Audit Uncovers Irregularities in Over 8,500 Cooperatives in Argentina
Title: Audit Reveals Irregularities in Cooperatives and Mutuals in Argentina
The Ministry of Human Capital, led by Sandra Pettovello, completed a significant audit of cooperatives and mutual organizations through the National Institute of Associativism and Social Economy (INAES). The findings were surprising. The audit led to the revocation of the authorization for 8,588 cooperatives and 673 mutual organizations to operate. Additionally, 7,887 cooperatives and 418 mutuals are currently facing potential suspension and legal investigations.
These organizations must provide required documentation, including assembly records and financial accounts for subsidies received during Alberto Fernández’s administration. If they fail to do so, they risk permanently losing their operating licenses.
From December 2019 to December 2023, social and civil organizations significantly benefitted from government funding, receiving $29,966,430,726. Out of this amount, $18,391,880,742 came from the Secretary of Popular Economy, led by Emilio Pérsico, and $11,574,549,984 from INAES. The major recipients were linked to organizations like the Movement Evita, MTE, CCC, and Barrios de Pie.
Each of these organizations had leaders in key positions at the former Ministry of Social Development, responsible for disbursing funds through programs such as Potenciar Trabajo, urbanization projects, and Alimentar. Notably, eight cooperatives and one federation linked to the Union of Workers of the Popular Economy (UTEP) received about $5 billion.
Key beneficiaries of government subsidies include:
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Federation of Limited Recycling Cooperatives and Social Civil Association El Amanecer de los Cartoneros: Each received $1.2 billion and are part of the MTE and CETEP connected to Juan Grabois.
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Federation of Work Cooperatives Evita Limited: Also tied to the Movement Evita, its leader, Emilio Pérsico, managed the Secretary of Social Economy.
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Cooperative of Work El Fortín de Encarnación Limited: Received $651,824,359. Its leader, ex-deputy Juan Carlos Alderete, is linked to the CCC.
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Social Civil Association SER.CU.PO: Received $639,245,356 and manages programs like Potenciar Trabajo.
- Somos Barrios de Pie through Social Civil Association Caminos de Tiza: Obtained $305,277,990 in funding.
Additionally, many cooperatives have faced legal issues tied to scandals, such as misappropriated funds. The audit detected a significant increase of 139% in registered cooperatives in just four years, raising alarm. The number jumped from 9,978 in 2019 to 23,836 in 2023, mostly in the work cooperative sector.
The INAES found troubling inconsistencies in documentation among many organizations. As a reaction, they implemented strict measures to ensure compliance and eliminate fraudulent practices.
Marcelo Collomb, head of INAES, aims to restore accountability in the cooperative sector, which has suffered from mismanagement and rampant irregularities. The previous administration had allowed around 10,480 cooperatives to remain suspended without investigation, exposing an inflated and poorly managed registry.
In March 2024, the government decided to suspend operations for all cooperatives registered between 2020 and 2022, affecting over 11,000 entities due to identical addresses and repeated members across cooperatives. The ongoing efforts aim to restructure the cooperative system and ensure transparency.
The INAES has ordered all entities to correct their status to avoid consequences, highlighting the urgent need for reform in this sector.