ARGENTINA'S DIPLOMATIC "CAR TALK" SCANDAL ROLLS ON

UNCLAS BUENOS AIRES 000146 SIPDIS SENSITIVE SIPDIS DEPT FOR L/WHA; L/M; L/DL; OFM; S/CPR E.O. 12958: N/A TAGS: AMGT KLIG KCOR KTIA ODIP PREL ASEC KREC AR SUBJECT: ARGENTINA'S DIPLOMATIC "CAR TALK" SCANDAL ROLLS ON REF: (A) BUENOS AIRES 0085 (B) BUENOS AIRES 0078 ¶1. (SBU) Summary: "Car Talk" continues to fill the daily press with new twists in allegations of illegal diplomatic car sales. The Supreme Court is expected to announce it found insufficient evidence against foreign diplomats to warrant its involvement in the case, somewhat vindicating the diplomats who objected vehemently to MFA, Customs, judicial and media handling of the case. Public interest in the U.S. Embassy's possible involvement in shady car transactions has dwindled. Press reports claimed the GOA would seek USG assistance in obtaining information related to vehicles exported from the U.S. to Argentina, but no such request has been received. Given the continuing uproar over mis-handling of car imports and sales by the MFA, we may face additional delays for processing post's paperwork at the MFA, where officials spooked by the scandal will be increasingly reluctant to sign anything. Action Request in para 11. End summary. Court Cases Losing Steam -------------- ¶2. (SBU) The Argentine Supreme Court is expected to return to a lower court the investigation of the "diplomatic car scandal," based on a finding by Attorney General Esteban Righi that there was not yet enough evidence against any diplomats to warrant a request for waiving immunities. The "diplomatic car scandal" is now under the jurisdiction of two parallel court cases: one led by federal judge Norberto Oyarbide, investigating a complaint filed by FM Jorge Taiana, the other led by judge Jorge Brugo, investigating a complaint filed by the head of Customs, Ricardo Echegaray. There is another, older case, overseen by judge Claudio Bonadio, based on charges filed by two private citizens against car dealer Pablo Rodolfo Rodriguez. (It was this case that first implicated MFA officials, reportedly prompting FM Taiana, seeking cover, to file the MFA's poorly documented complaint on January 21.) ¶3. (SBU) Judge Brugo took over the Customs case from Judge Marcelo Aguinsky, who conducted a search of the MFA and discovered that relevant MFA files for 2004-06 had been destroyed. He seized three computers, but press reports claimed these computers had recently been overhauled. Judge Aguinsky also made headlines when he ordered the confiscation �A;of 56 of the vehicles under investigation. The press has identified the current owners of many of those vehicles. Due to the high prices of the models involved (e.g., Porsche, Lamborghini, Hummer, etc.),many of these "diplomatic cars" are now in the hands of wealthy celebrities, most of whom insist that they bought the vehicles in good faith from middlemen. Diplomats Up in Arms -------------- ¶4. (SBU) The diplomatic community has reacted very negatively to the complaint filed by the MFA, criticizing it and other government entities involved in press leaks (Customs and the investigating judges) for lumping together truly suspect cases with patently innocent ones and causing much distress to diplomats unfairly impugned in the press. Russian Ambassador Yuri Korchagin speculated to the press about a possible political motive for the scandal, saying "it seems that someone seeks to alienate the foreign embassies from the MFA." He also mused, "We do not understand why the press has been playing up the fantasies and commentaries of dilettantes." Chilean Ambassador Luis Maira, whose name also appears in connection with the scandal, pointed out that he personally had not imported any vehicles but had, as chief of mission, signed necessary paperwork for embassy employees to clear their goods through customs, as required by the MFA. ¶5. (SBU) The Cuban ambassador, reportedly frustrated by repeated failures to get information from the MFA, showed up at the MFA unannounced, demanding an explanation. The Spanish DCM demanded and obtained a public apology from VFM Garcia-Moritan for the MFA's sloppiness in listing him by name in connection with the importation of a 1957 Austin, even though all duties had been paid on the vehicle. The Spanish diplomat was outraged that local press reports linking him unfairly to the scandal had been picked up in the Spanish media, to the potential detriment of his career. ¶6. (SBU) Following complaints from members of the diplomatic corps that the MFA had taken them by surprise with its formal complaint and leaks to the press, the MFA circulated a diplomatic note explaining that "in 2007, the MFA's Internal Auditing Unit prepared a report on the performance of the Department of Diplomatic Privileges. On the basis of a sample of 98 cases drawn from a universe of roughly 1000 cars, presumed irregularities were detected in the issuance of diplomatic exemptions during the period 2004-2007. As a result of this report, there is an internal administrative disciplinary action under way which is sensitive, protected information. Likewise, the corresponding complaint was thus presented to the judicial authorities. The MFA has implemented several measures to improve the system for issuing exemptions. While fully allowing for the division of powers and to the extent the MFA receives information from the court authorities, the MFA will keep the diplomatic corps posted." MLAT Request? -------------- ¶7. (SBU) Public interest in this Embassy's possible involvement in shady car transactions has dwindled, but the press has reported that the GOA might use the Mutual Legal Assistance Treaty (MLAT) to ask the USG to provide information on the sale and export of cars from the U.S. to Argentina relevant to the investigations under way (by non-U.S.-diplomats, citing a Venezuelan attache's purchase of a Lamborghini as an example). Under the MLAT, a GOA request would go directly from the Argentine Ministry of Justice to DOJ in Washington. To date, the Embassy is not aware of any such MOJ-DOJ communication. Other embassies lifting immunities? -------------- ¶8. (SBU) There have been press reports that other diplomatic missions in Buenos Aires were preparing to waive immunities in cases involving some of their employees. Embassy contacts with other embassies indicate that, in the absence of requests from the GOA for specific information, such actions would be premature. (The Bolivian and Paraguayan embassies are reported targets for multiple investigations.) Tensions in the GOA bureaucracy -------------- ¶9. (SBU) At the MFA, the two most prominent casualties of the scandal to date have been Jorge Matas, who headed the Exemptions Department until about six months ago, and Eduardo Mitchel, his replacement since then. More broadly speaking, another MFA casualty may be its relations with at least 14 embassies identified in the MFA complaint. In addition to getting much of the local diplomatic community up in arms, the MFA also seems to have irked other GOA agencies. Customs Director Echegaray publicly complained that the MFA had never notified Customs of some of its new rules, procedures, and limits for importing diplomatic vehicles. Echegaray's deputy was forced to resign over this scandal, and February 6 it was reported that Alberto Abad, head of the GOA's internal revenue service (AFIP),had ordered the removal of two more of Echegaray's team, including the Customs Inspector General, prompting speculation about increased tension between AFIP and Customs, and that Echegaray may be asked to leave also. Some informed observers tell us that the scandal, as it threatens to lead to internecine warfare within the GOA and wreak havoc on Argentina's relations with several Latin American and European countries, could potentially threaten Taiana's continued tenure at MFA. Embassy's Internal Investigation -------------- ¶10. (SBU) At the request of the Ambassador, RSO conducted an internal investigation into the allegations involving one mission employee. RSO did not uncover any evidence of criminal activity or fraud. A separate cable containing the report of investigation was sent via DS channel to DS's Criminal Investigative Liaison (CIL) Office. Action Request -------------- ¶11. (SBU) Post will not approach the MFA regarding the alleged case against the former mission Officer, but post does request the Department's guidance regarding what post can say publicly or in private to the MFA if asked about the case, or if the MFA requests information or copies from post's administrative files. Additionally, we would like clear guidance as to our response if post is asked to waive any immunities. Comment -------------- ¶12. (SBU) The Supreme Court's expected concurrence with the Attorney General's finding (see para 2 above) should shift, at least momentarily, the focus of the criminal investigations away from diplomats to the shady middlemen who brokered the car sales and the GOA officials complicit in the evasion of duties. The Supreme Court reserved the right to take up the case if evidence of diplomats' knowing involvement in these schemes is uncovered. While we believe the Embassy will not be a fruitful target of investigation, we may well be affected indirectly by the scandal's fallout. In other GOA ministries shaken by scandals, we have seen officials become excessively cautious about signing their names to anything. We have already seen reports that the MFA will review and computerize all car records for recent years. Pushing post's paperwork through the GOA bureaucracy will probably become even more onerous as MFA officials, already known to be sticklers, may carry their caution to extremes. WAYNE