ARGENTINA DERAILED

Plaza Once Station (photo by José María Pérez Núñez

CC by SA 2.0 creativecommons.org via Wikimedia

Commons: Ciudad Gris/La Estación)

Argentina this past week marked the first anniversary of the Plaza Once Rail Tragedy. I’ve placed this case title in caps because I think it deserves them. And the reader will note that I’ve used the word Tragedy, rather than “accident”, since while there may have been nothing premeditatedly intentional about it, there can be little doubt that what happened in the Plaza Once railway station in Buenos Aires on February 22, 2012, was not the result of an accident, a quirk of fate, a momentary lapse in human concentration or an isolated error in judgment. It would appear ever more clear, rather, that this horrifying train wreck was the outcome of long years of incompetence, negligence, indifference and worse, that inexorably culminated in the deaths of 51 passengers and the injury of more than 700 others. If the Once Rail Tragedy could ever be referred to as an “accident” it could only be within the context of “an accident-waiting-to-happen”.

It is also hard to separate that tragedy from a general attitude of indifference on the part of the current national government with regard to its invested responsibilities as the country’s elected administration and its accountability for the well-being of the country, its economy, its currency, its world image, its infrastructure and, ultimately, its people.  In this sense, the Plaza Once Rail Tragedy might well be seen as a symbol of the chronic and unwarranted deterioration to which Argentina has been subject in the past decade and, particularly, in the last half of that period.

The Tragedy. The wreck took place on a Wednesday morning at about 8:30, on the Sarmiento western commuter line, when the train, operated by concession-holder TBA (Trenes de Buenos Aires), was loaded with some 1200 rush-hour commuters. As the train came into the Once de Septiembre Station (better known simply as Once) on track No. 2, it slowed to a reported 20 kilometers per hour, but was then unable to brake and crashed into shock absorbers at the end of the track beneath the station platform. The impact was such that it sounded to many passengers and passersby like an explosion, and the lead car telescoped into the one behind it. These two cars were even more packed with workers coming into the city from the western suburbs than the rest of the train, since morning commuters tend to favor the cars up front so as to save time by getting off and out of the station quickly, ahead of the rush.

There was an immediate attempt by the firm and the government to blame the gory incident on “human error”, claiming that the commuter train’s driver was at fault. But although this may briefly have led the early investigation off on a tangent, rail workers were quick to come to their companion’s aid and tell the press and anyone else who would listen to them about the deplorable safety conditions under which they were working and the general disrepair of TBA’s rolling stock.

It was the third worst crash in the long history of Argentina’s railways, and it was the very worst in more than three decades.

Although President Cristina Kirchner—in common with Buenos Aires Mayor Mauricio Macri and Buenos Aires Provincial Governor Daniel Scioli—immediately decreed a 48-hour period of national mourning, and issued a succinct message of condolences to families of the victims, her first reaction to the tragedy was silence. And not merely silence, but reclusion as well. She left the national capital for nearly a week and holed up in her remote southern home province of Santa Cruz, where she hosted a private meeting with her Paraguayan colleague Fernando Lugo, in her luxury boutique hotel, Los Sauces, in Calafate, before traveling to her home in Río Gallegos, where she headed up a birthday homage at the private mausoleum of her late husband and predecessor, former President Néstor Kirchner, who died in October of 2010 and who would have been 60 years old that Saturday. Her absence from Buenos Aires in the face of the train crash attracted particular attention since she had already spent the previous week “resting” in Santa Cruz and returned there almost immediately after the tragedy—not without first meeting briefly with her transport secretary, Juan Pablo Schiavi.

Cristina Kirchner - too little too late.

Too Little Too Late. The president reappeared in public the following week—at a rally to celebrate the first raising of the Argentine flag on February 27, 1812—in the northern city of Rosario, where, on the tail-end of a half-hour speech about the achievements of her and her husband’s administrations, she finally mentioned the Once Rail Tragedy, saying, rather vaguely, that she would “take all measures necessary” in the case. Considering the time she’d had to think about it, her pronouncement seemed meager at best. She also sought to deflect government responsibility by exhorting Argentine justice to complete its technical investigations “within the next 15 days”. (The judicial branch, of course, immediately said that it would take however long was necessary to investigate that case and would accept no pressure to finish up quickly).  Then, in barely lukewarm acceptance of a small quota of accountability, the president admitted that the Argentine rail system needed “to be reformulated” and grudgingly confessed that “if we haven’t done more, it’s because money has been lacking.”

But that wasn’t strictly true.  TBA was a private consortium that took over the Sarmiento and Mitre commuter rail lines in 1995 as part of the decade-long privatization plan introduced by Peronist President Carlos Saúl Menem. At the time some private sources estimated that Argentina’s overall State-run medium and long-distance railways were losing on the order of a million dollars a day. That meant that international investors weren’t exactly tripping over each other to buy them. So consortia ended up being formed by local multi-interest groups and, in certain cases, international technical partners, as in the case of TBA. Still, the local operators—domestically perspicacious and good horse-traders that they were—argued that unless they raised ticket prices beyond what Argentine commuters could pay, it would be impossible to maintain the rail services. So as part of the clearly one-sided contracts that they negotiated, these companies not only were granted exploitation of the lines they dealt for, but also a pledge from the government to continue to pay massive subsidies for upkeep and to defray losses on ticket sales.

In retrospect it's hard not to suspect that subsidies were always what the “privatization” deals were all about, and, as long as we’re being suspicious, that precious little of those subsidies has ever been used for rolling stock and track upkeep. Otherwise, the Once Rail Tragedy never would have uncovered, for instance, just how disastrous the state of repair of some of the major commuter lines is. Furthermore, TBA wasn’t a stand-alone firm, but formed part of the Plaza Group (through its Cometrans holding group), majority-owned by the Cirigliano family of Argentina, and also of UGOFE (Unidad de Gestión Operativa Ferroviaria de Emergencia—or Emergency Rail Operations Management Unit), which also operated other rail services in the Buenos Aires area. TBA was also granted concessions for north-bound long-distance services, in total operating, according to unofficial estimates, about a thousand runs and carrying approximately 500,000 passengers a day.

Pino Solanas: A true swindle.

About a week after the Once Rail Tragedy, public pressure brought Federal intervention of TBA. In May of last year, three months after the disaster, the government revoked TBA’s concessions and placed them under the care of a consortium called UGOMS. But who is UGOMS?

UGOMS stands for Unidad de Gestión Operativa Mitre-Sarmiento (or Mitre-Sarmiento Operational Management Unit). It was formed on the same day that TBA lost its concession last year, and is a “temporary consortium” created especially to take over for TBA. It is made up of rail operators Ferrovías and Metrovías. According to filmmaker, socialist politician and Proyecto Sur Party Congressman Pino Solanas, on this first anniversary of the Once disaster, “the Ciriglianos continue to draw payment from the State—and with exaggerated surcharges—for the repair of train cars on the Sarmiento and Mitre lines, through their company, EMFER S.A, and they continue to operate trains through UGOFE S.A., which operates the San Martín, Roca and Belgrano South lines.” Solanas adds that “the brand new mirror company, UGOMS, which currently operates the Sarmiento and Mitre lines, is run by its partners, Ferrovías (EMEPA Group) and Metrovías (Roggio group).” 

Where Did All the Money Go? As described by Solanas, who is noted for uncovering government corruption, the repair contracts alone have been a succulent source of government subsidy income for the railroad concession-holders. The leftwing politician claims that no government audit has ever been carried out, for instance, to determine the final destination of “thirty-seven workshop-factories, thousands of railway cars, locomotives, machinery, equipment, and 60,000 spare part accounts.” According to Solanas, “the great majority of these assets have disappeared, without anyone’s ever having demanded their replacement.”   This is only part of what the congressman calls “a triangle of corruption” that includes, he alleges, “the Transport Secretariat, the National Commission for Transport Regulation, railway management and companies.” He adds that this apparent complicity is why no one has yet tracked the path of multi-million-dollar subsidies to find out “where all the money went that never reached the trains.”

In 2012 alone, rail lines serving the Buenos Aires Metropolitan Area are reported to have received over 4.6 billion pesos in subsidies (or about US$980 million at the official government exchange rate). About 3 billion pesos of that is reported to have gone to UGOFE. Solanas describes both UGOFE and UGOMS as being “invented by the government as holding groups for the TBA, Metrovías and Ferrovías concessions, as a means of covering up a true swindle against the citizenry [since] by contract, UGOFE and UGOMS, are corporations created by the State and managed by private firms, which are compensated for their management services. In other words, they have no civil accountability whatsoever in case of any sort of accidents or labor suits, and as if that were not enough, any fines that might apply to them don’t come out of their pockets, but out of those of the citizens.”

The administration, for its part, has managed to dodge a direct hit in the case of the Once Rail Tragedy by using two successive transport secretaries, Ricardo Jaime and Juan Pablo Schiavi, as scapegoats. It has also tried to blame the situation of ineffectiveness and scandalous corruption surrounding the concession contracts on the 1990s administration of fellow Peronist Carlos Menem, but after a decade of Kirchners at the helm, this complaint clearly seems less than credible, especially coming from a government that overturned the Due Obedience and Full Stop amnesties that protected members of the former military regime of the 1970s and 1980s from trial, and that had no problem deciding to re-nationalize the oil industry and the flag-carrier airline, which had also been privatized under Menem. And this leads one to ask why the railroad concessions are being kept alive—if on life-support—when they have so obviously failed to solve the country’s rail travel problems and are still bleeding the government treasury as always.

Ricardo Jaime

Jaime and Schiavi. Successive charges that have been leveled against former Transport Secretary Jaime would appear to provide an inkling of a response. He came to national office in 2003 when Néstor Kirchner was elected president. He remained in that post under Cristina Kirchner’s administration until 2009, when his name had become so connected with scandal that he was forced to resign. He has had numerous court actions filed against him and has been variously accused of charges ranging from contempt of court to alleged kickbacks and from failing to comply with the duties of a public official, to alleged involvement in a money-laundering cover-up and abuse of office. 

Juan Pablo Schiavi

His connection with the Kirchners went back 20 years, when as city council president for the Santa Cruz oil town of  Caleta Olivia, he joined Néstor Kirchner’s bid to unseat fellow Peronist and provincial political strongman Arturo Puricelli as governor. For his loyalty, Jaime was awarded the post of  cabinet chief for Kirchner’s first governorship, and when Kirchner won a second term, Jaime was appointed to head the Provincial Education Council. When Kirchner reached the presidency in 2003, the transportation slot was waiting for Jaime in the ministerial cabinet of Planning Minister (and first-hour Kirchner loyalist) Julio de Vido.

It was by the hand of de Vido that Juan Pablo Schiavi (55), a man with a somewhat chequered political past, came to the Transportation Secretariat. Of Peronist extraction, Schiavi became involved in politics while still a teen, as a militant in the Peronist Youth movement and with alleged ties as well to the Montoneros urban guerrilla organization.  He didn’t take up his first real political post, however, until, at age 32, he was appointed advisor to the Peronist Bloc in the Buenos Aires City Council. During Peronist politician Carlos Grosso’s brief term as mayor of Buenos Aires (1989-1992) Schiavi served as Undersecretary of Maintenance and Services.

Despite his Peronist background Grosso’s mayorship—like Menem’s presidency— was marked by flourishing relations between the public and private sectors and was to produce some major transformations in the city, not the least of which was the Puerto Madero urban renewal project that turned the old port of Buenos Aires into a luxury residential, tourist and entertainment haven. But it was also a municipal administration that generated wide-spread scandal and accusations of gross corruption surrounding not only the swift privatization processes that Grosso’s policies spawned but also his government’s handling of public funds. These accusations brought a wave of formal complaints and lawsuits, the pressure of which eventually forced Grosso to resign. By the time Grosso had dealt with all of the charges against him, his name was so tarnished that he retired entirely from politics, despite his managing to see most of the cases against him dropped, filed for lack of evidence or thrown out of court.

While Schiavi was in his post in the Grosso government, one of his jobs was to oversee trash collection contracts, which is where he met Mauricio Macri, who, 20 years later, was to become mayor of Buenos Aires and an archenemy of the Kirchners.  Back then, Macri was heading up SOCMA, the business conglomerate founded by his father, Franco Macri, one of whose companies was the trash management firm MANLIBA. Schiavi forged ties with Macri and with SOCMA executive Daniel Chaín, and, with Chaín (later Human Development Minister for the City of Buenos Aires), eventually formed a partnership, working together through the 1990s.  One of that partnership’s projects was the remodeling of some thirty train stations.

Schiavi was to later take part in Macri’s two bids for mayor (the first of which he lost to Aníbal Ibarra), but had a falling-out with Macri over his association with liberal economist Ricardo López Murphy. In the meantime, he returned to government when Ibarra was suspended and impeached because of accusations surrounding an infamous nightclub fire (República Cromagnon) in which 194 people died. When Ibarra’s Vice-Mayor and replacement, Jorge Teleman took over, he asked Schiavi to take up the post of Municipal Planning and Public Works Minister, a job he held from 2006 until the following year, when Macri, with whom he remained estranged, won the mayoral elections. During that year, however, Schiavi had managed to nurture a good relationship with Federal Planning Minister Julio de Vido, who placed him in charge of the Railroad Infrastructure Administration (ADIF), a State company whose job was supposed to be promotion of railway renewal.  But the ADIF obviously met with little success in complying with its express aim.  Be that as it may, when scandal forced Jaime to resign from the Transportation Secretariat post, it was Schiavi who de Vido tapped to take his place.

Planning Minister Julio de Vido

The de Vido Connection. While, as I said earlier, top government officials have done their darnedest to use Jaime and Schiavi as circuit-breakers to keep the Once Rail Tragedy blowback from hitting them smack in the face, it’s pretty hard to miss the fact that they had to have known full well what their subordinates were doing. It would be at least naïve to think that they wouldn’t be keeping a close eye (for their own individual interest if nothing else) on a post  that was the key to activities involving billions in subsidies.

Says Solanas: “For such a swindle, shouldn’t Planning Minister Julio de Vido—who has had the Transport Secretariat under his ministry since 2003, and who had Ricardo Jaime at the head of it for six years—be held accountable? And isn’t the president principally responsible for the administrations of her ministers? Everybody, including Cristina [Kirchner] knew about the reports of the Federal Auditor General, the National Ombusman and the [other] claims lodged,” he says, regarding the deplorable state of the railroads and the safety issues involved. “And yet,” he says, “de Vido was absolved in the case and the party of the concessions, subsidies, swindles and complicities carries on.”

Elisa Carrió: Impeach Cristina.

Meanwhile Civil Coalition Congresswoman Elisa Carrió—another noted crusader against corruption—said this past week that she would be presenting a request for the impeachment of President Cristina Kirchner, based, she added, on the administration’s responsibility in the Once Rail Tragedy. She said that she was also seeking charges against de Vido. Carrió announced the move after a Federal  Court brought more serious charges against Jaime and Schiavi and confirmed pursuit of charges against Sergio and Mario Cirigliano (who head the group that owns TBA). Carrió said that “reading the court’s decision convinces me that the crimes with which Schiavi and Jaime are charged are the same ones that correspond to Julio de Vido and Cristina Kirchner.” The congresswoman opined that it was impossible “for Cristina Kirchner not to have known about the illicit association that her husband led and, in any case, she maintained it during her own mandates, and it is on this that the request for impeachment for misconduct is based, on the calamity of crimes produced around public transport subsidies since the beginning of Néstor Kirchner’s administration.”

The Once Rail Tragedy cannot be taken out of the context of the Kirchner administration’s overall policies and their increasingly pernicious effects.  It is symptomatic of a situation in which Argentina could almost be said to be held hostage by the policies of an administration whose main focus from the outset has been staking and perpetuating its own claim to power at the expense of the rest of the country. The administration’s radical foreign policy that has isolated Argentina from the opportunities that could put it on the road to its rightful place as a genuine regional and world  leader, its disdain for the tenets of the kind of healthy economy it should be enjoying, its thoughtless dilapidation of the country’s foreign reserves, its failure to identify and deal with corruption, its hostility toward any and all sorts of criticism, its aversion to accountability and readiness to lay blame elsewhere, and its failure to recognize the democratic principle of the minority’s right to have its say are all symptoms of a greater and graver illness, one for which the Once Rail Tragedy stands as a public symbol.