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the Best Democracy Money Can Buy (for Us 5 Million)


The corrosive effect that capitalism has over democracy is becoming more and more clear. Economic exploitation and the progressive privatization of every single centimeter of the world simply cannot tolerate anything even vaguely similar to “the rule of the people”. In his recent book The Best Democracy Money Can Buy, Greg Palast exposed some evidence of the ever stronger network of lies and corruption of democracy that corporate interests produce. What he never thought, however, is that democracy could be bought for such a cheap deal.

A recent judicial investigation established what the exact price of Argentinean democracy is: five million dollars. Not too expensive, is it? Any second rank millionaire could buy it.

Five million dollars is the total amount of money that eight senators apparently received as a bribe to approve a controversial law in 2000. The law was given one of those funny names of the neoliberal jargon: “labor flexibilization”. The aim of that law was to “deregulate” labor market, that is, to eliminate all the social rights that workers used to have. “Flexibilization” meant that businessmen can now hire and fire workers as they like, without much costs or compensations for the dismissed.

By transforming the labor relationship between businessmen and workers into a “freely established temporary contract” (“garbage contracts”, as we call them), the owners of companies avoid the costs of social security, paid holiday, and other benefits. In sum, “flexibilization” means that workers have to be “flexible” to whatever the boss may need or desire. The rationale for the introduction of this new law was also one of the funny stories of neoliberalism:

“If you let businessmen fire workers whenever they feel like with no cost at all, then they will be encouraged to hire more workers, because they have nothing to fear.”

Needless to say, the effect was exactly the opposite. Not long after the law was passed, the rate of unemployment in Argentina reached 24%, and the real working hours increased while the overall level of salaries decreased quite noticeably.

In the year 2000, one Senator and the Vice-President had denounced this act of corruption. An investigation was initiated, but, as there were no proofs, the whole thing was quickly forgotten. Vice-President Carlos “Chacho” Alvarez quit in protest of this, which marked the beginning of the political crisis that eventually ended in the collapse of the whole administration after the popular rebellion of December 2001.

Everybody had forgotten about this case, when it suddenly reemerged three weeks ago. The judge in charge of the case was about to close it definitively for lack of evidence, when something unexpected happened. Mario Pontaquarto –for many years a member of the higher staff of the Congress— confessed he had been in charge of distributing the money between the senators. After his confession we know that the bribes were paid by the then President Fernando De La Rúa, who was ousted of the government by the popular rebellion of December 2001.

The money came from the secret funds of the Secretary of Intelligence. All three major political parties of Argentina were involved: the President and one of the corrupt senators were from the UCR, the rest of the senators were Peronists, and the Minister of Labor (who organized the whole operation) was from FREPASO.

Fernando de Santibañez, then head of the Secretary of Intelligence, is well known as a representative of business interests, and good friend of the US establishment. And we know the amount: only five million dollars were enough to reverse the political will of the Congress, and to bring suffering and distress to millions of Argentinean workers. Five million dollars was the exact price of Argentinean democracy.

It is possible that the politicians involved in this case will have to face charges against them, and will probably be imprisoned. It is clear, however, that the main protagonists of this affair will remain unpunished. These include the businessmen who collectively benefited from (and put pressure for the approval of) the law, of course, but mainly the IMF. Facing a rapidly deteriorating financial situation, De La Rúa was in desperate need of IMF support. The law of “labor flexibilization” was one of the conditions of the IMF to assist the government.

Without such a law, the IMF would refuse to disburse more funds for Argentina. Without more funds, the whole country would collapse, as it eventually happened not long afterwards. That probably explains why the government made such a corrupt and rather clumsy move. Indeed, De La Rúa had been one of the leading political leaders in the past decades, and –strangely enough for an Argentinean politician— he had absolutely no records of corruption. With a reputation of honesty, nobody would have guessed him capable of such an act of corruption when he was elected President.

And yet, this case also shows that corporate interests weaken democracy not only by the force of money, but also by that of violence. As Mario Pontaquarto recalled, he had a sudden consciousness of what he was doing the very day he gave the money to the corrupt senators. While bringing the money in his own car from the Secretary of Intelligence to the Congress, he had to pass through a large demonstration of trade unions. They were protesting against the project of “labor flexibilization” which, thanks to the bribes Pontaquarto was bringing, was to become a law that day. Demonstrators faced barbaric police repression that day –one well known union leader was seriously injured.

The case described above is particularly eloquent, but by no means exceptional. The hidden link between corruption, state violence, and (local and transnational) corporate interests can be perceived elsewhere. Argentina’s last military dictatorship is a good example. In seven years the military tortured and killed over 30.000 people –mainly union activists–, imposed a most hard neoliberal program, while enriching themselves through bribes and all sort of illegal economic transactions.

Big companies were benefited from an outrageous decision that the state would pay their own debts. Profits climbed, while salaries and social rights declined. Meanwhile, the IMF gave the military regime endless amounts of money and, as recently emerged in declassified CIA documents, Henry Kissinger provided political support of the USA and urged the military to “wipe out” he leftists before the new American administration started to ask questions about human rights abuses. While some of the military were forced to face justice, the rest of the players still benefit from impunity.

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