Chilean Politicians Use Community Funds for Personal Campaigns Summary

  • Last updated on November 11, 2022

Officials of Chiledeportes, the Chilean government’s sports agency, were accused of misusing as much as $1 million in funds designated for promoting community sports programs. An e-mail leaked to the media indicated that the Chiledeportes officials had used the money in districts represented by legislators from Concertación, or the Coalition of Parties for Democracy. Opposition legislators charged that the money had been illegally used to help political campaigns.

Summary of Event

In 2003, the Chilean government of President Ricardo Lagos responded to a series of scandals relating to corruption and influence peddling in the domestic development agency, the ministry of public works, and the central bank. In the wake of the scandals, a series of legal and administrative reforms were enacted to prevent a repeat of these scandals. The reforms clarified payments for public employees, changed campaign financing, established a permanent budget commission to oversee government spending, created a code of ethics for civil servants, and changed the way in which the ministry of public works awarded government contracts. The measures met with general approval both in Chile and abroad for increasing government transparency. [kw]Chilean Politicians Use Community Funds for Personal Campaigns (Oct. 22, 2006) Chiledeportes Aylwin Azócar, Patricio Lagos, Ricardo Bachelet, Michelle Chile Chiledeportes Aylwin Azócar, Patricio Lagos, Ricardo Bachelet, Michelle Chile [g]Central and South America;Oct. 22, 2006: Chilean Politicians Use Community Funds for Personal Campaigns[03690] [g]Chile;Oct. 22, 2006: Chilean Politicians Use Community Funds for Personal Campaigns[03690] [c]Corruption;Oct. 22, 2006: Chilean Politicians Use Community Funds for Personal Campaigns[03690] [c]Government;Oct. 22, 2006: Chilean Politicians Use Community Funds for Personal Campaigns[03690] [c]Politics;Oct. 22, 2006: Chilean Politicians Use Community Funds for Personal Campaigns[03690]

Even with this history of corruption, government corruption in Chile is relatively rare, according to the U.S. Department of State. Chile ranked about twentieth out of 163 countries in 2006 in the annual Corruption Perceptions Index released by the nongovernmental group Transparency International, thereby holding a position similar to that of the United States and Belgium.

Concertación (Coalition of Parties for Democracy) had held executive power in Chile since 1990, perhaps contributing to a complacent atmosphere among lawmakers. Despite the scandals, the center-left government remained popular, with President Michelle Bachelet (who began her term on March 11, 2006) ranking as one of the most respected women in the country. Bachelet is Chile’s first female president.

On October 22, 2006, a scandal emerged about the use of state funds by officials of Chiledeportes, a government agency that organizes local sporting activities. An audit of the agency revealed that about $1 million (U.S.), or about 90 percent of its budget, had been funneled into the coffers of local, leftist political campaigns. These payments to congressional candidates of the Party for Democracy (PD), which was part of the ruling Concertación, were fraudulently marked on forged invoices as electoral expenses.

The right-wing opposition immediately charged that Concertación had improperly used funds to win the last elections and was attempting a similar maneuver to win the upcoming elections. The main target of this charge appeared to be former president Lagos, who left office with a popularity rating of 70 percent and remained eligible to run again for president in the December, 2009, elections.

On October 30, Bachelet stated that she would not accept corruption in her administration. She was clearly concerned about the impact of the scandal upon Chile’s newly positive international image. She assured the public that the scandal would be properly investigated and that changes would be made to avoid new corruption cases. She announced that a number of actions would be taken to reform the direct allocation of public funds to state agencies to ensure that the funds directly benefit the people. Bachelet also announced a restructuring of Chiledeportes to refine the project evaluation process, strengthen internal accounting procedures and institutional oversight mechanisms, and change the sports fund guidelines to disburse money only when projects have met certain requirements as documented in the annual reports of the undersecretary for athletics.

Two former officials of Concertación, Edgardo Boeninger, a Christian Democrat and former ministry general secretariat of the presidency, and Jorge Schaulsohn, founder and former PD president, then blew the whistle in interviews. They stated that members of Concertación felt entitled to take public funds for campaign purposes since private industry generally financed right-wing political parties. Both officials alleged that a culture of corruption existed within the government. Gonzalo Martner, a former president of the Socialist Party, added to the fire by giving an interview to the newspaper El Mercurio, in which he supported Schaulsohn’s claims. Martner stated that the governing parties had used discretionary government funds, exempt from public scrutiny, to fund campaigns. Other former government officials supported the charges. Schaulsohn was expelled from the party in December. Schaulsohn, Boeninger, and Martner all opposed Lagos, and their attacks gave further support to the notion that much of the furor over Chiledeportes was part of an effort to block Lagos from again running for president.

Senator Camilo Escalona, Socialist Party president, stated that no members of Concertación had received money from discretionary funds since the establishment of democratic government in 1990. He charged that right-wing parties had received illegal campaign funds during the administration of dictator Augusto Pinochet Ugarte. The charge prompted the right-wing opposition Alliance for Chile to sue and attempt to subpoena more than one hundred people who had held high public office since 1990. The judge in the case blocked the subpoenas.

Emerging next was the claim that candidates for the right-wing National Renewal had used the same company as the PD to inflate their election expenses. Meanwhile, prosecutor Xavier Armendtriz pursued an investigation into Chiledeportes. Bachelet publicly supported the head of Chiledeportes and undersecretary for athletics, Catalina Depassier, and denied that a culture of corruption existed. Patricio Aylwin Azócar, president of Chile from 1990 to 1994 and a member of the coalition, stated that no culture of corruption existed, even though some government officials in his cabinet had used public funds for campaign purposes. Depassier resigned after it became known that she had lied about her educational credentials.

On November 23, 2006, Bachelet announced new anticorruption measures by releasing a thirty-two-page report produced by the minister of finance. The measures focus upon combating corruption, improving transparency in the public sector, modernizing government, and reforming campaign finance. A day later, Guillermo Díaz, president of the national railway system, faced fraud charges relating to his employment with the public works ministry under the administration of Lagos. The media charged that Díaz’s employment, even after he was suspected of fraud, demonstrated a lack of concern by Concertación-led governments about public corruption. Newspapers called for greater reforms as well as concrete actions to demonstrate the government’s willingness to stop abuses.

Impact

On November 24, the government established a legislative commission to investigate the scandal. Both progovernment and rightist Alliance for Chile members formed the commission. Monckeberg, Nicolás Nicolás Monckeberg, a deputy from the rightist National Renovation Party, headed the commission. When progovernment legislators presented a vote of no confidence against Monckeberg for allegedly abusing his leadership role by questioning government employees linked to the scandal, the opposition politicians withdrew from the commission. They argued that no credible outcome could be reached if the investigation into the government was led by progovernment politicians. The official report charged one official, Luis Guastavino, with corruption. A separate report issued by the alliance implicated PD officials Rodrigo González, Marco Antonio Núñez, and Laura Soto, as well as Socialist deputy Marco Enríquez-Ominami. Only Soto ultimately faced charges of embezzlement for using state funds.

The opposition’s actions stalled when it, too, became the focus of political scandal. In December, Bachelet called for an investigation into the improper use of public funds to create the two major right-wing parties, the Independent Democratic Union and National Renewal, at the end of Pinochet’s dictatorship during the late 1980’s. Members of Bachelet’s Socialist Party argued that the use of public funds in this case should also be examined if the Right was truly interested in reform. Chile Chiledeportes Aylwin Azócar, Patricio Lagos, Ricardo Bachelet, Michelle

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Angell, Alan. Democracy After Pinochet: Politics, Parties, and Elections in Chile. Washington, D.C.: Brookings Institution Press, 2007. Examines the political situation in Chile at the time of the sports scandal, which began in October, 2006.
  • citation-type="booksimple"

    xlink:type="simple">Oppenheim, Lois Hecht. Politics in Chile: Socialism, Authoritarianism, and Market Democracy. Boulder, Colo.: Westview Press, 2007. A good study of Chilean politics and economic development through 2006.
  • citation-type="booksimple"

    xlink:type="simple">Rector, John L. The History of Chile. New York: Palgrave Macmillan, 2005. An excellent and updated general history of Chile.

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