BUENOS AIRES, Argentina – A businessman with close ties to former Argentine President Cristina Fernandez refused to testify Wednesday in a money-laundering probe being closely watched as a test of the new administration's promise to crack down on corruption.
Lazaro Baez was escorted by police into a Buenos Aires court. However, he refused to testify and instead handed a letter to Judge Sebastian Casanello, the official Argentine news agency Telam said.
A top court official, speaking on the condition of anonymity, confirmed to The Associated Press that Baez refused to answer questions and said the suspect would be returned to custody until his legal situation could be sorted out.
It wasn't immediately clear what would happen next. Argentine judges have wide leeway to hold suspects during an investigation, particularly if they are deemed a flight risk.
A message left at Casanello's office was not returned. The person who answered the phone at the law firm representing Baez declined comment.
Baez was initially scheduled to testify Thursday, but his appearance was moved up after his surprise arrest Tuesday night.
Baez received large public works contracts during the administrations of Fernandez and her late husband and predecessor as president, Nestor Kirchner. Baez is accused of embezzling and laundering about $5 million. He denies any wrongdoing.
Prosecutors starting looking into Baez after a 2013 journalistic investigation said he was Kirchner's figurehead in an elaborate scheme. The news report charged that Baez used companies to launder money for the former presidents. Recent images aired on local TV showed one of Baez's sons and others counting wads of cash at a company being investigated.
For many Argentines, the allegations surrounding Baez underscore the kind of endemic corruption that has long plagued the South American nation. Argentina ranked 107 out of 167 on Transparency International's annual corruption index last year, worse than other Latin American countries with long histories of graft, such as Mexico, Brazil and Bolivia.
Fernandez, whose second term ended in December, has long been dogged by allegations related to Baez.
Her family owns several top hotels in the southern province of Santa Cruz. According to local news reports, the hotels are often empty and thus incapable of generating the kind of income they report. Prosecutors have said they are looking into the financial transactions at Kirchner family hotels.
Fernandez has denied wrongdoing and has not been charged. However, most observers think that a thorough investigation could never have happened while she was in power.
The current president, Mauricio Macri, a conservative who campaigned on promises to root out corruption, has been careful in comments about Fernandez. When asked about her by the AP during an interview last month, Macri noted she had not been charged with anything but said he would not stand in the way of any investigation related to her.
Diego Maria Olmedo, a criminal lawyer, said so far Macri's administration has taken a hand-off approach.
"In general, governments tend to keep federal judges at their side," Olmedo said. "This government is apparently letting them work" without interference.
Associated Press writer Debora Rey contributed to this report.