BUENOS AIRES, Argentina -- Police detained Jose Alfredo Martinez de Hoz Friday to investigate charges of fraud during his five-year tenure as Argentina's economy minister under some of the toughest years of military rule.
Martinez de Hoz, economy minister from 1976 to 1981, was the first civilian former Cabinet minister to be arrested in connection with abuses during military rule.
The 59-year-old former law professor and landowner was ordered held incomunicado after giving testimony before federal judge Nestor Blondi, police said.
He was taken to Unit 22 of the downtown penitentiary, the same jail where five former military junta members -- including ex-presidents Jorge Videla and Roberto Viola -- are being held on charges of human rights violations.
Court sources said Martinez de Hoz is accused of buying the privately owned Italo Argentino Electric Company in 1978 at an inflated price in a financial bailout operation on behalf of the Argentine government.
The former minister was a director of the Italo firm shortly before the military seized power in a coup in 1976.
The Argentine government, with Martinez de Hoz allegedly playing an influential role, bought the financially ailing Italo company for $350 million -- a windfall for the former owners, investigators say, because its real value was $35 million.
Martinez de Hoz pleaded innocent of wrongdoing in extensive congressional hearings last week and Thursday, saying the Italo purchase was carried out under the orders of the military authorities.
Congressional questioning revealed his economic policies during his five-year tenure were as much under assault as the purchase of the Italo company. He was also questioned about his associations with international bankers, such as David Rockefeller, and with personalities such as Henry Kissinger.
Martinez de Hoz defended his policies and declared that the military repression was outside his sphere of influence as economy minister.
Strikes were banned during Martinez de Hoz' tenure. A government investigation, ordered after Argentina returned to democracy last year, said military squadrons seized approximately 9,000 persons, including hundreds of labor activists, during a period of repression in the late 1970s, and secretly had them tortured and executed.
But Martinez de Hoz' policies of low import duties for foreign consumer goods initially gained the military administration a measure of popularity. It quickly collapsed, however, during a bank panic in 1981 and a recession that followed.
Businessmen, at first supportive of Martinez de Hoz' free enterprise ideas, later became angered at the collapse of national industries undermined by the sudden lowering of tariff barriers to foreign goods. An artificially overvalued currency contributed to the closure of industries and the growth of foreign debts.
