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OPINION AND ANALYSIS | 08-06-2024 05:32

The political commissar, the sister and President Milei’s only friend

With the expulsion of Nicolás Posse, Santiago Caputo becomes the only non-family member with a say in President Javier Milei’s inner circle.

President Javier Milei’s administration is going through a rough patch, even if they don’t want to admit it. Added to the self-inflicted wound that was the firing of Cabinet Chief Nicolás Posse (a longtime friend of the President), the government is now under heavy fire given a series of scandals at the cleverly named Human Capital Ministry, where another close friend of the head of state is on the ropes in a context of accusations of corruption and ineptitude in the sensitive issue of food assistance. 

In a country where nearly 60 percent of the population is poor and the government has engineered a recession to lower inflation, stashing perishables destined to social assistance is inexcusable, even if Milei maintains solid figures in opinion polls. As the President throws himself in front of the barrage of bullets aimed at his controversial Human Capital Minister Sandra Pettovello, Congress is playing its own game, passing its own bills aimed at strengthening the purchasing power of Argentina’s beleaguered retirees and pension plan beneficiaries. Knowing that Milei will veto them, given the negative impact on the budget surplus, the pragmatic majority that found Peronists, Radicals, and members of the “moderate” caucus commanded by Miguel Ángel Pichetto on the same side relied on a little of the good, old populism to hit back at the Casa Rosada, which could now find itself blocking financial relief for the elderly. How much of this is collateral damage? Or is it all part of star advisor Santiago Caputo’s masterplan to dismantle the government, anarcho-capitalist style?

Up until now, the inner circle with a seat at the Casa Rosada breathed a certain air of infallibility with regards to their communications strategy, with only a few minor missteps generating some level of apprehension that were quickly resolved. Even the multitudinous march in defence of the public university system was quickly corrected by releasing funding and deciding to negotiate and reach agreements. Caputo, the supposed mastermind behind the campaign and the ‘Priest-King’ of the ‘Mileist’ religion had even managed to turn several tough defeats into victories, for example by framing the initial failure of the ‘omnibus’ bill in the Chamber of Deputies as a prime example of the political caste looking to perpetuate its sinful benefits. 

Caputo, who referred to himself as the “regime’s political commissar” in an anonymous account on social media platform X (formerly Twitter) that was later shuttered, was trained in the craft of political strategy by Ecuadorean spin-doctor Jaime Durán Barba, and appears to have read the historical moment adequately, constructing the myth of the leader within the right-wing populist framework, leveraging the power of highly ideologised militant communities within the digital information ecosystem. While synthetic power was distributed throughout the network, real power has always been extremely concentrated within the ranks of La Libertad Avanza. With the expulsion of Posse, Caputo becomes the only non-family member with a say in the inner circle. The fall from grace of Pettovello undoubtedly represents a challenge for him and President Milei.

The Pettovello affair was so horribly managed that it increases the focus on the president’s stalwart support for “the best minister since the return of democracy,” as he recently described her. While the idea of creating a Human Capital Ministry sounds smart, it was a brilliant way to mask a clumsy attempt at communicating that this government was effectively shrinking the state. Five ministries (Labour, Social Development, Education, Culture and Women, Gender & Diversity) were merged to create a mega-ministry that was handed over to Pettovello, a journalist and social scientist with no previous experience in public service or management. The new super-portfolio quickly became unmanageable in an already bloated and Kafkaesque state bureaucracy, made even more precarious given the lack of high-level appointees throughout the structure and the magnitude of the crisis in the streets, which generates mounting demands for social assistance. 

A journalistic investigation noted the Ministry had stashed foodstuffs, a fact that was originally denied by the government. Then it was noted that there were perishables at the storage facilities, which was also denied. Ultimately, a judicial investigation found that officials had been sitting on the supplies, some of which were indeed perishable, and that there was no plan to distribute them, forcing an aboutface that saw the minister force out a high-ranking secretary, accusing him of corruption given supposed spurious contracts and kickbacks through international organisation OEI in the process. 

As the scandal kept on exploding in the hands of the government’s spokespeople, Milei himself was forced to take on the defence of his good friend Pettovello, marking a glaring difference with the treatment he gave Posse. He also suggested that Kirchnerite moles were responsible for the graft and the accusations, given his minister’s aptitude at detecting pockets of corruption.

Beyond the specific merits of the scandal, the reality is that the Milei administration is finally feeling the heat. Not only is one of the closest ministers to the president under intense public scrutiny, so is the economic plan. No-one denies that Milei and Economy Minister Luis ‘Toto’ Caputo are committed to fiscal balance, but their anti-inflationary plan that consists of absorbing every possible peso is engineering a deep recession. The expectation is that deregulation will lead to a wave of investments that will spark a “V-shaped recovery.” Yet, the government has failed to pass a single bill through Congress since taking office and its DNU emergency mega-decree is constantly on check by the Judiciary. The markets, which have been mostly calm throughout Milei’s Presidency, have become rattled, particularly as the opposition gathers the votes to pass their own correction to the formula that determines social security payments, one of the major components of Argentina’s chronic fiscal deficits.

The president needs a legislative win, quick. With Interior Minister Guillermo Francos taking over the post of Cabinet Chief, and getting the omnibus/’Ley de Bases’ bill over the first hurdle at the Senate, with amendments that reveal concessions, shows there is real hope within the government that they could push it through. The Milei administration needs to give real signs that they aren’t just zealots, but that it understands its role and the responsibilities it has. Society has given them ample support, even in the face of an excruciating recession that will only get worse in the near term. 

The “Kremlin Magician,” as Caputo has come to be called, has helped bring the president’s inner circle even closer in, meaning the decision-making process is even more concentrated. Neither Caputo nor sister Karina Milei are fond of speaking to the press, meaning that the president will bear the full brunt of the pressure along with a few trusted sidekicks like Presidential Spokesperson Manuel Adorni, who has no real power. Pettovello is trying to hold on, with the President’s full support. He better hope the “enfant terrible” has some tricks up his sleeve. Unless the plan is, of course, letting it all go up in flames, anarcho-capitalist style.

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Agustino Fontevecchia

Agustino Fontevecchia

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