The Argentine mid-terms campaign was stirred last weekend after a recent investigation linked La Libertad Avanza candidate José Luis Espert to a businessman facing drug trafficking charges.

Prosecutors in a Texas case found Espert’s name in accounting records held by Federico “Fred” Machado, an Argentine aircraft dealer awaiting extradition for drug trafficking, money laundering and fraud charges. The documents show that a trust managed by Machado and his partner, U.S. citizen Debra Lynn Mercer-Erwin, transferred US$200,000 to Espert on February 1, 2020.

Machado is currently under house arrest in Viedma, in the province of Río Negro, awaiting an Argentine Supreme Court decision on his extradition request. Mercer-Erwin is already serving a 16-year prison sentence in the U.S. in the same case.

The news was first published on Sunday in elDiarioAr by Sebastián Lacunza, who was Herald director between 2013 and 2017.

Opposition lawmakers demanded Espert be expelled from the lower house Budget and Finance Committee, which he presides over, for “moral incapacity.” The petition was introduced on Tuesday by deputies Victoria Tolosa Paz and Agustina Propato, and signed by representatives from Unión por la Patria and the Coherencia bloc, made of former La Libertad Avanza deputies and allies. 

“José Luis Espert cannot continue to chair the Budget Committee of @DiputadosAR,” posted Germán Martínez, head of Unión por la Patria bloc in Congress, on his X account.

Before joining Javier Milei’s party La Libertad Avanza, Espert ran for president in the 2019 elections with his own party Frente Despertar. According to Lacunza’s investigation, Machado was singled out as the main donor for that campaign by multiple sources.

Milei’s main national deputy candidate in the Buenos Aires province, Espert briefly addressed the issue in a TV interview, saying that he only saw Machado the time he travelled in the businessman’s private plane. He also accused Kirchnerism of setting up a smear campaign against him.

“In January or February 2019, I thanked someone I had been introduced to who wanted to present my book in Viedma,” he said on Sunday, referring to Machado. “Obviously, I thanked him for taking me on his plane. You can imagine that if I had known what that person was like, I wouldn’t have been thanking him from the rooftops.”

According to Lacunza, Espert actually met the indicted businessman at least six times, and his contributions to the campaign included cash as well as lending an airplane and a car. According to the reporter, Espert bought “a BMW worth US$90,000” a month after receiving Machado’s US$200,000.

President Milei backed Espert in a morning TV interview on Tuesday, describing the accusation as “hair salon gossip” and a “recurrent” political attack. 

Who is Machado?

The case against Machado was opened in 2019 by the Dallas-based WFAA TV channel in Texas, U.S. A series of stories published by the network led to the indictment of Machado and seven alleged associates.

The investigation found more than 1,000 aircrafts registered in Onalaska, a small Texas town with a population of a little over 3,000 people — a larger planes-per-capita ratio than anywhere else in the U.S.

Foreigners could anonymously register an aircraft by transferring ownership to a U.S. trust company. The investigation found that the trust that registered those planes in Onalaska was called Aircraft Guaranty Corp. The company’s airplanes were regularly found “loaded with drugs” outside the U.S.

“Prosecutors also told WFAA that their counterparts in Colombia believe a huge reduction in the number of narcotrafficking flights was a direct result of the indictments,” the investigation by WFAA said.

Texas prosecutor Ernest González accused Machado of being responsible for large-scale drug trafficking linked to the Sinaloa cartel. Machado himself admitted in an interview that he defrauded investors and lenders for at least US$350 million, in a scheme based on selling airplanes that either didn’t exist or weren’t for sale.

“The way they portray me is like you’re talking to El Chapo,” Machado said to the WFAA in 2023. “I’m not a saint,” he said. “I made mistakes, but I’m not a narcotrafficker.”