Argentina corruption scandal sweeps up business elite

Several executives from some of Argentina's largest energy and construction companies are behind bars as part of an unfolding corruption scandal with echoes of the giant Lava Jato imbroglio in Brazil.

Gerardo Ferreyra, vice president of local contractor Electroingeniería, which set up a joint venture with China to build two hydroelectric dams in southern Santa Cruz province, is among the senior businessmen who have recently been arrested. He has denied any wrongdoing.

Local power generator Albanesi canceled a planned bond sale after the arrest of its chairman Armando Loson. Juan Carlos de Goycochea, former head of the local affiliate of Spain's Isolux, was also detained. Neither has commented publicly.

The three executives are among nine who have been detained so far. Another two are considered fugitives. All are accused of participating in a criminal conspiracy that involved kickbacks for public works contracts.

The case erupted out of a set of eight notebooks in which Oscar Centeno, a former driver for the now defunct planning ministry, detailed a decade of receiving bags filled with cash from contractors and delivering them to government offices.

Judicial officials have described late former president Nestor Kirchner and his wife and successor, Cristina Fernandez de Kirchner, as leaders in the conspiracy to obtain kickbacks from contractors.

Centeno was the driver of Roberto Baratta, the right-hand man of Julio De Vido, the powerful planning minister during the Kirchner era who was in charge of all federal energy and construction works.

Baratta and De Vido have separately been accused in a different case involving alleged kickbacks in LNG imports.

The inclusion of private-sector executives in the wide-ranging case has set this investigation apart from other corruption-related probes that have involved Fernandez's allies since she stepped down in December 2015.

Her successor, sitting president Mauricio Macri, made changes to the contracting process to make it more transparent. Macri's own family made its fortune in the construction business, but has not been directly involved in the current scandal.

The Brazilian corruption scandal that broke out in 2014 embroiled state-controlled Petrobras and a pool of mostly local contractors led by Odebrecht.