The bill to nationalise currency printing company Valores de Sudamerica (CVS), formerly Ciccone, was passed yesterday in the Chamber of Deputies. This means the state will now control the printing of money in Argentina. The bill was passed last night after nine hours of debate. It received 145 votes in favour, 77 against and four abstentions.

The law declares the printing of money a matter of state interest and awarded President Cristina Fernández de Kirchner the power of executive intervention in money printing.

The bill’s success owes to its widespread support across political parties. As well as receiving support from Kirchnerist allies such as the Frente Cívico Santiagueño, Nuevo Encuentro and  Movimiento Popular Neuquino, many opposition members also voted in favour. These included members from traditional opposition parties Proyecto Sur, Unión Peronista and Frente Cívico de Cordoba.

However there was also much criticism of the bill, focused on the allegations of corruption surrounding vice-president Amandou Boudou. Boudou is accused of using his influence to favour the former owners of CVS, which was saved from bankruptcy in 2010 by Investment company The Old Fund. Critics claim Boudou’s links with The Old Fund are suspect and the current investigation into the deal brokered between them is still underway.

A key aspect of the investigation aims to uncover the owners of the Old Fund. Yesterday, opposition members both accused the government of trying to cover up the Boudou-Ciccone scandal with this law and also lambasted the government for taking over control of a company without knowing this information.

“Those who vote for this bill will be voting blindly,” said Deputy Patricia Bullrich from Unión Por Todos. “They could be voting for a company paid for with money from drug trafficking or money laundering.”

Frente para la Victoria deputy Agustín Rossi Rossi spoke out against these views last night, saying there had been many cases where businesses had “sought to disrupt democracy with accusations of corruption.”

Many supporters of expropriation spoke out in favour of the bill, claiming the ongoing investigation into Boudou and Ciccone was not relevant to the nationalisation of money printing.

Leader of opposition group Proyecto Sur, Fernando “Pino” Solanas said expropriation “would not interfere with the current judicial investigation.”

For more information on the history of Ciccone, CVS and ‘Boudougate’ read our in-depth news feature

Argentina is adding another notch to its expropriation belt, this time with money printing.

Following a quick series of debates and decision-making in Congress, the Argentine state became the brand new owner of the Compañía de Valores Sudamericana (CVS), formerly Ciccone Calcográfica. The acquirement of this mint puts the responsibility of peso printing in the hands of the government, declaring minting to be a matter of national interest.

“The state considers recovering the capacity to print the nation’s money to be of prime importance,” said the governmental document released upon announcement of the expropriation plan.

Congress debated taking over Compañía de Valores Sudamericana (CVS) (Photo: Pedro-Ignacio-Guridi)

The law appears at a time when vice-president Amado Boudou is in the spotlight for a scandal involving the ex-Ciccone. A federal judge is investigating Boudou for allegedly helping the company out of bankruptcy last year. Influence peddling, illegal enrichment, tax evasion, and money laundering are at the forefront of the accusations.

The timeliness of the expropriation has opposition outraged, saying the nationalisation of the mint is only a means of protecting Boudou. Meanwhile, the government is in a race against inflation.

The Bill, and a Story

On the 7th August, Minister of Economy Hernán Lorenzino and head of the CVS mint, Katya Daura, led a 60-day intervention of CVS, simultaneously announcing a bill to expropriate the company.

The expropriation makes CVS, which prints sensitive material such as bank notes, the second money printing company owned by Argentina. La Casa de Moneda prints peso notes, passports, stamps and official forms.

Lorenzino said the intervention was meant to “protect workers’ rights” as well as to keep the company going. He added that the government’s intervention of the company will “ensure the sovereignty of the state in the production of security papers”.

The bill entered its first day of debate in the Congress on 8^th August. Just ten days later, following a debate presided over by Boudou in his role as president of the Senate, the upper house passed the bill with a vote of 44-20. A week later, on Wednesday 22th August, the bill was passed into law by the Chamber of Deputies, by 145 votes against 77.

Frente para la Victoria (FPV) Senator Aníbal Fernández said that 'is to recuperate sovereignty in the printing of legal tender.' (Photo: Santiago Trusso)

Frente para la Victoria (FPV) Senator Aníbal Fernández spoke about the government’s purpose of expropriating CVS, saying it “is to recuperate sovereignty in the printing of legal tender.”

And now, full ownership of CVS will be handed over to the Argentine state, in turn cancelling the company’s tax debts, recovering its property, and converting the company’s employees to government workers.

Employees will retain labour rights, union affiliation, and their collective bargaining agreement.

The price to be paid for CVS will be decided, as in previous instances, by a valuation tribunal. However, the plan is to take into account the $250m in debt owed to tax agency AFIP. Because the amount is higher than the value of CVS’s assets, Lorenzino said he expects the expropriation will not cost the state any money.

According to the expropriation law, Lorenzino and Daura will be in charge of the mint. The two are known to be close allies of Boudou, raising potential complications and questions about the Boudou investigation’s overlap with the expropriation.

Judicial sources told local newspaper Infobae that the expropriation will not affect the investigation of Boudou and others.

The issue of Boudou’s alleged involvement with the company featured prominently in the parliamentary debate. Swaying from the opposition, senator Luis Juez, member of the Frente Amplio Progresista (FAP), voted in favour of the bill, saying, “there is no reason why the prosecutors and judges cannot get to the bottom of the matter.”

FAP submitted a similar expropriation bill in April, as did the Union Civica Radical, both of which voted against the expropriation in Congress.

Opposition has been resonant in recent weeks, with dissident Peronist deputy Eduardo Amadeo saying, “the measure shows its need to cover up a million-dollar case of corruption.”

Deputy Patricia Bullrich of the Unión por Todos party, believes the seizure of CVS is meant to protect Boudou.

“Because Boudou bought the company through figureheads (people who conceal these kinds of purchases by government officials) and today this purchase is so evident, that the government can’t find a way to continue covering the scandal. It wants to do it by purchasing silence,” she said in an interview with the Argentina Independent.

Santiago Drangosch, a member of the Partido Liberal Libertario, says the situation is like “a script for a movie.”

Drangosch, who is against the expropriation, saying it goes against property rights and the constitution, questions what will happen with the debts Ciccone owes, and believes this decision is the “final destruction of all that’s institutional”.

The Case

In a case nicknamed by the press as ‘Boudougate‘, vice-president Boudou found himself in a financial scandal with ties to shell company The Old Fund and the ex-Ciccone press.

‘Boudougate‘, vice-president Boudou found himself in a financial scandal with ties to shell company The Old Fund and the ex-Ciccone press. (Photo: Itupictures)

According to a timeline report in La Nación newspaper, in July of 2010, a judge requested Ciccone’s bankruptcy following the company’s severe debt. In September 2010, The Old Fund gave the company $2.3m to rise out of bankruptcy. In turn, The Old Fund’s president, Alejandro Vandenbroele, became president of the ex-Ciccone.

The scandal came to light this February when Vandenbroele’s ex-wife told the press that Boudou was part-owner of CVS. Boudou denied associations with or knowledge of Vandenbroele, though it was later found out that Vandenbroele had paid some bills at an apartment of Boudou’s in Puerto Madero, leading to suspicions that Vandenbroele was living there.

As evidence and information began to leak, more instances of a monetary relationship between Boudou and The Old Fund began to reveal themselves. In 2010, The Old Fund supposedly paid for several trips for Boudou’s friends, including a trip to the World Cup in South Africa for Boudou’s friend and Vandenbroele’s business partner, Jose María Núñez Carmonia, and a trip to the United States for Boudou’s brother.

When Boudou joined Cristina Fernández de Kirchner as vice-presidential candidate in the election race, their party, FPV, allegedly paid $1.9m to CVS to print primary election ballots, and $2.9m for the presidential election ballots in October.

A written report presented by prosecutor Jorge Di Lello accuses the vice-president of a “vertiginous and unjustified increase in personal wealth,” while Boudou was economy minister from July 2009 to December 2011.

President Fernández has not made any comments regarding the matter, and has stood by her cabinet.

In the bill to declare the company “of public interest and subject to expropriation,” the government did not mention the scandal, or open files in business and criminal justice.

Boudou denies allegations saying he is the victim of a “media and judicial conspiracy.”

Money in Argentina

Until recently, Argentina’s state-owned mint, Casa de la Moneda, administered by the Ministry of Economy, was solely in charge of printing Argentina’s paper money.

One of the badly printed 100 peso notes from Brazil (Photo: nachoherrera)

In November 2010, following a rising inflation that unofficial sources placed at 25% annually, and an inability to keep up with the demand for pesos, Argentina sought temporary help from Brazil’s Casa da Moeda mint. The company printed 130 million $100 notes, and another three billion $100 notes the following January. This was the first time Argentina sought help from Brazil in regards to money printing.

Despite the scandal surrounding CVS and Boudou, the Central Bank of Argentina went ahead in March with contracting CVS to print money. The first CVS-produced bank notes were released this May.

Though the possibility of printing $200 bills has been presented, President Fernández and the government have refused to print bills of a higher denomination. Critics say it is because there is a denial of inflation, and a fear of soaring prices reminiscent of past hyper-inflations.

“It’s because of inflation that people require more bills,” says Maximiliano Castillo, who is the director of economic research company ACM in Buenos Aires. “The government doesn’t want to print bills of higher denomination.”

Supporters of the new law believe the government makes a valid point with the expropriation. Senator Fernández said control of the printing is something “the state should have never given away.”

Instead of Argentina now working with both a state-owned and a private company, it is expected that the Casa de la Moneda will absorb CVS and its resources, resulting in one state-owned mint to cover all of the country’s currency printing needs.

Across the world, countries have various means of currency production, some relying on state-owned companies, others on private companies, and yet others on a mix of both.

Australia’s state-owned Note Printing Company prints the country’s own polymer banknotes, as well as some banknotes for countries like Chile. Meanwhile, in Canada, two private companies — BA International Inc and Canadian Bank Note Company — produce bank notes, and the state-owned Royal Canadian Mint produces coins. In the United Kingdom, the Bank of England plus seven retail banks are capable of printing banknotes.

Bullrich speaks to the opposition’s standpoint saying, “The state already has a company to make money, why would it need two? I see nothing positive in buying a company to perform a function that is already met by another company.”

Meanwhile, Senator Fernández said, the purpose of the expropriation was to “avoid that business that should be handled by Argentines, be handled by others.”

What do Argentines think about the expropriation of CVS? Click here to find out.

Yesterday, Congress passed a bill to nationalise currency printing company Compañía de Valores Sudamericana. According to the government, the printing of money should be the responsibility of the state. However vicepresident Amado Boudou is currently mired in a scandal with the company formerly known as Ciccone, prompting many to doubt the motives behind the decision.

We took to the streets to ask what the Buenos Aires public think about the controversial bill.

Portraits by Felipe de la Fuente.

Guillermo Godoy, 56, agricultural expert, Bragado

There are two main reasons I’m against the expropriation. First, we need to recognise the corruption of the government in relation to inflation which is increasing every month and galloping out of control. We need to understand what’s happening with inflation are recognise that there are problems and that we can’t rely on the mint to print money as is necessary.

Second, there is the issue of the corruption of Boudou which we saw yesterday in the national congress in the Senate. This was a situation which proved the hypocrisy of the government – it seems unbelievable that Boudou presided over a session about the expropriation of a company which he is thought to be guilty of having corrupt links to.

Maria Pecaldi, 61, retired, Saavedra

The Ciccone issue is another example of scheming behaviour from this government at an infamous level and has been done to disguise bigger scandals within the government. The only role that we as the public can play in this, the only thing we can do is to think carefully about how to vote in the future, it’s the only power we have here.

The Boudou scandal is yet another thing, I don’t think much else could surprise us in relation to him now. Unfortunately we are getting too familiar, and this is the worst thing, to the fact that everything is a mess. Look wherever, health, education, trains. Instead of increasing things we are cutting them. It all makes me very angry.

Fabián Acevedo, 46, architect, Zona Norte

I think that this is all very strange. It gives me the impression that things are being covered up, that this is an effort to hide something else that is happening behind the scenes. This is a political move to cover up the scandal with the economy minister Amandou Boudou.

I don’t think that the state should be taking control of a company which has had very shady links with the economy minister. I trust private companies a lot more to handle the printing of our money. I don’t think this is a good thing at all.

Christian Dojosoba, 26, anthropologist, San Telmo

Politics is all very complicated, particularly this. It’s difficult to know whether it’s a good or bad thing. In general completely agree with the principle of the state taking control of its own industries. It seems right to me that the national government should manage the printing of its own money. It shouldn’t be the responsibility of private companies.

I was in favour of the nationalisatoin of YPF. I think all countries should be able to manage their own resources and I thought that was a good thing. Though the situation here is a bit different. There are all the issues with Boudou and I’m not sure what I think about that scandal.

Cristina Uranoa, 43, music teacher, Microcentro

I think that this has been done to cover other things. It isn’t clean and it isn’t transparent. I don’t think the printing should be in the hands of the state. Maybe if it was done in a clean and transparent way and if it was handled well then yes, but this isn’t good. It seems very suspicious. It’s not that I think private companies should be trusted more in general but in this case I don’t think the government should have control.

The bill to expropriate currency printing company Compañia de Valores Sudamericana (CVS) could become law this afternoon if it is passed in the Chamber of Deputies. The session began in the lower chamber at midday today in the presence of 146 deputies.

The law has already progressed through the Senate and was passed on 16^th August. Today, the Chamber of Deputies will discuss whether the printing of money is a matter of “national interest” as well as the accusations of corruption surrounding vice-president Amando Boudou.

Boudou is accused of using his role to favour the current owners of CVS, however Frente para la Victoria deputy Diana Conti said that Boudou was not implicated in a “relevant” way in the current decision. Boudou remains supported by President Cristina Fernández de Kirchner’s party

The bill has gained both support and opposition from senators. Luis Juez, a Frente Ampio Progresista senator was one of the opposition members who voted in favour of the bill, similar to one he had submitted in April.

However many are still against the bill, including opposition deputy Elisa Carrió who today sent a letter to the Lower Chamber demanding the law was stopped.

In the letter Carrió said “(the intervention) not only constitutes a ploy to cover up crimes which are currently under investigation but also amounts to a serious institutional precedent as if approved, the law will… constitute a usurpation of functions and a serious violation of the republican government.”

The government argues that the printing of money should be the state’s responsibility and according to the bill it is “a matter of public interest and subject to expropriation”

The verdict is due later today.

The Senate approved last night the bill to expropriate the Compañía de Valores Sudamericana printing company (CVS, formerly known as Ciccone) for 44 votes against 20.

The company was intervened by the government on 7th August, and that same day the draft expropriation bill was submitted to Congress.

Last night’s debate in the Senate lasted for six hours and has been described by the Argentine media as “tense”. The main criticism from the opposition was towards vice-president Amado Boudou, who was present during the debate in his role as president of the Senate and who is being investigated for allegedly using his influence to favour the current owners of CVS. Opposition senators accused the government of using the expropriation to divert the attention from the judicial case.

The government managed to secure a broad majority thanks to the support of some opposition senators, such as four dissident Peronists and Luis Juez, from the Frente Amplio Progresista (FAP). Juez had submitted a similar bill in April, and despite sharing his concerns regarding the Boudou case, voted in favour of the government’s bill, as he stated that “there is no reason why the prosecutors and judges cannot get to the bottom of the matter.” The FAP’s vote was divided, as the rest of Juez’s fellow party members voted for the negative.

The Unión Cívica Radical (UCR) had also introduced a similar bill in April, however casted a negative vote last night, as well as part of the dissident Peronism and the Coalición Cívica (CC).

The Frente para la Victoria (FPV) senators defended vice-president Boudou against the accusations, and justified the expropriation by saying that the government’s intention is to bring the ability to print bank notes back to the state, something that, senator Aníbal Fernández stated, “the state should have never given away.” Fernández also mentioned that CVS has a $250m debt with tax agency AFIP, which will be taken into account when calculating the compensation the state will pay the current owners.

CVS is in charge of printing sensitive material such as bank notes. The bill approved by the upper house yesterday declares the company as a “matter of public interest and subject to expropriation.” The Chamber of Deputies will vote on it next week and, if passed, it will become law.

With 63 votes in favour and 3 against, the new prosecutor general Alejandra Gils Carbó was appointed by the Senate yesterday. It will be the first time a woman holds this position in Argentina.

The previous prosecutor general, Esteban Righi, resigned on 10th April after almost 8 years in office. His resignation came after vice-president Amado Boudou sued Righi’s law firm for allegedly offering him to “improve his relationship” with the federal justice, in the context of his implication in the ex-Ciccone case.

After Righi’s resignation, the executive put forward former head of SIGEN (the executive’s internal auditing body) Daniel Reposo as candidate for the job. However, Reposo’s nomination was resisted by the opposition due to his poor performance at a Senate hearing and irregularities in his CV. The opposition claimed that Reposo’s nomination was purely political, and that he was not up to the task. Reposo stepped down before the Senate vote, and Gils Carbó was subsequently nominated by the executive on 11th June 2012.

Gils Carbó is a lawyer, has over 18 years’ experience working within the justice system, and has been general prosecutor since 2004. She caused a mostly favourable impression in the public hearing held by the Senate last week, where her competence and independence were tested. Opposition senator Liliana Negre de Alonso, told Infobae.com that “the public hearing, where we were able to get to know the candidate, was important”. In the public hearing, “she did very well, she spoke about all the issues and left the senators satisfied [with her answers].” This won her the two-third majority vote she needed to be appointed as the head of all prosecutors.

After appointing Gils Carbó, the Senate will today meet to debate the bill to expropriate the ex-Ciccone. It is expected the Senate will pass the bill, which will be debated by the lower house next Wednesday.

Yesterday, Minister of Economy Hermán Lorenzino and head of the Mint, Katya Daura, led a 60-day intervention of the Compañía de Valores Sudamericana SA (CVS, formerly known as Ciccone). The intervention was decided by the executive, which also drafted a bill to expropriate the money-printing company.

The expropriation bill will begin to be debated tomorrow at 11am by a plenary meeting of the Senate commissions of Budget and Constitutional Matters. It is expected that it will be debated on the floor next week.

The large debt the company has with tax agency AFIP will be taken into account when calculating the price to be paid for the expropriated company. As that debt is estimated to be higher than the value of the company’s assets, Lorenzino said he expects the expropriation will not cost the state any money.

Lorenzino also explained that the intervention was done to “protect workers’ rights” as well as to keep the company going.

The CVS is in charge of printing sensitive material such as bank notes. Lorenzino believes that government intervention of the company will “ensure the sovereignty of the state in the production of security papers”.

Ciccone was the former name of the printing company that filed for bankruptcy in July 2010. The subsequent lift of the bankruptcy and the role that then economy minister and now vice-president Amado Boudou had in it are being investigated. Judicial sources told local newspaper Infobae that the decision to expropriate the company should not have any effect on the investigation.

Vice-president Amado Boudou has hopped into the fire once again, after the Anti-Corruption Office denounced him for allegedly falsifying an affidavit that excluded his car from his divorce proceedings.

Local media were all ablaze with reports that the second in command said he lied about the date he purchased a car. By doing so, it would have been declared his “own good” rather than shared property, thus excluding it from his assets during his divorce from Daniela Andriuolo.

If Boudou is found guilty by Federal Judge Julián Ercolini, the crime is punishable with from 15 days to two years imprisonment, plus perpetual disqualification to hold public office.

The presentation was made by Mario Mazzitelli, Secretary General of the Authentic Socialist Party (PSA). El Día reports that Mazzitelli based the claim on the data already verified in another open criminal investigation against former economy minister, stating that Boudou said he bought a 1992 Honda Civic CRX del Sol, on 1st July 1992.

“On 1st July, 1992 the car was not even in Argentina,” Mazzitelli said, according to El Día.

Boudou is already up to his eyeballs in corruption allegations. Boudou has been accused of using his political influence to help an ailing company, one with which he may have had personal ties. Last week, Prosecutor Jorge Di Tello also ordered the opening of an investigation into alleged illegal enrichment by the vice-president.

Prosecutor Jorge Di Tello has ordered the opening of an investigation into alleged illegal enrichment by Vice President Amado Boudou. Alejandro Vandenbroele and José María Núñez Carmona, both involved in the former Ciccone case, are also tied to the new investigation.

The allegations come in the context of a case filed by federal judge Ariel Lijo, who presented prosecutor Di Tello with evidence suggesting Boudou, along with several close companions, received unjust enrichment over the last decade.

A complaint filed by lawyer Alejandro Sánchez Kalbermatten, who represents journalist Cristian Sanz in the Ciccone case, lists several friends, businesses, and properties related to Boudou that have reaped dubious benefits during the period that will fall under the investigation.

The lawyer asked that the investigation look into “direct or indirect shareholding in the companies suspected of corruption,” including Compañía de Valores Sudamericana SA, Ciccone, and London Supply SA.

Additionally, prosecutor Di Tello has been urged to investigate inconsistent funds dispersed in several local bank accounts.

As a result of the recent deepening of the investigation, judge Lijo will be examining both the Ciccone case and the new claims of unjust enrichment.

Daniel Rafecas, the judge who was presiding over the case involving the vice-president Amado Boudou was yesterday relieved of his role due to an apparent lack of “impartiality”. It was announced today that Ariel Lijo is to replace him.

The case – in which the vice-president is accused of abusing his influence to help an acquaintance – has been mired in controversy since the beginning. Diego Pirota, the lawyer defending the associate and close friend of Boudou, José María Núñez Carmona – also implicated – challenged Rafecas weeks ago saying that he had “lost the impartiality to understand the case.” This accusation was upheld yesterday by the appeals court, which came to the conclusion that there were reasons to doubt the judge’s impartiality.

The accusation was based on messages that Rafecas had sent on a mobile chat network to another lawyer, Ignacio Danuzzo Iturraspe, that concerned the trial.

Today, the appeal courts drew a replacement judge from lots – typical in the Argentine judicial system – and selected Ariel Lijo to continue with the case.

One of the first problems he will have to deal with is figuring out whether of not the public prosecutor, Carlos Rívolo, whose impartiality has also been questioned, is fit to continue with the case.

Boudou is accused of using his political influence to help an ailing company with which he may have had personal ties. The company, Compañía de Valores Sudamericana (CSV), formerly called Ciccone Calcográfica, filed for bankruptcy in 2010 before an investment company, The Old Fund, paid $500,000 to keep it afloat. Boudou supported rescuing the company and asked the tax office to accept the company’s payment plan. Boudou is accused of having a personal relationship with The Old Fund’s director Alejandro Vandenbroele.