July 17, 2007 / 1:08 AM / 10 years ago

Argentina economy minister resigns over cash probe

4 Min Read

<p>Argentina's Economy Minister Felisa Miceli (L) leaves the Casa Rosada government palace accompanied by a driver in Buenos Aires July 16, 2007. Miceli presented her resignation hours after a prosecutor requested she testify about some $60,000 (30,000 pounds) she had stashed in her office bathroom.Santiago Pandolfi</p>

BUENOS AIRES (Reuters) - Argentine Economy Minister Felisa Miceli resigned on Monday as a judicial investigation intensified over some $60,000 (30,000 pounds) found stashed in a bag in her office bathroom.

Miceli's resignation proved a political embarrassment for President Nestor Kirchner three days before his wife, a prominent senator, is scheduled to launch her presidential campaign ahead of an October 28 vote.

In recent months, Kirchner has had to contend with a series of probes into allegations of corruption or irregularities by administration officials as his government prepares for the election.

The decision by Miceli, 54, came hours after a federal prosecutor requested she testify about the money found by police during a routine check of her office last month.

Judicial authorities are probing where the money came from. Miceli has said her brother loaned her most of the money for a planned real estate deal that was never carried out.

A former president of the state-owned Banco de la Nacion, Miceli was named economy minister in November 2005.

Kirchner appointed Industry Secretary Miguel Peirano, a 40-year-old economist, as her successor, but analysts said the decision did not signal any potential changes in economic policy.

"This is a government where the president makes most of the economic decisions," economist Luis Seco told local radio.

In May, Kirchner fired two mid-level officials and a third resigned in a public works bribery scandal after Swedish construction firm Skanska said it had found "improper payments" in a government pipeline project. A judicial investigation is ongoing.

Government officials last week were forced to defend the environment secretary after a leading newspaper published an investigative report accusing her of hiring relatives and spending lavish amounts of public funds.

Bag of Cash

Opposition politicians had harshly questioned Miceli's integrity since the money was found.

Miceli said she made a mistake by keeping the money in her office, but insisted she committed no crime. It is common in Argentina to pay for real estate in cash.

Guillermo Marijuan, the prosecutor investigating the case, said Miceli should be questioned under oath to determine if she could be charged with malfeasance.

Marijuan traced the cash back to a bank he said the money came from, but failed to find any accounts there linked to Miceli or her brother. He also found there was no record of a withdrawal for that amount of money at the bank.

"Such circumstances create ... sufficient suspicion that (the minister) covered up the spurious origin of the money found inside her office bathroom," the prosecutor said in a court statement.

Local media initially reported that police had found some $240,000 in Miceli's office, but the final police report put the figure at about $60,000.

Federal Judge Daniel Rafecas, who is temporarily in charge of the investigation, will rule on whether Miceli should be called to testify in the case.

Tax evasion is rampant in Argentina, as is the perception that government officials pad their salaries with illegal gifts or bribes.

Additional reporting by Hilary Burke

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