Lessons Learned from "New Rules for the Rule of Law in Argentina"

Friday, October 12, 2018

Exiger’s Integrity Forum, in partnership with the Argentina Project of the Woodrow Wilson Center, and the Inter-American Dialogue, had the honor of hosting Judge Mariano Borinsky, of the federal appellate court in Buenos Aires, Argentina, as the keynote speaker at an event held on September 11, 2018 in Washington, D.C. The event featured a panel discussion, moderated by Michael Camilleri, Director of the Peter D. Bell Rule of Law Program at the Inter-American Dialogue, with expert panelists Daniel R. Alonso, Managing Director at Exiger and Chair of the Integrity Forum; Roberto de Michele, Modernization of the State Principal Specialist at the Inter-American Development Bank; and Claudia Martín, Co-Director of the Academy on Human Rights and International Humanitarian Law at American University's Washington College of Law.

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The “Notebook Scandal” reveals widespread corruption

In August 2018, Oscar Centeno, the chauffeur of a high-ranking government official in Argentina, divulged to the press eight notebooks filled with Centeno’s accounts of corrupt activities that he witnessed. Centeno’s notebooks implicated the former President and dozens of her associates in over $50 million in alleged bribes paid over the course of a decade. The “notebook scandal” shed light on the widespread corruption and sense of impunity among Argentine elites, further eroding citizens’ and investors’ confidence in the rule of law and institutional strength of Argentina’s justice system.

Prior to the notebook scandal, Argentine President Mauricio Macri already began an ambitious effort to increase efficiency, transparency, and rule of law within the justice system. A critical component of President Macri’s “Justice 2020” initiative is the reform of the national criminal code under the leadership of the Judge Borinsky, whom President Macri appointed as Chair of the Commission on Reform of the Criminal Code of Argentina.

Proposed reforms to Argentina’s criminal code

Since its inception in 1921, Argentina’s criminal code has undergone approximately 900 modifications. Nearly a century of these ad hoc amendments and revisions gradually resulted in an inconsistent criminal code, and an inefficient and politicized justice system. “That institutional challengeis a burden for Argentine society,” explained Benjamin Gedan, Director of the Argentina Project. “It hurts the investment climate by failing to guarantee property rights and the enforcement of contracts, and it fosters a sense of impunity that encourages lawbreaking.”

Despite its many modifications, the current criminal code imposes ineffective or disproportionate sentences, and lacks several crimes that a modern criminal code should entail. Judge Borinsky’s recommended reforms seek to address such anomalies, imposing new or more severe penalties for:

  • money laundering;
  • cybercrime;
  • large-scale production and trafficking of illegal narcotics;
  • terrorism and financing terrorism; and
  • violent crimes such as murder, kidnapping, human-trafficking, and sexual assault.

Daniel R. Alonso’s perspective

“You always have to ask yourself ‘what is the ultimate societal good we are seeking here?’” Mr. Alonso stated. Mr. Alonso noted that the drug trafficking and production section of the code includes a “kingpin” provision, which allows law enforcement agencies, rather than simply prosecuting drug users and low-level dealers, to focus on high-ranking criminals who are responsible for a disproportionate amount of violent crime.

Notably, the current draft of the new criminal code includes much harsher and more comprehensive provisions to counter corruption, an area that carries immense practical and symbolic weight in shaping the rule of law—or lack thereof—in Argentina. Mr. Alonso, an expert on domestic and international corruption, commended the bribery section of the new criminal code. He noted in particular that the reform closes what he refers to as the “free-money loophole” by criminalizing significant payments to public officials even in the absence of a known quid pro quo. (Mr. Alonso has previously proposed a similar reform in the United States.)

Roberto de Michele’s perspective

While the corruption sanctions presented in the draft of the criminal code would mitigate the sense of impunity among Argentina’s public officials and private sector leaders, Mr. de Michele contended that the conversation about the Argentine justice system “has less to do with capacity and more to do with independence.” In order to guarantee rule of law, the new criminal code must therefore be accompanied by an independent judiciary and solid accountability mechanisms.

Next steps

As the reform seeks to modernize Argentina’s criminal justice system, the draft of the new criminal code places a greater emphasis on international law, expanding the state’s authority to prosecute crimes committed abroad.  It also recognizes the state’s obligations to the international community regarding extradition, and compliance with international standards in financial crime and human rights law. The reform establishes a corporate liability law within the legal framework put forth by the Organization for Economic Cooperation and Development (OECD), which encourages compliance culture and incentivizes companies to cooperate with regulators and law enforcement agencies.

Although the draft criminal code also includes necessary provisions for compliance with the international treaties and conventions that Argentina previously ratified, Ms. Martín noted that the draft does not fulfill several commitments that Argentina’s made under the Inter-American Convention to Prevent and Punish Torture, and the United Nations Convention against Torture. Ms. Martín contended that such deficiencies in the current draft fail to recognize the interconnectedness of criminal law to constitutional law, and to international human rights law.

The new criminal code, should the government choose to adopt it, would be an important step in combating the culture of corruption and impunity, and affirming rule of law in Argentina. The Argentine Senate will likely review the current draft of the new criminal code at the end of this year.

 

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Daniel R. Alonso, Managing Director | General Counsel

Click to read in Spanish | Click to Download Full Spanish Bio

Daniel R. Alonso is a Managing Director based in Exiger’s New York office, where he focuses on monitorships, investigations, and financial crime compliance (including anti-bribery and corruption). A lawyer and former high-ranking federal and state prosecutor and ethics official, he brings a distinguished enforcement career of more than 20 years to Exiger. At Exiger, Mr. Alonso has led monitorships, other third-party assignments, complex investigations, and compliance reviews. He also serves as Exiger’s General Counsel.