ARGENTINA: Cavallo Falls Victim to Menem’s Witch Hunt

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Apr 29 1997 (IPS) - Argentina’s former Economy Minister Domingo Cavallo returned to the front pages Monday after a surprise court case against him, accused of defending the public interest above that of a private company.

The foreign investors “know I am being persecuted by the Carlos Menem administration,” he said, speaking from the United States shortly after being advised he would be tried for “negotiations incompatible with his public function.”

Cavallo, who launched an electoral campaign as deputy for a centre-right alliance a week ago, has faced around 20 lawsuits since he was sacked by Menem in July 1996, but this is the first time he has had to go to court.

In his defence, the mentor of Argentine economic stability accused Interior Minister Carlos Corach of leading “a network of legal protection for smugglers, tax evaders and corruption.” This network, he said, involves judges and public prosecutors, and is being used against him.

Cavallo also repeated allegations against the communications entrepreneur Alfredo Yabran, alleging he was behind the legal action.

The former Argentine Economy Minister has often accused Yabran of leading a mafia and now he has gone one step further, linking Menem and his Interior Minister with the controversial businessman.

Yabran is suspected to be using front men in strategic businesses like the post, the customs tax stores, the tax-free shops and luggage ramps in airports, the printing of passports, identity documents and weapons licences.

“Menem decides, Corach operates and Yabran provides the funds,” said Cavallo. “Corach arranges impunity for corrupt officials, and that’s where his interests coincide with Yabran’s.”

These indications coincided with the dissemination of the most critical statement ever made against the government by the Catholic Church, slamming the lack of independence in the justice system.

“If the laws are manipulated, corruption has the way opened for it,” said the report.

The accusations worsened this week after the Federal Justice declared Cavallo had shown “illegitimate interest” in blocking a bid to distribute documents of the National Mortgage Bank, a State entity funding housing projects.

Then director of the entity, Adelina Dalesio, tried to give preference to Ocasa, a private postal service owned by Yabran, which used the public service and charged a surcharge. It was this company which took legal action.

Cavallo explained to Judge Norberto Oyharbide, that Ocasa only obtained the contract when norms were deliberately established to push Encotesa, the State postal service, out of competition.

The modifications in the specifications were carried out at the last minute, establishing made to measure norms for Ocasa, which would charge 1.82 pesos (on a par with dollars) per document delivered, compared with a cost of 0.4 pesos per unit in Encotesa, a service which covers the whole nation.

Cavallo showed the judge letters from the Mortgage Bank showing the Encotesa post mark, and the Ocasa distribution stamp.

This Monday, the National General Audit released a report backing Cavall. This organism said the State had benefitted Yabran’s postal companies to the detriment of the State Encotesa company in four of the seven public biddings between 1991 and 1996.

However, the judge said Cavallo had been interested in favouring Encotesa, as the State company was then directed by Haroldo Grisanti, a trusted official who used to accompany Cavallo on his early morning walks in Buenos Aires.

“The judge’s argument that I tried to benefit Encotesa because I went for a walk with the company supervisor every morning is incredible,” he said.

Cavallo also accused the former bank director for defending the decision to favour Ocasa, arguing the surcharge is not paid by the entity, but by the person receiving the documents.

“I have no doubt that Menem wants to push me out of politics because he likes politicians like Adelina Dalesio,” said Cavallo, accusing the President of being “afraid to confront corruption and scared of Yabran.”

The former minister will be standing for the October legislative elections as the first ever Alliance for the Republic deputy, an alliance made up of centre-right parties, but has already said that if he wins he will be prepared to abandon his privileges to put himself at the disposal of the justice system.

“Yabran knows how to intimidate the officials, for example, making the legal system process them like he did with me and other officials who worked with me in the customs or postal services,” said Cavallo, alluding to the customs auditor and postal director.

“Any official who dares to investigate corruption in Yabran’s companies ends up being tried or committing suicide,” he said, alluding to the case of Brigadier Carlos Echegoyen, a customs auditor who is supposed to have killed himself, although his family never accepted the verdict.

“Menem will gradually loose power, and the power will continue passing over to those who are scared of Yabran,” said Cavallo, who added that he hoped to become President in 1999, when Menem’s mandate ends.