The governors' WhatsApp: rampant nepotism and CryptoGate panic

The figure that best describes the current situation is that of a weak president who is a "head without a body" (the ruling party) and an opposition force that is a "very large body without a head" (Peronism). This dysfunction is serious : a weak president who governs with borrowed votes, and an opposition that, despite its electoral clout and legislative control—half of Congress, including a third of the Senate, which can block key decisions—has been left headless.

His boss has no political rights and is permanently barred from holding power . Although she may exert influence, her capacity for action is limited . She embodies the loss of a politician's most important attribute: power. The current president's difficulty governing lies in his lack of intrinsic power. To pass an important law or measure, he must ask permission from other forces , vote for him, or protect him from vetoes. This dysfunction, where a country is governed by politicians without effective power, is very serious.

The leader of the moderate opposition (Macri) is looking for shortcuts to withdraw and have someone dignifiedly remove him from the platform (Ritondo?), while the central figure of Peronism is disqualified. Cristina's defense, based on the idea of ​​persecution, failed to convince the Supreme Court, a sign that the legal strategy was flawed.

The country faces a significant deficit in addressing its problems , which are of great magnitude, since the main political leaders lack power, either because they have not built it, because they want to retire, or because they are incapacitated.

Called by necessity and the betrayal of their leaders, the governors tied their horses to the gates of the CFI this Monday to demand that the national government distribute the federal funds it is withholding under the pretext of ensuring a zero-deficit program. The image of tying the horses to the gates of the Pyramid of May is a recurring evocation of the tension between the provinces and the nation.

In the so-called "anarchy of the year 20," coastal leaders Francisco Ramírez and Estanislao López stormed the symbol of central authority on behalf of the provinces demanding federal order . The 24 provinces will be present at the meeting this Monday at 11 a.m. to draft a bill that mandates a distribution of the two coffers on which the Milei administration was based.

One is the Fuel Fund , which exists as a specific allocation for road works. The other is a percentage of taxes shared under the name ATN (National Treasury Contributions) , intended to address emergency situations and financial imbalances.

This Monday's meeting is the finale of a march that began on May 6 in Entre Ríos, with the gathering of a discreet group of governors who managed to gather all their colleagues from across the country to corner the nation to demand funds.

That command is made up of the host of that meeting, Rogelio Frigerio (PRO), Axel Kicillof (PJ), Maxi Pullaro (UCR), Nacho Torres (Chubut), and Peronists Sergio Ziliotto of La Pampa and Raúl Jalil of Catamarca. This push is a testament to the power of the ruling party, after the Supreme Court demonstrated its power by sentencing Cristina.

The government doesn't have much fuel left to confront this unprecedented multiparty government. It needs Congress more than ever this week, when bills it considers toxic, such as the pension increase with the moratorium, will be discussed in committee.

The unity of the governors' coalition is powerful because it has demonstrated it can move the needle on legislative votes . This is worth its weight in gold, given that the government has less than a month left until the delegation of powers to the executive branch through the so-called Basic Law expires.

The imminent election season also restores the Darwinian nature of politics and reestablishes the interconnected relationships between leaders, parties, and their conduct in management. Elections are a difficult time for everyone to play their own game; everyone becomes dependent on the whole.

The governors address their needs above party differences in a WhatsApp group called "23 Governors and One Head of Government." Everyone will be present at this Monday's meeting. The fragility demonstrated by the party leadership and leadership horizontalizes relations . What they decide in conversation is more important than what might come from above, from any of the bosses swept away by misfortune.

For the ruling party, it's difficult to move with blinders on with a president like Milei, who makes you see his sister. It's no easier for the opposition with Cristina , who requires police permission to see her, and on top of that, makes you see her son; or with a Macri who wants to stay home, doesn't want to be anyone's boss, and makes you see Ritondo or his cousin. Nepotism at its finest.

This situation reinforces the need for a league of governors across party lines to be on the verge of getting the government to concede to these two demands : to distribute the fuel revenue and at least 50% of the ATN, which is funded by 1% of the shareable funds.

In an interview last week, the government leadership (Guillermo Francos, Carlos Guberman, and others) heard the calculations being handled by a select group of leaders pushing this federal battering ram: Torres and Frigerio for the PRO party, Ziliotto and Jalil for the Peronist party, and the vice-governor of Córdoba, Myrian Prunotto, who asserts Córdoba's participation in this agreement.

If the leaders finalize the text of a bill they will submit to Congress this Monday, the government will give way to finalizing a new Fiscal Consensus . The presence of Frigerio and Córdoba ties this consensus into previous ones, dating back to the Juntos por el Cambio administration under President Mauricio Macri. These consensuses ensured that the provinces would reach the end of 2022 with a fiscal surplus and allowed for the reelection of most governors.

That stability deteriorated during the government of Alberto Fernández , which meant a deterioration of federalism, particularly in the provinces administered by Peronism, which was defeated in 2023. The presence of Nacho Torres and Claudio Vidal means that provinces emancipated from dependence on the Nation - because they have royalties that allow them to balance their accounts and have their own political game - are willing to let this project move forward .

Among the arguments the governors presented to the National Assembly was the increase in the national tax burden , which went from 22.8% to 23% during the current administration, while the provincial tax burden fell from 5.1% to 4.8%. In other words, the provinces reduced their tax burden, and the national government increased it. They also rejected the argument that the nation has a fiscal balance. In reality, the leaders argued, it has a deficit because it is not disbursing the funds it is legally required to transfer to the provinces that did not transfer their pension funds to the National Assembly.

Nor does the government release funds that feed trust funds, which had specific allocations and have been repealed. The governors are cornering the national government by taking a backseat, because it fears that Congress will pass the pension increases into law . It has said it will veto the law, but to do so, it needs the vote of legislators who can control the governors .

A middle way out would be for the Senate to approve the increase for retirees, but not the moratorium. This extension of the retirement period without contributions was a proposal by the Union for the Homeland party in the House of Representatives, which was passed because sectors of the opposition friendly to the government abstained or walked out of the chamber.

This led to an unexpected legislative victory for Peronism , which the government now wants to stop in the Senate or with a possible presidential veto. The governors' consensus is to support the increase, not the moratorium. But for this to happen, the nation must sweeten the Peronist provinces.

The governors' certainty that this will move forward without problems is because they are aware of the panic that the process in the House of Representatives is causing in the ruling party. CryptoGate investigation . This week, there will be special guests at a briefing from the respective commission.

As a result of the presentation by guests (cryptocurrency experts, a journalist), the commission will fire a barrage of requests to local and foreign courts , where the innocence or guilt of public officials will begin to be established. It's a missile that's being fired, and it's unknown where it will hit.

So far, the friendly opposition has been more than patient, but the government is playing the forgettable card. It's in its best interest to make peace with the governors. But the opposition's patience with the government in handling the affair has a limit: the electoral dispute, which is when anything goes .

The group has more aggressive bills prepared, which have already been presented in Congress. One dates back to when Torres was a senator for his province and proposes an aggressive co-participation of the check tax , one of the highest revenue sources in the tax system. It advanced until some signatories withdrew their support.

Radical Party member Victor Zimmerman presented another equally aggressive initiative in the Senate. He proposes creating an Argentine Regional Development Fund comprised of 1% of the revenue from existing or newly created national taxes and from export and import duties. This fund excludes Social Security contributions and specific Social Security tax allocations.

The consensus on these two taxes is close to collapse due to another weakness of the ruling party. Peronism has, for now, secured a veneer of unity , which is based on Cristina de Kirchner's arrest. It is a perishable product, because time will mitigate the effect of that arrest. Peronism will not miss the opportunity to test the power it gained through unity, however fragile it may be.

The test could come this week in the Senate, if Unión por la Patria forces rulings on bills such as pensions, disability, and others . If this happens, that faction will request a special session to discuss them in the Senate without further delay. The Chief of Staff will appear before them on Wednesday . The opposition will test the power of the slogan coined by the Partido Juventud (PJ): Cristina is Milei's prisoner.

Francos's figure is an opportunity for a shot at target practice and a test of accuracy . Victimization and the perception of persecution by leaders can be transformed into a proselytizing opportunity. In fact, this can become a catalyst for unification, as recently observed with expressions of solidarity from figures who were previously competing for party leadership.

This inherently undesirable event then becomes a strategic or tactical opportunity. The absence of this figure could facilitate internal unity . From another perspective, this frees the main political force from dependence on a single figure. The triumph of the emerging force in 2023 is partly explained by having captured votes from the opposition coalition, after the main political force finished third in the primaries.

The interior sector of the main political force disengaged from the presidential election and lost in several provinces in the first round, demobilizing in the second. This was due, among other things, to hostility toward the metropolitan faction , which, according to some leaders, "cuts back" and "shrinks" the force when it should be seeking to expand it.

Furthermore, Peronism has been warned by the ruling party, led by Ezequiel Atauche, that the government is preparing a decree to reform the law on the National Audit Office . This decree will be the source of renewed disputes because the Constitution mandates that the AGN be regulated, but that it be done through a law approved by a qualified majority. This is what legal experts call a "constitutional law."

The DNU echoes the demands of bills like those of Juan Carlos Romero, José Mayans, and, in the House of Representatives, Martín Menem. They all agree on reducing the auditors' mandate, but modifying the number of representatives in each chamber. This DNU threat seeks to hinder multiparty agreements in both chambers, which exclude representatives from La Libertad Avanza.

The audit office currently operates solely under the president's authority. The six auditors representing Congress have already completed their mandates . Those who are looking in the dark believe there's an agreement between the government and the Peronist party to have the AGN, which is supposed to audit the executive branch's expenditures, run by a single person, but without auditors representing Congress, at least until December, when the legislature changes.

The current president of the AGN is Peronist Juan Manuel Olmos , a strongman of the Partido Juventud (PJ) and responsible for auditing the spending of Alberto Fernández's administration, which he served as deputy chief of staff. Every government's dream is to have no one control its spending and for the controller of the previous administration to belong to the same party that governed.