BUENOS AIRES, Argentina—President Nestor Kirchner is facing the worst political crisis of his administration less than six months before presidential elections as an investigation into an alleged bribery scheme implicates members of his center-left government.
The 57-year-old Peronist leader remains the favorite to win if he runs for re-election Oct. 28. But allegations that the Swedish construction firm Skanska paid about $4.5 million in bribes to government officials to win a contract expanding a gas pipeline to Bolivia could take a toll.
On Wednesday, Kirchner fired two top officials who are under investigation, Fulvio Madaro, the president of the government's natural-gas regulator, ENARGAS, and Nestor Ulloa, a financial manager with the state-run bank Banco Nacion. They were the first in Kirchner's government to leave because of the alleged scheme.
Kirchner aides say the scandal won't reach him and that he favors a free and full investigation.
"If there have been officials involved, we want justice to freely investigate," Alberto Fernandez, the president's chief of staff, said Thursday. "The president has clean hands."
Opposition leaders have pointed fingers at Kirchner's planning minister, Julio de Vido, whose ministry oversaw the pipeline project.
Sen. Geraldo Morales, the president of the opposition Radical Civic Union Party, said last week's firing "clearly shows the recognition that there are acts of corruption in (Kirchner's) government. But the president also will have to recognize that there is an institutionalized system of corruption in public works."
The scandal comes on top of weeks of protests by teachers and city workers demanding pay raises in Kirchner's home province of Santa Cruz, where he was governor for a dozen years. The tension forced Gov. Carlos Sancho, a Kirchner ally, to resign May 10.
The scandal also comes as uncertainty revolves around whether Kirchner or his wife, Sen. Cristina Fernandez de Kirchner, will run for president this fall. Last year, Kirchner said a "penguin" of either gender could be the candidate, a reference to residents of the Patagonian province, from which the couple hail. Since then, there's been much speculation about which of the two will run. They have until July to decide.
At least four other candidates have emerged to challenge either Kirchner, including the president's former economy minister, Roberto Lavagna.
The bribery scandal is the first tangible threat to Kirchner since he won the presidency in 2003, analysts said.
"The political fact of the moment is that cracks have appeared in the armor, and, for the government of Nestor Kirchner, in political terms, the bullets have begun to enter," columnist Julio Blanck wrote Friday in Clarin, the country's biggest-selling newspaper.
Political analyst Graciela Romer said the political damage had been limited so far. About three-fifths of Argentines still approve of Kirchner's government, according to recent polls. His wife also would win the presidency if the vote were held now, albeit by a smaller margin.
Many Argentines are willing to overlook the allegations because they credit the president with reviving the country's economy after it collapsed more than five years ago, Romer said.
"The accusations that come from the opposition would only have a very remarkable weight, if, effectively, the prosecutors or the judges find proof that someone very close to the president was involved in this corruption," she said.