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CHALLENGES 2006-2007: Corruption Allegations and Score-Settling in Chile

Analysis by Gustavo González

SANTIAGO, Dec 27 2006 (IPS) - The rightwing opposition in Chile has been reveling in the allegations of corruption in the financing of election campaigns by the centre-left governing coalition, but it may now find itself in the dock as accused, rather than accuser.

The media spotlight on corruption took a short break from Dec. 10-13 to cover the death and funeral of former dictator Augusto Pinochet (1973-1990), who abused his power and his position as army chief until March 1998 to build a personal fortune for his own benefit and that of his family.

It is salutary to remember that at the time of his death, Pinochet was not only facing prosecution in four cases linked to human rights crimes, but also two other trials involving secret bank accounts belonging to his wife, his five children and himself. His death at the age of 91 meant that he escaped any reckoning with justice.

But now, following endless legal manuevering by the right to delay the cases, there may be an opportunity to investigate the destination of undisclosed government discretionary expenses during the last five years of the dictatorship, which benefited not only Pinochet and his immediate family, but also civilians with close ties to the military regime.

Prominent representatives of the Socialist Party (PS), to which President Michelle Bachelet belongs, recently called for an investigation into the alleged improper use of public funds at the end of the dictatorship to create the two big rightwing parties, the Independent Democratic Union (UDI) and National Renewal (RN).

The origins of business conglomerates that bought up public enterprises at knockdown prices is another aspect to be studied in depth if the right is really interested in clarifying corrupt practices, said the members of the PS. These companies today finance the electoral campaigns of both the rightwing parties.

The debate about improper use of public funds broke out in November with the Chiledeportes case, when it transpired that the state sports promotion agency made payments to congressional candidates for the Party for Democracy (PPD), part of the ruling coalition, which were later fraudulently accounted for as electoral expenses using forged invoices.

Although it was discovered that candidates for the RN used the same company as the PPD to inflate their election expenses, the rightwing Alliance for Chile, made up of the RN and UDI, is attempting to paint a picture of the government as riddled with corruption.

According to the right, the Coalition for Democracy, which has governed Chile since the end of the dictatorship in March 1990, created mechanisms for transferring government funds to the coalition’s member parties, especially during the six-year term of former president Ricardo Lagos, who handed over to Bachelet on Mar. 11, 2006.

The allegations were backed by some leaders within the governing coalition, such as former minister Edgardo Boeninger of the Christian Democrat Party (PDC), the largest party in the centre-left coalition, which is also made up of the PPD, the PS and the Social Democrat Radical Party.

The PDC headed the first two transition governments, under presidents Patricio Aylwin (1990-1994) and Eduardo Frei (1994-2000). They were followed by Lagos, a moderate socialist (2000-2006), and it was during his administration that the improprieties involving Chiledeportes purportedly took place.

Former parliamentary deputy and ex-president of the PPD Jorge Schaulsohn added his voice to the chorus of criticism within the Coalition for Democracy, telling the El Mercurio newspaper in an interview that under the Coalition administrations an “ideology of corruption” has taken root.

This “ideology” is used to justify improperly using public funds in election campaigns, with the argument that this is the only way to counter the copious contributions from the business community to rightwing parties, said Schaulsohn, who scoffed at this argument as, he said, there are members of the business community who also help finance the parties in power.

In another interview with El Mercurio, Gonzalo Martner, a former president of the PS, added fuel to the flames by asserting that the governing parties finance themselves from discretionary government funds, which by their nature are exempt from public scrutiny.

Both Schaulsohn’s and Martner’s claims were strongly denied by the governing parties. Senator Camilo Escalona, president of the PS, said that none of the governing parties have received money from discretionary government funds since democracy was restored in 1990.

In a verbal clash with RN Deputy Alberto Cardemil, Escalona said that between 1980 and 1988, funds for discretionary expenses available to Pinochet were 15 times higher than the amounts reserved for this purpose by the administrations that have ruled Chile since 1999, when they began to be substantially reduced. Martner’s assertions prompted the Alliance for Chile to bring a suit before the courts, which resulted in an investigation under Judge Macarena Rubilar. The upshot was that she threw out the opposition’s request to subpoena 102 persons who have held high public office since 1990.

The opposition chose to take the conflict to the justice system on the pretext that the government coalition, which has a majority in the Chamber of Deputies, was sabotaging the work of a congressional investigative commission created in November, presided over by Nicolás Monckeberg of the RN.

Meanwhile, the Chiledeportes case trundles on in the courts with an investigation headed by prosecutor Xavier Armendáriz. Nine former officials of Chiledeportes have been formally charged so far.

President Bachelet maintains that the accusatory zeal of the right is part of their strategy to bring the centre-left coalition into disrepute, and so reverse the defeats the right has suffered in every presidential election since the return to democracy.

In political circles it is being said that the main target of this strategy is former president Lagos, who left office with a popularity rating of 70 percent, and could stand again for president in the December 2009 elections.

The campaign against him is reinforced by anti-Lagos sectors of the governing coalition, with which Schaulsohn and Martner identify themselves, as well as Boeninger, who said that Lagos should publicly announce now that he will not be a candidate in 2009 because of the Chiledeportes scandal.

The year-end therefore finds Chilean politics in an upheaval rooted in concrete cases of corruption, but which indicates at the same time that moves are already afoot with a view to the next presidential elections. The conflict could give rise to scrutiny of how the current rightist leaders and parties were launched into Chile’s modern democracy by the dictatorship.

This scenario is unfolding in a country which according to the latest report by Transparency International, published in November, has a reputation for one of the lowest levels of corruption in the Latin American region, and is ranked 20th out of 163 countries, on a par with the United States and Belgium.

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