SOUTH AMERICA : Legal War Rages in Chile Over Germans’ Controversial Colony

Friends of Colonia Dignidad say it is a settlement of pious, hard-working Germans who have created a shining example of prosperity and benevolence in rural Chile. Critics say it is a secretive enclave ruled by a clique of greedy despots who have subjected residents to brainwashing, semi-slavery and sexual abuse.

Through the years, controversy has not kept Dignidad from thriving. But now it is fighting a legal battle for survival. Chile’s government is trying to cancel its nonprofit status and is investigating its leaders for suspected labor infractions and alleged tax and customs fraud. Officials say allegations of human rights violations and other crimes also will be probed.

Dignidad is appealing to the Supreme Court. The legal contest has become a bone of contention between Chile’s center-left administration and the right-wing opposition.

The right contends that the government is persecuting Dignidad for political reasons; 17 conservative senators have filed a complaint before the Constitutional Tribunal alleging that President Patricio Aylwin had no authority to issue a February decree canceling Dignidad’s legal status.

The decree declares that the agricultural community never has been dedicated to the purpose for which it was founded in 1962: to help Chilean orphans. It cites an official report showing that only 9% of Dignidad’s earnings finance a school and a hospital, which are the community’s only charitable enterprises.

Fidel Reyes, Dignidad’s lawyer, argues that the decree is based on “unfounded assertions.”

But a government lawyer predicted a court victory that will leave the decree standing. “There is absolutely no juridical merit to presume that this decree will be declared unconstitutional,” the lawyer said.

Dignidad’s leader is Paul Schafer, now about 70. When he came to Chile in 1961, he was wanted in Germany on charges of homosexually abusing minors. He and other German immigrants bought a small farm near the town of Parral, about 250 miles south of Santiago. They received government recognition as a nonprofit corporation. Membership grew to about 250 Germans, and its holdings expanded to about 34,000 acres.

Since the late 1960s, several former colony members have accused Schafer of sexually abusing boys on the farm, Villa Baviera. They also say Dignidad’s leaders committed other sexual and physical abuses against community members, separated children from parents, kept members from leaving the property, made them work without pay, brainwashed them and gave them mind-altering drugs.

Dignidad filed a libel suit against the German magazine Stern and Amnesty International after they reproduced some of those allegations in 1977. In the litigation, still pending in Germany, more allegations against Dignidad became public.

According to some of the most sensational accusations, Villa Baviera installations were used to detain and torture political prisoners after the Chilean armed forces seized power in a 1973 coup. Those accusations have been repeated by former political prisoners, as well as former members of the military government’s secret police, known as DINA.

Officials of the current administration, which took office last year, say Dignidad was allowed to function as a “state within a state” by the military regime.

“The government intends to subject Colonia Dignidad to Chilean legislation,” said one official. “Its impunity has ended, and the protection it was given by the dictatorial regime has ended.”

The decree canceling Dignidad’s status stipulates that its property will be turned over to a Chilean Methodist Church group.

The government’s goal is to bring criminal charges against Schafer and other leaders of Dignidad and convict them in Chile or deport them to Germany. Then, officials say, they will seek restitution for innocent community members exploited by the leaders.