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Organized Crime Challenges Awaiting Argentina’s New President

Argentine president-elect Javier Milei addresses supporters after winning Argentina’s runoff presidential election, in Buenos Aires, Argentina November 19, 2023. REUTERS/Agustin Marcarian

Javier Milei rode promises of extreme free-market reforms and hard-nosed security policies to become Argentina’s next president. But with rising insecurity, an economy in turmoil and a minority in Congress, Milei’s platform will face many barriers.

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Argentine president-elect Javier Milei addresses supporters after winning Argentina’s runoff presidential election, in Buenos Aires, Argentina November 19, 2023. REUTERS/Agustin Marcarian

Javier Milei emerged victorious in Argentina’s presidential elections yesterday on promises of extreme free-market reforms and tough-on-crime security policies.

An economist and far-right political newcomer, Milei has sparked controversy for espousing extreme proposals like destroying the central bank, legalizing the sale of organs, and loosening gun restrictions. Although he distanced himself from these positions after coming second in the first round of elections, experts warn that Milei’s drastic policies could actually make things worse — if he is even able to pass major laws despite a lack of political allies.

Still, Milei’s calls for radical change clearly resonated with Argentines tired of 140% inflation and widespread poverty.

During his victory speech, he promised major reforms to build a “new Argentina,” saying, “There is no room for gradualism, no room for lukewarmness, no room for half measures.”

Milei takes over on December 10. In addition to triple-digit inflation, extreme political polarization, and rising public debt, he will face entrenched criminal structures.

Here are three of the most pressing organized crime problems he will have to confront.

1. Ports and Borders

Argentina neighbors major cocaine and marijuana-producing countries and has multiple international ports, making it an attractive territory for criminal groups involved in transnational drug trafficking.

The country’s northern provinces of Salta and Jujuy share a porous border with Bolivia, where the cocaine business is on the rise. A major highway, long used for cocaine smuggling, passes through these provinces, connecting Bolivia to Argentina’s biggest cities and ports. Farther east on the border with Paraguay, the provinces of Corrientes, Misiones, and Formosa are important corridors for trafficking potent marijuana grown in there.

Some of the drugs that enter the country are consumed locally. Cocaine use has historically been high in Argentina, and marijuana consumption has been increasing. But the main criminal markets are abroad. With a long coastline and numerous international ports, organized crime groups use Argentina as a transit country for drug shipments to Europe and Australia, where a kilogram of cocaine sells for many times the price of a kilogram in Argentina.

Argentina Profile

Trying to stem the influx will be difficult. Argentina’s borders are long and difficult to patrol. When one route is shut down, traffickers quickly establish another.

Instead of trying to stop the drugs before they enter, authorities may find it more effective to focus on departure points, security analyst and political scientist Diego Gorgal suggested.

“If you lower the probability of moving drugs through [Argentina’s] 20 international ports, you reduce the amount of drugs entering the country to be exported,” he said. ”It’s much more effective to control 20 ports than 2,500 kilometers of northern border.”

2. Corruption

No policy, operation, or initiative can make significant progress against organized crime so long as corruption allows groups to bypass border inspections, avoid prosecution, and launder profits.

Argentina has seen corruption cases at the highest levels of government. In 2017, former President Cristina Fernandez de Kirchner was indicted on charges of money laundering. She was accused of using her construction company, which she founded in 2006 during the presidency of her late husband, to launder bribes she received while in office. As part of the investigation, $590 million of Kirchner’s assets were frozen. The case was closed and then reopened, with one of the judges involved himself facing investigations. The case remains ongoing.

Kirchner’s vice-president, Armando Boudoud, received a five-year prison sentence in 2018 for awarding public contracts to a company he partly owned. And in 2018, federal judge, Walter Bento, was indicted for collecting bribes and laundering money in connection to the release of people arrested for contraband, drug trafficking, and falsifying documents.

How a Gender Focus Impacts Argentina’s Criminal Cases

With public officials in various branches and at various levels of government willing to take bribes, organized crime has moved in, building connections to avoid capture and flout investigations.

In Salta, a family of traffickers known as the Castedo Clan moved some 4 tons of cocaine a month from Bolivia to Argentina’s ports. They got away with this for decades thanks to corrupt officials, including a judge who gave the group’s leader, Delfín Reinaldo Castedo, warnings about operations against him, and a congressman who owned a farm on the Bolivian border that the Castedos used to move cocaine.

In Corrientes, a marijuana trafficking group known as the Gordos is accused of relying on the former mayor, top brass in the police, and other public officials to move tons of marijuana from Paraguay. Meanwhile, in Rosario, an important port city which has been plagued by violence for years, corrupt police have worked with local dealers and traffickers.

Milei has focused his attention on corruption in public works, claiming that privatization would cut down on the possibility of corruption. “If the market (individuals) want the project in question, it will not be necessary for a politician to do it, so there is a double social loss, one for differential return, and another for the money that passes through the largest number of hands. This is the basis of corruption,” he said on Twitter.

He said he will replicate the policies used in Chile to privatize elements of the public sector to reduce the amount of money passing through politicians’ hands.

3. Money Laundering

Money laundering is vital to Argentina’s organized crime groups, converting their criminal activities into usable profits. If Milei is going to address Argentina’s organized crime problems, he will have to increase the country’s anti-money laundering capacity.

“We know the complexity of the drug problem has to do with production, transport, commercialization, and also with financing and laundering. We cannot address these issues separately,” said Jorge Jofré, criminologist and judicial officer with the Province of Córdoba Attorney General’s Office.

The latest analysis conducted by the anti-money laundering unit of Argentina’s Ministry of Justice and Human Rights found that 59% of money laundering sentences in Argentina involved drug trafficking. But, according to the report, Argentine courts rarely try these cases.

A number of factors make Argentina vulnerable. For one, it lacks a centralized database of evidence for money laundering investigations, making it hard to track cases that span jurisdictions. In addition, much of the country’s economy is informal and relies mostly on cash payments, making it difficult to track financial transactions.

Local groups have been able to exploit these weaknesses to launder profits from numerous criminal activities, including drug trafficking and human trafficking. International groups, such as the Jalisco Cartel New Generation (Cartel Jalisco Nueva Generación – CJNG), and Pablo Escobar’s family have also laundered money in Argentina.

Argentine elites have been implicated in money laundering and corruption as well. The accused include ex-President Fernández de Kirchner (2007-2015) and construction magnate Lázaro Baez

The government is considering reforms to strengthen Law 25.246, which established the Financial Information Unit (Unidad de Información Financiera – UIF) and built a system to investigate suspicious operations. But given that Argentina already has laws on the books to fight money laundering, Milei will need the political will to actually prosecute major cases if Argentina is to significantly interrupt organized crime’s financial dealings.

Major reforms will be challenging. Despite recent electoral gains, Milei’s Liberty Advances party only holds a fraction of the seats necessary for a majority in both houses of Argentina’s legislature. He is likely to form a coalition with allies of ex-President Mauricio Marci and Patricia Bullrich, both of whom Milei thanked in his victory speech. The exact coalition he will make and what their legislative priorities will be, however, remains to be seen.

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