Argentina’s Macri Will Annul Father’s Postal Debt Deal

Argentina’s President Mauricio Macri said on Thursday he would annul an agreement his government reached to resolve a 15-year-old debt the country’s postal service incurred when it was owned by Macri’s father.

Macri spoke after a federal prosecutor asked a judge to open an investigation into him and Communications Minister Oscar Aguad earlier this week.

The deal, reached last year, had prompted conflict-of-interest allegations from another prosecutor who asked a court last week to block the agreement, calling it a “forgiveness of debt” that benefited the president’s family.

“I have given Dr. Aguad instructions to start over,” Macri said. “The good thing is that this is no fait accompli, nothing happened yet.”

Macri admits mistake

While his Cabinet Chief Marcos Pena said on Tuesday that Macri had not done anything wrong regarding the debt deal, on Thursday Macri conceded that he could have been more transparent.

“I have to admit that something was missing on my part,” he said.

The case dates to 1997, when then-President Carlos Menem privatized the country’s postal service. Control of the service went to Grupo Macri, a conglomerate owned by real estate magnate Franco Macri, the current president’s father and one of Argentina’s richest men.

Macri worked for his father’s conglomerate before going into politics.

Value of debt has dropped

Former President Nestor Kirchner re-nationalized the postal service in 2003. The company had declared bankruptcy in 2001, and owed 296 million pesos to the Argentine government.

The debt was worth $296 million in 2001, but today is valued at $19.1 million.

Kirchner’s wife and successor, former President Cristina Fernandez, never succeeded in reaching a deal on the debt.

Probe of president proposed

Months after taking office in December 2015, Macri’s administration struck an agreement to allow the company to repay the 296 million pesos over 15 years at 7 percent interest.

Prosecutor Gabriela Boquin said the terms were overly generous, given that more than a decade of rampant inflation and devaluation had eroded the peso’s value.

Prosecutor Juan Pedro Zoni asked to open an investigation into the president on the grounds the deal resulted in a substantial loss to the state.

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