Argentina unveils new rules to fight corruption

BUENOS AIRES, Argentina (Reuters) -- Argentine President Fernando de la Rua, striving to repair his reputation as a corruption fighter after a Senate bribery scandal, on Monday announced new rules to clean up political parties' financing.

Presenting a bill to cut state funding of the parties, restrict television advertising and ban anonymous donations, De la Rua said the bribery allegations must be "completely, totally and finally cleared up" if the Alliance government is to be credible in its struggle against corruption.

The new law is meant to make it harder for individuals or companies to channel money to politicians in hopes of influencing decisions.

The 10-month old government hopes that sending the bill to Congress will show the public it remains committed to fighting corruption and help repair its reputation for honesty, which has taken a battering from suspicions that officials bribed opposition Peronist senators to pass a labor market reform in April.

"I will not abandon even for one minute my commitment to providing the moral leadership in the ethical recovery of the country," said De la Rua.

The new rules, which will be sent to a Congress where the government cannot always command a majority, impose a maximum expenditure by any political party of $1 per eligible voter for elections. There are 24 million people eligible to vote in Argentina, which has a total population of 36 million.

Political parties will not be allowed to take donations from unions, from groups linked to gambling, or from foreign countries and will have to make their accounts public. Parties will also have to select their presidential candidates in national primaries open to all voters who are not registered with other political groupings.

Violations will be punishable with prison sentences and fines.

But campaign spending has not been a major issue in Argentina in recent years, and the new measures may fail to displace the bribery scandal in the minds of voters.

A 63-year-old centrist, De la Rua was elected last October in large part due his promise to clean up politics after 10 years marred by regular corruption scandals under President Carlos Menem of the Peronist Party.

But the bribery allegations shook public confidence in the administration. They also pushed the government into crisis when Vice President Carlos Alvarez resigned in protest at De la Rua's failure to fire two officials who had been forced to deny paying bribes.

A federal judge has named 11 of the nation's 69 senators as suspects in the case and has said he thinks the money for the alleged bribes came from the government, but has not pointed the finger at any officials.

The resignation of Alvarez, leader of De la Rua's left-leaning junior coalition partner, Frepaso, has led to serious doubts about the Alliance's durability.

Still, the two officials Alvarez wanted fired -- the former spy agency chief and labor minister -- have now both resigned and the Frepaso leader says he thinks the coalition will hold.

Opposition Peronists have infuriated the president by suggesting his government could follow the path of President Raul Alfonsin -- like De la Rua a member of the Radical Party -- and collapse before it completes its term, which is scheduled to end in 2003.

De la Rua, due to leave later on Monday for an official visit to Spain, said he wanted to concentrate on reviving Argentina's sluggish economy -- whose failure to recover from two years of recession and stagnation has been aggravated by political uncertainty.

Responding to persistent rumors that Economy Minister Jose Luis Machinea was about to lose his job, De la Rua said the official enjoyed "my total support." Machinea, who has been criticized for concentrating on meeting tough fiscal targets agreed upon with the International Monetary Fund, was expected to announce measures to encourage growth later on Monday.

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