ECONOMY MINISTER MICELI RESIGNS, REPLACED BY

C O N F I D E N T I A L BUENOS AIRES 001360

SIPDIS

SIPDIS

WHA FOR WHA/BSC AND WHA/EPSC
E FOR THOMAS PIERCE
PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE
EX-IM BANK FOR MICHELE WILKINS
OPIC FOR GEORGE SCHULTZ AND RUTH ANN NICASTRI
PASS USTR FOR SUE CRONIN AND MARY SULLIVAN
USDOC FOR ALEXANDER PEACHER AND JOHN ANDERSEN
TREASURY FOR LTRAN
USCINCSO FOR POLAD

E.O. 12958: DECL: 07/16/2016
TAGS: ECON EFIN ETRD PREL AR
SUBJECT: ECONOMY MINISTER MICELI RESIGNS, REPLACED BY
INDUSTRY SECRETARY PEIRANO

REF: BUENOS AIRES 1351

Classified By: Ambassador E.A. Wayne. Reasons 1.5 (b,d)

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Summary
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1. (SBU) GoA Economy Minister Felisa Miceli, dogged by
scandal following the discovery of over $60,000 in cash in
her office, has resigned. Chief of Cabinet Minsiter Alberto
Fernandez announced Miceli's subordinate, Secretary of
Industry and Trade Migueil Peirano, will be named to replace
her for the remaining five months of the Kirchner
administration's term in office. Peirano is generally
considered to be a harder-line trade protectionist than
Miceli. End Summary

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Miceli Resigns
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2. (SBU) Economy Minister Felisa Miceli resigned her
position in the late afternoon of July 16, under increasing
pressure from a developing scandal that followed the
discovery of $64,000 in cash hidden in her office bathroom.
She had earlier released a statement that "...for my own
stupidity, I am not going to undermine a President who has
trusted me." Earlier in the day, Federal Prosecutor
Guillermo Marijuan called for a formal investigation into the
origin of the cash.

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Toilet-Gate: The Minister and the Money
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3. (SBU) Economy Minister Miceli came under scrutiny in late
June after Perfil reporter Jorge Lanata reported that during
a routine inspection by the explosives brigade in the Economy
Ministry, a bag with US$241,000 had been discovered in the
closet of Miceli's private bathroom. A Ministry spokesperson
clarified that the amount was actually more like US$60,000
and that the money had been declared in the Minister's public
declaration upon taking office. According to Miceli's
office, the money was intended for the acquisition of
property. The press and some opposition members alleged
corruption, tax evasion, and other violations. Opposition
legislators requested information from the executive and
called for Miceli's to appear in Congress to give
explanations on the case. .


4. (SBU) During the weekend of July 8-9, Cabinet Chief
Alberto Fernandez and President Kirchner came out in support
of Miceli. At the time, Fernandez stated there are no plans
for Miceli to step down, that the President believed her
explanation regarding the money, and that hers was "just a
lapse in judgment, but not a crime." For her part, Miceli
claimed there was a dirty campaign against her by some in the
Economic Ministry.


5. (SBU) Miceli's public statements did little to dispel
suspicion of wrongdoing and highlighted several
inconsistencies in her story. The press reported other
supposed anomalies such as some of the money being in Central
Bank "bundles." According to the press, the Central Bank
only provides money to banks or financial institutions, not
to individuals. Agendas that were seized by the court did
not show any indication that Miceli had scheduled meetings
with real-estate brokers, to which Miceli responded that she
had not yet found a house and, therefore, had no sales
contract or broker.

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Industry Secretary Peirano Named to Replace Miceli
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6. (SBU) At 20:10 local time, Chief of Cabinet Minister
Alberto Fernandez announced that Industry, Trade and Small
Business Secretary Miguel Periano will replace Miceli for the
remaining five months of the Kirchner administration term in
office. Well known to the Embassy, 40-year old Peirano's
current responsibilities include management of Argentina's
trade and tariff policies designed to protect and promote the
post-crisis development of Argentina's domestic industrial
base. He is generally considered to be a harder-line trade
protectionist than Miceli. Peirano participated in the June
2007 Atlanta Competitiveness Forum hosted by the Commerce
Secretary Gutierrez. In his current Economy Ministry

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position, he has not worked on finance issues, including high
profile Paris Club and bond holdout discussions.

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Comment
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7. (C) President Kirchner has yet to comment publicly on
Miceli's resignation or, in this rapidly developing story,
the decision to choose Peirano as the new Economy Minister.
While local financial markets are closed for the day, Embassy
financial service sector contacts do not anticipate any
significant impact on July 17 opening equity or debt market
prices. Miceli has been considered a weak Minister, chosen
specifically by President Kirchner to replace high profile
former Economy Minister Lavagna. Lavagna had been forced to
resign in 2005 after challenging the Kirchner
administration's infrastructure project procurement policies
and is now running as an opposition Presidential candidate.
WAYNE