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CHILE: Corruption Scandals Contrast with Clean Reputation

Analysis by Juan Pablo Cárdenas, special to IPS *

SANTIAGO, Nov 15 2006 (IPS) - Most Chileans have a very poor opinion of politicians and acknowledge that corruption is firmly rooted in their government and a number of State institutions, according to surveys.

This view is in sharp contrast with Chile’s rating as one of the least corrupt countries in Latin America and the world (it ranks 20th on Transparency International’s corruption perception index), in spite of the large number of allegations and legal investigations for misappropriation of public funds, irregular public tenders, and roadworks and low-income housing so shoddily built that they do not last through the first winter.

Ever since Chile returned to regular democratic elections in 1989, it is generally assumed that campaign spending is in excess of the legal limits, to the point that contributions have taken on the nature of bribes, with big business exerting open pressure to claim returns on their “investments” in politics.

The first allegations arose as early as the Patricio Aylwin administration (1990-1994). The Ministry of Education, headed by future president Ricardo Lagos, purchased computer classrooms from Spanish firms at prices above the market value, and without a transparent bidding process.

Later, during the Lagos administration itself (2000-2006), a scandal broke out when it was found that ministers and under-secretaries were receiving payments over and above their official salaries, and, to cap it all, were evading tax on this income, in a country where middle and low-income people are burdened with heavy taxes.

Next came the notorious “MOP-gate” scandal involving the Ministry of Public Works (MOP), which is still being aired in the courts. Among the accused are ministers, close associates and relatives of Lagos, the head of State against whom most allegations of lack of probity have been made, and yet who still commands strong popular support in opinion surveys.

Early on in Lagos’s six-year term it was feared that he would not be able to complete his presidency, and to this day it is supposed that agreements reached between the president’s office and the head of the rightist Independent Democratic Union (UDI, the main opposition party) were responsible for saving the president and getting the main rightwing newspapers to tone down their allegations.

In an interview on Nov. 10 with Radio University of Chile, UDI Senator Pablo Longueira admitted to the Lagos salvage operation, and justified it by the need to protect the incipient democracy, the opportunity it provided for Congress to approve transparency rules and regulate political spending, and the promise made by the centre-left governing coalition not to commit any more such crimes.

However, only a few short months into Michelle Bachelet’s term, which began in March, Chileans are again overwhelmed by allegations of corruption. The Office of the Comptroller General of the Republic discovered that a large sum of directly assigned funds from Chiledeporte, the government sports promotion and funding agency, never reached their stated recipients.

Instead, they may have lined the pockets of politicians or their proxies.

Some parliamentary candidates submitted invoices from phony companies to justify hidden expenses in the accounts they are now obliged to present to the Electoral Service, since the State has undertaken to pay for part of the campaigns and limit spending. The person in the deepest hot water here is Senator Guido Girardi of the ruling coalition, well-known for his loud tirades in the media against corruption and pressures from the powers-that-be, to the extent that he made several enemies among fellow members of Congress, who are today celebrating the crumbling of his credibility.

But the skein of corruption that is unravelling day by day brings news that is intensely irritating to Chilean public opinion, and is bringing to light a great deal of dirt that had been swept under the rug by public servants.

This appears to be due to the politics of consensus, ever since the governing coalition abstained from investigating the illegal acts of the dictatorship, especially the transfer of State companies to the business community and agents of the regime of General Augusto Pinochet (1973-1990).

In exchange, it is suspected, the rightwing opposition alliance agreed to let them recover from so many years on the sidelines of power and exclusion from the public purse, greatly augmented now by the high world price of copper, Chile’s main source of foreign exchange.

The country has learned that even funds earmarked for job creation, training of fisherfolk and help for small farmers’ businesses and rural workers have wound up financing election campaigns. Prosecutors and the courts will lay charges against other lawmakers very soon.

These latest allegations, like the misappropriation of resources that should have gone towards supporting dedicated young athletes, have brought politics into massive disrepute. They could create a climate which nurtures “caudillos”, or strongmen, who promise to sweep away parties and politicking, as has happened in the past.

The latest poll conducted by the newspaper El Mercurio and the Opina polling firm found that more than 61 percent of respondents said that corruption is widespread in Chile, while 65.3 percent said the measures taken by Bachelet to curb it were insufficient.

Leaked information that an attempt to prevent the setting up of a commission in the Chamber of Deputies to investigate the misappropriation of Chiledeporte funds may have arisen within the government itself has also created shock waves.

The move against the commission was reported by a governing coalition legislator, and Bachelet’s spokesman, the son of the former president, who has oversight of Chiledeporte, is bruited to be the person who gave the order to undermine the parliamentary investigation.

Should this be true, Bachelet’s promise to find out the culprits, “let the chips fall where they may,” might be thwarted by the actions of her own partisans.

The worst of the crisis is being played out within the co-governing Party For Democracy (PPD), whose members include those accused in the Chiledeporte scandal, and several legislators implicated in that and other reported financial improprieties.

Perhaps the height of irony is that millionaire PPD Senator Fernando Flores is demanding that the facts be investigated and all those guilty punished, to which end he will finance lawyers and investigators to prove the guilt of his fellow PPD members.

On Nov. 5 he announced he was “freezing” his membership of his party over this issue. It cannot be ruled out that he and other leaders may resign from their parties, fed up with corruption and the way politicians close ranks in corporate and mutual defence.

The opposition is rubbing its hands with glee over the escalation of accusations, and the possibility of the break-up of the governing coalition.

However, there is no certainty that the right will gain electoral dividends from the current situation, as it is politics as a whole that is affected by these scandals, as well as the prestige of the democracy that cost so much to recover.

There are some who advocate another quick accord between governing and opposition politicians to put a stop to the accusations, and to calm public opinion with laws and reforms to perfect those that have been shown to be ineffective. But the view is spreading that it is time to get to the bottom of things and show clearly that those with clean hands will be able to act freely, and that the regulatory institutions and the justice system work.

The majority opinion seems to be that all these accusations can be cleared up and punished according to law, depending on the position taken by Bachelet. In the face of this crisis, and other situations, her leadership abilities are already being questioned.

The “proof of her purity” would be for the chips indeed to fall where they may. For example, for former president Lagos, who ended his term of office under the shadow of alleged nepotism, to face the justice system if necessary, in spite of his high popularity rating and his resolve to run again for president.

* Chilean journalist and winner of the National Journalism Prize, 2005.