- The Washington Times - Saturday, April 27, 2002

Argentina's former economy minister, Domingo Cavallo, who was jailed this month on charges of arms smuggling, has taken the assertion that he is victim of a political vendetta to the Organization of American States (OAS).

Arguing that the Argentine judicial system is an instrument in the hands of the country's ruling politicians, Mr. Cavallo says he is a scapegoat for a series of irregularities that have occurred in the past several years.

By leapfrogging his nation's judiciary, Mr. Cavallo hopes to convince the OAS that he has suffered a human rights violation through trumped-up contraband charges of diverting weapons from Latin American markets to Croatia.

Such a ruling would weaken the hand of those seeking to try him.

He has hired Argentina's top human rights lawyer, Luis Moreno-Ocampo, to represent him before the OAS' Inter-American Human Rights Commission in Washington.

"We need an international institution to solve the problem, because the issue is much bigger than Mr. Cavallo's particular case," Mr. Moreno-Ocampo said in a telephone interview from Buenos Aires.

He accused the government of President Eduardo Duhalde of pointing the finger at former officials to deflect attention from the Latin American nation's dire economic situation.

Mr. Moreno-Ocampo also said recent charges against several of Mr. Cavallo's former colleagues are part of a campaign to allocate the blame for Argentina's crisis, which has resulted in five presidents since December.

Mr. Cavallo, a 55-year-old Harvard-trained economist, first served as minister under President Carlos Menem, from 1991 to 1996. He won international acclaim for stabilizing the Argentine economy by pegging the peso to the U.S. dollar, which helped stop hyperinflation.

He was appointed to the same post in February 2001 by President Fernando de la Rua, who resigned in December amid deadly street riots. Mr. Cavallo's belt-tightening policies and his decision to partially freeze bank accounts proved highly unpopular.

"In November 2001, Mr. Cavallo engineered a local debt swap in which domestic financial institutions, including banks and private pension funds, were forced to provide credit to the government," said Steve Hanke, an economics professor at Johns Hopkins University in Baltimore.

"This destroyed billions of dollars worth of assets at these institutions and also replaced liquid tradable assets with illiquid, non-tradable assets," he said.

Mr. Cavallo was one of several ministers who signed decrees ordering arms sales to Panama and Venezuela in the 1990s. But he insists he had nothing to do with the arms ending up illegally in Croatia in 1991 and 1993, when it was under a U.N. arms embargo, and in Ecuador in 1995, during a border war with Peru.

Mr. Moreno-Ocampo said Mr. Cavallo was surprised by his arrest because in December Judge Julio Speroni, who issued the arrest order, said the former minister had nothing to answer for.

Earlier this month, however, the judge provided declarations from customs officials that "secret decrees" from Mr. Cavallo's ministry had prevented them from checking the illegal shipments.

Mr. Cavallo's indictment charged him with "aggravated contraband," saying he diverted 6,500 tons of weapons worth more than $100 million. If convicted, he could be sentenced to from four to 12 years in prison.

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