Gone with the Wind: Argentina’s Former First Family Used Luxembourg Companies to Reap $70 Million

Data in Luxembourg’s UBO registry may help unlock an investigation into the Macri family’s lucrative dealings in six wind farms.

Key Findings

  • A Luxembourg company could hold the key to a corruption scandal that has swirled around Argentina’s former president, Mauricio Macri, and his family for years.
  • Lares Corporation, set up by his brother, was part of an international chain of companies used to buy and sell six wind farms in deals that allegedly netted the Macris $70 million.
  • Argentinian law enforcement, who have been probing the deal since 2018, say the discovery of the company may be an important piece of evidence in their case.

In December 2015, Mauricio Macri, a civil engineer who had risen to fame as the head of the popular football club Boca Juniors and the mayor of Buenos Aires, was sworn in as the new president of Argentina.

The heir of one of the country’s richest families, Macri was seen by many as a pro-business leader who would help open Argentina to the world. But by the time his term ended in 2019, the country was mired in a deep recession.

While Mauricio was still president, his younger brother Gianfranco quietly set up a company in Luxembourg, a tiny country in the heart of Europe known for its low tax rates and financial secrecy.

This company, Lares Corporation S.A. SPF, may now be the key to unlocking a corruption scandal that has swirled around the Macri family for years.

An investigation by OCCRP and La Nación can reveal it was part of a chain of entities registered in Argentina, Spain, and Luxembourg used to buy and sell six wind farms in allegedly corrupt deals that are thought to have netted the former president and his relatives around US$70 million.

Argentinian law enforcement have since 2018 been investigating Gianfranco Macri and at least one official in his brother’s government in connection with the deal.

A source close to the investigation said the discovery of the new Luxembourg company could be a key piece of evidence in understanding how the Macris benefited from the scheme at a time when the probe has stalled.

“It is useful for us to complete the plot, the scheme of the business,” said the source, who spoke on condition of anonymity.

A spokesperson for the Macris confirmed that the family used Lares Corporation to invest in renewable energy, but said the company had been properly declared in Argentina.”

OCCRP could not confirm if Lares Corporation had been disclosed to tax authorities, but the source close to the probe into the wind farm deals confirmed the company was unknown to investigators.

The Macris have previously said the wind farm deal was not “opportunistic buying and selling,” but an attempt to avoid a conflict of interest. The farms were sold due to a “need to divest from state-related businesses,” they told Argentinian news outlet Perfil.

🔗The Macris' Dirty Laundry

The wind farm scandal is not the first time the Macris’ business affairs have been in the spotlight.

Their father Franco Macri, an Italian immigrant who arrived in Argentina in the late 1940s and built a family fortune that today is worth an estimated $540 million, was the target of several investigations for money laundering and corruption.

He and his sons hit international headlines when undeclared companies in an offshore tax haven belonging to the Macris were discovered in a massive leak of law firm records known as the Panama Papers. Franco and his family were also caught up in the so-called “notebooks” corruption scandal, after copies of a driver’s notes were obtained by the daily newspaper La Nación detailing what seem to be illicit political payments made by Franco and Gianfranco under the previous Kirchner government.

“[My father] was part of a system of extortion involving the Kirchnerite movement in which in order to work, you had to pay up,” Mauricio Macri said on Argentinian TV show La Cornisa not long after Franco died in 2019. “It was a crime and everyone has to take responsibility.”

Many of the family’s secrets were spilled in October 2020 with the publication of “Hermano,” a tell-all account from younger brother Mariano, as told to Argentinian journalist Santiago O’Donnell. In it, Mariano says he is sure the former president is behind the wind farm scandal, though he offers no hard evidence other than noting that Mauricio often managed to manipulate Gianfranco due to his superior intellect.

“Without any doubt whatsoever, Gianfranco acted as Mauricio's front man,” he said.

"Despite being younger in age, Gianfranco was much bigger than Mauricio, but he never beat him up. At some point very early on, Mauricio took note of the physical issue and began to manage it. ... He always had him under control from his head. He would revile him and after that dazzle him with his reasoning."

Mauricio Macri has dismissed the accusations in his brother’s account as “false” and the result of family conflicts.

Credit: casarosada.gob.ar President Mauricio Macri inaugurating Chubut Norte I wind farm in Chubut province, southern Argentina, in January 2019.

Suspect Sales

In 2009, the company Isolux Ingenieria, part of the Spanish group Isolux Corsan, obtained a concession to build four wind farms in Argentina’s southern Chubut province. By 2015, the year Macri came to power, only one of the four had been put into operation.

Mired in debt, by October 2016, Isolux had sold off its concessions to two Argentinian companies, Sidsel S.A. and Sideli S.A.

Remarkably, Macri’s government awarded Isolux two more wind farm concessions around the same time, which the Spanish company swiftly sold to one of the same buyers. The day the results of the tender were announced, Argentina’s energy minister at the time, Juan José Aranguren, held a press conference hailing the deal’s transparency.

“We are very satisfied with the impact of this process,” he told the assembled journalists.

“With transparency, absence of discretion, and clear rules maintained throughout the process, investors have shown that they are willing to trust Argentina and trust its authorities … to guarantee energy security.”

In July 2017, Isolux declared bankruptcy.

Within a year, Sidsel and Sideli, which had bought a total of six concessions for $25 million, sold them for $95 million, making a huge profit of around $70 million. A Chinese company bought five of them, and one went to an Argentinian company.

At the time, the Macris’ role in the sales was hidden behind several layers of corporate secrecy. That changed at the start of 2018, when Perfil published an explosive report showing the family’s trusted accountant had set up four of the companies involved in the deal.

They included Sidsel and Sideli, the two companies used to buy and sell the wind farms, as well as Usir Argentina, which controlled them and was reportedly set up just two weeks after Mauricio Macri took office.

Credit: bocajuniors.com.ar President Mauricio Macri was welcomed in the Bombonera stadium, by the president of Club Atlético Boca Juniors, shortly after he was elected as Argentina’s president in 2015. Macri was Boca Juniors’ president between 1995 and 2007.

Later articles revealed two Argentinian football stars, Carlos Tevez and Guillermo Barros Schelotto from Boca Juniors, the popular club which Macri had previously headed, had invested millions of dollars in the wind farms.

Perfil also reported in 2019 that the Macri family’s corporate setup was managed by a Luxembourg company named Rainbow Finance, through companies in Argentina and Spain.

Rainbow Finance appeared to be a dead end, as neither journalists nor law enforcement knew how the company was connected to the Macris. Although it was the holding company for the entities involved in the wind farm deal, no one from the family appeared on its paperwork.

OCCRP and La Nación’s investigation shows the connection was the company Gianfranco set up in Luxembourg while his brother was president, Lares Corporation S.A. SPF.

This discovery explains how the Macris were able to channel money into the deals without leaving a trace for investigators in Argentina. While Luxembourg launched a register of corporate beneficial ownership in 2019, it took months of work by Le Monde and OCCRP to scrape its millions of entries and make them fully searchable by the names of beneficial owners.

Although a Macri family spokesperson confirmed that Lares invested in the wind farms through Rainbow Finance, he contended that Rainbow Finance was “a shared investment fund,” in which not only Gianfranco Macri invested, and that he did not put in much. OCCRP could not confirm this. On paper Lares Corporation’s total assets have always ranged between 27,000 and 31,000 euros.

Asked why the Macris structured the deal through Luxembourg, a jurisdiction known for its low taxes and financial secrecy, their spokesperson said the family had wanted to avoid red tape and have more flexibility to seek financing or exit the business if necessary.

“It was not for tax reasons, but commercial reasons,” the spokesperson said.

🔗"All the Natural Qualities"

Born in 1961, Gianfranco Macri is one of Franco Macri’s six children.

His brother Mariano described him as a rebel who was kicked out of schools, and something of a bully in his youth. But in an account published in 1997, his father suggested Gianfranco had the qualities to follow in his own footsteps as a titan of industry.

“Gianfranco never cared much about his preparation for the future, for the family business or for his future,” Franco Macri wrote.

“He is very intelligent and, if he ever decides what he likes, he has all the natural qualities to be a successful businessman.”

Gianfranco seems to have done what his father had hoped, gaining an MBA from the Massachusetts Institute of Technology in the U.S., then joining the family business. Today, he lives in Uruguay and keeps a lower profile than his politician brother, though according to media reports he still owns an exclusive golf club in Buenos Aires.

Credit: La Nación Investigators in Argentina have been probing the wind farms deals since 2018.

The Macri Matrioshka

Congressman Rodolfo Tailhade, one of two lawmakers who filed a criminal complaint after the Perfil’s first article on the wind farm deals hit the stands, has a different take on why the Macris structured the deal through Luxembourg.

“The only justification for structuring businesses as a mamushka A mamushka, or matrioshka, is a set of traditional Russian dolls that are placed one inside the other in decreasing size. It can also be used as a metaphor for offshore corporate structures that are employed to evade taxes. through offshore companies is the need to hide profits, evade taxes, and launder assets,” Tailhade told OCCRP.

“In Argentina it has not yet been possible to establish what has been the level of invoicing of these companies that invested in the wind farms, because the Macris do not present the corresponding documentation to the [authorities],” Tailhade said.

“This offshore company network prevents us from knowing what the profits and dividends of the business were.”

Credit: Edin Pasovic/OCCRP

The source close to the investigation said the discovery of Lares Corporation could help revive the probe, which has stalled as investigators have struggled to get information from outside Argentina.

“We are … aware of the existence of Rainbow in Luxembourg,” but not Lares, the source said.

“This information is very valuable for the investigation because it is almost impossible to obtain information from abroad during the pandemic.”

Investigators started examining the deal after Perfil’s first report in 2018.

In February 2019, a federal judge ordered Gianfranco Macri’s tax records be released to help investigators trace the movement of money in connection with the purchase of the wind farms, according to local media reports.

The judge, Marcelo Martínez de Giorgi, was reportedly interested in a $5 million loan to Gianfranco made by an Argentinian company controlled by the Macris.

The source close to the probe said investigators are looking into the potential collusion between the companies the Macris owned and government officials, who may at the very least have looked the other way.

“This is what is being investigated as a minimum hypothesis,” the source said. “In addition to the fact that the presidential family did excellent business thanks to that.”

“The hypothesis is that [the Macris] were benefited by some official at that time to obtain that profit. Isolux may have acted as a cover, as a layer, to enable them to do their businesses secretly.”

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