Suitcase of cash sparks new scandal in Argentina

BUENOS AIRES, Aug 10 (Reuters) A scandal over a businessman carrying a suitcase of cash on a government-hired jet has put President Nestor Kirchner on the defensive as he tries to help his wife replace him at this year's election.

Claudio Uberti, a highway official who is one of Kirchner's key negotiators on energy deals with Venezuela, resigned yesterday after he allowed a Venezuelan businessman carrying almost 800,000 dollar in undeclared cash to travel on a jet hired by Argentine state energy company Enarsa.

The scandal comes a month after Kirchner's economy minister was forced to step down over more than ,000 found stashed in a bag in her office bathroom. Under renewed pressure, Kirchner defended his record yesterday.

''I don't cover up anything. When something happens the people find out about it and we take the appropriate measures. For the first time, Argentina is seriously fighting corruption ... whoever is involved,'' he said in a public speech.

Opposition politicians, who are struggling in polls ahead of the October 28 presidential vote, jumped on the new cash case.

''This is from God, I'm super happy. The truth has come out, and it is proof of corruption in this government,'' leftist presidential candidate Elisa Carrio told La Nacion newspaper.

First lady Cristina Fernandez de Kirchner, a long-time senator, is running to replace her husband as president and polls show her well ahead of her rivals despite a series of scandals involving government officials.

Kirchner's government is generally seen as austere and relatively clean after the heavy spending and corruption of Argentine governments in the 1990s, but opposition leaders are now questioning that reputation.

''This reminds me of the '90s,'' Esteban Bullrich, a lawmaker with the center-right PRO party, said of the new scandal.

Uberti flew to Venezuela on Saturday along with the head of Enarsa to discuss Venezuelan oil company PDVSA's investments in Argentine energy projects.

On the way home, three PDVSA officials, the son of a PDVSA executive, and Venezuelan businessman Guido Antonini joined the Argentines on the jet, Enarsa said. Customs officials found the cash in Antonini's suitcase when the group arrived.

A prosecutor said the money had been confiscated, but local media said Antonini was not arrested and had left the country.

Kirchner's cabinet chief, Alberto Fernandez, said the Venezuelans ''abused the good faith of Argentine officials'' by asking them to take along a businessman with that much money.

He said the government kept quiet about the incident for a few days despite heavy media coverage so as not to make Venezuelan President Hugo Chavez uncomfortable on a visit here earlier this week.

Chavez is a vocal left-wing critic of the United States and has close ties to Kirchner. He has used Venezuelan petrodollars to win influence in South America and is on a regional tour to announce energy investments in four countries.

REUTERS AK SSC1037