Argentina has once again found itself at the center of a political storm, as allegations of high-level corruption rock the administration of President Javier Milei just weeks before crucial midterm elections. The scandal, which erupted in late August 2025, centers on leaked audio recordings that appear to implicate some of the president’s closest allies—including his sister and chief-of-staff, Karina Milei—in a sophisticated bribery scheme linked to the national disability agency (ANDIS).
The controversy began when the Carnaval streaming channel and independent investigative outlet DataClave released a series of audio clips in which a voice, widely believed to be that of Diego Spagnuolo, Milei’s former lawyer and then-head of ANDIS, describes an elaborate system of kickbacks and inflated medicine procurement contracts. According to the Buenos Aires Times, Spagnuolo’s comments in the recordings suggest that pharmaceutical laboratories were required to pay significant sums to secure lucrative state contracts, with funds allegedly funneled through the distributor Suizo Argentina and ultimately reaching high-ranking government officials.
In one particularly damning excerpt, the voice attributed to Spagnuolo claims, “I spoke with the President and told him: ‘They’re stealing, you can play dumb, but don’t dump this burden on me. If trouble breaks out and I’m not protected, I’ve got all Karina’s WhatsApp messages.’” The recordings go on to detail how the bribery scheme purportedly operated: lower-level officials skimmed off between $20,000 and $30,000 each month, while the overall operation was estimated at between $500,000 and $800,000. The percentage of kickbacks allegedly increased from five to eight percent, with Karina Milei reportedly receiving only three percent after deductions for operational and lower-level bribes.
The Buenos Aires Times further reports that Spagnuolo named not only Karina Milei but also Institutional Management Undersecretary Eduardo ‘Lule’ Menem and Congress Speaker Martín Menem as part of the collection chain. Spagnuolo claimed that ‘Lule’ Menem was actively trying to position mid-level officials within ANDIS to facilitate larger-scale theft, and that Suizo Argentina, owned by the Kovalivker brothers, acted as the central node for collecting and distributing the illicit payments.
As the story broke, authorities moved swiftly. According to Reuters, several properties—including Spagnuolo’s residence—were raided by law enforcement, resulting in the seizure of mobile phones and a cash-counting machine. The search was described as part of a broader criminal probe into government corruption. Spagnuolo was promptly dismissed from his post, although the authenticity of the leaked audio remains officially unverified.
The Milei administration was quick to push back against the allegations. President Milei himself, while avoiding direct comment on the scandal, characterized the reports as politically motivated attacks by opposition groups seeking to undermine his government ahead of the October midterms. Cabinet chief Guillermo Francos stated that Spagnuolo had never directly reported bribery allegations to the president’s office, an assertion that did little to calm the growing political and public uproar.
Opposition lawmakers, seizing the moment, demanded that top health officials overseeing ANDIS testify before Congress. The scandal has become a lightning rod for criticism of Milei’s administration, with some analysts warning that the president’s ability to push through his ambitious reform agenda could be seriously compromised. Marcelo Garcia, director for the Americas at risk consultancy Horizon Engage, told Reuters, “It affects the government’s capacity to be reputable enough to continue to introduce tough reform in the next two years.” He added that the allegations were “matters of substance because they touch on social programs, and without admission or action, Milei shows he doesn’t care for the weak and the poor.”
The timing of the scandal could hardly be worse for Milei. As reported by the Buenos Aires Times and Reuters, Argentina’s financial markets responded with alarm. The week of August 25-26, 2025, saw the country’s international dollar bonds tumble to multi-month lows, the 2038 sovereign note dropping 2.4 cents to 67.37 cents on the dollar, and the 2041 issue falling nearly 3 cents. The Merval stock index slid 4% after a 3.8% drop the previous week, and the peso weakened by almost 3% against the US dollar, reaching 1,356 per greenback. Over the preceding four weeks, the peso lost more than 5% of its value against the dollar, deepening investor unease.
The scandal is just the latest in a series of high-profile controversies involving the Milei administration and its allies. Spagnuolo, for example, had already attracted negative attention earlier in 2025 after being accused by Marlene Spesso, the mother of a 12-year-old boy with autism, of mistreatment during a meeting. President Milei intervened at the time, dismissing the incident as a “Kirchnerite operation.” Spagnuolo’s close relationship with Milei dates back to the founding of the La Libertad Avanza political movement in early 2021, when he offered to handle a civil lawsuit for Milei ad honorem—a gesture that won him favor with both the president and Karina Milei. Despite having only a brief stint in the Pilar municipal government as his sole health sector experience, Spagnuolo was appointed to lead ANDIS at Milei’s insistence in late 2023.
The broader context, as the Buenos Aires Times points out, is a political landscape rife with so-called “smear campaigns” and covert espionage operations, especially during election season. The leak of the Spagnuolo audio is widely seen as part of a calculated strategy to inflict maximum political damage, but the underlying allegations have not been seriously disputed by the government, and Spagnuolo was removed from office almost immediately after the leak. This, analysts suggest, lends credibility to the accusations and raises uncomfortable questions about the integrity of Milei’s inner circle.
Adding to the government’s woes are parallel scandals involving other high-profile figures and companies with alleged ties to the administration. The Menem family, for instance, has reportedly secured multiple state contracts through a web of companies since aligning themselves with Milei’s libertarian movement. Meanwhile, the ongoing investigation into contaminated fentanyl deaths has ensnared business figures with political connections, further fueling public concern about systemic corruption.
For many Argentines, the scandal cuts to the heart of Milei’s anti-corruption, anti-“caste” rhetoric—a central pillar of his political brand. As the October elections approach, the electorate faces a stark choice: whether to back a president whose economic reforms have shown some promise, or to turn away amid fresh reminders of the entrenched corruption that has long plagued the nation’s politics. The outcome could determine not only the future of Milei’s reform agenda but also the trajectory of Argentina’s fragile democracy.
With markets jittery, political alliances shifting, and public trust in government again under strain, Argentina’s midterm season has become a high-stakes test of both leadership and accountability. The coming weeks will reveal whether the Milei administration can weather this latest storm, or whether the scandal will mark a decisive turning point in the country’s turbulent political saga.
