NotiSur, 06/15/01 - Argentina, Peru, Ecuador Via NY Transfer News * All the News That Doesn't Fit [This is a personal reading copy only. NOT FOR REDISTRIBUTION!] ------------------------------------------------------------ L A T I N A M E R I C A D A T A B A S E NotiSur - South American Political & Economic Affairs ISSN 1060-4189 Volume 11, Number 22 June 15, 2001 ------------------------------------------------------------ Copyright 2001, Latin America Data Base (LADB), Latin American Institute, University of New Mexico Director: Rebecca Reynolds Bannister Editor: Patricia Hynds Staff writers: Carlos Navarro, Robert Sandels LADB ARCHIVES: Back issues are referenced to provide historical background relevant to the articles in this newsletter. These can be accessed with a subscription to the LADB searchable on-line archives at http://ladb.unm.edu/ by clicking on Search Archive. For subscription information, e-mail info@ladb.unm.edu or call 1-800-472-0888. In This Issue: ARGENTINA: FORMER PRESIDENT CARLOS SAUL MENEM UNDER HOUSE ARREST IN ARMS SCANDAL * Menem implicates US * Menem is latest in string of arrests * Other testimony ties Menem to sales * Menem's brother says he is political prisoner PERU: ALEJANDRO TOLEDO WINS PRESIDENCY * Toledo calls for unity * Toledo will face a divided Congress ECUADOR: PRESIDENT OF CONGRESS RESIGNS * Quevedo declares Congress in recess ____________________________________________________________ ********************* ARGENTINA ********************* ARGENTINA: FORMER PRESIDENT CARLOS SAUL MENEM UNDER HOUSE ARREST IN ARMS SCANDAL A federal judge placed Argentina's former President Carlos Saul Menem (1989-1999) under provisional house arrest on June 7 as part of an ongoing investigation into illegal arms sales during Menem's administration. Menem, who began his presidency by pardoning the former military leaders who had been tried and convicted of human rights abuses during the 1976-1983 dictatorship, now stands accused of the common crime of heading an "illicit association" that arranged and profited from the arms sales. The arms-smuggling investigation began in 1995, and 46 people have already been indicted. Between 1991 and 1995, Argentina sold 6,500 tons of arms that were officially destined for Panama and Venezuela but ended up in Croatia and Ecuador. The sales violated international bans on arms sales in place at the time (see NotiSur, 2001-04-27). Prosecutors and Judge Jorge Urso moved quickly to subpoena Menem and other high-ranking members of his administration after a Federal Appeals Court on April 4 upheld the indictments of several top ministers in Menem's government on fraud charges and asked that they also be investigated on the more serious charge of illicit association. Menem, who heads the now-opposition Partido Justicialista-peronista (PJ), is the first former president in Argentina's history to be charged with a common crime. His arrest thwarted his honeymoon plans with former Chilean beauty queen Cecilia Bolocco, whom he married May 26. On June 1, Judge Urso denied Menem's request to travel to Syria for a honeymoon. Syria does not have an extradition treaty with Argentina. At the request of state prosecutor Carlos Stornelli, Judge Urso first ordered Menem to appear in court on July 13, but the date was unexpectedly moved up to June 7, which his lawyers tried unsuccessfully to postpone. When he arrived in court, Menem handed Judge Urso a 13- page statement declaring his innocence but refused to answer questions from the judge. Urso then informed Menem of his arrest. Menem benefits from a law allowing people over 70 to be detained at home rather than in jail. He chose the luxurious country home of a friend near Buenos Aires. "The best defense in cases as grave as this is silence," said Oscar Roger, one of Menem's lawyers, following his arrest. "No one is obliged to testify and that does not create the presumption of responsibility. An accused must be proven guilty." The judge has 10 days to decide whether to formally charge Menem. If ultimately charged and convicted, he could face a sentence of three to 10 years. Menem implicates US On television before his arrest, Menem suggested that the US knew of the operation to help Croatia in the early 1990s. US officials have denied any connection to the case. Lawyer Ricardo Monner Sans, who has pushed the case against Menem, is convinced the US was involved. He said it is "impossible that the sale of arms to Croatia could have happened without US encouragement at an informal level or without it giving an OK. It seems that Washington found in Menem someone to act as the third party in the deal." But Monner said even if the US had entrusted this "dirty deed" to Menem--who bragged of being Washington's number-one Latin American ally--it would not justify setting up shell companies for laundering the million-dollar commissions from the illegal arms deals. Stornelli has requested help from the US Justice Department in tracing the money trail from the arms sales, but his seven requests that banking records be opened have gone unanswered. Menem is latest in string of arrests Menem's arrest is the latest of several relating to the arms scandal that began with the arrest of his former aide and former brother-in-law Emir Yoma on April 7. Yoma is in a federal jail awaiting trial. Luis Sarlenga, former controller at the state-run Fabricaciones Militares, is also charged in the case but is currently free on bail. Yoma was arrested after Sarlenga named him as being among those responsible for the illegal weapons deals. Justice officials are investigating reports that Yoma collected a US$400,000 commission for the arms operations. Statements from several people, including Yoma's former private secretary Lourdes Di Natale, indicate that Yoma is the holder of bank accounts bearing the names of shell companies based in Montevideo, Uruguay. Sarlenga said he deposited money from the arms deals in those accounts. Another accused participant, former defense minister Antonio Erman Gonzalez, implicated Domingo Cavallo in the arms scandal in his testimony on April 4 and April 10. Cavallo served in Menem's Cabinet in the early 1990s and is now economy minister. Cavallo has insisted he had nothing to do with the arms sales. On May 23, Judge Julio Speroni ordered Gonzalez arrested on the charge of "aggravated smuggling," a crime that carries a mandatory prison term of four to 12 years. In addition, Speroni imposed a million-dollar freeze on Gonzalez's assets. He was the first former Cabinet minister to be detained. Former army chief retired Gen. Martin Balza was called to testify June 6 rather than June 13 as originally scheduled. But before the interrogation began, Judge Urso told Balza that he was under arrest for his alleged participation in organizing an illicit association for arms trafficking. Balza, widely respected in Argentina for a historic apology in 1995 for the army's role in human rights crimes during the 1976-1983 dictatorship, was taken to an army jail at the Campo de Mayo barracks outside Buenos Aires. Balza has repeatedly said that the army had no ties with Fabricaciones Militares, the arms manufacturer that produced the munitions sent to Ecuador and Croatia. "While the soldiers and I were proudly serving as the armed branch of foreign policy for the sake of peace, and boasting about our impartiality, my country sold weapons to one of the warring bands," Balza said. But Sarlenga testified that Balza was aware of the transactions. Other testimony ties Menem to sales On May 21, Esteban Caselli, who held several positions in Menem's administration, testified in writing to Judge Urso that Menem personally asked him to intercede with the Defense Ministry to keep Sarlenga as controller at Fabricaciones Militares. Menem's ex-wife Zulema Yoma appeared in court May 23 to testify before Judge Urso. She has said that their son, Carlos, told her details of the arms sales shortly before he was killed in a helicopter crash in 1995. She contends that his death was not an accident and was tied to the arms scandal. Former foreign minister Guido di Tella admitted on May 24 that illegal activities were carried out "by criminals who tarnished the foreign policy of Argentina." But he insisted that the administration did not know what was happening. Menem's brother says he is political prisoner The Alianza coalition government of President Fernando de la Rua hailed the arrest as a sign that the Argentine legal system was finally acting independently. The image of the justice system plummeted during Menem's time in office. He even expanded the number of justices on the Supreme Court to maintain a majority who supported him. Naming federal judges with personal ties to the government, some of whom received illegal bonuses, contributed to an image of injustice. De la Rua said Menem's arrest was a dramatic event but would not destabilize the country. "This is a monumental event because it has to do with the nation's ex-president," said de la Rua. "But in no way does this mean...that our politicians or institutions will stop working. It shows that the courts' independence is respected in our country." Five days after Menem was put under house arrest, his family called him "the first political prisoner in democratic times." "He has been jailed on totally insane charges of illicit association," said the former president's brother Eduardo, a leading PJ senator. Menem's nephew Adrian, a deputy, accused Urso of acting on orders of the government--something the government emphatically denies. "Urso's actions obey what I believe to be the active participation of the government," said Adrian Menem. Meanwhile, Urso has begun probing the family's finances, looking for the money allegedly paid for the arms but never found in the state treasury. Political analysts predict that Menem's arrest and probable lengthy legal challenges will allow a new generation of governors to take over the party founded by Gen. Juan Domingo Peron half a century ago. [Sources: Associated Press, 04/30/01, 05/22/01, 06/04/01; The Miami Herald, 06/06/01; The New York Times, 06/07/01; Inter Press Service, 05/23/01, 06/08/01; Notimex, 05/10/01, 05/17/01, 05/21/01, 05/28/01, 06/10/01, 06/11/01; CNN, 06/11/01; La Opinion (Los Angeles), 05/24/01, 06/11/01; Spanish news service EFE, 05/04/01, 05/11/01, 05/17/01, 05/21/01, 06/07/01, 06/12/01; Reuters, 05/05/01, 05/23/01, 06/04-09/01, 06/12/01] ********************* PERU ********************* PERU: ALEJANDRO TOLEDO WINS PRESIDENCY After a campaign that grew progressively bitter, Alejandro Toledo was elected president of Peru, defeating former President Alan Garcia (1985-1990) in the June 3 runoff. Fernando Tuesta, head of the Oficina Nacional de Procesos Electorales (ONPE), announced the final results on June 12, with Toledo of Peru Posible (PP) receiving 53.08% of the valid votes, while Garcia of the Alianza Popular Revolucionaria Americana (APRA) received 46.92%. The ONPE said 11.06% of the ballots were blank or null, despite opinion polls prior to the election that projected as many as 30% of voters might choose that option. About 19% of eligible voters stayed home, although voting is mandatory in Peru. The Jurado Nacional de Elecciones (JNE) officially proclaimed Toledo the winner on June 13. His Peru Posible ticket includes Raul Diez Canseco Terry of Accion Popular (AP) as first vice president and David Waisman Rjavindthi of the PP as second vice president. Toledo will begin his five-year term July 28. Congress recently extended by two days the mandate of interim President Valentin Paniagua, the former president of Congress, from July 26 when the congressional term ends to July 28. In his brief stint as president, Paniagua has solidified a reputation for acting with integrity. He introduced anti- corruption initiatives and justice reforms and ensured a clean election to choose his replacement. "This election was absolutely clean," said former Guatemalan foreign minister Eduardo Stein, head of the Organization of American States (OAS) observer mission. Stein praised Paniagua's transition government and the Peruvian people, saying they "have given us a lesson in internal reform." Peru's year-long electoral process began when former President Alberto Fujimori (1990-2000) won a third term last May in a vote widely seen as fraudulent. Fujimori was later pressured into calling new elections amid a corruption scandal, fled to Japan, and was replaced by a transition government headed by Paniagua (see NotiSur, 2000-12-08). Despite the evidently clean elections, the nearly 20% absenteeism and the 11% blank and null ballots reflect the frustration of many voters with their choices. When elected president in 1985, Garcia was a sign of hope for much of Latin America. By the time he left office in 1990, he was seen as heading a government marked by ineptitude, corruption, hyperinflation, and an inability to stem growing guerrilla terrorism. Toledo, credited with laying the foundation for Fujimori's ouster, faced accusations in the press that he used cocaine, frequented hotels that cater to prostitutes, was involved in domestic violence, and misused hundreds of thousands of dollars in campaign donations during his presidential bid last year. He refused to take a DNA test after a teenager claimed that he was her father. "No one knows who is telling the truth and who is lying," said Giovanna Penaflor, head of the Imasen polling firm. "Toledo and Garcia have not re-established confidence in politics. There is only more confusion, creating a culture of cynicism." As voters' cynicism grew, so did the calls for leaving the ballot blank. In the end, however, voters decided to give Toledo a chance. Toledo calls for unity At a massive rally after the initial returns were announced, Toledo told Peruvians he would not disappoint them, and he called on them to support a government of national unity. In the campaigns, Toledo was often referred to as "the cholo from Harvard." In Peruvian Spanish, cholo refers to anyone of Indian descent. Indians make up 45% of Peru's 26 million people and 37% are of mixed Indian and Caucasian blood. No Indian or mestizo had ever been elected president, although several came to power through military coups. Although he lost the election, Garcia was still a winner. Until a few months ago, his candidacy was considered hopeless, and his administration was blamed for many of the ills that befell Peru in the 1990s. When he first entered the race, political observers gave him no chance of capturing significant support. He is now a leading opposition figure. "Four months ago, Garcia was the pariah of Peruvian politics. No politician wanted to have their photo taken with him," said political analyst Augusto Alvarez. "Today he's a star. He's the head of the opposition and a central player." Toledo will face a divided Congress The new president will not have a political honeymoon. Toledo's PP has the largest bloc in Congress with 45 representatives, but is far short of a majority in the 120- member legislature. Garcia's APRA has 28 seats, and the coalition that backed Lourdes Flores of the Partido Popular Cristiano (PPC) in the April 8 primary has 17 seats. Since the election, however, Toledo has received the support of 11 deputies of the Frente Independiente Moralizador (FIM), three from Accion Popular (AP), four from Somos Peru (SP), and six from the Union por el Peru (UPP), which would give him control of 69 seats. "That alliance would be stable as long as things were going well for him on the economic front," said analyst Santiago Pedraglio of the daily newspaper La Republica. "But if he is unable to deliver promptly on his promise of creating jobs, and if social unrest breaks out, some of them would likely break the pact." Toledo has promised to create a million jobs, raise wages, boost agriculture, industry, and education, attract foreign investment, and control state finances. But the US$54 billion economy shrank 2.6% in the first quarter of 2001. The government has cut its 2001 growth forecast from between 2% and 3% to 1.5%, following 3.6% growth in 2000. But economists say even the new growth target will prove tough to achieve. Official figures indicate 54.1% of the population lives in poverty, with 14.8% in extreme poverty, while 62 of every 100 adults lack full-time work. If they work, they work in the informal sector. Forty percent of the work force earns under US$170 a month. Per capita GDP is at 1970 levels, and debt servicing takes US$2.1 billion a year. Toledo's vague program calls for doubling exports within an unspecified time and adopting slight tax reductions, which might boost consumption but would jeopardize already scarce tax revenues and weaken the chances of attracting foreign investment, say observers. While Peruvians during Garcia's administration were battered by hyperinflation and during Fujimori's by political violence, "today, Toledo will face a new specter-- unemployment," said sociologist Raul Serrano. "Since 1998, the recession triggered by the failure of the neoliberal model introduced by Fujimori has destroyed around one million jobs," he said, in a country where some 325,000 young people enter the labor market every year. "Fujimori wanted us to board the train of modernity via the opening of the economy, but that did not bring development, and the only thing we obtained from globalization was a more acute foreign dependence and an accentuation of the most widespread fear, which is unemployment," said Serrano. "If Toledo doesn't score a few goals in his first 100 days, things could really start to blow up," said political analyst Augusto Alvarez. During his campaign, Toledo's aides and supporters enthusiastically chanted, "Pachacutec! Pachacutec!"--the name of a 15th-century Inca emperor. "There is in Toledo an element of unpredictability," said political analyst Mirko Lauer. "The question is, will he have the kind of feedback that keeps him from believing he IS Pachacutec?" [Sources: The New York Times, 05/27/01; Notimex, 06/01/01; Spanish news service EFE, 06/04/01; The Miami Herald, 05/29/01, 06/05/01; Associated Press, 06/04/01, 06/05/01; Reuters, 05/28/01, 06/04/01, 06/06/01; Inter Press Service, 06/01/01, 06/04/01, 06/06/01; Latinamerica Press (Peru), 06/11/01; La Opinion (Los Angeles), 06/13/01] ********************* ECUADOR ********************* ECUADOR: PRESIDENT OF CONGRESS RESIGNS The president of Ecuador's Congress, Hugo Quevedo, resigned his leadership position on June 6 rather than face impeachment for a series of alleged wrongdoings. Controversy had surrounded Quevedo since he was elected to his post last August (see NotiSur, 2000-09-15). Political analysts questioned the legitimacy of his presidency because he had been expelled from the party entitled to the post--the Partido Social Cristiano (PSC)--before the vote. The latest upheaval in the often rancorous Congress began in late May when legislators representing a majority of the parliamentary groups gave Quevedo an ultimatum, demanding that he step down or face an impeachment process. He was accused of violations of the congressional code of ethics. An oversight committee accused him of reselling airline tickets purchased at a discount by the legislature for official travel. Other accusations ranged from excessive spending on calendars for Congress to ordering a police guard to leave a heated debate that turned into a fistfight. Opponents needed 62 votes in the 123-member unicameral Congress to expel Quevedo. The three parties that called for him to quit--the PSC, Democracia Popular (DP), and the Izquierda Democratica (ID)--had the necessary votes with the support of another 22 deputies from minority parties or independents who also opposed Quevedo. Quevedo has the backing of the Partido Roldosista Ecuatoriano (PRE) of former president Abdala Bucaram. "We have discussed the need to change the head of Congress, and that the head, with the respective changes, needs to motivate committees to work and the legislative process to move forward," said Juan Jose Pons, former head of Congress and one of the lawmakers opposing Quevedo. Representatives of a majority of the blocs in Congress said on May 30 they planned to vote to remove Quevedo and several other legislators for violations of the ethics code. They said the expulsions were part of a purge that sought to improve the institution's image amid political instability that has given Ecuador five presidents since 1996. Congress has the lowest approval rating of the country's institutions, according to local polling firm Cedatos. Several deputies have been removed from their posts on charges of scandals, corruption, and defamation. Political leaders in Ecuador have long discussed the need for reforms to make Congress more efficient and representative of its constituents. But the talk has not led to action. "We can't continue to pay such a high price, allowing a group of legislators to make a mockery of the legislature," said ID Deputy Wilfrido Lucero. Lucero said his party supported the effort to get rid of Quevedo because "he is becoming the principal obstacle to legislative work." Quevedo declares Congress in recess "Hugo Quevedo's position as president of Congress is unsustainable," said Xavier Neira, PSC leader in Congress, on May 30. Quevedo, an independent from the coastal province of El Oro since his expulsion from the PSC, insisted he had a "clear conscience." The following day, he abruptly declared a one- month legislative recess and ordered the congressional guard to chain shut the legislature's doors in an apparent effort to prevent his possible impeachment. Antonio Posso, the second vice president of the legislature, called Quevedo's decision "illegal," noting that the recess, effective June 1, would suspend the debate on the new customs law as well as all other pending legislation. This would have serious consequences, as the customs law is considered "urgent" for the country's economy, said Posso. Legislators from the Movimiento de Integracion Nacional (MIN) said it was trying to obtain the 82 votes needed to bypass Quevedo and call the Congress back into session. On June 4, the legislature's leadership council (Consejo Administrativo) failed to muster a quorum. The following day, however, the Consejo broke the locks and chains and convened a session in which they voted to ignore Quevedo's directive declaring a recess, which paved the way for action on his impeachment. After saying that he would not resign, Quevedo did just that on June 6. "Faced with a real situation of collusion that would affect not only the Congress but the whole nation...I have decided it proper to hand over my position for the good of Ecuadorans," Quevedo said. He would not say whether he also intended to resign his congressional seat. The legislature's vice president, Jose Cordero, assumed the presidency of the legislative body and vowed to carry out a "self-purification of Congress." With the approval of 85 deputies, Cordero was sworn in for a term that will end in January 2003, when the term of the current Congress ends. Posso, who had been second vice president, assumed Cordero's position. On June 11, groups of deputies began presenting motions to disqualify six deputies for violations of the code of ethics. They include Quevedo, Enrique Camposano, Julio Noboa, Bolivar Sanchez, Kaiser Arevalo, and Vicente Estrada. At least part of the motive behind the purge seems to be that most of the deputies targeted had either been expelled from their political parties or left on their own to become independents. [Sources: Xinhua, 05/31/01; Inter Press Service, 06/05/01; Reuters, 05/29/01, 05/31/01, 06/06/01; Spanish news service EFE, 05/30/01, 06/04-06/01; Associated Press, 06/06/01; Notimex, 05/21/01, 05/25/01, 05/28/01, 05/31/01, 06/11/01; Hoy (Ecuador), 06/14/01] ================================================================= NY Transfer News Collective * A Service of Blythe Systems Since 1985 - Information for the Rest of Us 339 Lafayette St., New York, NY 10012 http://www.blythe.org e-mail: nyt@blythe.org ================================================================= pvtsa-06.15.01-23:18:23-27704