Siege May Force Colony to Yield Its Secrets

The old man with the glass eye is on the run again, probably hiding somewhere in the 34,000-acre fiefdom he rules in the Chilean countryside.

Paul Schaefer, a corporal in the German army during World War II, fled his homeland in 1961 while under investigation for allegations of sexually molesting children. Now Chilean police are hunting for the 76-year-old founder of a reclusive German-speaking community here on a new charge of sexual molestation.

For 36 years, Schaefer’s Colonia Dignidad--the Dignity Colony--has thrived in the Andean foothills, despite accusations that leaders engaged in sexual abuse and cult-like activity and helped Chilean secret police operate a concentration camp after the 1973 military coup.

Schaefer has built a state within a state, complete with agribusinesses, a hospital, school, airfield and paramilitary force. He has lavished hospitality on politicians and top military officers under Gen. Augusto Pinochet, Chile’s former dictator and current commander of its armed forces.

But the government of today’s democratic Chile has placed the colony under siege. A special prosecutor is investigating allegations ranging from million-dollar tax fraud to slave labor.

*

Colonia Dignidad has become an enigma wrapped in suspicion and myth. The government seems determined to answer longtime questions: Has the brightly painted compound behind barbed wire--where about 350 men, women and children are segregated from one another in barracks under Schaefer’s orders--been the scene of barbaric crimes? Or is it just a persecuted rural charity? And how has this secretive enclave accumulated power and survived for so long?

“There has always been something strange, an aura of power that protected them,” said Sen. Sergio Bitar of the governing center-left coalition. “This is one of the dark chapters of the Chilean system. . . . I am in favor of dismantling the place. I believe this is a group with a Nazi-inspired philosophy that has ties to extreme rightist groups and military connections--that this is the source of their power.”

Schaefer has frustrated a manhunt for months. He is believed to be hiding somewhere in the fields and pine forests of his domain, which is equipped with tunnels and bunkers. The isolated outpost lies at the end of a dirt road about an hour’s drive from the town of Parral.

About 300 police swarmed the compound last week and conducted the longest search yet for the fugitive leader. There was considerable tension but no violence.

Schaefer is charged with sexually abusing one boy and is under investigation in three more cases. Other Dignidad leaders are charged with helping him elude justice and refusing to return Chilean children enrolled in the colony’s boarding school to their parents, who are peasants from the surrounding area.

The crackdown has its critics. Although Schaefer’s allies admit that the charges are serious, they defend the community and the charity work of its hospital and school.

“We are concerned that as a result of a veritable campaign against Dignidad, their social work will come to an end,” a group of 22 conservative senators declared recently. The senators urged Schaefer to surrender but accused the authorities of persecuting the colony’s inhabitants.

The colony does not deserve its sinister image, Sen. Hernan Larrain said in an interview.

“They are not Nazis; they were German soldiers,” he asserted. “This is not some kind of cult. That image does not coincide with the reality I know. . . . My impression is that they are happy, tranquil people. They have a love for music, an admirable form of working, a very clean hospital. You cannot condemn them all.”

One of Colonia Dignidad’s most effusive defenders is Manuel Contreras, whose father was the general in charge of the now-disbanded Chilean secret police known as the DINA. The father, also named Manuel Contreras, is serving a seven-year prison sentence after being convicted in 1993 of ordering the 1976 assassination in Washington, D.C., of Chilean exile Orlando Letelier. That assassination was one of thousands of crimes--murder, torture, kidnapping--blamed on the DINA during Pinochet’s dictatorship.

The Contreras family had a warm relationship with Schaefer and “these Germans, veterans of World War II who were eager to cooperate with the military government,” the younger Contreras told the magazine Caras. The colony’s leaders were experts in intelligence and security techniques, he said.

Reminiscing about the place as a kind of blissful summer camp where he hunted rabbits with “Uncle Paul”--”I have never seen a better marksman”--Contreras said his father first visited the enclave in 1974 with Pinochet. The Contreras family later received high-tech medical care in the colony’s hospital.

The Germans admired his father because he did his duty, Contreras said. “In their fatherland, in their war, they also obeyed orders and no one appreciated them.”

Schaefer’s alliance with the chief of the secret police is key to the network of power and protection he constructed during the dictatorship, critics say.

Since its founding by Schaefer, leader of a breakaway Baptist sect, the secretive community also has generated allegations of ties with high-ranking fugitive Nazis who hid in South America after the war.

The colony “has always been suspected of harboring fugitive Nazis, but it is very difficult to prove these ties,” said Sergio Widder, the director in Buenos Aires of the Simon Wiesenthal Center.

The colony’s airfield, high-tech fortifications and self-contained infrastructure seem perfect for the clandestine movement of people and contraband, critics say.

The first concrete allegation here against Schaefer came in 1966, when a German youth fled the colony on horseback and told police that Schaefer had molested him repeatedly. The only person who went to jail in that case was the alleged victim, who was charged with stealing the horse.

*

The colony withstood investigations and criticism until the military toppled Marxist President Salvador Allende in 1973. The colony supported the coup and allegedly aided the ensuing repression.

Schaefer and the secret police set up a concentration camp on his land where blindfolded political prisoners were tortured and slain, according to Chilean and international human rights watchdogs. German-speaking doctors administered drugs to prisoners in underground chambers, survivors testified at hearings.

Conservatives say the charges have not been proved. But the government’s National Commission on Truth and Reconciliation, which probed abuses by the military regime, reported in 1991: “The commission must at least conclude that a certain number of people arrested by the DINA were in fact taken to Colonia Dignidad, held there for some time, and some of them were tortured with the participation not only of DINA agents but also of people who lived on this property.”

During the 17-year dictatorship, Schaefer courted officials. He invited them to retreats at a well-appointed guest house. He developed outside business ventures, such as a casino, and cultivated protectors in the security forces and politics who shield him to this day, critics say.

“The dictatorship was like a party for them; they consolidated themselves and got rich,” said Congressman Jaime Naranjo, a Socialist politician.

Schaefer was accused of child molestation again in 1981, but the case file disappeared at the courthouse in Parral, according to Carlos Verdejo, chief of a child-abuse unit of the National Service for Minors. The judge handling the case allegedly lived in a house in Parral that was owned by the colony, Naranjo said.

The return of democracy in 1990 changed the official attitude. The most recent molestation charges surfaced last year and persuaded authorities to take action.

If the investigators are right, the old man with the glass eye is hiding out with armed guards somewhere in the countryside that he has transformed into his own fortified patch of Bavaria. The showdown could get ugly.

“I am sure he is in there because he knows the place like the back of his hand,” Naranjo said. “I believe he is in an extraordinarily difficult situation. And this desperate situation could lead to a violent defense or to collective suicide.”

Rotella was recently on assignment in Parral.