Argentine Time Bomb

Behind the Scenes of a Narco-Scandal

By Verónica Gago
Special to The Narco News Bulletin

March 21, 2005

The “narco-scandal,” as it is popularly called in Argentina, is like a ball of yarn that just keeps on unraveling, entangling soldiers and businessmen in the business of drug trafficking and airport security. A month has gone by since the whole affair was uncovered, and it still dominates a good portion of the local press. This all comes from the revelation in the pages of the newspaper La Nación that four suitcases containing 60 kilos of cocaine came through the Ezeiza airport on September 16, 2004, bearing apocryphal luggage tags reading “Argentine embassy in Spain,” avoiding any kind of security controls in Buenos Aires and finally running aground on the luggage conveyor belt in the Madrid airport without anyone there to pick them up. What has become evident is that this is just one episode from a well-oiled smuggling machine. In fact, the case has grown to reveal the details of this machine: a strategically-located trafficking organization, operating within the Southern Winds (SW) airline in Ezeiza, with the son of the airport’s military chief as a key piece of the organization. (Editor’s note: this gave the impression in public opinion, although without proof, that the company was already controlled by traffickers.)

The case provoked a swift response from the government: President Néstor Kirchner forced the leadership of the air force, the only one of Argentina’s armed forces that until now had never been held responsible for the crimes committed during the military dictatorship… including Commodore Alberto Beltrame, the decorated veteran of the Malvinas war and Ezeiza’s military chief, as well as the father of Walter Beltrame, the SW station manager accused of having given the order to load the drugs in “flyer” suitcases – that is, luggage not belonging to any of a plane’s passengers. Kirchner also ordered the disbanding of the National Aeronautic Police (PAN in its Spanish initials), created by dictator Jorge Videla in 1977, and the creation of the new Airport Security Police (PSA), which would be run by the Ministry of the Interior rather than the Ministry of Defense. (Until last month, Argentina was one of only four countries in the world – the others being Chile, Nigeria, and Uruguay – that delegate control of commercial aircraft and airports to the Air Force.)

Another of the government’s responses was to end more than $2 million dollars in state subsidies to SW (which operates routes for state airline Líneas Aéreas Federales, or Lafsa) earmarked for fuel and salaries, and for covering the route to Tacna, Perú, on which fifty kilos of cocaine have been found on eight flights in the last six months. These measures left SW just a few steps from bankruptcy, leading Lan Chile to buy the airline last week to create Lan Argentina. This will guarantee job security for SW employees for at least the next three months, according to the government.

But what has made this case into a real Pandora’s box is the crisscrossing of local and international narco-trafficking mafias with their military, judicial and business accomplices, just as a discussion is forming on drug policy in Argentina, where cocaine use has been on the rise consistently for the last four years. In fact, the “narco-scandal” led to the launch of the first National Drug Plan, approved by decree January 20, which includes goals from “locating and neutralizing clandestine airstrips” to the regulation of alcohol and tobacco advertising. Also, in the last few days, it has become known that the government is considering creating a National School on Fighting Narco-Trafficking, which would be composed of security forces personnel.

Meanwhile, the “narco-scandal” has led to three arrests of former SW employees (including the younger Beltrame). Five other high-level officials from the airline (including SW owners the Maggio brothers) have been called in by a judge for questioning and taken into protective custody.

A Several Months-Long Delay

The narco-suitcase affair took a long time to break. And when it finally did, SW General Manager Christian Maggio was quick to point out that it was he who initiated its revelation with a complaint to Attorney General Guillermo Marijuán in October. What’s more, government officials claim that the U.S. Drug Enforcement Agency (DEA) had informed them in August 2004 that SW was under suspicion for transporting drugs among its passengers. At the time, the DEA’s reports led agents of the Argentine State Intelligence Secretariat (SIDE) to investigate a supposed drug smuggling route between the cities of Tacna, Perú, Cordoba and Buenos Aires, Argentina, and Madrid, Spain, using SW for shipping. The SIDE sent its report to other antidrug officials in the Argentine government, but it was never really given much importance.

In the last few days, thanks to the uproar over the “narco-scandal,” it has been confirmed that there were more than a dozen arrests of passengers transporting drugs on SW’s Tacna-Córdoba route in 2003 and 2004. But now fired air force chief Brigadier General Carlos Rohde (another hero of the Malvinas war who cried when the president let him go), was in on the situation. In fact, he later publicly admitted that he had committed an error in not advising the minister of defense or the president of what was happening. But this plea for forgiveness was not enough, and after an internal investigation he was placed under arrest for thirty days, as were three other officials.

Military analyst Rosendo Fraga explains:

“The number of brigadiers forced into retirement, including the current chief of staff, is unprecedented, not just for the air force but for the other armed forces. The paradox is, as the Kirchner administration prioritized trials for human rights violations in his military policy, the most tense situations were generated with the army (with its portrait of former dictator Videla hanging in the Military College) and the navy (with its historical museum in the Naval Mechanics School, or ESMA, a military facility used for torture during the last dictatorship), for the simple reason that these forces have many more people involved in these issues (related to the 1976-1983 dictatorship) than the air force. However, it is the air force that has produced a crisis for Kirchner’s presidency.”

Private Security

Private airport security is another decisive link in the narco-trafficking chain in the SW case. The company SW had hired for controls and baggage screening was Top Air Security (TAS). It was the National Aeronautic Police that certified that TAS was a competent security operation while it was that force’s responsibility to watch the company. The newspaper Página/12 revealed that one of the major leads in the in investigation is in fact the relationship between SW, TAS, and the company Aeropuertos Argentina 2000, whose privatization was one of the largest in Argentina in the last decade, and is now the property of leading Argentine entrepreneur Eduardo Eurkenaian. One of TAS’s major stockholders is Santiago Adolfo Donda, son of retired warship captain Adolfo Miguel “Palito” Donda Tigel. The senior Donda is now charged with sixty-two counts of crimes against humanity for his work at the Navy Mechanics School, and also linked to airport security through his work for shady businessman Afredo Yabrán, who died under strange circumstances a few years ago.

Donda Tigel was one of the famous directors of Zapram, the security company that oversaw money transfers at the Ezeiza airport when it still belonged to Yabrán. He also worked in Quality Control together with Víctor Dinamarca, a former agent of the Detention Service during the dictatorship, another of the repressors from that period hired by Yabrán. The online “Gallery of Argentine Torturers” records not just his government file but also his relationship with airport security. It is worth reprinting here a short article published in the newspaper Clarín on August 13, 2000, which portrays Donda Tigel’s replacement at his post in the airport by a CIA spy as a scene representative of how prized the control of airport security is:

He was introducing himself to his new employees at the Ezeiza airport when he was interrupted by a provocative shout. “Hey, Holder!” About twenty steps away, in the hanger door, appeared a disheveled Adolfo Donda Tigel, showing his teeth and giving [a rude gesture]. “I’m going to give it to you now, gringo!” he shouted.

Behind his exterior of a Harvard alumnus, Frank Holder – the one on the receiving end of the insult – is a former CIA agent who was headed for his country’s embassy in Buenos Aires, and in those days was put in charge of security for Edcadassa, the financial deposits company at Ezeiza that Alfredo Yabrán had just sold to the Exxel Group. Donda Tigel, the displaced security chief, is a former navy captain who darkened his black eyes when he participated in work groups at the Navy Mechanics School, only free today thanks to the “Due Obedience Law” [essentially a post-dictatorship impunity law that protected those involved]. The sale of Yabrán’s companies, which had recycled Donda Tigel into their private army, forced him into retirement.

This changing of the guard – Holder for Donda Tigel – happened in late 1998 and would have ended in blows in the four employees had not intervened. The scene, on a sunny morning in a part of the airport closed to the public, is a perfect example of singular transition going in on key areas of security: work abandoned by the members of the dictatorship, replaced by U.S. spies.

Who Owns Southern Winds?

The company’s main stockholder is its President, Juan Maggio. Eduardo Eurnekian, owner of Aeropuertos Argentina 2000, also has a 30 percent share in SW. Nevertheless, the company had many problems. “The numbers are overwhelming – in two years the company had losses of more than 100 million pesos ($33 million dollars) and gave up two thirds of its fleet,” says a report by the Center for Transparency in Public and Private Management, led by Doctor Paula Oliveto Lago and coordinated by legislators from the Alternative for a Republic of Equals (ARI) party. The information on the airline’s decadence was presented to the General Justice Inspection – that is to say, it was publicly available. Despite the sorry state of SW, in December, Martín Varsavsky, an Argentine businessman based in Spain, invested US$6.3 million to rent two jumbo jets that would let him increase the frequency of the Buenos Aires-Madrid flights that the company began offering in 2002. He justified this to the newspaper La Nación on November 16, 2004: “The operation of the two 747 airplanes will mean US$100 million in income annually. There are many opportunities in transportation right now because of the boom in Argentina.” On Febrary 24, Varsavsky told his version of the story to the Spanish paper

ABC: Why and when have you given them this concession?

Varsavsky: We signed it on November 19, 2004. I did it after making an analysis, a study that indicated to me that SW was, as it continues to be despite these events, a good business. It hadn’t come out of nowhere the day before; it had been operating for nine years and had won many prizes. It was a company the government was helping because it wanted to rescue the national air transport sector. Aerolíneas Argentinas had received an $800 million subsidy from Spain and used it, in large part, to destroy the local competition. It was a bit like the story of Asterix and the Romans, or David and Goliath – my specialty.

ABC: Who introduced you to the Maggio brothers?

Varsavsky: I met Juan Maggio in José Ignacio (an Uruguayan coastal resort town), where I own some property. I was driving in my four-by-four along the beach when I got stuck. The tide was rising and I was about to lose my truck, when he appeared with a friend, and they pushed me out with some logs.

ABC: You signed the deal on November 19, and the drugs were seized in Barajas on September 17. Did you know about this?

Varsavsky: No. I did not know that two months before I signed the deal they had found employees of the airline implicated in cocaine trafficking. (The Maggio brothers) never told me that. I felt they had lied to me, although now they say that they didn’t tell me because there was a gag order on the whole thing. I found out eight days ago, in the papers.

Varansky the impresario was already famous in Argentina for financing, with $111 million, another renamed project: the Internet portal Educ.ar, which was launched by one of former president Fernando De la Rúa’s sons. Another fact that can’t help but call one’s attention: Educ.ar also hired Donda Tigel to manage its security.

The United States’ Relationship

On Thursday, March 10, the United States’ ambassador in Buenos Aires, Lino Gutiérrez, visited the government and met with Ministor of the Interior Aníbal Fernández to speak about the “narco-scandal,” although the minister’s spokesmen insist that it was merely “a meeting already set January,” and delayed simply because of a “scheduling issue.” Also present at their meeting was the local representative of the U.S. Drug Enforcement Administration (DEA), Anthony Grecco.

“At no time did he give any critical opinion on the way the Argentine authorities have behaved regarding airport security or issues regarding drug trafficking,” said Fernández’s spokesmen. And they added, “transnational crime, narco-trafficking, terrorism, contraband smuggling, and money laundering were all discussed.” They also emphasized that “Aníbal Fernández publicly announced six months ago that Argentina would begin to work in conjunction with the United States in combating transnational crime.”

Despite the marginal character with which the authorities have tried to portray this meeting, one must take into account the U.S.’s insistent pressure – which was also manifested in the meeting – for the approval of three laws currently held up in the Argentine Congress: two of them regard the ratification of international conventions on the financing of terrorism (the Inter-American Convention Against Terrorism signed in Bridgetown, Barbados, and the International Convention for the Suppression of the Financing of Terrorism, adopted by the United Nations), and the other is law that would raise penalties for money laundering. If Argentina doesn’t approve these laws before June, it could end up excluded from the Financial Action Task Force on Money Laundering (FATF). The threat had a rapid effect: Congress will decide on all three in the next few weeks.

Added to these recommendations the paragraphs from the annual State Department drug trafficking report, signed by Condoleezza Rice, that deal with Argentina, and which the ambassador had also pointed out in his meeting with the Fernández. The report underlines the recent appearance of cocaine laboratories in Greater Buenos Aires, the metro area surrounding the capital that is home to more than ten million people. Colombian drug traffickers, according to the report, set up these laboratories to process coca base paste that they import from Bolivia. Another fact the report notes is a rise in the sale of “paco,” a drug similar to crack. The State Department, however, called the coordination with Kirchner in 2004 “excellent.”

The test comes on March 22, when U.S. Defense Secretary Donald Rumsfeld arrives in Argentina. His mission is now well known: to speed up the installation of high-tech surveillance equipment in the country’s borders. The control and militarization of the land is the U.S.’s biggest goal, which the above report cites as a decisive point, urging “the creation of a Tri-border task force in the province of Misiones.” Comments have also circulated from drug Czar John Walters, speaking of “the narcos’ efforts to come to Argentina,” as a strategic point for traffic to Europe.

The narco-scandal has brought up the issue of drug trafficking in Argentina – the statistics, the routes, the complicity – and opens the question of what policy the government will follow. That is to say, if the state really has the capacity to manage security when, in the case of SW and the Ezeiza “drug pipeline” (but also other cases), the control seems to lie with the mafia, along with the winking complicity of numerous officials. In fact, the legal investigation is now working under the hypothesis that it will find an organization tied to the country’s political and economic elite, with the participation of security forces.

The situation of many important government members remains unclear – in particular, the Argentine ambassador to Spain, Carlos Bettini, who was director of Aerolíneas Argentinas until 1998, when that company began its partnership with SW. According to Spanish investigators Carlos Alvarez Teijeiro and José Cretazz, “the company had an agreement with Southern Winds, which acted as a ‘feeder line’ (a branch separated from the airline’s main routes). It is, very possibly, the first time in the history of commercial aviation in which a company paid a flat rate to its feeder line, independent of the number of passengers it is transporting.” (Read the report here.)

Another unresolved issue is that of Transportation Secretary Ricardo Jaime, who despite explicit support from the government could not avoid falling under prosecutor Ruiz Morales’ magnifying glass for the link between his department and SW. “The justice department wants to establish the relationship between SW and the Transportation Department,” a source close to the investigation told the newspaper Página/12. For his part, SW owner Juan Maggio said that Jaime was his “boss.” With things as they are, it seems the “narco-scandal” is here to stay for a while longer.

Verónica Gago is an Argentine journalist who contributes to the newspaper Pagina/12 of Argentina and the Uruguayan weekly Brecha. She is also the co-author of the book Apuntes sobre el Nuevo protagonismo social” (“Notes on the New Social Prominence”) from Editorial De mano en mano, a member of the autonomous research collevitve “Situations,” and a student of international economy at the University of Buenos Aires.

Lea Ud. el Artículo en Español

For more Narco News, click here.