In 1936, the Argentine Electricity Company, The company that supplied electricity to the Federal Capital had to renegotiate the service concession and extend until 1997 the exclusivity of the provision of electrical service.
The decision was in the hands of the Buenos Aires Deliberative Council, composed in a high percentage of radicals. The other important groups were the socialists and the liberal-conservatives, grouped together under the curious name of “independent socialists.”
Starting in 1933, the Belgian-owned company, a subsidiary of the multinational SOFINA, which had been transformed into an Argentine public limited company to evade taxes, He began to lobby and bribe different councilors from different parties. and buy, via advertisements, the opinion of the majority of the Buenos Aires press.
In 1936, the business group presented to the Deliberative Council the request to extend the concession in time and space, since it intended to expand its area of influence to Greater Buenos Aires. “Generously”, he offers in exchange a reduction in the home rate and an increase in the cost of service for businesses and industries.
Her urgency for approval led her to contact Dr. Marcelo T. de Alvear in September 1936., which was in Europe. Senior officials of the firm meet with “Don Marcelo” with the aim of having him telegraph to his co-religionists ordering them to support the CADE project.
His independent socialist colleagues did the sameurged by their leader, the Minister of Finance, Federico Pinedo, former legal and technical advisor of the electric company.
A renegotiation tailored to the company
On October 29, 1936, with the votes of radicals, conservatives and independent socialists, the Deliberative Council of Buenos Aires promulgated ordinance 8,029 granting CADE a new concession until 1997 (due to different political events it would not be fulfilled, but it was in effect for decades) .
In addition, the State forgave the company the reimbursement of more than 60 million pesos that he had overcharged consumers (0.35 pesos instead of 0.25 pesos per kilovat), arguing a “confusion.”
CADE was also exempt from paying any type of taxes on its current buildings or those to be built.
The Investigative Commission of the Public Electricity Services of the City of Buenos Aires determined that “The Municipality should have taken free possession of the facilities and those millions were credited at the expiration of the contracts, and that CADE was obliged to return, on December 31, 1942, 115,595,510.92 pesos for excess profits and the CIAE 82,651,803.67 pesos for the same concept. (1)
The Commission also found that The draft ordinances and even the speeches of the councilors were written by CADE staff under the close supervision of SOFINA. (2)
It was said then that each councilor who voted for the “favors” to CADE received 100,000 pesos at that time. An average salary was $150 per month.
The corruption of CADE, that is payments for “professional services” were not limited to corrupt councilors but they included prominent figures from General Justo’s government, such as Carlos Saavedra Lamas, future Nobel Peace Prize winner and director of CITRA, a company associated with SOFINA; Alberto Hueyo, vice president of CADE; and Federico Pinedo, technical and legal advisor of CADE.
1. Report of the Investigative Commission of the Public Electricity Services of the City of Buenos Aires, Buenos Aires, Workshops of the National Penitentiary, 1944.
2. Juan Pablo Oliver, La CADE and the Revolution, Buenos Aires, 1945.
