Global Policy Forum

By Anthony Faiola

President Fernando de la Rua rode into Argentina's Pink House in December as the country's white knight, pledging to lance festering corruption in national politics. But after only 10 months in office, de la Rua is facing a crisis of confidence as his reputation as a corruption fighter has taken an embarrassing nose dive.

De la Rua's popularity has plummeted, and his governing center-left coalition is in danger of rupturing over a bribery scandal in the Senate that has reached into the president's inner circle. On Friday, de la Rua's popular vice president, Carlos "Chacho" Alvarez, resigned to protest a cabinet shuffle in which Labor Minister Alberto Flamarique--allegedly linked to the scandal--was promoted to de la Rua's chief of staff. De la Rua, in an interview today, firmly denied that any official in his administration is tied to the scandal, in which 11 senators are under investigation for allegedly accepting bribes to vote for a labor reform bill that is at the core of the president's economic plan. He said he regrets the resignation of his vice president, whose left-wing Front for a Country in Solidarity (Frepaso) made up half of de la Rua's Alliance coalition. But he also insisted the coalition will persevere.

"Argentina is not facing an institutional crisis; we have lost the vice president, but the presidency is functioning normally," de la Rua said in his spacious office at the elegant Pink House, Argentina's presidential palace. "We continue asking the people for their trust and will prove that we are worthy of it." De la Rua's popularity was bursting over 70 percent earlier this year as his government made big corruption sweeps, nailing former public officials for ill-gotten gains. But after Alvarez's resignation Friday, and on the heels of the Senate scandal, de la Rua's approval rating has fallen below 30 percent, the lowest of his tenure.

The vice president, extremely popular because of his hard line on corruption, has chided de la Rua for his handling of the scandal and for "promoting people who have associations with crimes." Alvarez's resignation led Flamarique to step down after less than 24 hours as chief of staff. And on Sunday, Jose Genoud, another figure targeted by Alvarez, resigned as president of the Senate. He was replaced today by career politician Mario Losada.

The ruction has added to a sense of disillusionment in Argentina, long Latin America's wealthiest country, but one in which record numbers of citizens are applying for visas to leave as the country suffers a third year of economic stagnation. Even with the passage of de la Rua's key reform bill, which is aimed at lowering labor costs, unemployment has risen to more than 15 percent. And de la Rua, a 63-year-old career politician with the air of an old-world aristocrat, is getting much of the blame. "Even before the [bribery scandal], de la Rua was suffering from a growing image problem, as people saw him as unable to make the right decisions to solve the country's problems," said Graciela Romer, a Buenos Aires political analyst. "But now, he is facing an even greater challenge. Fighting corruption was at the heart of his campaign pledges, and now he needs to recover the profile of an honest man in control of the country. It is key to his future ability to govern."

The scandal has put extraordinary stress on the coalition that brought de la Rua to power last year. The Alliance--a union of de la Rua's centrist Radical Civic Union (UCR), one of Argentina's oldest and most traditional political parties, and the left-wing Frepaso--defeated the candidate of the Justicialist Party of former president Juan Peron for the first time in 10 years. Alvarez has pledged to continue supporting the Alliance, and today de la Rua reiterated that "the Alliance will continue; it will be strong and go on." But other officials in the coalition have begun to question its longevity. A rupture would have a serious impact on de la Rua's ability to get legislation through Congress. It would also have a profound psychological impact on the already troubled nation, adding uncertainty at a time when foreign investors remain leery. "You are ignoring the obvious if you say the Alliance is not in trouble," Elisa Carrio, a member of Congress from de la Rua's party, told reporters this weekend. "And you are also ignoring the obvious if you say there is not a credibility problem in the government."

De la Rua said today he will outline a comprehensive infrastructure and housing program this week to generate badly needed jobs and that he will press crackdown a on tax evaders and corruption. But he dismissed calls by Alvarez and the powerful Buenos Aires mayor, Anibal Ibarra, that he fire his chief of intelligence, Fernando Santibanez. Santibanez, a close friend of the president, has been linked in news reports to the bribery scandal, although he has denied any wrongdoing. De la Rua added that he trusts that a judicial investigation underway into the bribery scandal will clear his administration. "From this government, no money ever went to bribes that is, if there ever were any," he said.