POLITICS-ARGENTINA: Former Minister Cavallo Released from Prison

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Jun 7 2002 (IPS) - Argentine justice authorities ordered the release Friday of former economy minister Domingo Cavallo, who spent 64 days in a military prison on charges of smuggling arms to Ecuador and Croatia in the 1990s.

The order for Cavallo’s release does not free him from the legal proceedings for his alleged role in weapons contraband, charges similar to those that put former president Carlos Menem (1989-1999) under house arrest from June to November 2001.

As minister, Cavallo was in charge of Customs and had signed decrees that authorised weapons sales to Venezuela and Panama. But those shipments ended up in Ecuador and Croatia, two countries that were banned from purchasing arms at the time.

Ecuador and Peru were engaged in a brief border war in 1995, and Argentina was one of the countries serving as guarantors of peace between the two, therefore prohibited from selling weapons to either. As part of the former Yugoslavia, Croatia was under a United Nations-imposed arms embargo as a result of the wars in that region in the first half of the 1990s.

The alleged crime would have occurred when Cavallo was serving as economy minister in the Menem administration. The former president was indicted last year as alleged chief of an “illicit association” that carried out the arms smuggling.

But the Supreme Court of Justice ultimately ordered Menem’s release from house arrest – an alternative to prison provided for those over 70 – saying there was not enough evidence to prove the existence of such an illicit association.

Cavallo’s release was met with anger by the hundreds of account holders who regularly gather outside of banks to demand access to their deposits, which have been under restrictions since early December. Cavallo imposed the restrictions – this time serving the Fernando de la Rúa government (1999-2001) – to prevent a run on the banks.

“If he is free, then tell him to give us back our money,” shouted a women in the group of protesters, underscoring the suffering she said his ministerial decisions have caused millions of Argentine savers.

Cavallo resigned Dec 19, the day before De la Rúa followed suit, amidst the eruption of a serious social and economic crisis that triggered widespread protests and looting. Thirty people died and dozens were injured in those incidents, most as a result of clashes with the security forces.

The restrictions on cash withdrawals, known as the “corralito”, or little fence, remain in place today.

In the wake of his brief time as economy minister for De la Rúa, Cavallo was forced to seek refuge at home or at his office to protect himself from the ire of the Argentine people, enraged by the corralito.

The Argentine economic and social crisis that exploded in December has pushed unemployment above 23 percent. Over half the country’s population of 37 million lives in poverty, with several million falling below the poverty line just this year.

It is in this context that a federal court ordered Cavallo’s arrest for “aggravated contraband of weapons”.

The decision came under fire from criminal lawyers, who said there was insufficient evidence to detain the former official.

The Chamber of Appeals also argued that “there was no evidence for the indictment,” and overturned the lower court’s April ruling. The appellate court also reduced the charges against Cavallo from “necessary participant” to “secondary participant” in the alleged crime.

The prison sentence for “necessary participant” in arms smuggling is four to 12 years. But the court ruled that Cavallo could have been a “secondary participant”, and thus qualified for release.

As economy minister for Menem, Cavallo launched the peso-dollar exchange regime in 1991, known in Argentina as the “convertibility” law, which pegged the peso to the dollar at one- to-one parity, a system that lasted more than 10 years – and which some experts blame for the country’s profound four-year recession.

In 2001, with De la Rúa in the presidency, Cavallo was called to head the Economy Ministry once again. He served eight months, until his December resignation.

He had become so unpopular that some Argentines took to the streets to celebrate when the courts ordered his arrest in April.

The response was different in the business and academic communities. Some 70 international personalities signed a letter published in May by The New York Times in which they demanded Cavallo’s release, and this week economists from France’s University of Sorbonne issued a similar call.

So far, neither Cavallo nor Menem has obtained a dismissal of proceedings or a legal declaration of their innocence.