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Bondholders argue that Argentina is hiding money in Basel
El Cronista
January 26, 2010

The president of the American Task Force for Argentina (ATFA), Robert Shapiro, also said that the debt swap will only benefit the vulture funds

FROM NEWS AGENCIES Buenos Aires

The president of the American Task Force for Argentina (ATFA), Robert Schapiro (sic), said that Argentina is hiding funds, to avoid embargoes, at the Bank for International Settlements in Basel (BIS), while down-playing the scope of the debt swap, saying it will only benefit the vulture funds and will not improve the country's access to the markets.

In an interview given to the Reuters news agency in Rome, and published on the ATFA website, Shapiro said: "There is no reason for those who rejected the first swap to accept this one, which has more unfavorable conditions."

"She," meaning President Cristina Fern ndez, "can escape from legal decisions, but she can't degrade and debase an international financial institution to do it," Shapiro said.

Meanwhile, the Finance Secretariat continues to delay the confirmation of the submission of the response to the Securities and Exchange Commission (SEC) on the objections it sent back.

Official sources consulted at the Palacio de Hacienda are agreeing to talk about tangential aspects of the swap, but when asked specifically about the response to the SEC, the response is stony: "We won't talk about that."

According to speculation, officials don't plan to reveal the exchanges of information that are being produced, anticipating that the consultations be repeated, and thus avoiding the downward spiral of responses and counter-responses.

Despite these complications, the Finance Secretariat says that this week, officials from their section will travel to Europe to move conversations with bondholders forward.

Those who embark to the old continent will run into Shapiro, who is taking advantage of a visit to Italy, where the majority of holders of so-called "tango bonds" are found, where he will ask the Italian Central Bank and Treasury officials to pressure the BIS so that Argentina reduces its reserves with the bank.

The bondholder representative said that he will carry the same message to London, Paris and Berlin.

"Italian pensioners ask, 'where is my money?', and the response is 'it's across the border in Switzerland," Shapiro said. "The Italian government should do something."

"We want the BIS to tell Argentina that it can only keep the funds that it requires for the legitimate BIS matters," said Shapiro, ex-economic advisor to former President Bill Clinton.

"Argentina is using the BIS and abusing its international role in order to evade court judgments in the United States, Italy, Japan, England and France," he said.

Regarding the actions of the Argentine government, he said that "it is likely they have mixed what might be technical reserves with other government assets," and added that the government had begun closing its foreign bank accounts starting in 2001, in preparation for the default.

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