ARGENTINA: IBM Under Investigation for Corruption

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Jun 11 1997 (IPS) - Only two years ago, the president of IBMs Argentine affiliate, Ricardo Martorana, was the US computer company’s star executive, but Wednesday saw him behind bars, charged with bribery and fraud against the State.

In his deposition, Martorana said the parent company had justified their decision to ask for his resignation and the ensuing investigation as part of their corporative defence strategy.

For under United States’ Law, IBM could be tried for allowing corrupt practices to take place abroad – a norm never as yet applied to Argentina.

Carlos Manfroni, president of the non governmental Public Ethics Foundation, told IPS that for the US law to be applied in this case it would have to be proven in detail that the parent company had been aware of the business undertaken by its affiliate, and that it had given its approval.

For the time being, the IBM parent company and the government of the United States have been unenthusiastic about collaborating with the Argentine justice system.

In order to prove the law was broken a fax, electronic message or other document will have to be found to prove the link with the affiliate company.

This week, Federal Judge Antonio Bagnasco repeated Washington’s request for Buenos Aires courts to investigate the IBM Argentina division chain of management, especially those executives linked to the contract: Steve Lew, Marzio Kaiser, Robeli Libero and Peter Rowley.

Martorana was asked to leave IBM when a legal investigation started into the affiliate company’s 250 million dollar contract with the State Bank of the Nation of Argentina.

The judge considered the rate offered was 50 percent higher than the rest of the market and that an illegal commission of 37 million dollars was paid by IBM Argentina.

Seven former Bank directors – some either imprisoned or fugitives from justice – were tried, as were two IBM directors. One of these was Martorana, who gave himself up this week after 20 days on the run, and the other was Gustavo Soriani, former manager of the affiliate who is still at large.

Meanwhile, the suspect directors of the leading Argentine bank have not all escaped, for while the bank president, Aldo Dadone, has still not been caught, Alfredo Aldaco has already been tried and detained, and Genaro Contartese has been tried.

Another runner is Juan Carlos Cataneo, who was undersecretary of the current presidential chief of staff, Alberto Kohan. He resigned in 1996, when the legal system was on the point of trying him for links with the IBM case through a company he owned, which would have become a supplier in the project.

Contartese was a good friend of Argentina’s President Carlos Menem and, according to facts revealed this week, they often played golf together. Dadone was a close associate of former economy minister, Domingo Cavallo, who said he felt let down by his colleague’s action.

According to a newspaper scoop which came to light this week, Aldaco and Contartese hold two Swiss bank accounts holding 2.1 million and 1.4 million dollars respectively.

The account numbers where the IBM illegal commissions had been deposited were provided to the judge by Cavallo.

The courts believe the CCR company, closely linked to Cataneo, actually received 21 million dollars of the agreed commission.

In his declaration before the court, Dadone said Martorana and Soriani had offered a bribe in order to win the bidding for the bank computerisation project, but Martorana insisted he was unaware of the details of the deal which was “supervised by people in the parent company.”

Martorana was forced to resign, and Soriani, currently on the run, was sacked.

In 1995, Martorana had been honoured as a model IBM executive in the United States, at an annual convention of company delegates from around the world. At the time, the IBM head, Louis Gestner, had congratulated the executive on his performance.

“I want Martorana, the man able to create the Banco Nacion deal, which generated 70 percent growth for this affiliate, to stand up,” said Gestner to a storm of applause.

But this Wednesday, Martorana, a diminished figure, gave himself up and was locked up in prison until his trial gets underway.