieve stabilize financial markets, the devaluation of the Argentine peso, debt restructuring with the IMF, introducing new terms of trade, as well as the implementation of new revenue measures, which in turn produced higher domestic savings. Kirchner eventually erased Argentina’s debt to the IMF in 2005. His success led to the easy election of his wife (and current Argentine president), Cristina Fernandez de Kirchner, in 2007.

Political Reconciliation

In October of 2007, de la Rúa was indicted for manslaughter for his role in the deaths caused by the riots of December 2001, as part of an effort launched by the Kirchners to resolve past political conflicts and tie up loose ends within the government. However, the charges were dismissed in April 2008 on the grounds of a lack of evidence that de la Rúa was directly involved in any alleged police brutality. In what could be seen as an attempt at reviving the spirit of governmental atonement, several weeks ago de la Rúa was once again summoned to a tribunal to account for his government’s role in past violence, with the court claiming that the closing of the investigation is not possible until every relevant avenue is pursued.

As expected, de la Rúa has vehemently denied any wrongdoing on the part of his government, maintaining that at the time he opposed the violence. He also denied the occurrence of an alleged meeting on the morning of December 20th which was supposed to have dealt with the treatment of the protestors, claiming that a government plot to repress the protesting crowds never existed. The former president insisted that the state of siege in Buenos Aires was the result of pressure coming from the city commissioners, above all from Carlos Ruckauf, whom he accused of organizing a coup to overthrow the presidency in favor of Duhalde. Unfortunately, his repeated denials of ever having authorized such action and his constant transfer of such blame only served to reinforce his reputation for weakness and ineffectuality.

Although de la Rúa came to power during a difficult time, one cannot write off his tenure as an unfortunate result of circumstance, and as simply being dealt a bad hand. His lack of support even today, nearly 10 years after the events in the Plaza de Mayo, speaks volumes about the public’s scorn for his presidency. He was elected with the hope of a more transparent, less corrupt government, but his administration’s policies and governmental culture were little more than a return to menemismo under the guise of progress and stability. While this attempt by the current administration to reconcile past injustices is admirable, it seems to be more of a futile witch hunt rather than a comprehensive solution to economic and political woes, both past and present.

De la Rúa is the de facto scapegoat of the 2001 economic crisis, and not unjustly so. But Argentina’s economic and political weaknesses run far deeper than the former president’s gigantic failures. Endemic inequality in the distribution of wealth coupled with inefficient and often corrupt governance are the real issues at hand, and the primary catalyst for the riots of 2001. While we can applaud the Kirchners for holding past administrations responsible for suffering inflicted in the Argentine people, Argentina needs more. What Argentines need is an effective government and a stable economy; they also need social protection that is not financed by distortionary taxes and a corrupt legislature. Furthermore, the Kirchners should move from the politically easy investigations of de la Rua to the investigations of true national relevance- those of the military officials involved in the real atrocities in Argentine history.