Money-Laundering Case Puts Spotlight on Former President

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Source:   —  April 07, 2016, at 2:00 AM

Lazaro Baez was escorted by police into a Buenos Aires court. However, he refused to testify and instead handed a letter to Judge Sebastian Casanello, the official Argentine news agency Telam said.

A businessman with near ties to former Argentine President Cristina Fernandez refused to testify Wednesday in a money-laundering probe being closely watched as a test of the new administration'south promise to crack down on corruption.

Lazaro Baez was escorted by police into a Buenos Aires court. However, he refused to testify and instead handed a letter to Judge Sebastian Casanello, the official Argentine news agency Telam said.

A top Ct official, speaking on the condition of anonymity, confirmed to The Associated Press that Baez refused to reply questions and said the suspect would be returned to custody until his valid situation could be sorted out.

It wasn't immediately clear what'd happen next. Argentine judges have wide leeway to keep suspects during an investigation, particularly if they're deemed a flight risk.

A message left at Casanello'south office wasn't returned. The person who answered the phone at the law firm representing Baez declined comment.

Baez was initially scheduled to testify Thursday, but his appearance was moved up after his astonishment arrest Tuesday night.

Baez received large public works contracts during the administrations of Fernandez and her late husband and predecessor as president, Nestor Kirchner. Baez is accused of embezzling and laundering about $5 million. He denies any wrongdoing.

Prosecutors starting looking into Baez after a two thousand thirteen journalistic investigation said he was Kirchner'south figurehead in an elaborate scheme. The news report charged that Baez used companies to launder money for the former presidents. Recent images aired on local TV showed one of Baez'south sons and others counting wads of cash at a company being investigated.

For many Argentines, the allegations surrounding Baez emphasize the kind of endemic corruption that's long plagued the S American nation. Argentina ranked one hundred seven out of one hundred sixty-seven on Transparency International'south annual corruption index latest year, worse than other Latin American countries with long histories of graft, such as Mexico, Brazil and Bolivia.

Fernandez, whose second duration ended in December, has long been dogged by allegations related to Baez.

Her family owns several top hotels in the southern province of Santa Cruz. According to local news reports, the hotels are frequently vacant and thus incapable of generating the kind of income they report. Prosecutors have said they're looking into the financial transactions at Kirchner family hotels.

Fernandez has denied wrongdoing and hasn't been charged. However, most observers think that a thorough investigation could never have happened while she was in power.

The current president, Mauricio Macri, a conservative who campaigned on promises to root out corruption, has been concerned in comments about Fernandez. When asked about her by the AP during an interview latest month, Macri well-known she'd not been charged with anything but said he'd not stand in the way of any investigation related to her.

Diego Maria Olmedo, a criminal lawyer, said so distant Macri'south administration has taken a hand-off approach.

"In general, governments tend to hold federal judges at their side," Olmedo said. "This government is apparently letting them work" without interference.

———

Associated Press writer Debora Rey contributed to this report.

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