Tuesday, December 1, 2020

ARGENTINA | 28-03-2019 05:10

Menem, Cavallo sentenced to jail over 1991 sale of La Rural building

Former president and his ex-economy minister also banned for life from holding political positions.

Former president Carlos Menem was sentenced on Wednesday to three years and nine months in jail for embezzlement.

His former economy minister, Domingo Cavallo, was also sentenced to three years and six months in jail, though neither he nor Menem will likely spend time behind bars. The pair were also banned for life from holding political positions. The decisions can be appealed.

The case dates back to the 1991 sale of the Rural Society's fairground building, which Cavallo executed despite the property's status as a public building whose sale required the approval of Congress. It was sold at below market rates, prosecutors concluded.

The grounds of La Rural, which occupies 114,620 square metres of prime real estate in the capital, today hosts many major exhibitions and shows, including the famous International Book Fair of Buenos Aires.

The sell-off was part of the Menem government's State Reform package which began in 1989 and included, among other projects, the privatisation of more than 60 public companies.

Judges of Federal Oral Court 2 – Rodrigo Giménez Uriburu, Jorge Gorini and José Michelini – ruled the sell-off of the La Rural building cost the State approximately US$100 million in losses at the time. The former government sold the property at the equivalent of US$30 million, with the peso pegged one-to-one with the dollar at the time.

In 2012, former president Cristina Fernández de Kirchner attempted to appropriate the building by decree but her manoeuvre was blocked by the Supreme Court. Two years later, the same Court ordered the case against Cavallo and Menem to be reopened.

Neither Menem nor Cavallo will spend time behind bars given their advanced ages and, in Menem's case, his parliamentary immunity from jail as a national senator. Nevertheless, the court has sent the former president's sentence to the upper chamber, to assess if lawmakers would withdraw his immunity.

The case's lead prosecutor Gabriela Gaibún suggested both could be restricted to house arrest, highlighting the fact that Cavallo, now 72, is undergoing chemotherapy for a cancer diagnosis.

The pair were tried and sentenced in tandem in a separate case in 2015 for the illegal payment of wages during their government. The case is still before the Supreme Court.

Menem, 88, also has a sentence of seven years jail time against him for the illegal trafficking and sale of arms to Croatia and Ecuador between 1991 and 1995, but after the appeal was dismissed due to "excessive passage of time."


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