Amnesty for undeclared dollars divides Argentina

BUENOS AIRES, Argentina (AP) — A plan to get Argentines to pull their undeclared U.S. dollars from under their mattresses and out of illegal tax havens, and deposit them in the banking system is eliciting warnings that it will turn the country into a magnet for money launderers and organized crime.

The government of President Cristina Fernandez dismisses those concerns, saying the proposal to accept these dollars without charging taxes or asking whether they were obtained legally is needed to finance the key construction and energy industries, which have stalled due to inflationary pressures and currency controls.

Critics say the real motive is to bring billions of greenbacks into the investment-starved formal economy, and thus stave off another crippling devaluation of the peso before October's mid-term congressional elections determine whether Fernandez can keep ruling with a free hand.

The proposal, which goes before the Senate next week, aims to get savers and investors to deposit undeclared dollars at Argentina's Central Bank in exchange for bonds and certificates of deposit. The bonds would pay 4 percent through 2016, while the CDs could be traded and eventually redeemed for the entire amount in dollars, as long as the holder presents evidence that the money was spent on construction or real estate.

The government says the law is aimed principally at Argentines who have bought U.S. dollars as a hedge against high inflation. Deputy Economy Minister Axel Kiciloff estimated that Argentine individuals and companies have socked away up to $200 billion in undeclared currency outside the country.

The government is trying to make up for its disappearing foreign reserves, which have fallen more than 20 percent to $39.4 billion, by bringing in these black-market savings before the legislative elections, said Alfonso Prat-Gay, a deputy for the opposition Civic Coalition and former president of the Central Bank.

But Argentina's auditor general Leandro Despouy warned senators that it could exacerbate the dollar shortage by increasing distrust among international anti-money laundering groups and holding back foreign investment even more. "This law is going to be objected to because of the opening it entails for the possibility of laundering," Despouy told a senate committee on Tuesday. He called it a huge invitation for anyone to have their money "legitimized through fictitious groups."

The Financial Action Task Force, which guides governments worldwide on money laundering controls, could conclude that Argentina is providing incentives to launderers because this would be the second amnesty the Fernandez's government has offered in five years. The last amnesty pulled about $4 billion into government coffers in 2009.

This proposal specifies that no elected officials and no one linked to crimes of money laundering, financing terrorism or tax evasion can benefit from the amnesty. But Roberto Durrieu, a lawyer specializing in the prevention of corruption and money laundering, said the law needs to include a "more specific typology of these crimes."

"There is a series of contradictions in articles of the project, and we run the risk that organized crime would see a window to enter Argentina," Durrieu told lawmakers.

Opposition politicians have noted that the proposal comes amid a federal investigation into money laundering allegations involving businessmen and financiers with close ties to Fernandez.

Lazaro Baez, a businessman close to Fernandez and her late husband, President Nestor Kirchner, has denied allegations that he became rich on public works projects through his access to the presidential couple and had cash flown out of the country on private planes. Kirchner's former personal secretary, Miriam Quiroga, meanwhile spent hours testifying before a judge and prosecutor on Tuesday after declaring in a TV interview that she saw bags of cash brought through the presidential residence.

Fernandez has rejected the criticism, and said her opponents are pressing for a peso devaluation that would devastate ordinary Argentines who lack the ability to hide funds abroad.

"Those who want to make money at the cost of a devaluation that the people will have to pay for will have to wait for another government," she said last week. "Every time there's an election, on the side there's the economy and on the other, the scandals. It's typical of every election."

The government's refusal to pay billions of dollars to foreign governments and other investors whose businesses have been expropriated or otherwise harmed by government decisions have largely closed off foreign capital markets to Argentina. The risk to future investments has raised borrowing rates to the point that poor, landlocked Bolivia can issue debt at a third of the cost of resource-rich Argentina. Meanwhile currency controls meant to stem capital flight have had the opposite effect, with dollars flowing out at an increasing rate.

The proposed bonds would help finance oil and gas development by YPF SA, the state-controlled energy company Argentina seized from Spain's Grupo Repsol last year. Repsol has gone to international courts seeking $10.5 billion for its controlling shares, which the Fernandez government has so far refused to pay, and threatened to sue any other energy company that tries to develop the Argentine oil and gas resources it discovered.

Argentina's construction sector, meanwhile, traditionally has fixed contracts and estimated building costs in dollars, and it slowed to a standstill after the Fernandez government ordered all new contracts to be made in pesos. Many buyers and sellers have found it too difficult to settle on prices in an economy where actual inflation is estimated to be rising more than twice as fast as the official rate of 10 percent, black-market trading for dollars values pesos at half their official exchange rate, and fears of a disruptive currency devaluation have grown.

In this context, the initiative seems to offer a lifeline to real estate developers.

"Any measure that looks to get dollars out from under people's mattresses and into the real, productive economy is welcomed," said Gustavo Weiss, president of the Argentina Construction Chamber.

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Argentina offers tax amnesty for undeclared cash

BUENOS AIRES, Argentina (AP) — Argentina's government announced new measures on Tuesday intended to suck up undeclared dollars in response to growing pressure to abruptly devalue the nation's currency.

Economy Minister Hernan Lorenzino said the new tax-free bonds and certificates of deposit will pull into the banking system the foreign currencies that Argentines have hidden under mattresses and spirited out to illegal tax havens.

Both measures are being sent to congress for approval, presumably because enabling people to declare cash without paying criminal penalties requires the force of law.

Argentines will need to deposit these undeclared dollars at the Central Bank, which will issue CDs for the entire amounts, Central Bank President Mercedes Marco del Pont said. The bonds will pay 4 percent interest through 2017, Lorenzino said.

The money will be used to finance energy and home construction projects, generating jobs and stimulating the economy.

Both sectors have stalled, in part because speculation about future inflation and a possible devaluation has made long-term investments in Argentina too risky.

Tax chief Ricardo Echegaray said that once approved, the amnesty will last for three months, and that any person or corporation can benefit. But he also said elected officials and anyone facing money laundering probes cannot participate.

"We have a long list of people facing charges who are not eligible," Echegaray said, and named some names beginning with Lazaro Baez, a businessman close to President Cristina Fernandez and her late husband Nestor Kirchner who is the focus of a federal money laundering investigation.

Hours earlier, Fernandez ruled out any currency devaluation while she's president, and dismissed the brewing Baez scandal as election-year politics.

But many Argentines have lost faith in the peso and in her leadership as inflation soars, Central Bank reserves drop and the economy slows, hamstrung by currency controls that make doing legal business more difficult.

A closely watched sign of the country's economic future is the illegal currency market, where Argentines are increasingly desperate to ditch their pesos as inflation climbs above 25 percent a year. Amid fears of a potential currency shock, they're now trading nearly 10 pesos for each dollar — close to half the official value of 5.2.

This "blue dollar" trading remains marginal compared to the overall economy, but it's a free market, stubbornly beyond the government's control, and as such, it's increasingly being looked at by Argentines trying to protect their pocketbooks. The central bank periodically releases dollars to rein it in, but that's risky as well, now that Argentina's reserves have dropped by more than 20 percent, to $39.75 billion.

New polls suggest Fernandez has lost more than half the support she had when re-elected in October 2011, including a 10-point ratings drop in the days since a scandal broke on April 14 over allegations that Baez spirited millions in cash out of Argentina in private planes.

A survey by the Management & Fit agency said only 29 percent approval of Fernandez's leadership, down from 64 percent when she was re-elected. That poll of 2,000 Argentines, taken just after the scandal broke, had an error margin of about two percentage points.

A separate survey about her personal image said 48 percent viewed it as positive after the scandal broke, down from 57 percent before. A total of 1,000 Argentines responded to that survey by the Ipsos-Mora firm, which had an error margin of three percentage points.

Fernandez waved away the trouble in a speech at the Casa Rosada government house Monday night.

"Those who want to make money at the cost of a devaluation that the people will have to pay for will have to wait for another government," she declared. History shows that devaluations have only hurt ordinary Argentines, while enabling the financial sector to make huge gains "off the hunger, misery and de-industrialization of the country," she warned.

"They're raising this idea again because an election period is approaching," she added. "Every time there's an election, on side there's the economy and on the other, the scandals. It's typical of every election."

That brief reference to scandals was her first comment yet about allegations that Baez had used his access to the presidential couple to make huge profits that he laundered by having aides fly the cash out of the country in mysterious trips on private planes.

The allegations, made by former Baez associates in televised interviews with investigative journalist Jorge Lanata, have made for sensational television in Argentina, and a judge agreed to open a formal investigation of Baez and his associates.

Lanata struck closer still to the president on Sunday night, interviewing Kirchner's former secretary, Miriam Quiroga, who described bags full of cash in the Casa Rosada. She said they were delivered to the southern province of Santa Cruz, where Baez based his business empire and the Kirchners have several homes. Quiroga also alleged that the Kirchners had vaults built to hold the cash.

Judge Julian Ercolini subpoenaed Quiroga to testify in the widening criminal investigation by prosecutor Guillermo Marijuan, and Attorney General Alejandra Gils Carbo ordered additional police protection for the prosecutor, who reported receiving at least two threats that his young daughters will be killed if he doesn't drop the probe.

Meanwhile, Fernandez faced a new challenge on her left flank: the launching Tuesday of a new political party by her former ally, union boss Hugo Moyano, who has become one of her toughest critics. Moyano plans to run lists of candidates under his "Culture, Education and Jobs" banner in October's midterm elections.

___

Associated Press writer Almudena Calatrava contributed to this report.

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Argentina rains death toll up to 55, 20 missing

LA PLATA, Argentina (AP) — Argentine police and soldiers searched house to house, in creeks and culverts and even in trees for bodies as more than 20 people remained missing Thursday from floods that killed at least 55 people in the province and city of Buenos Aires.

The torrential rains stopped and the waters mostly receded Thursday, but a public health and safety crisis gripped this provincial capital of nearly 1 million people, where thousands remained without power or safe drinking water.

Many people barely escaped after seeing everything they own disappear under water reeking with sewage and fuel that rose more than six feet (nearly two meters) high inside some homes.

The wreckage left behind was overwhelming: piles of broken furniture, overturned cars, ruined food and other debris.

The nearby Ensenada refinery, Argentina's largest, remained offline after flooding caused a fire that took hours to quench in the middle of the rainstorm, the state-run YPF oil company said.

Buenos Aires provincial Gov. Daniel Scioli said Thursday that the death toll had risen to 49 people in La Plata, following six deaths in the national capital from flooding two days earlier.

A store and an elementary school were looted, but police and troops helped residents guard neighborhoods overnight to prevent more crimes, Scioli said. In addition to 750 provincial police officers, the national government sent in army, coast guard, police and social welfare workers, he said.

"The humanitarian question comes first. The material questions will be resolved in time. For this reason we've planned several lines of action so that the people have the support, the tranquility and the security that they'll be able to recover what they've lost for this tragedy. I will apply the necessary resources," Scioli promised.

Scioli said four mobile hospitals have been activated and government workers were handing out water, canned food and clothing at dozens of shelters.

Provincial Health Minister Alejandro Collia said hepatitis shots were being given at 33 evacuation centers, and that the flooded neighborhoods would be sprayed to kill mosquitoes that spread dengue fever.

Scioli also thanked Pope Francis for sending a message of support. The governor said "this has to give us all the strength to accompany these families."

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Argentina: flooding from torrential rains kill 52

LA PLATA, Argentina (AP) — The governor of Argentina's Buenos Aires province says at least 46 people have died in flooding due to torrential rains in his provincial capital.

That increases the overall death toll from three days of rains to at least 52.

More than a quarter-million people remain without power in Argentina's capital and surrounding province.

Nearly 1 million people live in and around the city of La Plata and many are struggling to recover even as more rain is in the forecast.

Gov. Daniel Scioli said Wednesday that emergency workers are focusing on the people most in need.

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Argentina: flooding from torrential rains kill 41

LA PLATA, Argentina (AP) — At least 35 people were killed by flooding overnight in Argentina's Buenos Aires province, the governor said Wednesday, bringing the overall death toll from days of torrential rains to at least 41 and leaving large stretches of the provincial capital under water.

Gov. Daniel Scioli said many people drowned after trying to take shelter in their cars in Tolosa, an area of the provincial capital of La Plata. Heavy rains had killed at least six people in the nation's capital of Buenos Aires the day before.

Cars were flooded to their rooftops and rainwater flowed over the windowsills into many houses in La Plata. People waded out of their neighborhoods through chest-high water, and police and neighbors teamed up using rubber motorboats to evacuate families and pets to higher ground.

"Such intense rain in so little time has left many people trapped in their cars, in the streets, in some cases electrocuted. We are giving priority to rescuing people who have been stuck in trees or on the roofs of their homes," Scioli said. La Plata "has never seen anything equal" to this disaster.

The rains also flooded the country's largest refinery, causing a fire that took hours to put out. The La Plata refinery has suspended operations as a result, and Argentina's YPF oil company said it has an emergency team evaluating how to get it restarted again.

The rains — almost 16 inches (400 millimeters) in about two hours — hit provincial La Plata after causing widespread flooding and power outages and killing six people in the city of Buenos Aires the day before.

"We lost family heirlooms, appliances, clothing," said Natalia Lescano, who escaped with her family to a friend's house on higher ground. She said they had to get out by themselves, and complained that authorities weren't doing enough to rescue people.

About four more inches (100 millimeters more) of rain were expected before the bad weather passes on Thursday, the national weather service said.

At least 2,500 people were evacuated from their homes in the La Plata area, which is about 37 miles (60 kilometers) southeast of Argentina's capital.

National Planning Minister Julio de Vido said about 280,000 people remained without power in the city and surrounding province of Buenos Aires, where most Argentines live. "Our job is focused on restoring service, but we're going to wait until the equipment dries to guarantee the safety of the electricity workers, because we don't want any deaths," De Vido said.

The flooding threatened to ruin food supplies across La Plata's metropolitan area, which has nearly 1 million people.

"There's no power in nearly the entire city," Casals said, adding that the flooding "wiped out the downtown and the surrounding neighborhoods such as Tolosa, Elvira, Los Hornos, with as much as 2 meters (more than 6 feet) of water, and people are on their roofs."

Many of the evacuees slept in their cars overnight. Transportation and business of all kinds in the city were at a standstill.

YPF said no injuries were caused by the refinery fire, which it blamed on "an extraordinary accumulation of rainwater and power outages in the entire refinery complex." The impact on Argentina's chronically short fuel supplies wasn't immediately clear.

The six killed in Buenos Aires included a subway worker who was electrocuted and an elderly woman who drowned inside her home. Many still had standing water in homes, basements, parking lots and storage rooms on Wednesday.

The governments of President Cristina Fernandez and Buenos Aires Mayor Mauricio Macri sought to blame each other for the chaos, and the nation's divided media focused their coverage in ways that put one side or the other in the worst light.

Macri said Wednesday that the only solution is for the constantly warring governments to work together on expensive and long-term public works projects, creating huge underground drainage pipes to carry increasingly common torrential rains out to the Rio de la Plata.

"Facing the magnitude of what we've lived through, I insist that public works are what will change this story," Macri said, describing one such project that was achieved through regional cooperation and a World Bank loan — the kind of borrowing that the government of President Cristina Fernandez has sought to avoid.

"We need to do the same with all the waterworks that are needed in the city, in greater Buenos Aires and in the province of Buenos Aires," Macri said.

___

Associated Press Writer Michael Warren contributed to this story.

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Abuse victims want pope to open Argentina files

BUENOS AIRES, Argentina (AP) — A U.S. group that tracks clergy abuse called on Pope Francis to apologize Tuesday for what it called the Argentine church's protection of two priests who were eventually convicted of abusing children.

The Bishop Accountability group cites the case of Father Julio Cesar Grassi, who ran the "Happy Children" foundation and was convicted of pedophilia in 2008, and Father Napoleon Sasso, convicted in 2007 of abusing girls at a soup kitchen in suburban Buenos Aires. Sasso had been moved to the kitchen by church authorities after he got into trouble for pedophilia in remote San Juan province.

Jorge Bergoglio, who became Argentina's cardinal in 2001, wasn't directly involved in any sex abuse scandals or coverups, but he failed to remove priests accused of sexually abusing their faithful, and refused to meet with the victims, their attorney Ernesto Moreau told The Associated Press.

"Bergoglio has been the strongest man in the Argentine church since the beginning of this century," Moreau said, and yet "the leadership of the church has never done anything to remove these people from these places, and neither has it done anything to relieve the pain of the victims."

Now Grassi is free on appeal, thanks in part to the church's report. Before he was convicted, he thanked Bergoglio for "never abandoning him."

Bishop Accountability co-director Anne Doyle says this shows Bergoglio was behind the curve in the Catholic church's global struggle to deal with sex abuse by its priests, which began in 2002 after thousands of cases became public in the United States and around the world.

"We would be alarmed if the archbishop Bergoglio had done this in the '60s or '70s. That would be sad and disturbing. But the fact that he did this just five years ago, when other bishops in other countries were meeting victims and implementing tough reporting laws, it puts him behind some of his American counterparts, that's for sure," Doyle told the AP.

The group said that to send a message of zero tolerance, Francis should tell the Buenos Aires archdiocese to release the complete files on these two cases; publicly identify any priests who are "credibly accused"; publicly endorse the mandatory reporting by church officials to law enforcement of any suspected abuse; admit that he was wrong to defend abusive priests; apologize to the victims of Grassi and Sasso; and offer to meet with the victims now.

Doyle noted that The Washington Post reported on these cases just as Francis was being installed as pope in a Vatican ceremony seen around the world.

"The victims of these two priests are the very children of God about whom he was speaking in his homily today," she said. "They are the most vulnerable of the poor. We hope that Francis will seize this as a priority and reach out to the victims and rectify his terrible insensitivity to them when he was archbishop."

Messages left by phone and email by the AP seeking comment from the Buenos Aires archbishopric's press office were not immediately returned Tuesday.

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Argentina blends devotion and marketing with pope

BUENOS AIRES, Argentina (AP) — From slum chapels to Buenos Aires' imposing cathedral, Argentines celebrated their pope in Sunday Masses.

While the faithful prayed, vendors sold papal memorabilia and workers installed huge screens in the capital's central Plaza de Mayo in preparation for an all-night vigil ahead of Francis' formal installation ceremony, which will begin before dawn Tuesday Argentina time.

Mass in the slums began earlier and seemed more intimate. At the Villa 21-24, one of the capital city's most dangerous slums, many recalled how as an archbishop, Jorge Mario Bergoglio blessed their tiny Caacupe Virgin of the Miracles chapel.

Not everyone could fit inside its yellow walls with painted saints and many stood outside. Blanca Franco, a 58-year-old housewife, listened and shed some tears.

"I have feelings in my heart that only God knows," Franco said. "I'm happy about the appointment of our archbishop."

Nearby, Marcos Manuel Solar, a 28-year-old former drug addict, smiled widely as he told passers-by that he had received the rite of confirmation from the pope himself. Solar, who works at a soup kitchen, said he kicked the habit through a rehab program funded by the church.

In the heart of Buenos Aires, the mood was festive.

Vendors outside the Cathedral sold pins, calendars and posters with the image of Francis. The flag of the Vatican City seemed to be the most popular sales item.

Uma Eiras, a 10-year-old student, waved a tiny one with its two white-and-gold vertical bands and said she would hang it in her room.

There seemed not to be a single pew empty inside the giant national Cathedral and many followed the Mass on large screens across the street.

Sabina Podrez, a 39-year-old scrivener, said she attended the Mass out of hope that Argentina and the world will change under a new pope.

"We were going to work disheartened, with insecurity," Podrez said. "This is a breath of fresh air."

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Argentina: HSBC helped launder money, evade taxes

BUENOS AIRES, Argentina (AP) — Argentina's government on Monday accused the British banking giant HSBC of facilitating money laundering and tax evasion.

Tax chief Ricardo Echegaray said HSBC's Argentina subsidiary created an illegal scheme enabling its clients to hide more than $100 million. He said the scheme included a criminal organization and fake receipts used to launder money for various companies.

HSBC's Latin America spokeswoman, Lyssette Bravo, issued a statement that did not deny the accusations and promised to cooperate.

"HSBC takes compliance with the law, wherever it operates, very seriously and strongly supports the efforts of governments and regulators to detect unlawful activity and take appropriate action," the statement said.

Echegaray said that since February, the bank "had been rolling out a fraud-enabling platform" that he called "a maneuver to hide bank account information from tax collectors."

He named three companies: Mas Distribuidora SA, Recaudaciones y Servicios del Sur SRL and Red de Multiservicios SA.

"They evaded taxes and laundered money through the purchase of fake receipts that were later used to justify the issuance of checks whose amounts were deposited under a generic tax identification number," Echegaray said, adding that HSBC never informed the AFIP tax agency about it.

The three companies used "phantom operations" to deposit checks laundering $76 million and evaded taxes on an additional $44 million, he said.

The tax agency is pursuing a criminal investigation against HSBC in Argentina's courts.

"They have to pay what they owe and break up this band of crooks, which involved private figures as well as public authorities in the purchase of fake receipts," Echegaray said.

HSBC's statement said Argentina's allegations were a matter of great concern. "We are committed to working cooperatively with authorities to ensure a thorough review and appropriate resolution of the matter."

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Argentina blends devotion and marketing with pope

BUENOS AIRES, Argentina (AP) — From slum chapels to Buenos Aires' imposing cathedral, Argentines celebrated their pope in Sunday Masses.

While the faithful prayed, vendors sold papal memorabilia and workers installed huge screens in the capital's central Plaza de Mayo in preparation for an all-night vigil ahead of Francis' formal installation ceremony, which will begin before dawn Tuesday Argentina time.

Mass in the slums began earlier and seemed more intimate. At the Villa 21-24, one of the capital city's most dangerous slums, many recalled how as an archbishop, Jorge Mario Bergoglio blessed their tiny Caacupe Virgin of the Miracles chapel.

Not everyone could fit inside its yellow walls with painted saints and many stood outside. Blanca Franco, a 58-year-old housewife, listened and shed some tears.

"I have feelings in my heart that only God knows," Franco said. "I'm happy about the appointment of our archbishop."

Nearby, Marcos Manuel Solar, a 28-year-old former drug addict, smiled widely as he told passers-by that he had received the rite of confirmation from the pope himself. Solar, who works at a soup kitchen, said he kicked the habit through a rehab program funded by the church.

In the heart of Buenos Aires, the mood was festive.

Vendors outside the Cathedral sold pins, calendars and posters with the image of Francis. The flag of the Vatican City seemed to be the most popular sales item.

Uma Eiras, a 10-year-old student, waved a tiny one with its two white-and-gold vertical bands and said she would hang it in her room.

There seemed not to be a single pew empty inside the giant national Cathedral and many followed the Mass on large screens across the street.

Sabina Podrez, a 39-year-old scrivener, said she attended the Mass out of hope that Argentina and the world will change under a new pope.

"We were going to work disheartened, with insecurity," Podrez said. "This is a breath of fresh air."

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Argentina blends devotion and marketing over Pope

BUENOS AIRES, Argentina (AP) — From slum chapels to Buenos Aires' imposing cathedral, Argentines celebrated their pope in Sunday Masses.

While the faithful prayed, vendors sold papal memorabilia and workers installed huge screens in the capital's central Plaza de Mayo in preparation for an all-night vigil ahead of Francis' formal installation ceremony, which will begin before dawn Tuesday Argentina time.

Mass in the slums began earlier and seemed more intimate. At the Villa 21-24, one of the capital city's most dangerous slums, many recalled how as an archbishop, Jorge Mario Bergoglio blessed their tiny Caacupe Virgin of the Miracles chapel.

Not everyone could fit inside its yellow walls with painted saints and many stood outside during the vigil. Blanca Franco, a 58-year-old housewife, listened and shed some tears.

"I have feelings in my heart that only God knows," Franco said. "I'm happy about the appointment of our archbishop."

Nearby, Marcos Manuel Solar, a 28-year-old former drug addict, smiled widely as he told passers-by that he had received the rite of confirmation from the pope himself. Solar, who works at a soup kitchen, said he kicked the habit through a rehab program funded by the church.

In the heart of Buenos Aires, the mood was festive.

Vendors outside the Cathedral sold pins, calendars and posters with the image of Francis. The flag of the Vatican City seemed to be the most popular sales item.

Uma Eiras, a 10-year-old student, waved a tiny one with its two white-and-gold vertical bands and said she would hang it in her room.

There seemed not to be a single pew empty inside the giant national Cathedral and many followed the Mass on large screens across the street.

Sabina Podrez, a 39-year-old scrivener, said she attended the Mass out of hope that Argentina and the world will change under a new pope.

"We were going to work disheartened, with insecurity," Podrez said. "This is a breath of fresh air."

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Argentina: Boot camp for a politically savvy pope

BUENOS AIRES, Argentina (AP) — Pope Francis has honed his leadership skills in one of the most difficult classrooms on the planet: Argentina, where politics has long been a blood sport practiced only by the brave.

Rising through Argentina's Roman Catholic hierarchy in times of dictatorship, capitalist excess, economic crisis and populist fervor, Francis has sought to secure a place for his church in an increasingly modern, secular society.

It might be just the training a pope needs before taking on the problems of the world's 1.2 billion Catholics and helping them recover from scandals over sex abuse and feuding and corruption at the highest levels of the church's hierarchy.

"Buenos Aires is a microcosm of the world's problems. He's going to have to deal with political crises and we have political crises here. This is a scale model of the world's inequality," his former spokesman, Guillermo Marco, told The Associated Press.

"On top of that we have drug and insecurity problems, but we also have wonderful people, we're passionate, we're prone to fighting .... Bergoglio is all that!"

As Buenos Aires archbishop, Jorge Mario Bergoglio provided an outspoken counterpoint to the ever-more concentrated power of President Cristina Fernandez.

With the president's key supporters putting dictatorship-era officials on trial for human rights violations like never before, Bergoglio drew a line against blaming the church as a whole for the key support that Catholic leaders provided to the murderous 1976-1983 junta.

"The church was, is and will be persecuted," Bergoglio said from the pulpit during a particularly tense phase in 2007, before a police chaplain was given a life sentence for junta-era tortures and killings. "The methods were and are the same: disinformation, defamation and calumny."

During his sermons at Mass, Bergoglio showed deep disdain for political corruption and unbridled capitalism. When the economy crashed in 2002 and Argentina's politicians seemed incapable of containing social unrest, or when people suffered from acts of terror or other tragedies, he took strong stands in public on behalf of the people.

Meanwhile, behind the scenes, Bergoglio became a skilled operator, welcoming politicians from all sides into his office and offering his opinions on matters having more to do with state than church.

"The Argentine political opposition always found Bergoglio willing to chat," said Washington Uranga, an expert on religious issues and columnist for Pagina 12, a newspaper that closely reflects government thinking.

"His office has been visited by innumerable political leaders, (and) Bergoglio acted like a political strategist who measures his steps and actions," Uranga said.

Marco, the former spokesman, said Bergoglio sees politics as a duty: He maintains his serenity and is open to getting advice, "but never runs away from conflict."

As a Jesuit leader who spent his entire career outside the Vatican, Bergoglio has seen real-world conflicts first hand.

At the height of the country's economic meltdown, Bergoglio got fed up at hearing politicians pointing fingers at each other while the jobless stormed supermarkets desperate for food. He made headlines by writing that "Argentina looks ever more like a funeral procession where everyone wants to console the family but no one wants to carry the dead."

He also won wide acclaim for standing with the survivors and blaming political corruption for Argentina's mass tragedies, such as a nightclub fire that killed 194 people or a commuter train accident that killed 51. "We can't afford to be idiots, fools, towards those who sponsor the culture of death," he said.

Another pope with a personal touch, John Paul II, campaigned to bring down the Cold War's Iron Curtain. Today's challenges have more to do with poverty, inequality and corruption, and Francis has seen it all.

"He wasn't living in a separate house protected by bodyguards, or riding in a car with tinted windows, aloof to reality. No. He lived that reality," Marco said. "If the subway was late, he was late. He took a bus like everyone else and heard the protests, because people would recognize him on the streets and would say, 'Do Something!'"

The challenge is to respond to Argentina's "social debt without stoking new exasperations and polarizations," he said in 2010. "We have to overcome the constant state of confrontation that deepens our ills. The homeland is a gift; the nation, a duty. We have to pray for the prudence of its authorities and the austerity of its citizens, so we can live in peace."

His clashes with Fernandez and her late husband and predecessor, President Nestor Kirchner, became evident in 2004. Every May 25, Argentina celebrates it declaration of independence and church leaders deliver a "Te Deum" address describing what's wrong with society. Political leaders traditionally sit in the front row.

But the Kirchners took it personally that year when Bergoglio publicly questioned "the exhibitionism and strident announcements" of those in power. They never came back.

With popular backing and in clear defiance of the church, they pushed for mandatory sex education in schools, free distribution of contraceptives in public hospitals, and the right for transsexuals to change their official identities on demand. Argentina became the first nation in Latin America to legalize same-sex marriages.

Fernandez's slogan became "we're going for more."

Bergoglio responded in kind.

In last year's address, he said Argentina was being harmed by demagoguery, totalitarianism, corruption and efforts to secure unlimited power: a strong message in a country whose president has ruled by decree and left scandals unpunished.

"He's not looking for conflicts, but he doesn't avoid them. His language is direct and plain. From that perspective, he doesn't act like a diplomat," said Rosendo Fraga, an analyst with the New Majority consulting firm. "He knows how to conciliate, gather strength and look for meeting ground."

That's difficult in highly polarized Argentina. Gabriela Michetti, an opposition lawmaker who considers Francis her spiritual guide, said that every time he would speak about poverty, or the need to cool tempers, he was talking to all Argentines. But the Kirchners saw them as direct attacks.

"Kirchner branded him as the big opposing force, but Bergoglio didn't like that, because he wanted to be seen as a pastor and not a politician," said Michetti.

Others say Bergoglio was born for politics.

"Bergoglio likes politics more than 'dulce de leche' (Argentine caramel)," said Ignacio Fidanza, an analyst at lapoliticaonline.com.

"Bergoglio is always sending signals of an austere church, one that rejects ostentation, and he does it like politicians do it: through words and gestures, successfully, because his actions have an impact," Fidanza added.

Bergoglio also is familiar with the byzantine nature of Vatican politics, having served in three important Vatican congregations since he became a cardinal in 2001. But he seemed less than critical of its shortcomings, even after internal turf battles, intrigue and allegations of corruption emerged in leaked papal documents.

Those revelations featured heavily in the conclave that elected Francis pope, with cardinals particularly from the U.S. insisting that the new pontiff must clean up the mess within the Vatican's own walls to restore credibility to the church as a whole.

Reform of the bureaucracy is a major task ahead for Francis to make the Holy See more responsive to the needs of the church in the field and more governable at home, since it currently operates like a collection of independent fiefdoms where the right hand doesn't know what the left is doing.

In a 2012 interview with veteran Italian Vatican journalist Andrea Tornielli, Bergoglio acknowledged that the church is both "saint and sinner," but that one cannot allow the sins to overshadow "the saintliness of so many men and women who operate in the church."

"The Roman Curia has its defects, but it seems that what is being highlighted is the bad and not the good being done by the lay and consecrated men and women who work there," Bergoglio said.

It was a message not unlike his position on the dirty war, which has left the new pope open to criticism that he cares more about protecting the image of the church than exposing its failings.

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Associated Press writers Michael Warren and Almudena Calatrava in Buenos Aires, Argentina, and Nicole Winfield in Rome contributed to this report.

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Luis Andres Henao on Twitter: https://twitter.com/LuisAndresHenao

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Falkland Islanders vote with an eye on Argentina

STANLEY, Falkland Islands (AP) — Britain is hoping this weekend's referendum on the political status of the Falkland Islands will push the United States and other neutral governments off the fence in its territorial dispute with Argentina over the remote South Atlantic archipelago.

The local Falkland Islands Government has mobilized a major effort to get as many of its 1,650 registered voters as possible to cast their secret ballots Sunday and Monday, preparing to send off-road vehicles, boats and seaplanes to remote sheep farms across the lightly populated islands.

Elections observers from Canada, Mexico, the U.S., Paraguay, Uruguay, Chile and New Zealand also will be watching as islanders answer a simple yes-or-no question: "Do you wish the Falkland Islands to retain their current political status as an Overseas Territory of the United Kingdom?"

Islanders expect the answer to be overwhelmingly in favor of British governance and protection, a result they hope will put their own self-determination at the center of any debate about their future in the face of Argentine claims to the islands. Britain wants the U.S. in particular to recognize the islanders' rights, but Secretary of State John Kerry refused to budge during his recent visit to London.

"I'm not going to comment, nor is the president, on a referendum that has yet to take place," Kerry said, punting the question until after the results are announced Monday night. "Our position on the Falklands has not changed. The United States recognizes de facto U.K. administration of the islands, but takes no position on the question of the parties' sovereignty claims."

"Sovereignty" is a term that focuses on a territory more than its people, and it's the word Argentina often invokes while asserting its claim to the islands. Late Friday, Argentina's foreign ministry repeated its assertion that the islanders are an "implanted" people and that U.N. resolutions require Britain to resolve the dispute bilaterally, "taking into account the 'interests' (not the 'desires') of the inhabitants of the islands."

Britain prefers to refer to "self-determination," which focuses more on the people than the land they live on.

The U.S. strongly endorsed self-determination for the people of South Sudan ahead of their 2011 referendum, which showed 99 percent wanted independence from their northern neighbor. President Barack Obama said during the Arab Spring uprisings that "the United States of America welcomes change that advances self-determination" for people in Egypt and Tunisia. The Palestinians and the Puerto Ricans have gained similar support for self-determination rights, and Obama even came out in favor of a UN declaration supporting self-determination for Native Americans.

The Obama administration also has expressed support for letting Puerto Ricans, who are U.S. citizens, determine their territory's relationship to the U.S., though the result of a referendum on the question last year was ambiguous.

But when it comes to the Falklands, which Argentines claim Britain stole from them nearly two centuries ago, and which the two nations fought a war over in 1982, Washington has always tried to take no side. US policy casts it more as a dispute over a territory than a population. This is why the referendum poses a potential dilemma for the U.S., diplomats and political scientists say.

"What we hope is that an act of self-determination in a free society, where people are able to vote as they did in Puerto Rico, is not something that anybody can dismiss or ignore," Britain's ambassador to Chile, Jon Benjamin, told The Associated Press. "It's a self-evident reflection of the will of the people. And that will be the case shortly in the Falkland Islands too. The people there have the right to choose how they are governed and under whose sovereignty."

Mark Jones, a Latin American politics expert at Rice University in Texas, called the U.S. position "tortured" and difficult to maintain.

"It's hypocritical for the U.S. to deny the right of the Falkland Islanders to self-determination, while at the same time supporting that same right for a host of other groups throughout the globe. The referendum's clear-cut outcome makes the U.S. position increasingly untenable and difficult to justify," Jones said.

The Falkland Islands Government is a direct democracy and largely self-governing, although Britain handles its defense and foreign affairs, and the queen's representative has veto power over its decisions. So far, islanders have decided to keep their permanent population very small, making it very hard to obtain formal "islander status."

Excluding the British military and civilian contractors, the islands' population was 2,563 in last year's census, and only 1,973 of them had islander status. The referendum rules exclude anyone who lacks a British passport and hasn't lived in the islands for the last 12 months.

It boils down to 1,650 voting adults, a tiny electorate and one in which the voters all know each other — and their parents and grandparents, some going back nine generations — very well. There were no polls before the vote, but islanders interviewed by the AP predicted that nearly everyone would vote to keep things as they are.

Immediately following the vote, Falkland Islands lawmakers Sharon Halford and Mike Summers planned to arrive in Washington to lobby administration officials and members of Congress.

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Associated Press writers Michael Warren in Buenos Aires and Luis Alonso Lugo in Washington contributed to this report.

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Michael Warren on Twitter: (at)mwarrenap

Luis Alonso Lugo on Twitter: (at)luisalonsolugo

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Argentina has very different papal candidates

BUENOS AIRES, Argentina (AP) — Both are the sons of Italian immigrants. Both are doctrinal conservatives. And both are known for their warm personalities.

But the two Argentine cardinals widely given an outside chance to become pope have had very different careers.

Jorge Mario Bergoglio, who would be the first Jesuit pope if chosen, has spent nearly his entire career at home in Argentina, overseeing churches and shoe-leather priests. Leonardo Sandri, who left for Rome 42 years ago, is a Vatican insider who has run the day-to-day operations of the global church's vast bureaucracy and roamed the world as a papal diplomat.

The election of either of them as pope might help to reconcile two conflicting trends in the papal election: the push to return to the tradition of Italian popes, and the longing for a pontiff from the developing world.

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EDITOR'S NOTE: As the Roman Catholic Church prepares to elect a successor to Pope Benedict XVI, The Associated Press is profiling key cardinals seen as "papabili" — contenders to the throne. In the secretive world of the Vatican, there is no way to know who is in the running, and history has yielded plenty of surprises. But these are the names that have come up time and again in speculation. Today: Jorge Mario Bergoglio and Leonardo Sandri.

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Bergoglio, 76, reportedly got the second-most votes after Joseph Ratzinger in the 2005 papal election, and he has long specialized in the kind of pastoral work that some say is an essential skill for the next pope. In a lifetime of teaching and leading priests in Latin America, which has the largest share of the world's Catholics, Bergoglio has shown a keen political sensibility as well as the kind of self-effacing humility that fellow cardinals value highly, says his official biographer, Sergio Rubin.

Bergoglio would likely encourage the church's 400,000 priests to hit the streets to capture more souls, Rubin said in an Associated Press interview. He is also most comfortable taking a low profile, and his personal style is the antithesis of Vatican splendor. "It's a very curious thing: When bishops meet, he always wants to sit in the back rows. This sense of humility is very well seen in Rome," Rubin said.

Bergoglio is known for modernizing an Argentine church that had been among the most conservative in Latin America,

Sandri, 69, left for Rome at 27 and never came back to stay in Argentina. Initially trained as a canon lawyer, he reached the No. 3 spot in the church's hierarchy under Pope John Paul II, the zenith of a long career in the Vatican's diplomatic service ranging from Africa to Mexico to Washington.

As substitute secretary of state for seven years, he essentially served as the pope's chief of staff, running the central office at the heart of the Vatican bureaucracy known as the Curia.

"It's hard to find somebody in church circles who doesn't like Sandri. Granted, few might describe him as 'charismatic,' but he's almost universally seen as warm, open and possessing a lively sense of humor," Vatican analyst John Allen wrote in the National Catholic Reporter. "Personal relationships are all-important, and Sandri has a lot of friends."

The jovial diplomat has been knighted in a dozen countries, and the church he is attached to as cardinal is Rome's gorgeous, baroque San Carlo ai Catinari. In contrast, Bergoglio stands out for his austerity. As Argentina's top church official, he's never lived in the ornate church mansion in Buenos Aires, preferring a simple bed in a downtown room heated by a small stove on frigid weekends. For years, he took public transportation around the city, and cooked his own meals.

Bergoglio has slowed a bit with age and is feeling the effects of having a lung removed due to infection when he was a teenager — two strikes against him at a time when many Vatican-watchers say the next pope should be relatively young and strong. "But he's going to be very influential in the congress of cardinals, one of those who is most listened to," Rubin said.

Sandri, on the other hand, seems robust. He's also relatively unscathed by recent Vatican controversies.

It was seen by some as a demotion when Benedict replaced Sandri as his No. 3 in 2007, putting him in charge of Eastern-rite churches, a job outside the pope's inner circle. But Sandri left with a reputation for no-nonsense, efficient governance, and was out of the way when a scandal over leaked documents and other controversies vexed the papacy, Allen said.

Sandri remains a consummate Vatican insider. Benedict promoted him to cardinal and named him to the Vatican's Supreme Tribunal, which provides the second-to-last word on church law, after the pope. Sandri also is one of very few cardinals in the Congregation for the Doctrine of the Faith, the rule-making bastion Ratzinger led for many years before becoming pope.

The Catholic faithful probably best remember him as the "voice of the pope" who delivered papal speeches when John Paul II became too infirm, and it was Sandri who announced the beloved pope's death to the crowd in St. Peter's Square, adding the memorable observation that "we all feel like orphans this evening."

But Sandri has never led a congregation, a strike against him for cardinals who want the next pope to have pastoral experience, Allen said.

Both men are seen as moderates with open minds, even as their doctrinal and spiritual positions remain well in line with the legacy of John Paul II and Benedict XVI, both conservative popes.

Bergoglio couldn't prevent Argentina from becoming the first Latin American country to legalize gay marriage, or stop its president, Cristina Fernandez, from promoting free contraception and artificial insemination. When Bergoglio argued that gay adoptions discriminate against children, Fernandez compared his tone to "medieval times and the Inquisition."

This kind of demonization is unfair, says Rubin, who wrote Bergoglio's authorized biography, "The Jesuit."

"Is Bergoglio a progressive — a liberation theologist even? No. He's no third-world priest. Does he criticize the International Monetary Fund, and neoliberalism? Yes. Does he spend a great deal of time in the slums? Yes," Rubin said.

Critics also accuse him of failing to stand up publicly against the country's military dictatorship from 1976-1983, when victims and their relatives often brought first-hand accounts of torture, death and kidnappings to the priests he supervised as leader of the Jesuit Order in Argentina

Like other Jesuit intellectuals, Bergoglio has focused on social outreach. Catholics are still buzzing over his speech last year accusing fellow church officials of hypocrisy for forgetting that Jesus Christ bathed lepers and ate with prostitutes.

"In our ecclesiastical region there are priests who don't baptize the children of single mothers because they weren't conceived in the sanctity of marriage," Bergoglio told his priests. "These are today's hypocrites. Those who clericalize the Church. Those who separate the people of God from salvation. And this poor girl who, rather than returning the child to sender, had the courage to carry it into the world, must wander from parish to parish so that it's baptized!"

Bergoglio compared this concept of Catholicism to the Pharisees of Christ's time: people who congratulate themselves while condemning others.

"Jesus teaches us another way: Go out. Go out and share your testimony, go out and interact with your brothers, go out and share, go out and ask. Become the Word in body as well as spirit," Bergoglio said.

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