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Former Argentine Minister Arrested in Arms Case

Latin America: Once a dominant government figure, Domingo Cavallo is accused of approving illegal weapons sales.


BUENOS AIRES — Domingo Cavallo, Argentina's controversial former economy minister, was arrested Wednesday in a case involving illegal arms sales to Croatia and Ecuador in the 1990s.

Cavallo's detention came at the end of an hourlong court session in which Judge Julio Speroni questioned him about the arms deals, which sent $100 million worth of ammunition, gunpowder, mortars and other weapons to the two countries, which were then under an international arms embargo.

The arrest of the man who just months ago was a dominant figure in the Argentine government was only the latest in a series of judicial actions against top officials in the administration of former President Fernando de la Rua, who resigned Dec. 20 in the face of massive street protests over the country's shattered economy.

"He has the clean conscience of a man who knows he did nothing against the law," said Guillermo Contini, a member of Congress and a Cavallo ally. "I believe this is more political persecution than a judicial decision."

Cavallo was implicated in the arms-trafficking case because he signed the decrees that allowed the sale of 6,500 tons of arms and ammunition that were destined, ostensibly, for Venezuela and Panama. The true destination of the shipments was uncovered after Argentine peacekeeping troops stationed in the former Yugoslav federation came across some of the weapons and alerted authorities.

In response to the charges, Cavallo said he signed the documents as a matter of routine and that he had no idea they would be used to hide an illicit transaction.

Cavallo, 55, was being held in a military facility also occupied by former Security Minister Enrique Mathov, who has been charged with misconduct in connection with the deaths of five people shot by police in the hours before De la Rua's resignation.

On Tuesday, De la Rua was brought in to answer questions before a judge investigating the police repression of the demonstrations against him. Former federal Police Chief Ruben Santos is also under arrest in the case.

The arms sales that Judge Speroni is investigating occurred during the administration of another discredited Argentine president, Carlos Menem, for whom Cavallo was economy minister from 1991 to 1996.

Menem, accused of orchestrating the arms-smuggling scheme, was placed under house arrest for six months last year by an investigating judge but was released.

A congressional commission is also investigating Cavallo for his actions in De la Rua's government.

Elisa Carrio, who heads the commission, said Cavallo's arrest brought her "immense happiness." Her panel is investigating suspected irregularities in the large-scale conversion of Argentina's public debt. "Truth and justice will return to Argentina," she said.

Cavallo is being investigated by another judge for telling banks to ignore court orders overturning restrictions on cash withdrawals imposed during the De la Rua administration.

In recent years, Cavallo has become one of the most reviled figures of the nation's political class, a man whose name is synonymous with Argentina's economic crisis.

Under Menem, Cavallo's orthodox policies helped orchestrate a boom in the Argentine economy. De la Rua brought Cavallo into his government last year, but the Harvard-educated economist, a favorite of the international banking community, failed in his attempt to rescue Argentina from its ever-deepening recession. He resigned hours before De la Rua himself stepped down.

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