Volkswacht Bodensee - Scandal facing sister of Argentina's president: 3 things to know

The burgeoning corruption scandal made waves after leaked audio recordings linked Karina Milei, who serves as the General Secretary of the Presidency, to profiting from the country's purchases of medicine for disabled people.

No charges have been brought in the matter, but the brother-sister duo's motorcade was pelted with stones and bottles at a campaign event Wednesday.

Here are three key points about the campaign season scandal that's keeping the Argentine populace in suspense ahead of provincial and national elections:

- What is being investigated? -

Leaked audio recordings are purported to reveal the former head of the National Disability Agency (Andis), Diego Spagnuolo, saying Karina Milei allegedly collects three percent of his agency's payments for medicine to pharmaceutical company Suizo Argentina.

"Karina gets 3 percent and 1 percent goes to the operation," a voice alleged to be Spagnuolo says in the leaked recordings. He also claims to have informed the president about his sister's alleged scheme.

"They take half a million or more per month," the voice continues, apparently noting a monthly take of more than $500,000 US dollars.

The audio files were released on August 19 and the government removed Spagnulo from his position thereafter "in light of publicly known events."

The alleged scheme also implicates Eduardo "Lule" Menem, the nephew of former president Carlos Menem, who led Argentina from 1989 to 1999.

Federal judge Sebastian Casanello ordered 16 raids on Friday, including the home of one pharmacy owner, Jonathan Kovalivker, whose business partner and brother Emmanuel was caught attempting to flee police with $266,000 in envelopes.

- What the government says -

Karina Milei has not made a public statement responding to the scandal despite topping headlines and triggering a flood of memes on social media.

On Wednesday, the president addressed the audio recordings, saying they belonged to Spagnuolo but told reporters "everything he says is a lie; we will take him to court and prove that he lied."

The statement was made minutes before Milei was forced to evacuate a campaign rally after protesters hurled stones at the van he was traveling in.

Milei's spokesperson took to X to call the allegations "political exploitation by the opposition during an election year."

The national legislative elections on October 26 will put part of Congress on the ballot and test Milei's popularity after wrangling inflation amid a severe austerity program that demanded painful public spending cuts, including for those with disabilities.

Local legislative elections in the province of Buenos Aires -- which accounts for more than a third of registered voters in Argentina -- will also be held in September.

- Repercussions -

Markets are responding negatively to the hubbub: the stock exchange in Buenos Aires dropped in recent days, the peso is under pressure against the dollar, and the country's risk index -- which measures the government's borrowing cost in foreign currency -- has surged.

The scandal comes after Congress overruled Milei's veto on a law declaring a disability emergency and allocating more funds to the sector -- a major political blow to the president and his budget-slashing approach.

The pharmaceutical company, Suizo Argentina, issued a statement saying it acted "fully in compliance with current rules and laws" and vowed to work transparently with oversight agencies and government.

G.Frei--VB