SCANDAL-WEARY ARGENTINA UNFAZED BY ESCOBAR-MENEM LINK

BUENOS AIRES, Argentina -- When the widow and two children of
Colombia's late drug lord Pablo Escobar turned up unexpectedly in
Argentina recently, no one here was all that stunned.

No one was surprised when they found out she had a false passport, and
residents were hardly shocked when police suspected she was laundering
some of her late husband's multimillion dollar fortune.

And they were not exactly bowled over when Carlos Menem, the
charismatic, two-term president who leaves office next month, admitted
he knew about her presence and her false identity.

During Menem's eventful 10-year reign, such scandals were not
uncommon. In fact, they were almost a regular occurrence.

"This, for many people, is corruption in the Menem years," said Felipe
Noguera, a political analyst and consultant. "It has to do with money
laundering, false passports and identities, and the idea that these
people have some sort of hidden relationship with the government.
Nobody is surprised."

But they finally were fed up, and last month, Argentines voted Menem's
party out of power. Menem was constitutionally forbidden from running
for a third consecutive term, but voters turned their back on his
Peronist party to choose Alliance candidate Fernando de la Rua.

The scandals continue, and Menem has been in the thick of it. He said
last week that he knew 18 months ago that Victoria Henao, her son,
Juan Pablo Escobar, and her daughter Manuela, had entered Argentina
under false names.

As the scandal grew, he changed his story to say that he only found
out a few months previously. Then, muddying the waters still,
Argentina's foreign minister reversed his earlier comments, saying he
knew last year.

The stream of statements, denials and contradictions make it difficult
to know who is telling the truth. What seems certain is that the
person doing most of the talking is Henao.

The widow of the Medellin cartel boss Escobar, who was gunned down in
a shootout with police in December 1993, has spent her time in custody
giving evidence to judicial officials. While little of her testimony
has been disclosed formally, officials who spoke with the media say
she has wasted no time in spilling the beans.

Henao reportedly entered Argentina four years ago under a false
passport given to her by Colombian authorities happy to see her leave.
She has tried to settle in 17 countries, including the United States,
Canada and Germany, but was unsuccessful until Argentina opened its
doors.

Henao walked right in and began spending what police suspect is her
late husband's fortune, which some estimate may be as much as $3
billion. She bought a home in the country, eight apartments and at
least one office, according to newspaper reports.

Argentine police feared that she was laundering money, and they began
investigating her as far back as 1996. They found no evidence to
suggest that Maria Isabel Santos -- the name Henao assumed upon
leaving Colombia -- was breaking the law. Unaware that Santos was
married to the Medellin boss, police said, they had to halt their
investigations.

In another mini-bombshell, Menem last week told reporters that
Argentine police had been made aware of the family's presence. Police
insist they only found out about the woman's real identity two months
ago, when they discovered that her fingerprints matched those of
Escobar's wife.

They began trailing Henao, but last week were forced to abandon the
surveillance and arrest her just hours after an Argentine TV show
reported she was living in Buenos Aires.

Henao told officials that she was allowed into Argentina under a
secret agreement between senior Argentine and Colombian officials.

Argentine police said they were not party to the accord and so are
likely to charge her with entering Argentina on a false passport. She
also is expected to face charges related to organized crime, money
laundering and failing to declare assets to customs officials.

Nobody knows whether the money she spent was drug cash or if, as she
claims, it is the result of an inheritance from her father. Justice
officials have ordered banks to check their records, a task that could
take months.

Henao's lawyer could not be reached for comment, and officials at the
president's office did not return phone calls.

The case is the third involving Menem and suspicions of money
laundering, false identities and misuse of privileged information in
the past few years.

In the most memorable affair, Menem's sister-in-law, Amira Yoma, who
was also his private secretary, was embroiled in a scandal set off by
her marriage to a former colonel of Syrian military
intelligence.

Although he spoke no Spanish, the colonel was appointed to a key
position as head of the customs office at Buenos Aires' international
airport. The ensuing scandal was christened Yomagate. The two later
divorced, and he left Argentina for Europe.

In another incident, Menem became friends with an Arab who ran a fleet
of armored security vans and had a near monopoly of the
intergovernmental mail and courier systems.

The man, Alfredo Yabran, was charged with ordering the murder of a
photographer. Yabran committed suicide before police could arrest him.

None of the big fish involved in either case were brought to
trial.

Although Menem could be called before a judge to get his own story
straight, Noguera said he did not expect any senior officials involved
in the Escobar passport and money laundering scandal to be judged either.

"It is a pattern," he said. "There's a scandal, and we get to know the
main players. Then we get introduced to the rest of the cast. There's
a connection to the government and then you never hear anything else.
In the U.S., politics is entertainment; in Argentina, maybe corruption
is entertainment."

"There is a perception that under the Menem government, these strange
Mafia-type things have been going on," Noguera said. "I think that's
one of the reasons people voted for de la Rua. They are tired of this
kind of thing."