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Talk of 'Crisis' Overblown, Argentine President Says

Scandal: Fernando de la Rua disputes those who contend his reformist government risks a split over political fallout from alleged bribery of senators.


BUENOS AIRES — President Fernando de la Rua of Argentina downplayed Tuesday the political turmoil that threatens the survival of his ruling coalition, saying his government remains firm despite the surprise resignation of the vice president.

De la Rua said he reasserted control with his Cabinet shake-up last week that caused the resignation of Vice President Carlos Alvarez, the architect of the two-party Alliance coalition. Alvarez quit Friday after two months of tension, expressing disgust with the president's failure to dismiss top officials under investigation in a Senate bribery scandal.

"There is no crisis regarding the vice president," De la Rua said during an interview with The Times. "There is a conflict within the Alliance. But everyone says they want to preserve the Alliance, and with that spirit, we will preserve it. This is a transition that will be overcome."

Argentina's upheaval does not come close to the woes of nations such as Peru and Ecuador, with their restive militaries and crippled institutions. But Alvarez's dramatic departure after only 10 months in office has rocked the president, a veteran of the Radical party known for his unruffled and conservative manner.

De la Rua, 61, was elected with high popularity ratings and a mandate to clean up government and reverse an economic recession. The Senate scandal shattered his partnership with the restless, dynamic Alvarez. The bond seemed tenuous from the outset because it teamed De la Rua's centrist Radicals, a mainstay of the political establishment, with the upstart, left-leaning Frepaso party.

Alvarez portrayed his decision to quit as a break with politics as usual. Certainly, the crisis illustrates a tough challenge to this modernizing, well-educated and most European of Latin American societies: Argentina must attack entrenched corruption and criminality in order to realize its unfulfilled potential.

"De la Rua had raised hopes of a clean government," said Luigi Manzetti, a political scientist at Southern Methodist University in Dallas and an expert on corruption issues. "He created an anti-corruption office that was a trendsetter in the region. . . . There was a psychology that things would change. But it seems contradictory to shovel all this dirt under the rug."

Investigators seem far from proving allegations that the administration paid multimillion-dollar bribes to at least eight senators in exchange for their approval of a labor reform law this spring. Nonetheless, Alvarez demanded the resignation of the accused senators as well as two officials targeted by the probe: the chief of the intelligence service and the minister of labor. Labor Minister Alberto Flamarique quit only after Alvarez himself stepped down as vice president.

Polls show that 95% of Argentines suspect graft is common in the Senate, which La Nacion newspaper compared in a recent editorial to a thieves' hide-out.

So De la Rua walks a tightrope. On the one hand, in the interview in the presidential palace, he defended his refusal to dismiss the aides who were under investigation and questioned how solid the allegations are. He pointed out that he made an unprecedented decision to let investigators scrutinize the secret budget of the intelligence service, which some critics believe was the funnel for the bribes.

"I don't think the money came out of the government; I can't find a source where it could have come from," De la Rua said. "This happened in the Senate, and its magnitude is undetermined. I hear consistent opinions that yes, this happened--[but] we don't know how much money, which senators."

The president insisted that he has not abandoned his reformist crusade or capitulated to the political establishment. Critics worry that his replacement of the justice minister in the Cabinet shake-up last week could muzzle the new and well-regarded anti-corruption agency.

"The fight against corruption is the banner of the Alliance, so this [Senate scandal] must be cleared up," the president said.

With more than three years left for this administration, the next moves on the political game board will be crucial. De la Rua says he believes Alvarez's promise that he will continue as a loyal leader of the political coalition despite his resignation.

Another likely scenario: Alvarez, 51, becomes an opponent and tries to compensate with his media skills for his lack of a party machine. If he takes part of the Alliance with him, De la Rua and the Radicals could move closer to their main opposition, the center-right Peronists, analysts say.

The political future depends partly on the economy, which suffers from 15% unemployment, low growth and a widening deficit. De la Rua has placed key allies in Cabinet posts in hopes of making progress on the economic front. If he succeeds, analysts say, there will be less pressure to pursue an anti-corruption purge.

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