Argentina’s political landscape has been thrown into turmoil as President Javier Milei, once hailed as a reformer determined to root out corruption, now finds his inner circle under the harsh glare of scandal. The shockwaves began on August 29, 2025, when police raided the offices of the National Disability Agency and Suizo Argentina SA, a pharmaceutical company at the center of explosive allegations involving Milei’s influential sister, Karina Milei. The timing could hardly be worse: with crucial legislative elections looming in October and provincial polls in Buenos Aires just around the corner, the president’s credibility—and his ambitious reform agenda—hangs in the balance.
According to NZZ and Latin Times, at the heart of the controversy are accusations that Karina Milei, who serves as both Secretary General of the presidency and a key strategist for the La Libertad Avanza party, was involved in a bribery scheme. The allegations claim she received a three-percent cut on payments made by the National Disability Agency (Andis) to Suizo Argentina for the purchase of medicines. The pharmaceutical company’s turnover has reportedly soared since Milei took office in December 2023, raising eyebrows among watchdogs and political opponents alike.
The scandal erupted after leaked audio recordings surfaced, in which Diego Spagnuolo, then-director of the disability agency, can be heard saying, “Karina gets three percent.” The fallout was immediate: Spagnuolo was swiftly fired once the recordings became public, but the damage had already been done. Karina Milei, for her part, has remained silent, refusing to issue any public comment on the swirling claims. President Milei, however, broke his silence four days after the story broke, telling reporters, “Everything (Spagnuolo) says is a lie,” and vowing, “I will bring him to justice.” Suizo Argentina has also denied any wrongdoing, but the cloud of suspicion lingers.
The president’s delayed response has only fanned the flames of public outrage. At a campaign event in Buenos Aires province—a traditional stronghold of the opposition Peronists—tensions boiled over as protesters pelted the Milei siblings’ convoy with stones, forcing bodyguards to rush them to safety. The episode underscored the rising unrest and the volatile mood gripping Argentina ahead of the upcoming votes. As blue News notes, the September 1 provincial elections in Buenos Aires will serve as a bellwether for national sentiment, while the October 26 congressional elections represent a critical test of Milei’s mandate.
For a leader who swept into power on a wave of anti-corruption and libertarian rhetoric, the scandal is particularly damaging. During his campaign, Milei famously wielded a chainsaw as a symbol of his intent to slash through what he called Argentina’s bloated state apparatus and endemic corruption. Many of his supporters expected him to deliver on this promise. Yet now, with his closest confidants—including his own sister—accused of the very practices he vowed to eliminate, faith in his leadership is eroding.
Observers point out that Karina Milei is no mere background figure. As secretary general of La Libertad Avanza, she is reputed to run the party with an iron hand and has been a central figure in the administration’s anti-corruption messaging. The allegations of nepotism and bribery have therefore struck at the very heart of Milei’s political identity. The fact that these claims center on state contracts for vital medicines—procured by the National Disability Agency for some of Argentina’s most vulnerable citizens—has only heightened the sense of betrayal among the public.
Political opponents have seized on the scandal to question the president’s integrity and motives. Milei’s spokesman, Manuel Adorni, has dismissed the affair as a calculated smear campaign by the opposition, aimed at undermining the president’s economic reforms and electoral prospects. “This is an attempt to discredit the maverick economist in an election year,” Adorni asserted, hoping to rally the president’s base. Yet the impact on public confidence is unmistakable.
According to the Torcuato Di Tella University index, voter trust in Milei has dropped sharply in August—the same month the scandal broke. Investors, too, are getting jittery. As NZZ reports, risk premiums on Argentine bonds have climbed, the peso has lost ground against the dollar, and the country’s stock market index slumped by 14 percent over the course of August. These economic tremors reflect not just the immediate fallout from the corruption allegations, but also deeper anxieties about political stability and the prospects for Milei’s radical reforms.
Ironically, some of the president’s economic policies have shown results. Argentina has managed to bring monthly inflation below 2 percent for three consecutive months—a remarkable feat in a country long plagued by runaway prices. The annual inflation rate, while still high at 36 percent, is a significant improvement. Milei can also point to a budget surplus as evidence that his austerity drive is bearing fruit. But these achievements have come at a steep cost. Austerity measures have hit government spending on pensions, healthcare, and infrastructure, leaving many Argentines—especially the elderly and disabled—worse off. For those already feeling the pinch, the idea that officials may have profited from state contracts for essential medicines is especially galling.
Complicating matters further is Milei’s fraught relationship with both allies and adversaries in Congress. His party controls just 11 percent and 15 percent of the seats in the two chambers, making it difficult to pass his ambitious reforms. Congress is now moving to abolish the emergency decree that has been Milei’s main tool for bypassing legislative gridlock. If successful, this would force the president to negotiate with a hostile legislature—a tall order given his famously combative style.
It’s been less than two years since Javier Milei’s dramatic rise to power, propelled by promises of a new era in Argentine politics. Today, his administration is grappling with the very challenges it pledged to overcome. As the legislative and provincial elections approach, the president faces a crucial test: can he weather the storm of scandal, restore public trust, and keep his reform agenda on track? The coming weeks will tell whether the so-called “chainsaw president” can cut through the mounting doubts—or whether the allegations engulfing his closest allies will prove too much to overcome.
For now, Argentina waits, watching to see whether its boldest reformer will become another casualty of the country’s long battle with corruption, or emerge from crisis with his promises intact.
