LATIN AMERICA : Metals Trader’s Gambling Spree Has Chile Riled : His effort to recoup losses cost the country $206 million. Some call it Coppergate.

Juan Pablo Davila’s secret gambling spree in international metals markets cost his country $206 million in public funds. The losses have triggered an avalanche of national outrage, shaken the political stage and raised doubts about the Chilean government’s ability to manage Codelco, the biggest copper company in the world.

Some call it Coppergate, and the scandal is casting a shadow over the administration of President Patricio Aylwin as he prepares to turn the government over to his elected successor, Eduardo Frei, in March.

Davila, who was Codelco’s chief trader of copper futures, says a series of erroneous entries in his personal computer for transactions last September led to $30 million in losses. Instead of reporting his mistake, he tried to recover by speculating in copper, gold and silver futures. But he only went deeper and deeper into the red, he said.

“I don’t believe I’ve committed any crime,” Davila, 34, told reporters recently. “I made a mistake and I am going to assume the responsibility that falls on me.”

From September to Jan. 20, Davila made more than 5,000 futures transactions with 23 brokers in London and New York.

According to one account, he gambled on futures worth a total of up to $1.8 billion, far surpassing his authorized daily limit of $1 million.

Investigators are looking for possible criminal conduct. They are trying to figure out how Davila obtained multimillion-dollar credit lines with brokers, why Codelco’s supervisors and internal auditing system did not detect his losses and whether anyone profited from his mistakes.

Lawyer Fernando Molina, a member of the Codelco board of directors, said it was hard to believe that one person could carry out “this enormous operation” without anyone else knowing.

“He would have to be a genius,” Molina said.

Davila, an accountant, had worked for Codelco since 1986. He apparently had won the trust of superiors by earning the company $30 million on copper futures last year before his troubles began in September. Colleagues sometimes called him “J.P.,” as in J.P. Morgan.

President Aylwin has been credited with solid leadership in consolidating Chile’s democracy since he took office at the end of a 16-year military regime headed by Gen. Augusto Pinochet.

The Codelco scandal, however, has embarrassed his administration with a storm of bleak headlines that has not let up since it broke Jan. 26.

The conservative opposition is threatening congressional action to impeach Finance Minister Alejandro Foxley Riesco and Mining Minister Alejandro Hales, who are Codelco directors.

Aylwin’s center-left coalition could easily block an impeachment motion, but the wrangling could poison the atmosphere for the March 11 inauguration of Frei, who belongs to the same coalition.

Conservatives and business groups are also seizing on the scandal to push for the privatization of Codelco, which operates huge mines once owned by the U.S.-based Anaconda and Kennecott copper companies. Their interests in Chile were nationalized in the early 1970s under the late Socialist President Salvador Allende.

The current governing coalition, which includes Allende’s Socialist Party, opposes privatization of Codelco.

Mining and refining more than 1 million tons of copper a year, Codelco accounts for about 10% of world copper production and earns about 20% of total Chilean export revenue. The $206 million lost by Davila represents 44% of Codelco’s reported profit of $466 million for 1993.

Codelco’s president and seven other executives were forced to resign this month.

One of them, Gonzalo Trivelli, is a nephew of Aylwin’s wife. Trivelli was vice president for marketing and one of Davila’s bosses.

Trivelli and former sales manager Owen Guerrini had previously been partners in Chilean firms that represented futures brokers on the London metals market, where Davila did most of his futures trading.

Opposition politicians have called attention to those links, implying that they might be related to Davila’s bad decisions.

But Trivelli and Guerrini deny they had any links to metals brokers after taking their Codelco positions, or any knowledge of Davila’s monumental losses until he reported them Jan. 21.

The lower house of Congress is scheduled to hold a special session Sunday to decide whether to form a special investigative commission.

Investigations by a specially appointed judge, the national comptroller general and the police have already begun.