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Weekly Report - 06 October 2011 (WR-11-40)

ARGENTINA: Leftist ally deserts Fernández over gold scandal

He was once a comrade, even a friend, but now Miguel Bonasso speaks of “treason” when he refers to President Cristina Fernández and defines the interior minister, Julio de Vido, and cabinet chief Aníbal Fernández as “accomplices”. Bonasso, who is due to leave his seat in the lower chamber of congress on 10 December, worked with the iconic journalist of the Latin American Left, Rodolfo Walsh, during his youth and was an active member of the “marvellous youth” of the 1970s and of the Montoneros guerrillas. However, his role as president of the lower chamber’s committee on natural resources set him on a collision course with mining interests, which he says, Fernández and the governor of San Juan, José Luis Gioja, prioritised over the good of the nation.

 

On paper, Bonasso appears to be a natural ally of the ruling Frente para la Victoria (FPV), having served as press secretary of the short-lived administration of Héctor J. Cámpora (1973) and being the author of ‘El presidente que no fue’, the book on Cámpora that inspired Máximo Kirchner to found ‘La Cámpora’, the Kirchnerista youth movement. However, he says that his position over mining policy destroyed any relationship he ever had with Kirchnerismo and he claims that the Argentine governments of Carlos Saúl Menem (1989-1999), Fernando de la Rúa (1999-2001), Néstor Kirchner (2003-2007) and Cristina Fernández granted numerous mining permits to the Canadian mining giant Barrick Gold, which violated taxation, national defence and environmental laws. “If it were just a simple act of corruption, I carried out my duty as a citizen when I denounced it to the judiciary, but this is structural corruption. We are talking about the future of the Republic,” he said in an interview with the local daily La Nación.

‘El Mal. El modelo K y la Barrick Gold’ resulted from an investigation into the dealings between the ruling party and the Canadian firm; it argues that there are several ‘secret’ gold extraction projects in the province of San Juan, which exist with the consent of the national and provincial governments. Most of Bonasso’s information was provided by a disappointed Barrick employee, whom he calls “the spy”. One such undertaking was the so-called Proyecto Argenta, which ‘the spy’ claimed was officially registered as a “project” (i.e. area of exploration) when in reality it was a fully functioning mine. The interview between Bonasso and ‘the spy’ took place in March 2009 and the Barrick employee claimed it had been in operation for at least one year. The Argenta “project” was declared a working gold and silver mine in July 2009. This would mean that during this period, the company violated at least taxation and environmental regulations and, effectively, stole the deposits from the Argentine state.

Pascua-Lama

However, Bonasso argues that the most blatant violations of the law took place with regards to the bi-national Argentine-Chilean Pascua-Lama mine. In 2009 Barrick Gold told the two governments to come up with a taxation agreement for the mine or Pascua-Lama would simply become Lama – the threat was absurd, however, because while 75% of the gold is on the Chilean side (Lama), 90% of the water used to extract it would come from Argentina (Pascua). A deal was eventually agreed and signed in secret on 29 April 2008 – just five days after the head of Barrick, Peter Munk, had met Michele Bachelet of Chile (2006-2010) and two weeks after visiting Fernández in Buenos Aires.

The deal stipulated that taxes on the “indivisible cross-border services” would be calculated “in relation to the proportion of materials removed from each jurisdiction”. This means that 75% of the gold would pay taxes in Chile and 25% in Argentina; that was an excellent deal for the company since in the former it would pay at a rate of 17% tax while in the latter it would pay at a rate of 35%. The problem with the arrangement is that Argentina would receive all the untreated, highly contaminated water used in the extraction process and the secrecy of the agreement also violates VAT and capital gains tax regulations in Argentina, a crime defined in the Argentine penal code and for which, Bonasso argues, Fernández and her ministers should be charged.

  • The glaciers

According to Bonasso, in the environmental impact studies (EIS) relating to the bi-national Pascua-Lama mine, which straddles the Andes, Barrick Gold lied about the existence of three glaciers in the area. When environmentalists on the Chilean side challenged the company’s findings with satellite imagery, Barrick Gold added an annex to the EIS proposing the cutting of glaciers Toro I, Toro II and Esperanza and moving the ice with cranes to the larger Guanaco IV glacier. “Just like one says ‘add an ice cube to my whisky,’” Miguel Bonasso concludes sarcastically.

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