Argentina’s political landscape has been rocked by a high-profile extradition case involving businessman Federico Andrés ‘Fred’ Machado, whose ties to the ruling Libertad Avanza party and President Javier Milei have triggered a wave of controversy just weeks before crucial midterm elections. The Supreme Court’s decision on October 7, 2025, to approve Machado’s extradition to the United States on charges of drug trafficking and money laundering has not only intensified scrutiny of Milei’s administration but also exposed deep fissures within the country’s political and economic fabric.
Machado, 57, has been under house arrest in southern Argentina since 2021, following his apprehension under an Interpol warrant. According to the Associated Press, Machado faces a raft of charges in Texas, including conspiracy to manufacture and distribute cocaine, money laundering, wire fraud, and export violations. U.S. prosecutors allege that Machado and his associates illegally registered planes under shell companies, exported the aircraft to criminal organizations in Latin America, and used the jets to fly multi-ton shipments of cocaine into the United States. Machado denies all charges.
The extradition saga took a dramatic turn last week when documents surfaced from the U.S. District Court for the Eastern District of Texas, revealing that José Luis Espert—a prominent member of Milei’s Libertad Avanza party and the party’s top candidate in Buenos Aires Province for the upcoming October 26 midterm elections—had received a $200,000 payment from Machado in 2020. Espert initially denied receiving the money, but later admitted, in a social media video posted on October 2, 2025, that he had accepted the funds for consulting work tied to a mining company linked to Machado. He also acknowledged taking around 35 flights on Machado’s private planes, though he insisted he was unaware of any illicit activities.
“I have nothing to hide and I will prove my innocence before the courts,” Espert declared on October 5, 2025, when he announced his resignation from the congressional race. He added, “Time will show that all of this was a big lie to taint this electoral process.” Despite his denials, a prosecutor opened an investigation into Espert for alleged money laundering on October 7, and opposition lawmakers began pushing for his expulsion from Congress. The revelations have placed President Milei in an increasingly precarious position, as he seeks to expand his party’s minority in Congress and implement sweeping economic reforms.
Machado, for his part, admitted in an October 7 radio interview that he had provided Espert with both financial and logistical support, stating that the agreed sum exceeded $200,000. “His mistake was denying me,” Machado said to Radio Rivadavia. “The idea of supporting Espert financially came because he said to me: ‘I need you, there aren’t many of us, we’re few.’” These admissions have only deepened the scandal, with Machado also accused of financing Espert’s 2019 presidential campaign.
President Milei responded swiftly to the Supreme Court’s extradition ruling, instructing the Foreign Ministry, the Legal and Technical Secretariat, and the Cabinet chief “to immediately take the administrative and diplomatic steps necessary” to comply with the court’s decision. In an official communiqué, the President’s Office reaffirmed “the commitment of the Argentine Republic to international cooperation in the struggle against the laundering of assets, drug-trafficking and organised crime” with the aim of “thwarting the mafias and boosting both national and transnational security.” According to Buenos Aires Times, Milei accepted Espert’s resignation and attributed the scandal to “a sinister operation” orchestrated by the opposition, suggesting political motivations behind the timing of the allegations.
The political fallout from the Machado affair comes at a particularly sensitive moment for Milei’s government. Since taking office in late 2023, Milei has imposed a sweeping austerity program that succeeded in eliminating Argentina’s chronic fiscal deficit for the first time in years. However, the promised economic revival has yet to materialize, leaving many Argentines frustrated as inflation and unemployment remain high. Recent setbacks—including a landslide loss in a provincial vote, a bribery scandal involving Milei’s powerful sister, and several congressional votes overturning his vetoes—have further eroded the administration’s standing.
With midterm elections looming on October 26, the stakes could hardly be higher. Milei is under pressure to reassure investors and the public after his party’s crushing defeat in the Buenos Aires provincial election triggered a run on the peso and a sharp bond sell-off. The government is scrambling to contain the turmoil, with hopes pinned in part on upcoming talks with U.S. President Donald Trump. Milei is scheduled to visit Trump at the White House on October 14, 2025, as Argentina negotiates a $20 billion financial support package. U.S. Treasury Secretary Scott Bessent has pledged support, but details remain vague, according to Devdiscourse.
Meanwhile, the legal process surrounding Machado’s extradition has been closely watched both domestically and abroad. After his initial arrest in 2021, Machado’s defense team—comprised of Roberto Rallin and Norberto Francisco Oneto, the latter known for representing Milei in other legal matters—challenged his extradition on constitutional grounds. They argued violations of the principle of equality and sought to recuse the judge, but these appeals were dismissed by the Supreme Court, which ratified the Neuquén federal court’s decision to send Machado to the U.S.
Adding another layer to the case, Machado’s partner, Debra Mercer-Erwin, has already been jailed in the United States in connection with the same investigation. The Argentine government has emphasized its commitment to international law and cooperation, underscoring the importance of working with U.S. authorities to combat organized crime and money laundering.
As the extradition proceeds, political observers note that the outcome could have far-reaching implications for Milei’s reform agenda and the broader stability of Argentina’s democracy. The scandal has emboldened the opposition, which is leveraging the controversy to question the ethical standards of the ruling party and demand greater transparency. At the same time, Milei’s supporters argue that the rush to judgment is politically motivated, aimed at undermining the president’s efforts to overhaul Argentina’s troubled economy.
With the midterm elections fast approaching and the nation’s economic future hanging in the balance, the Machado affair has become a litmus test for both the government’s resolve and the public’s appetite for change. Whether Milei can weather this storm and deliver on his promises remains to be seen, but one thing is clear: Argentina’s political drama is far from over.