Kirchner under fire over $2M deal

Feb. 3, 2010 at 6:10 PM
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BUENOS AIRES, Feb. 3 (UPI) -- Former Argentine President Nestor Kirchner, husband of President Cristina Fernandez, faced renewed criticism Wednesday over a $2 million deal that has drawn charges he took advantage of privileged information soon after the outbreak of the 2008 global financial crisis.

Kirchner used a radio show to denounce "ill intentioned" accusations by the Argentine opposition and the media over his purchase of $2 million in U.S. currency in October 2008, a month after the collapse of Lehman Brothers.

Kirchner, no stranger to controversy during and after his time in office, was drawn into the row as Argentine media published reports that he bought the dollars on the basis of insider information to benefit from currency fluctuation.

In the radio show Nestor Kirchner admitted buying the dollars but argued the purchase was not speculative and was used to acquire a percentage of stock for a hotel located in El Calafate, Patagonia.

"Due to ill-intentioned rumors published recently in the media, that affect my honor, I am here to inform the community and formally deny those rumors," he told the radio show.

He said he actually bought $1,999,999.80 in October 2008, which was still within legal limits.

That money, "along with other amounts coming from personal investments in U.S. currency," was then used to buy equity in the hotel, Kirchner said.

"There was no chance for any possibility of benefiting from the currency exchange, the payments were always done in the same currency," he explained.

The opposition counters the U.S. dollar was selling at 3.25 pesos in September while at the end of 2008 it was at 3.42 pesos.

The new scandal follows a political row after Martin Redrado, the governor of the central bank, was ousted for refusing to hand over $6.5 billion of reserves to a government debt-repayment fund. He opposed the move, arguing the funds could be seized by the holders of some bonds that remain unpaid since Argentina's 2001 default of about $100 billion in loans.

Redrado was reported to be the first to hint that he knew of highly placed individuals who had bought dollars, traditionally a hedge against currency fluctuations in Argentina after the Lehman Brothers collapse. Later, however, Redrado denied making any such remarks, but by then it was too late, as the media had already begun digging deeper into the affair.

The Argentine opposition now wants the former president investigated for alleged insider dealing and illicit gain.

Both Kirchner and Fernandez faced other charges of illicit gain earlier but were cleared in December of any wrongdoing.

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