Penta, SQM, Dávalos: The continuing controversy of Chile’s never-ending political scandals
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Penta, SQM, Dávalos: The continuing controversy of Chile’s never-ending political scandals

It’s been a tumultuous summer for Chile’s political class, as a series of scandals have uncovered corruption and exposed the uncomfortable relationship between business, politics and privilege.

Politicians cultivating a cozy relationship with businessmen have typically been associated with right-wing parties, but the sudden wave of scandals engulfing the political elite has not spared Michelle Bachelet’s government or her left-wing coalition.

Pentagate: from tax fraud to an investigation of national priority

The scandal known as ‘Pentagate,’ which began as a case of tax fraud by investment bank Penta and ensuing revelations of illicit campaign funding of right-wing politicians, has given rise to a meticulous investigation that continues to implicate new political and business actors.

Pentagate now includes a sub-case involving a mining company, Soquimich (SQM), which has been accused of using the same techniques as Penta – fake invoices and phony services – to illegally fund politicians.

This time, however, among the 19 individuals listed in the SQM investigation, at least five have close ties to the governing left-wing coalition, Nueva Mayoría.

The Secretary-General of the Socialist Party, Senator Fulvio Rossi, remains the most high-profile politician targeted in the newest development of Pentagate, after evidence emerged that his former adviser Mariela Molina received more than US$7,000 from SQM during Rossi’s 2009 campaign.

Even more controversial than the allegations themselves has been the judicial handling of the case.

To the astonishment of both the political class and the public, Chile’s independent Public Prosecutor’s Office announced last week that the Pentagate investigation would no longer be carried out by Carlos Gajardo – the prosecutor leading the investigation since its inception – but would be separated into two distinct cases, Penta and SQM, to be overseen by regional prosecutors.

The announcement raised doubts about the independence of the institution as the changes coincided with the accusations compromising political figures from Nueva Mayoría.

In an effort to restore trust in the autonomous institution, the decision was reversed on Tuesday, when National Public Prosecutor Sabas Chahuán took an extraordinary measure allowing him to assume control of the investigation.

“Chile’s Public Prosecutor’s Office did not have and will not have political considerations in sight when making decisions,” Chahuán said.

Nueragate: Bachelet speaks out

After two weeks of silence, President Michelle Bachelet made her first public appearance after her son, Sebastián Dávalos, was accused of using his influence to secure a bank loan for his wife’s company.

Bachelet declared she found out about her son’s dealings through the press, a claim that failed to convince either the opposition or center-left Christian Democrats (DC) from her own coalition, Nueva Mayoría.

Ignacio Walker, the president of the party, criticized Bachelet for lacking authority, while Deputy René Saffirio said he had hoped the President would have shown more self-criticism.

Bachelet nonetheless continued to receive support from the Socialist Party (PS), despite the party’s harsh critiques of Dávalos and his wife Natalia Compagnon, both party members and now facing expulsion.

The public also expressed its discontent with the president’s management of the crisis as public opinion polls have shown her approval rates dropped to 31 percent since the scandal broke. Asked about the case, 60 percent of respondent thought Bachelet previously knew about her son’s dealings, while another 56 percent said the President did not convey trustworthiness.

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