At the end of her
second term, Argentina's President Cristina Kirchner accuses judges,
and especially the Supreme Court, of plotting against her. For their
part, and after long years of awkward silence, some judges and public
prosecutors seem to have recovered their eyesight and are
investigating cases of embezzlement, money laundering, and abuse of
power that reach the president, her son, as well as some very
fortunate new millionaires who are said to be their front-men. On top
of that, Alberto
Nisman, the prosecutor appointed to investigate the bomb attack
perpetrated in 1994 against the Jewish community AMIA building,
accused Cristina Kirchner of plotting together with the Iranian
government to cover-up the crime. Worst of all, the day before Nisman
had to present his charges in Congress he was found dead in his
apartment. The government never sent a word of solidarity to his
widow and two little daughters.
All that is in
the news. Nevertheless, the present rift between the federal
judiciary and the President should not hide the fact that the Supreme
Court has decided every key case in favor of Kirchner's government.
It is important to set the record straight. Those who admire the
Kirchner's regime will be less inclined to criticize the Court. On
the other hand, those who deplore their government will be more
realistic in their evaluation of the Court's role.
How the new Supreme Court was born
In December 2001
a civilian coup toppled President Fernando de la Rua. Congress was
dominated by his enemies, both in the Peronist party and even more
virulently in his own party, the Radical party (which, in Argentina, is a center-left moderate party). There was some
haggling over the succession, and Argentina had 4 presidents
appointed successively by Congress in 10 days. Though people in
the streets demanded elections to replace the fallen government, it
was decided not to risk it. Instead, and by an overwhelming majority,
Congress finally chose the candidate who had lost the election against de
la Rua, the Peronist Eduardo Duhalde.
The new
government decided to take the dollars people had in their bank
accounts. That was rather unexpected because, beside other
grievances, the immediate motive for the protests against de la Rua
-which led to his demise- had been the limits his government had
imposed on the amount of cash people could withdraw from their bank
accounts -limit that concerned cash, but not other ways of disposing
of their savings. Instead, the newly elected government took people's
dollars and gave bonds in exchange. A law to that effect was duly
approved in Congress by the same combination of forces that toppled
the former president.
Perhaps already
longing the times when they protested against mere limits on cash
withdrawal, many Argentines went to the courts reclaiming their
dollars, and they won their cases. After a while, appeals reached the
federal Supreme Court. The judges said that in taking the dollars,
the government had violated article 17th of the federal Constitution
which states that "property is inviolable". One of the
first cases was "Smith" and it was followed by "San
Luis" (link to the Court's
site1).
This latter case was peculiar because it involved a provincial
government suing the federal government in order to recover its
dollars –the federal government had taken even the dollars that
belonged to one of the states (provinces) that form Argentina. The
Supreme Court decided in favor of San Luis.
By that time
Eduardo Duhalde had been replaced by Néstor Kirchner, also a
Peronist, elected president in 2003 with president Duhalde's
patronage. In fact Kirchner had lost the election's first round, but
then the winner –Carlos Menem– retired from the contest and
Kirchner was appointed president without a second run. Meanwhile,
with their decisions confirmed by the highest court of the land,
lower courts were piling up thousands of sentences against the
government and in favor of the right of people to their savings in
foreign currency. Then Kirchner, again with the support of both the
Peronist and Radical parties, decided to change the Supreme
Court.
The new Court changes course
Then Congress
accused some of the judges of the old Court of having been
subservient to a previous (Menem's) government. Nevertheless,
some argued that the real problem was that they had refused to be
subservient to the new government. Under pressure, three of
the judges retired –one argued
“moral exhaustion”, another denounced an attempt against
his life. Two others refused to retire and were removed by Congress,
still dominated by the same forces that brought down Fernando de
la Rua's government. The Attorney General, whose legal report to the
Court had supported the saver's claims, resigned too and was replaced
by a former Peronist minister. Newspapers, TV channels, and radio
unanimously celebrated those decisions. Now Argentina would have a
Court that would be independent from a previous government!
The first three
seats thus emptied where filled by appointing judges Maqueda,
Highton, and Zaffaroni (the first had been President of the Senate
after the coup against de la Rua). The new majority in the Court
reversed the course and declared that taking the dollars was
according to the Constitution (case "Bustos"
10/26/2004). The judges used the occasion to harshly criticize the
former decisions of the Court. They said that they had caused
economic and legal chaos. They scourged the savers who had gone to
the courts and had already recovered their dollars saying that they
had obtained an unfair privilege. They criticized the economic
measures of the two previous governments. They declared that the
so-called property over dollars was “a big fallacy” and gave two
reasons to support that conclusion (paragraph 9, majority's opinion):
1. Argentines
don't earn their salaries in dollars
2. To exchange Argentine pesos for dollars in currency exchange offices was possible only in border
countries, but not further away
I mention this
reasoning because it is a good example of the kind of economic
analysis often displayed by the Argentine Supreme Court. Certainly,
the first argument should have alerted other courts around the globe
of similar fallacies: Swedes don't earn their salaries in dollars,
nor do Russians, Chinese, Japanese, or Lithuanians. They might be
told that their savings in foreign currencies have been transformed
into bonds by the force of a syllogism.
The second
argument was considered by many Argentines a decisive proof of the
fallacy. The Court simply repeated that piece of popular wisdom. I
remember that a man told me that at Paris airport he had tried to pay
for a cup of coffee with pesos, and that the waiter had refused them
and demanded Euros. The man adopted that shrewd expression Argentines
show in the many occasions in which they unearth such global
conspiracies and told me that evidently the parity between peso and
dollar had been a big lie concocted by banks and the media for more
than ten years. Of course, he as well as the judges confused the
readiness with which a currency is accepted and its exchange value.
They didn't realize that they couldn't have paid for the cup of
coffee with Swiss Francs, Yens, or Swedish Krona. Moreover, what was
that supposed to prove? That all those currencies not accepted by
waiters have no value, zero value? The waiter in the story didn't ask
for a more favorable exchange rate, he simply rejected the foreign
currency. I failed to convince the man that he was mistaken. No
doubt, the savers failed to convince the judges.
Concurring with
the majority, judge Zaffaroni, the closest to the new government
among the new members of the Court, said that those economists who
had given advice to the two previous administrations should be
criminally persecuted.
After further
places had been emptied, two new judges, Lorenzetti and Argibay,
filled them. Then, the new Court in full ratified the precedent
"Bustos" and again declared that taking the dollars
was right (precedent "Massa"). But these two new
judges weren't so assertive in their support to the government's
right to the savings of the population. They produced very odd
opinions: using only general words, judge Lorenzetti warned that it
would be necessary to think carefully about the negative consequences
of the Court's long tradition of "tolerance" (his word) for emergency laws that make inroads into property rights. He recalled
the example of old cases in which, although in single dissenting
opinions, a few judges firmly supported property rights.
Nevertheless, he sided with the new majority.
Judge Argibay's
opinion was even more peculiar: she explained at length why the
presidential decree that commanded banks to give dollars in private
accounts to the government was against the Constitution and even
declared that the saver had the right on his side. Nevertheless, in a
short final paragraph she said that for "institutional reasons"
(her words) it was "prudent" (idem) to reject the claim.
That was perhaps one of the strangest opinions ever issued in the
history of the Supreme Court.
More perplexities
were added when in 2007 the Court admitted –with one dissenting
opinion– a claim for the dollars that had been deposited in a bank
during the course of a trial (case “EMM S.R.L.”). It often
happens that in a trial some party has to deposit money in a State
owned bank, sometimes to pay for expenses, sometimes as a caution,
etc. Money in those accounts cannot be extracted without
authorization of the judge in charge of the case. In “EMM”,
the Supreme Court said that the government couldn't take these
dollars from their bank accounts without violating the Constitution.
What was the difference with common bank deposits in dollars? The Court
declared that judges have to protect the goods put under their
custody –a duty which apparently they limited to such goods. And
they added that if the government took those dollars, it would
violate not only property rights but the independence of the
judiciary.
In my Spanish
blog I have included a detailed analysis of the Court's ruling2.
In short, we must conclude that in “EMM” the judges
considered that their duty of protecting deposits in foreign currency
made during trials was different from that other –which they must
have deemed much weaker– of protecting dollars deposited in any
other bank account, or of property in general.
The government takes retirement savings
A law passed in
1994 allowed workers to choose between a State managed retirement
system and private accounts administered by companies known in
Argentina by the acronym AFJP (Pension Fund Administrators, similar systems exist in many countries). While in
the first scheme money enters a common fund that the government uses for many purposes besides paying pensions, in those privately
administered ones each saver had an individual account. The law
stated that money in those accounts belonged to each saver and that
they could be left as property to heirs.
These private
funds had invested in Argentine bonds –a law had forced them to do it–, so the future pensioners were
among the main creditors of the State's defaulted debt. In December 2007, at the end of Néstor Kirchner's term, Cristina Kirchner was
elected to replace her husband. A year later, she decided to take the
retirement savings held by people in their individual accounts. In
this way, together with many other assets, the government took
possession of its own bonds and the debt was wiped out.
Some savers sued
the government and in March 2013 one of these cases reached the
Supreme Court (this was of course, the new Court). The judges rejected the claim3.
Their decision is remarkable for its brevity, just three lines. The
judges said that they shared the Attorney General's advice against
the saver. Certainly, it isn't unusual that in very simple cases and
for brevity's sake the Court just asserts that it shares the Attorney
General's reasoning. But never before had a case of such importance
been decided that way. Though the case directly concerned a single
saver, in fact it decided the fate of about ten million future
pensioners, thousands of millions of dollars, assets in Argentina as
well as investments abroad, and in fact the future of the whole
pension system.
Just three lines.
And what was the reasoning provided by the Attorney General that the judges found so convincing? He said
that though the law stated that savings in individual accounts in
pension funds belonged in property to each saver, that wasn't really
property, so the government wasn't really violating the
Constitution's clause that protects property (art. 17 “...property
is inviolable...”). Why wasn't it property? It wasn't because
saving for future retirement was compulsory. Though such savings remained in a private account that the law distinctly declared as property, it wasn't money that the
saver could use immediately, he couldn't touch it before he retired, and that proved –according
to this argument– that the account in the pension fund wasn't
really property.
The case received
little attention in the media and only a few perfunctory articles were published about it in law reviews.
The battle for the control of mass media
In June 2009
Cristina Kirchner's government lost the legislative elections and
therefore its hegemony in both houses of Argentina's Congress. Her
husband and former president Néstor Kirchner had lost the elections
in the most important province, Buenos Aires. Two months later, the
government presented a draft for a law to regulate the mass media:
television and radio. This was called “the mother of all battles”.
As it was announced, the purpose of the law was to fight the few
so-called monopolies that shared the biggest part of the audience in
detriment of others –the State owned channel being among those less
favored by the public. The government proposed to limit the number of
viewers and listeners that each broadcasting company could reach,
thus establishing a fair partition of the audience among them. The
law was approved in Congress though most of the opposition chose not
to be present. Nevertheless, as it has been the case in many other
issues, their objections didn't concern the main points in the law
and were related to matters of form.
A major media
company, the Clarín group, sued in defense of its broadcasting
license. After having supported the Kirchner's government for some
years, they had become one of their main critics. The case finally
reached the Supreme Court. By a majority of 4 to 1 (and 2 others in
between, with partially dissenting opinions) the judges decided that
the law was constitutional.4
The objections
against the new statute covered both its main technique of dividing
the audience among companies and the fact that it violated
broadcasting licenses still in vigor. The law forced Clarín to
“disinvest” (that was the word in the new statute), to shrink its
size, well before its licenses had finished. As mentioned, 4 judges
said all was unobjectionable, 1 said both things were against the
Constitution, 1 said that though the main system was OK, the
government had to wait till the licenses granted under the previous
law had finished, and 1 also said that the government had to wait,
but that it was better for the Court to postpone its decision about
whether the system was constitutional till that time. That last
opinion was judge Argibay's and was remarkable because there won't be
any future occasion to discuss the matter. Judge Argibay must have
understood perfectly well that, as all the other judges gave their
views concerning the objections against the main system, the
plaintiff won't have another chance to challenge the statute.
In total, there
were 5 judges who said that the limits to the number of people who
can view a TV channel or listen to some radio broadcaster don't
affect freedom of expression. Judge Fayt said it did (judge Argibay
dodged the issue). The majority's argument was that the size of the
public anyone can reach isn't relevant. Judge Maqueda asked, isn't it
true that the freedom enjoyed by a little local radio station is no
different from that of a big media company? Both are free. So if a
law forces the latter to shrink to the size of the former, freedom of
expression in itself isn't violated. As long as some way of
expressing one's opinions is preserved, there is no constitutional
objection, only a matter of size. The majority said that as long as a
media company isn't “asphyxiated” by regulation (their word,
pages 11, 38, 94 of the sentence), freedom isn't affected.
Furthermore, the
judges distinguished between what they called individual and
collective freedom of expression. The first is simply the right to
voice one's opinions. The judges acknowledged that in that respect,
restrictions must be carefully scrutinized. On the other hand, there
is a collective freedom: that of those who may listen to those
opinions. In that respect, State regulation may be more “intense”(the
judges' word, page 38).
The judges used
yet another distinction: they said that there are two ways to fight
monopolies. Government can suppress them if and when they appear, or
–without waiting for that– it can regulate beforehand how people
can access information so that they receive a well balanced stream of
information (page 36). I have dedicated two articles to the Court's
decision in my Spanish blog. There I argued that in fact, these
aren't two different techniques, but two different goals. To monitor
and shape the kind of information the population receives (checking
whether it is fair and balanced, according to the authorities) is a
goal very different from that –much more limited– of fighting
monopolies. In his dissenting opinion, judge Fayt said that to
replace people's judgment with that of the authorities is the essence
of unconstitutional paternalism (page 338).
Judge Zaffaroni,
always more prone to ideological pronouncements, concurred with the
majority and said that nobody can doubt that the mass media has an
influence on people's ideas, tastes, fears, stereotypes, aesthetic
judgment, even people's language and existential goals. He said that
dominant economic groups may make people more culturally homogeneous,
in detriment of diversity. He concluded that in a time in which
technology changes communication in revolutionary ways, a government
that leaves that power to monopolies commits “cultural suicide”
(page 77).
General indifference, no debate of ideas
Most Argentines
have shown no interest in the cases here reviewed. Journalists have
covered them as battles where the only relevant question is, Who is
the winner, who has managed to impose his will? Though the Court's
decisions are easily accessible on the web, journalists never cared to look at them and examine the reasons presented by each side.
Only a few academics published some articles in law reviews.
The Argentine
legal philosopher Carlos Santiago Nino, many times cited by the Court
itself, wrote that Argentines suffer from anomie, a lack of interest
about their own future.5
Nino died before any of these Court controversies took place, but in
them he would have found ample justification for his remark.
This post is not
the place to analyze why so many Argentines limit their attention to
soccer. Nevertheless, I will add that even among politicians and
academics, the debates seldom tackle fundamental questions. And when
there is a rift, it often takes place between people who share the
same fundamental view. They only dispute who is better prepared to
realize it. People who have struggled together for power often become
bitter enemies once they conquer it.
1These
and other cases commented here can be found in full text in the
Argentina's Supreme Court web site (in Spanish):
www.csjn.gov.ar/data/em_econom2.pdf.
This is a document that collects most of the cases related to
emergency decrees and laws.
3Case
R. 37. XLVI. RHE; ROSSI PABLO ARIEL c/ ESTADO NACIONAL - MINISTERIO
DE TRABAJO EMPLEO Y SEGURIDAD SOCIAL Y OTROS Y OTRO s/AMPAROS Y
SUMARISIMOS; 26/03/2013. Unfortunately, there is no direct link to
the decision. Nevertheless, it can be retrieved from the search page
of the Supreme Court:
http://servicios.csjn.gov.ar/confal/ConsultaCompletaFallos.do?method=iniciaConsulta
4There
are two detailed articles about this decision in my Spanish blog, as
well as a link to the full text of the sentence (all in Spanish):
http://arielbarbero.blogspot.com.ar/2013/11/conceptos-juridicos-del-fallo-clarin.html
and
http://arielbarbero.blogspot.com.ar/2013/11/derechos-adquiridos-y-ley-de-medios.html
5Nino,
Carlos Santiago: Un país al margen de la ley [A country outside the
law] published in 2005, many years after his death.
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