2006–2007 Chilean corruption scandals
Encyclopedia
The 2006–2007 Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...

an corruption scandals
are a series of events that have affected the Chilean governing Concertación
Coalition of Parties for Democracy
The Concert of Parties for Democracy , more often known as the Concertación, is a coalition of center-left political parties in Chile, founded in 1988...

 coalition since October 2006.

Chiledeportes

In October 2006, it was discovered that 90% of the projects of Chiledeportes, the government's sports organization, had some sort of anomaly: either initiatives that were never started or false and nonexistent identities. The investigation into this mystery led to the arrest of Juan Michel, a prominent member of the Christian Democrat Party
Christian Democrat Party of Chile
The Christian Democratic Party is a political party in Chile and governs as part of the Coalition of Parties for Democracy coalition. In the 2009 election it won 19 congress seats and 9 senate seats....

. Later, it was discovered that much of the money that went to Chiledeportes' Valparaíso Region
Valparaíso Region
The V Valparaíso Region is one of Chile's 15 first order administrative divisions.Valparaíso Region, 2006 With the country's third highest population of 1,539,852 million in 2002 and third smallest area of , the region is Chile's second most densely populated after the Santiago Metropolitan Region...

 branch was used to finance the political campaigns of Concertación members, mainly those of Party for Democracy
Party for Democracy
The Party for Democracy is a political party in Chile; it is social democratic in its political orientation. It was founded in December 1987 by Ricardo Lagos, who aimed at forming a legal social democratic party . The party continued to function after the defeat of Pinochet...

 deputies Laura Soto and Rodrigo González. Twenty people were arrested because of this misuse of government funds.

Publicam

The crisis continued when it was discovered that Senator Guido Girardi
Guido Girardi
Guido Girardi Lavin is a Chilean physician and politician. He is currently serving the period between 2006 and 2014 as senator for the district No. 7 for Santiago Poniente...

, of the Party for Democracy
Party for Democracy
The Party for Democracy is a political party in Chile; it is social democratic in its political orientation. It was founded in December 1987 by Ricardo Lagos, who aimed at forming a legal social democratic party . The party continued to function after the defeat of Pinochet...

, had used false bills from a nonexistent company, Publicam, in order to justify his campaign expenses to the Servicio de Impuestos Internos (Internal Tax Service). Some of the members of Girardi's campaign team, among them his lawyer, Dante Leoz, were arrested and accused of financial fraud. Girardi himself is currently under investigation, but there have been no charges. He has denied charges of corruption, but admits that he should have studied his campaign expenses more carefully.

Senator Fernando Flores
Fernando Flores
Carlos Fernando Flores Labra is a Chilean engineer, entrepreneur and politician. He is a former cabinet minister of president Salvador Allende and was senator for the Arica and Parinacota and Tarapacá regions between 2001 and 2009...

, who leads the more liberal faction of the Party for Democracy, temporarily suspended his membership of the party, saying that it was ruled by a corrupt "gang". He later decided to rejoin, but in 2007 he resigned from the party permanently (see below).

The right-wing opposition (the Alliance for Chile
Alliance for Chile
The Alliance for Chile , also known simply as The Alliance , was a coalition of right-wing Chilean political parties.The Alliance was replaced in 2009 by the Coalition for Change....

) likened the Chiledeportes and Publicam cases to previous corruption scandals that took place during the administration of Ricardo Lagos
Ricardo Lagos
Ricardo Froilán Lagos Escobar is a lawyer, economist and social democrat politician, who served as president of Chile from 2000 to 2006. He won the 1999-2000 presidential election by a narrow margin in a runoff over Independent Democrat Union candidate Joaquín Lavín...

. Former presidential candidate Sebastián Piñera
Sebastián Piñera
Miguel Juan Sebastián Piñera Echenique is a Chilean businessman and politician. He was elected President of Chile in January 2010, taking office in March 2010.- Education :...

 (which later also was found linked to Publicam) said the scandals proved the government had few qualms about committing electoral fraud and intervention. Likewise, former presidential candidate Joaquín Lavín
Joaquín Lavín
Joaquín José Lavín Infante is a Chilean politician and economist. He is a member of the Independent Democrat Union party and former mayor of Santiago and Las Condes municipalities of capital Santiago...

 said that the victory of Lagos by a razor-thin 2.62% margin in 2000 could have been due to election fraud. No proof was ever given for such claim.

Whistleblowers

The crisis deepened when Edgardo Boeninger, a Christian Democrat
Christian Democrat Party of Chile
The Christian Democratic Party is a political party in Chile and governs as part of the Coalition of Parties for Democracy coalition. In the 2009 election it won 19 congress seats and 9 senate seats....

 and former Minister Secretary General of the Presidency, said in an interview with influential Chilean newspaper El Mercurio
El Mercurio
El Mercurio is a conservative Chilean newspaper with editions in Valparaíso and Santiago. Its Santiago edition is considered the country's paper-of-record and its Valparaíso edition is the oldest daily in the Spanish language currently in circulation. El Mercurio is owned by El Mercurio S.A.P...

that "since the beginning of the Concertación it was thought that, since the private sector's money favored the right-wing parties, it would not be illegitimate to receive public [government] money.".
His declarations were supported by former deputy Jorge Schaulsohn, founder and former president of the Party for Democracy
Party for Democracy
The Party for Democracy is a political party in Chile; it is social democratic in its political orientation. It was founded in December 1987 by Ricardo Lagos, who aimed at forming a legal social democratic party . The party continued to function after the defeat of Pinochet...

. Also in an interview with El Mercurio, Schaulsohn said that during the time he presided over his party, all of the four parties of the Concertación coalition received money from the government. Additionally, Schaulsohn reported that government money had also been used to directly finance the campaigns of Concertación candidates. He accused the government and the Concertación of an "ideology of corruption".

Lastly, former president and deputy of the Socialist Party
Socialist Party of Chile
The Socialist Party of Chile is a political party, that is part of the center-left Coalition of Parties for Democracy coalition. Its historical leader was the late President of Chile Salvador Allende Gossens, who was deposed by General Pinochet in 1973...

 Gonzalo Martner in another interview with El Mercurio declared that Schaulsohn's accusations were correct, and that "public resources were used to finance the activities of the political parties [of the Concertación]".

All the leaders of the Concertación denied the charges of Boeninger, Schaulsohn, and Martner. However, in El Mercurio former president Patricio Aylwin
Patricio Aylwin
Patricio Aylwin Azócar was the first president of Chile after its return to democratic rule in 1990, following the military dictatorship of General Augusto Pinochet.- Early life :...

 acknowledged that some ministers in his cabinet had been paid extra money that came from government reserved funds, though he denied the charges of an "ideology of corruption". Other former government officials agreed with these three whistleblowers.

Crisis in the PPD

Although all the parties denied receiving money from the government, only the Party for Democracy (PPD) took action against the whistleblowers. The Supreme Tribunal of the party requested that Schaulsohn testify and present evidence of corruption. Instead, Schaulsohn wrote a report stating his opinions. On December 28, the Tribunal decided to dismiss Schaulsohn from the party. This act caused outrage among many Concertación members, some of whom likened the Tribunal's decision to Stalin's purges. Many wondered why Schaulsohn had been dismissed but no such action was undertaken for Girardi, who is under investigation by the police for corruption. Former Minister of Public Works Juan Etcheberry resigned in protest of the "Stalinist" action of the Tribunal in dismissing Schaulsohn.

Senator Flores was one of the prime opponents of the Tribunal's decision. Because of the influence he wields in the party, it was expected that if he resigned, many other members, including more than a few deputies, would resign with him. Flores spoke with Schaulsohn at length during the time both of them stayed in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 in New Year
New Year
The New Year is the day that marks the time of the beginning of a new calendar year, and is the day on which the year count of the specific calendar used is incremented. For many cultures, the event is celebrated in some manner....

 (Flores has a family in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...

 and Schaulsohn was in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

). His conferences with the Party of Democracy's president, Sergio Bitar, came to nothing. He then launched an independent political organization called Chile Primero (Chile First) in what many believed to be a prelude towards his resignation. He finally submitted his resignation in the morning of January 9, 2006.

Effects

Former President Michele Bachelet, who belongs to the Concertación, has said little regarding the corruption scandals. Meanwhile, former President Patricio Aylwin has been the only one to acknowledge that there might have been corruption during his government, although he insists that if there was, it was not an "ideology" as Schaulsohn described it. Former President and current President of the Senate Eduardo Frei
Eduardo Frei Ruiz-Tagle
Eduardo Alfredo Juan Bernardo Frei Ruiz-Tagle is a Chilean politician and civil engineer who was President of Chile from 1994 to 2000. He is currently Senator for Los Ríos and was President of the Senate from 2006 to 2008. He attempted a comeback as the candidate of the ruling Concertación...

 has denied there was corruption during his government, and former President Ricardo Lagos
Ricardo Lagos
Ricardo Froilán Lagos Escobar is a lawyer, economist and social democrat politician, who served as president of Chile from 2000 to 2006. He won the 1999-2000 presidential election by a narrow margin in a runoff over Independent Democrat Union candidate Joaquín Lavín...

 has done likewise.

The presidents of the four Concertación parties have all denied that their parties received or have ever received money from the government. The Socialist Party President Camilo Escalona was particularly enraged by Schaulsohn's remarks, and threatened to sue him for libel. Sergio Bitar of the Party for Democracy said he would not interfere with the Tribunal's decision to dismiss Schaulsohn, although he remarked it would've been better if he had not been dismissed. After Flores' resignation, Bitar declared that he had done "everything possible" to maintain party unity and that any "responsibility" lay on those who voluntarily left. Bitar maintained he hoped to have positive relations with Flores despite the latter's resignation. The next day, Flores supporter and deputy Esteban Valenzuela
Esteban Valenzuela
Esteban Valenzuela Van Treek is a Chilean writer, journalist and politician, born in Rancagua.- External links :*...

 also resigned.

Investigations

The opposition Alliance for Chile
Alliance for Chile
The Alliance for Chile , also known simply as The Alliance , was a coalition of right-wing Chilean political parties.The Alliance was replaced in 2009 by the Coalition for Change....

 pressed for investigations regarding the recent discoveries of corruption. The case is currently being investigated by Judge Macarena Rubilar, of the Second Criminal Court of Santiago. On January 6, she called Boeninger, Martner, and Genaro Arriagada (the latter had also spoken of corruption in the government) to testify. Schaulsohn testified before Judge Carlos Aránguiz of the Court of Appeals of Rancagua on January 10, upon his return from a New Year
New Year
The New Year is the day that marks the time of the beginning of a new calendar year, and is the day on which the year count of the specific calendar used is incremented. For many cultures, the event is celebrated in some manner....

s trip to New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

.

Meanwhile, the Alliance for Chile requested the creation of an investigative commission rearding the corruption in the Chamber of Deputies. The commission was originally headed by Nicolás Monckeberg, of the opposition, but the Concertación members of the commission requested that Monckeberg be censured for his supposedly "overagressive" interrogation of the chairman of Chiledeportes, Catalina Depassier. Monckeberg denied that he mistreated Depassier and the Alliance accused the Concertación of trying to halt the investigations. When Monckeberg was finally replaced by Enrique Jaramillo (a member of the Concertación), the Alliance withdrew from the commission in protest. Instead, the Alliance decided to do their on investigation into the corruption, and presented their report the same day the Concertación presented the official one. The Alliance's report was much more critical than the official one, and accused PPD
Party for Democracy
The Party for Democracy is a political party in Chile; it is social democratic in its political orientation. It was founded in December 1987 by Ricardo Lagos, who aimed at forming a legal social democratic party . The party continued to function after the defeat of Pinochet...

 deputies Rodrigo González
Rodrigo González
Rodrigo González, better known as Rockdrigo or El profeta del nopal , was a Mexican musician and songwriter. He founded the Movimiento Rupestre , a voice-and-guitar folk music scene that strongly influenced Mexican rock...

, Marco Antonio Núñez, Laura Soto, and Socialist
Socialist Party of Chile
The Socialist Party of Chile is a political party, that is part of the center-left Coalition of Parties for Democracy coalition. Its historical leader was the late President of Chile Salvador Allende Gossens, who was deposed by General Pinochet in 1973...

 deputy Marco Enríquez-Ominami
Marco Enríquez-Ominami
Marco Antonio Enríquez-Ominami Gumucio is a Chilean-French filmmaker and politician. He was elected deputy for District 10 in December 2005 as a member of the Socialist Party, but changed his political affiliation to independent before running for President of the Republic in the 2009 election...

 to have been involved in corruption during their election campaigns. The official report limited itself to blaming the former independent of Valparaíso
Valparaíso Region
The V Valparaíso Region is one of Chile's 15 first order administrative divisions.Valparaíso Region, 2006 With the country's third highest population of 1,539,852 million in 2002 and third smallest area of , the region is Chile's second most densely populated after the Santiago Metropolitan Region...

, Luis Guastavino. When the Chamber voted to accept the official report, the Christian Democrat
Christian Democrat Party of Chile
The Christian Democratic Party is a political party in Chile and governs as part of the Coalition of Parties for Democracy coalition. In the 2009 election it won 19 congress seats and 9 senate seats....

s decided to abstain, declaring that the electoral fraud and intervention that was uncovered benefited the Party of Democracy and the Socialist Party. Therefore, falling four votes short of the necessary 58 votes, the official report was rejected by the Chamber.

The Alianza's report, among other things, discovered that the head of Chiledeportes, Christian Democrat Catalina Depassier, lied about her credentials. In her official curriculum, Depassier stated that she had graduated with a license in philosophy from the University of Chile. In an interview with the press, Monckeberg stated that a phone call with the vice-headmaster of the university revealed that Depassier had never graduated from that institution. "The University explained that [Depassier] only studied Humanitites there for a semeter in '85. They also told us that in '84, [she] also studied for one semester in the school of Government and Public Service, which she left for academic reasons," Monckeberg said in an interview with El Mercurio. On January 23, two days after Monckeberg's declarations, Depassier submitted her resignation to President Bachelet, which was approved. In a later press interview, Depassier apologized for the false information about her curriculum. She lashed out against the Alliance
Alliance for Chile
The Alliance for Chile , also known simply as The Alliance , was a coalition of right-wing Chilean political parties.The Alliance was replaced in 2009 by the Coalition for Change....

, accusing them of waging a "personal" campaign against her. The presidents of the UDI and National Renewal
National Renewal
National Renewal may refer to:*National Renewal *National Renewal...

 both denied that there was a "personal factor" in the accusations. The UDI president added, "It was she who lied to the country. She should not try to protect herself by blaming those who have made proven accusations against her".

Meanwhile, deputies Soto and González denied the charges that they had used government money to fund their election campaigns, saying the accusations were a "political maneuver by the right". On January 25, they "froze" their membership of the Party for Democracy, supposedly to avoid harming the party.

Trials

The Public Ministry formally charged Deputy Laura Soto with embezzlement
Embezzlement
Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted....

 for using state funds of the Programas de Generación de Empleo (PGE, Job Making Programs) to finance her 2005 electoral campaign on March 5, 2007. Soto refused to attend the hearing, and her attorney Juan Carlos Manríquez declared that she believed her presence was unnecessary. Manríquez also questioned the legality of subjecting a congressperson to an investigation and trial. He criticized the Public Ministry for not having insufficient evidence and declared the Constitutional Tribunal should decide whether Soto should be investigated. Judge Jorge Abott responded by saying the Public Ministry would continue their investigation. Soto denied critics' assertions that she was "hiding" from the investigation and trying to use her position as deputy to halt them. She also denied any knowledge of the use of PGE money to fund her campaign.

The Public Ministry has announced it is also investigating Soto's daughter Marisol Paniagua, member of the municipal council of Valparaíso
Valparaíso
Valparaíso is a city and commune of Chile, center of its third largest conurbation and one of the country's most important seaports and an increasing cultural center in the Southwest Pacific hemisphere. The city is the capital of the Valparaíso Province and the Valparaíso Region...

, and José Manuel Mancilla, Regional Secretary of Labor in the Valparaíso Region
Valparaíso Region
The V Valparaíso Region is one of Chile's 15 first order administrative divisions.Valparaíso Region, 2006 With the country's third highest population of 1,539,852 million in 2002 and third smallest area of , the region is Chile's second most densely populated after the Santiago Metropolitan Region...

, for embezzling using the PGE money. Deputy Rodrigo González
Rodrigo González
Rodrigo González, better known as Rockdrigo or El profeta del nopal , was a Mexican musician and songwriter. He founded the Movimiento Rupestre , a voice-and-guitar folk music scene that strongly influenced Mexican rock...

, facing the same charges, will be charged on April.

Laura Soto has been acquitted of all charges by the tribunal.

External links

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