CHILE: Race to Freeze Pinochet’s Alleged Fortune in Gold

By Daniela Estrada Reprint | | Print |

Daniela Estrada

SANTIAGO, Oct 25 2006 (IPS) - Former Chilean dictator Augusto Pinochet (1973-1990) has 160 million dollars worth of gold deposited in his name in a Hong Kong bank, according to information that the government of President Michelle Bachelet has passed on to the courts. Now, every minute counts to prevent the alleged fortune in gold from being hidden once again.

“We have always said that Pinochet’s fortune exceeded 100 million dollars,” stated Jorge Insunza, lawyer for the plaintiffs in the so-called Riggs case, in which the 90-year-old former dictator is being investigated and prosecuted for embezzlement and tax evasion.

The case opened in 2004 after the U.S. Senate reported that secret accounts in the Washington, D.C.-based Riggs Bank and other financial institutions around the world held millions of dollars in the names of Pinochet, his family and cronies.

Insunza was reacting to reports that were published Wednesday by the local newspapers El Mercurio and La Nación and confirmed by Chilean Foreign Minister Alejandro Foxley, who said Pinochet may be holding 9,000 kg of gold in the Hongkong & Shanghai Banking Corp (HSBC).

Insunza said he believes the origin of the fortune lies in “commissions from arms sales.”

Foxley confirmed Wednesday that the Foreign Ministry had received the information a few days previously and immediately relayed it to the Santiago Court of Appeals and the State Defence Council (CDE), which is representing and advising the state in prosecutions against Pinochet.

The minister said the information reached the Foreign Ministry “through some of our diplomatic missions abroad,” but did not provide further details.

“The important thing is for the information to be processed and analysed quickly, and for precautionary measures to be taken without delay. After that, a thorough but swift investigation must be carried out,” said Foxley.

The CDE stated in a communiqué Wednesday that the Foreign Ministry informed it on Monday of a supposed deposit of gold in the name of Augusto Pinochet in the HSBC, and provided “legible photocopies of commercial certificates and documents on the transaction.”

The prosecutors have asked the courts to take precautionary measures to prevent any gold or funds from being moved.

Judge Sergio Muñoz, who was previously handling the Riggs case, established that the retired general amassed a fortune of at least 26.9 million dollars, and evaded paying 8.77 billion pesos (16 million dollars) in taxes.

Pinochet’s defence lawyer Pablo Rodríguez denied that the elderly retired general had deposits in Hong Kong, describing the reports as “slander”, and said that “if Pinochet had a gram of gold in an account abroad,” he would be the first to resign from the case.

Rodríguez said he had no doubt that Pinochet was innocent, adding that he had personally met with the retired general and his wife Tuesday and asked them straight out about the reports, which Pinochet denied.

The attorney said that Pinochet “told me the only gold he has is his wedding ring.”

One of the central arguments used by Pinochet’s defence lawyers in a number of human rights cases is that he suffers from senility and is thus mentally unfit to stand trial.

Rodríguez argued that the reports on alleged gold deposits are a “smokescreen” with which the government is attempting to divert attention from irregularities committed by the governmental Chiledeportes sports funding agency in 2005, under the government of Ricardo Lagos (2000-2006).

The scandal broke last week when the Comptroller General’s Office issued a report stating that funds were diverted in more than 70 of the agency’s projects, which had a total cost of 474 million dollars. A prosecutor was appointed to investigate the case.

Meanwhile, Marco Antonio Pinochet, one of the retired general’s sons, staunchly denied that his father or his family possessed a fortune in gold.

“We have been hearing false news for a long time, so nothing surprises me anymore,” he told a local TV station, adding that the latest reports in the local media formed part of “a smear campaign that has no limits.”

“Pablo (Rodríguez) is going to take legal action against everyone who turns out to be responsible” for this farce, said Marco Antonio Pinochet, who added that “it is easy to say things, but they must be proven in the courts.”

Speaker of the Senate and former president Eduardo Frei (1994-2000) said the amount of gold purportedly held in Pinochet’s name “goes beyond the pale,” and urged the courts to take quick action.

Representatives of the right-wing opposition alliance, many of whose members formed part of Pinochet’s de facto regime, responded to the news reports with surprise, while urging, however, that attention not be deflected away from the problems facing Chiledeportes.

“We were shocked by the reports, but as always, the allegations must be verified and proven, and that is the job of the courts,” said the president of the conservative Independent Democratic Union (UDI), Hernán Larraín.

For her part, the secretary-general of the rightist National Renovation (RN) party, Lily Pérez, said that if it is proven that Pinochet has gold in the Hong Kong bank, it would be simply “unacceptable.”

Sergio Bitar, the president of the leftist Party for Democracy (PPD), which forms part of the centre-left coalition that has governed Chile since 1990, said “these reports are shocking and hard to believe, even after the embezzlement of funds into the Riggs Bank accounts came to light.”

Bitar, a former education minister, said Pinochet’s alleged fortune in gold is equivalent to “the entire yearly expenditure on scholarships and loans that go towards financing the studies of tens of thousands of young university students.”

Lorena Pizarro, the head of the Group of Families of the Detained-Disappeared, which represents the relatives of victims of the dictatorship, said “no news about Pinochet could shock us, because he is the worst scum in this country.”

On Thursday, the Santiago appeals court will study a plea by Pinochet’s defence counsel that has brought progress on the Riggs case to a halt since August. The judge handling the case warned that the gold supposedly deposited in Pinochet’s name could be moved if the courts are not authorised to freeze the funds.