Cablegate: Argentina's Diplomatic "Car Talk" Scandal Rolls On


DE RUEHBU #0146/01 0381535
O 071535Z FEB 08





E.O. 12958: N/A


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

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
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
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.


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.


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