Mary O’Grady reported in the December 6 Wall Street Journal that a key Argentine anti-money-laundering unit may have been protecting President Cristina Fernandez de Kirchner and her late husband, Nestor, from scrutiny and investigation in the area of dirty money.

Apparently under the Kirchners, Argentina has become a feeble ally in the global fight against drug money laundering. Other tidbits that have emerged recently expose a poor record of governance in Argentina’s “Pink House” (Casa Rosada). Secretary of State Hillary Clinton questioned Cristina’s mental and Nestor’s gastrointestinal health; the U.S. Embassy in Buenos Aires reported that Nestor’s “personalistic, often erratic operating and decision-making style” amounted to a “divide and conquer” approach to governing.

More troubling are reports about Kirchner’s approach to law enforcement and to economic policy. A cable reported that the leader of a Financial Action Task Force review of Argentina’s anti-money-laundering and counterterrorism finance regime was “skeptical” of the Kirchners’ intentions to combat money laundering and terror finance.

So perhaps it is not surprising that Argentina’s GDP per capita has steadily eroded in the past seven years under the rule of the Peronist Kirchners. In 2001, Argentina defaulted on its massive sovereign debt—the largest such default in world history—and it has yet to settle with all of its official bilateral and private foreign creditors, to whom it owes billions of dollars.

President Kirchner, like President Obama, is a devotee of Keynesian deficit spending. She wants to “spread more wealth around” by raising new funds for her government through the issuance of new sovereign bonds, but Argentina’s past (and as yet unpaid) debts prohibit fresh borrowing. A return to world capital markets might help the Peronists cling to power in the 2011 presidential election, but will the unsavory details that have come to light shake the markets’ faith in Argentina’s “willingness” to pay back the country’s debts? The latest revelations certainly provide skeptics with more reasons to question whether the Kirchner Administration can be trusted.