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Friday, 7 June, 2002, 21:15 GMT 22:15 UK
Argentina's ex-finance chief freed
Domingo Cavallo
Free after two months in jail: Domingo Cavallo
A court panel in Buenos Aires has said there are no grounds to prosecute Domingo Cavallo on accusations of gun-running.

Mr Cavallo, 55, was Argentina's economy minister until last December when he resigned amid streets riots and a collapsing economy.


Of course, Cavallo is innocent. There is no proof whatsoever that he did anything wrong

Alfredo Castanon
Lawyer

He was released after 65 days spent in a military jail on charges that he helped to send arms shipments to Croatia and Ecuador during the 1990s.

His lawyer, Alfredo Castanon, said: "This is a very good decision and makes clear that the investigating judge does not have anything to go on."

He said there had never been any evidence against Mr Cavallo.

"Of course, Cavallo is innocent. There is no proof whatsoever that he did anything wrong."

Federal investigation

Mr Cavallo was detained on 3 April on the orders of federal judge Julio Speroni, who has been investigating several former officials in an alleged gun-running scandal dating back a decade.

Mr Speroni is investigating arms shipments made during the administration of former President Carlos Menem.

Mr Cavallo was one of Mr Menem's top aides, and was accused of signing a decree that approved the arms sales.

A protester kicks the door of a government building in December, 2001
The economic crisis led to riots and forced Mr Cavallo from office
The shipments to Croatia in 1991 and Ecuador in 1995 occurred while international arms embargoes were in place against those countries.

In the indictment, Cavallo was charged with "aggravated contraband" amid allegations he was involved in the diversion of 6,500 tons of weapons worth more than $100m that had been officially destined for Panama and Venezuela.

Mr Cavallo, a Harvard-trained economist, and his supporters have denounced the charges as politically motivated, saying his detention was intended to distract attention from the country's economic crisis.

He won international acclaim when he as economy minister he managed to stabilise the economy.

He returned to government in 2001 in the administration of then-President Fernando De la Rua.

BBC News Online explains how Argentina suffered the near-collapse of its economy

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10 Apr 02 | Business
03 Apr 02 | Americas
11 Dec 01 | Business
07 Jun 01 | Americas
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