Monday, October 6, 2014

Ex Minister Cavallo acquitted in ‘Mega-swap’ trial

Former minister Domingo Cavallo (file photo).

Former Economy minister Domingo Cavallo was acquitted today in the trial for the 2001 “mega-swap” deal. The Federal Oral Court found him not guilty of carrying out “negotiations incompatible with public office” and the verdict will be announced on October, 17.

The court ruled on the former minister’s role in choosing the financial institutions that were in charge of the placement of bonds in the debt swaps of Argentina’s public debt titles in 1997-1998 and 2001-2002.

Federal Prosecutor Fabiana León had asked the Federal Court for a three-year prison sentence for the ex minister.

Before the decision, Cavallo said he was “a scapegoat” in the “terrible crisis” the country suffered in 2001. “They removed us from power just as we were about to complete the debt restructuring process,” he said. “Political leaders wanted to overthrow (president Fernando) De La Rúa, they did not give us enough time,” Cavallo added.

The mega-swap deal was a failed bid to freshen the country’s debt that included the exchange of US$30 billion dollars in debt for new, longer-maturity issues in 2001. The deal rolled over tens of billions dollars until after 2005. It was blamed for increasing the national debt by almost US$40.65 billion dollars overnight via sky-high interest rates, hastening the economic collapse of late 2001.