MINISTER OF ECONOMY JOSE MARTINEZ DE HOZ COMMENTS ON THE GRAIVER CASE - 1977/05/03

• Document Type: SPECIALCOLLECTION
• Collection: Argentina Declassification Project - The "Dirty War" (1976-83)
• Document Number (FOIA) /ESDN (CREST): 06626852
• Release Decision: RIFPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: April 3, 2019
• Document Release Date: April 12, 2019
• Publication Date: May 3, 1977

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DEPARTMENT OF STATE ctot.t-K
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DCM 40000". important conversation with the Economy Minister on the Graiver
POL3
POL/R investigation. Martinez de Hoz labelled the Graiver affair as
Ecm
DSIS an attempt by high ranking military officers, ubom he did not
RF
CHRDN wish to identify, to discredit and eventually oust President
Videla from the government. However, Martinez de Hoz thought
that Videla had regained control over the situation and would
be able to ease the conspirators out of their present posts by
the and of the year. Many if not most of the people publicly
accused of having links to the Graivers are not guilty of
anything more than illegal foreign exchange transactions-which
is a rather common offense. Martinez de Hoz. also doubted that
the police had discovered the alleged financial transactions
between the Graivers and the Montoneros in the manner they have
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Minister of Economy Jose Martinez de Hoz comments on the
Graiver case
SECSTATE WAC
CONFIDENTIAL BUENOS AIRES
REF: Buenos Aires 3052
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1. SUMMARY. This cable reports the Ambassador's lengthy and
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claimed, i.e. through a slip by Juan Graiver when he allegedry-I
mistook a group of police officers for Montoneros. On the
brief arrest of Herald editor Cox, this action had been
carried out an the orders of Interior Minister Harguindeguy
who decided that the government could not allcrd Cox's viola-
tion of the press law to go unpunished. With regard to the
missing Edgardo Sajon, Martinez de Hoz assured the Aubassador
that no goverment agency was responsible for his disappearance.
He did not rule out the possibility of legal action against ex-
President lanusse for his alleged illegal activities. END
&MARY.
2. Accompanied by Legatt Scherrer, the Ambassador paid farewell
call upon Economy Minister Martinez de Hoz April 26. The
Ambassador thanked the Minister for his friendship, understand-
ing and assistance in matters of mutual interest to the USG
and GOAL The Minister told the Ambassador that he personally,
and the GEVL, appreciated the Ambassador's efforts to improve
US-Argentine relations.
3. The Ambassador then showed the Minister andnEographed
handout in the Spanish language captioned, "Infanne Sobre el
Caso Graiver" which had come into the possecsian of the
Embassy. The Ambassador noted that this handout contained a
volume of data on the Graiver case, which by inference
connects various Percnist politicians and businessmen, incumb-
ent and former military leaders, the hierarchy of the Raman __]
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r--,, Catholic Church in Argentinefilumbent GOA officials,
including the Minister and Ricardo Ybfre, the Sub-Secre-
tary General of the Presidency, with illegal financial
transactions linked to Graiver. The Edbassador expressed
his concern with regard to the accuracy of information
contained in the pamphlet and the possible repercussions
that it might have on the GOA, and the Minister personally.
The Minister asked whether the handout presented to him
by the Ambassador was "the infamous report an Graiver" put
r 4 41
out by the StatejitTeatterniceiga (UDE). Legatt in-
formed the Minister that there was no apparent connection
to SIDE but that several sources had reported that the
handout in question might have been prepared and distributed
by the Argentine Army First Corps in Palermo.
4. After scanning the handout, the Minister stated that
it was part of a. plot or conspiracy led by "an active-duty
Argentine Army General and a retired Argentine Army
General" for the purpose of discrediting President Videla,
as well as other members of the GOA, with the eventual goal
of ousting President Videla. (IIUTE: Martinez de Roz made
no attempt to identify the two officers further, but we
believe he was referring to General Carlos Willem�
Suarez Mason, the incumbent Commander of the Army First
Corps, and 'retired General Iberia� Saint Jean, the Governor
of Buenos Aires Province.) The Minister indicated that
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1-- the President, upon learning of the plans of the afore- --1
mentioned two Army generals, promptly took action to take
personal control of the situation in order to insure that
a fair, impartial, yet thorough investigation of the
Graiver matter would be conducted. The Minister indicated
that President Videla ncra had complete control of the situ-
ation and that Army G-4. General Gallino, whom he described
as a reasonable, intelligent Army officer, would control
the investigation and prevent sensational-type innuendos
and inferences from appearing in the future.
5. The Minister noted that the two generals who conceived
the aforementioned conspiracy believed that they hadunre
support than they really did. In addition to miscalculating
their support, the Minister noted that the plotters made two
other serious mistakes in launching their campaign against
President Videla and other members of the GOA; namely,
President Videla has an untarnished reputation for honesty
and integrity in the Argentine military establishment.
Also, the accusations by inference connecting other GOA
officials with the Graiver scandal were patently absurd
and easily recognized by the majority of ranking Argentine
military leaders as such. The Minister indicated that
President Videla did not desire to create a scandal by
relieving the two generals of their current positions
L__ and that the President would wait until the end of the
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year to quietly ease these two generals out of their --1
present posts.
6. The Minister indicated that he understood frau Army
sources that the Buenos Aires Provincial Police (BAPP) had
instituted an investigation into Graiver's financial
activities quite same time ago. According to the Minister's
information, officers of the BAPP approached Juan Graiver
in order to interview him concerning his son's financial
activities. The Minister said that Juan Graiver mistook
the BAPP officers for Mbntoneros and indicated that he Tiould
make good the money entrusted to David Graiver by than.
The Minister reported that subsequently Juan Graiver pro-
ceeded to make a complete confession of Montonero involve-
ment in the Graiver financial empire. The Minister noted
that it was incredible and extremely difficult for him to
believe that someone as astute, cautious and experienced
as Juan Graiver would make such an obvious blunder by
blurting out and asking unidentified individuals who
approached him whether they were Mbntoneros.
7. The Minister indicated that apparently the BAPP had
identified a foreign exchange dealer nand Francisco
("Paco") Fernandez, the former Chief of Foreign Exchange at
the Banco de Galicia, as having handled illegal financial
transactions for the Graivers. The Minister noted that
L__ through Francisco Fernandez the BAPP was able to connect
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other wellrknown money changers, Ernesto Estrada and
Dante Marra. The Minister noted that many, if not the
majority of persons whose connections have been publicly
linked with the Graivers, had simply conducted illegal
financial transactions through the aforenentioned
exchange dealers. The Minister offered the example of
Monsignor Adolfo Tortolo, the Vicar General of the Argen-
tine Armed Forces, whose name had been publicly connected
with the Graiver affair. In the case of Monsignor Tortolo,
the Minister stated that the only evidence against him was
that apparently he had cashed 000 (US) through one of the
above-named currency dealers and a record of this trans-
action had been discovered.
8. The Minister then madealengthy comment on the informa-
tion linking him with the Graiver scandal. The Minister
noted that Dr. Martinez Segovia, a menber of the Board of
Directors of Papel Prensa, was actually a member of the
Minister's law firm. Martinez Segovia, through his Papel
Prensa connections, was linked to former President Lanusse's
Press Secretary, Edgard� Sajcm., who was connected with "La
Opinion." It was further alleged that Martinez Segovia,
through his connections with the Minister, had obtained a
questionable credit for Papel Prensa through the Banco
Nacional de Desarrollo. The Minister noted that Papel
L__ Prensa had on its Board of Directors at all times since
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its founding, at least three members of the GOA, in that --1
GOA funds were originally invested in the founding of Papel
Prensa. The Minister zahcbind also said that Martinez
Segovia had never been arrested but had merely beenninterro-
gated to ascertain any knowledge he had concerning Sajca.
9. The Minister claimed that literally hundreds of indi-
viduals fran all walks of life and different political
persuasion had apparently utilized the services of the
abovementioned currency changers to conduct illegal
currency transactions; i.e. black market exchanges during
the pest several years. The Minister jokingly commented
that at least 70% of all persons in Buenos Aires having
foreign currency dealt through the above-Immned exchange
dealers. The Minister pointed out that the conspirators
desiring to discredit the President and other individuals,
such as former President Lanusse, were drawing connections
between individuals who could be linked with past or
present governments to illegal financial transactions with
exchange dealers who allegedly linked the Graiver family
to the Montoneros.
10. The Ambassador noted that he hoped that at the appro-
priate time in the future the GOA would issue a complete
factual report of its findings in the Graiver case clearly
separating the purely illegal financial activities frail
the alleged subversive ramifications. The Minister
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� r-- replied that he, too, hoped such a report would be issued --1
by the GOA, but noted he believed that the issuance of
such a report would not be in the immediate future.
11. The Ambassador showed Martinez de Hoz copies of letters
which the Ambassador bad signed in 1975 informing the banking
superintendent of the State of N.Y. that the Eabassy had
uncovered no derogatory Information concerning the integrity
of W. Craiver or of his financial institutions. The
Ambassador offered to make copies of these letters available
for the Minister's files, but Martinez de Hoz showed little
interest in the letters and declined the opportunity.
12. The Ambassador also nand asked about the arrest of Herald
Editor Robert Cox and its serious consequences. The Minister
stated he thought that Cax's detention by the Federal
Police of Argentina (EPA) was extremely ill-advised and
unfortunate. The Minister noted that President Videla,
Foreign Minister GUzzetti and he were all in Paraguay when
Interior Minister Harguindeguy authorized ('ox's detention.
The Minister advised that upon his return to Buenos Aires
he immediately contacted General Harguindeguy to inquire as
to the details of Cox' s arrest. Can. Harguindeguy told
the Minister that Cox had clearly violated Argentine law
and that if the GQA did not proceed against Qxt then every
newspaper and magazine editor in Argentina would be free
L__ to violate the law. The Minister stated be thought that
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same other milder form of action might have been taken --1
against Cox to avoid the sensational publicity which was
afforded his arrest. The Minister noted that Gen.
Harguindeguy assured him that the Ministry of the Interior
had "no axe to grind" with 03K and that he, Harguindeguy,
had informed the judge handling Cox's case that it would be
in the best interests of all if Cox would be released on
his personal recognizance as soon as possible.
13. The Minister then raised the case of Edgardo Salon and
affirmed to the Ambassador that he had "personally verified"
that Sajon had not been taken into custody by any entity of
the GOA. The Minister offered the possibility that Sajon
a
had carried out/"self-kidnapping" or that possibly he had
been kidnapped by the Montoneros and killed. The Minister
solid explanation
stated he could offer no gligintfor Saion's disappearance.
14. In connection with the Salon case, the Ambassador asked
the Minister whether in his opinion same form of legal
action would be taken against farm= President Lanusse,
based on widespread allegations appearing in the Buenos
Aires press and from rumors freely circulated in Buenos
Aires connecting the former President with illegal activities.
The Minister answered by stating that former President
Lanusse had made many enemies in Argentina and that some
type of legal action against him in the future might well
L__ be possible.
--1
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15. The Minister closed the meeting by wishing the
Ambassador well upon his return to the US and indicated he
hoped that the excellent working relationship established
by the Ambassador with all sectors of the GOA would con-
tinue after his departure-
16. Martinez de Hoz' comments are the first admission we
bevelled from a reliable government source that President
'Videla views the Oraiver case as bediabeelnefntended by those
behind the investigation and the attendant publicity cam-
paign as a means toward toppling Videla frcmpcwer. We
had suspected all along that that was the objective of
General Suarez Mason, Governor St. Jean and other high-
ranking Any officers, but we have been surprised that the
this
usual =nor mills have not played up ihmtitheme to any
great degree. Martinez de Hoz' comments also tend to
substantiate the flimsiness of the information on which
guedingett the disgraceful rumormongering deliberately
Jhas bee based.
unleashed in this case/ Ubere we are uncertain is the
degree of control Which Videla is alleged to have regained
in this matter.
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