BUENOS AIRES, Argentina (AP) — Argentina’s top court on Tuesday approved the extradition of an Argentine businessman to face drug trafficking and money laundering charges in the United States, the latest development in a politically explosive case that has tainted a key ally of President Javier Milei.
The Argentine Supreme Court ruled that the businessman, Fred Machado, should be handed over to American authorities in Texas, where a Justice Department indictment for drug trafficking, money laundering, wire fraud and other financial misdeeds stands against him. Machado denies the charges.
Tuesday’s court order to extradite Machado must be signed within 10 days by Milei’s government, which is now negotiating a $20 billion lifeline with the Trump administration to stem a run on the peso before the country’s crucial midterm elections.
Since Milei took office in 2023, he has imposed a sweeping austerity program aimed at balancing Argentina’s budget for the first time in decades, but recent political scandals have threatened his political agenda.
Machado, who has been in custody in Argentina since 2021, is the center of the latest controversy. His long-running case sparked a media firestorm last week when documents surfaced showing that Machado had sent a $200,000 payment in 2020 to a member of Milei’s Libertad Avanza party, José Luis Espert.
Espert, one of Milei’s top candidates for upcoming Oct. 26 midterm elections, admitted accepting the money in a social media video posted Thursday, claiming it was for consulting work to help a mining company linked to Machado. He denied knowledge of Machado’s allegedly illicit activities.
The revelation piled pressure on the president, who has suffered a series of political setbacks in recent weeks including a landslide loss in a provincial vote, a separate bribery scandal engulfing his powerful sister and several votes in Congress that overturned presidential vetoes and boosted social spending that threatens his hard-won fiscal balance.
Espert, a current lawmaker and economist, withdrew his candidacy Sunday for Milei’s libertarian party in Buenos Aires Province.
“I have nothing to hide and I will prove my innocence before the courts,” Espert said in announcing his resignation, acknowledging that he took over a dozen trips on Machado’s planes, which U.S. authorities say were registered illegally. “Time will show that all of this was a big lie to taint this electoral process.”
Milei seeks to expand his party’s tiny congressional minority in upcoming midterm elections as he struggles to push through his radical overhaul of Argentina’s long-troubled economy and reassure jittery investors.
His party’s crushing defeat in the Buenos Aires provincial election triggered a run on the peso and a sharp bond sell-off that his government is scrambling to contain with help from key ally U.S. President Donald Trump. U.S. Treasury Secretary Scott Bessent pledged financial support but was short on specifics.
Milei, who is set to visit Donald Trump at the White House on Oct. 14, told local media last week that he was “working on the details.”
