For Argentina, Foreign Lessons On Justice And Democracy

In Brazil, the arrest this month of Joao Vaccari Neto
In Brazil, the arrest this month of Joao Vaccari Neto
Facundo Landívar

BUENOS AIRES — There are a handful of images I've seen in the news recently that remind me of the postcards people used to send back home. Short and sweet, those postcards were like informal news dispatches, instructive little snapshots of events beyond the country's borders. The pictures I'm thinking about now are equally informative. They're also relevant to events happening here in Argentina.

The first one comes from Spain and shows police pushing Rodrigo Rato, a former deputy-prime minister and International Montary Fund (IMF) chief, into a squad car. Rato, hailed at one point as "the best minister of the economy in history," is one of the most prominent faces of his party, the conservative Popular Party. Now he is accused of corruption.

The image shocked the Spanish public. And yet unlike in Argentina, where the government of President Cristina Kirchner blames the media for all its problems, the ruling party in Spain isn't lashing out at the press. Nor does it presume to give the judiciary lessons, or try to use its influence to cover up the scandal.

Prime Minister Mariano Rajoy acknowledged that the Rato case has hit the party hard at a time when Spain is weeks away from local elections. And yet he stressed that prosecutors will have full autonomy as they investigate the affair. There was no attempt to paint the case as political persecution of any kind.

Kirchner on television denouncing Clarin — Source: Wikipedia

The second image comes from closer to home, in Brazil, where the treasurer of the country's ruling Workers Party (PT), Joao Vaccari Neto — handcuffed and with his arms behind him — was put on public display following his arrest on charges of money laundering, bribing construction firms and financing political activities with Petrobras funds, which are public property. Vaccari is no minor political operator: he handled a good many financial decisions for the party of Presidents Luis Inacio Lula da Silva (2003-2010) and Dilma Rousseff.
Did the Rousseff administration respond by pointing the finger elsewhere? No, not once. How many judges and prosecutors has Dilma Rousseff accused of mounting a "soft coup" or trying to "destabilize" her government? None — which is a big deal because the charges against Vaccari and, in essence, the entire PT, are far from trivial.
President Rousseff has already taken a huge hit: Her approval rating is at 13%, one of the lowest in history. So how did she react? Neither a tweet (hint hint, Mrs Kirchner?) nor a Facebook entry nor — not a single public declaration, choosing instead to let justice take its course.
The last image comes from just across the Andes, in Chile, where President Michelle Bachelet recently had to fire her son, a minor government official, because of allegations that he and his wife used their privileged connections and maybe even insider information to execute a multi-million-dollar real estate deal.
The president's son, Sebastián Dávalos, was summoned for questioning. His house was searched. And he could eventually end up in court. The political impact on his mother is terrible: her popularity has plummeted since the scandal broke in February. But at no point has Bachelet claimed to be the victim of a political witch hunt. What she did say is that "as a mother and as president, these have been painful moments." She went on to say that her job as president "requires having to make painful decisions."
Pictures, as they say, can tell 1,000 words. Unfortunately, the government in Argentina doesn't seem to be listening.
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Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money but the simplest of errors exposed the scam and limited the damage to investors.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.

Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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