New Evidence Shatters Chileans’ Image of a Frugal Pinochet

Not even the most vocal opponents of Augusto Pinochet, this country’s former dictator, ever called him a crook.

True, many believe he is responsible for the deaths of thousands of people, including the president he overthrew, Salvador Allende, who committed suicide. But over the years, there has been a growing consensus that Pinochet’s disciplined rule put Chile on the road to becoming South America’s most prosperous country.

In the wake of a July 14 report by U.S. Senate investigators linking the former general to a money-laundering scandal at the Washington-based Riggs Bank, Pinochet’s reputation as an austere, selfless leader has been shattered. The report revealed that Pinochet had squirreled away millions of dollars in hidden wealth.

Suddenly, Chileans are comparing the seemingly frugal Pinochet to other, more extravagant autocrats who populate Latin American history.

“Now you can say we are the equal to the dictatorship of any banana republic, where presidents and their families leave the country with their suitcases stuffed with cash,” said Alejandro Navarro, a congressional deputy with the ruling Socialist Party. “This is the funeral of Pinochet’s legacy. The appearance of these accounts buries the myth of Pinochet’s silent [economic] revolution.”

The Senate report details several monetary transfers and cashier’s checks written to Pinochet after he stepped down from power in 1990, part of a larger investigation into Riggs Bank’s ties with certain foreign leaders, including the ruling family of Equatorial Guinea.

The bank has long-standing ties to the Chilean military. Pinochet opened a personal account with the bank in 1994, when he was still serving as commander in chief of the military.

In 1998, he came under indictment in Spain in a case involving the killing of that country’s nationals in Chile during his rule. During the year and a half Pinochet spent under house arrest in London facing extradition to Spain, Riggs secretly transferred $1.6 million to his accounts in the United States, the report said.

Riggs, the report said, “served as a long-standing personal banker for Mr. Pinochet and deliberately assisted him in the concealment and movement of his funds while he was under investigation and the subject of a worldwide court order freezing his assets.”

In Chile, the case has been dubbed the “Pinochecks” scandal.

The Senate investigators reported that Pinochet’s bank balance varied from $4 million to $8 million. Clara Szczaranski, president of the State Defense Council, an official watchdog of Chilean government funds, said it was mathematically impossible for Pinochet to have saved that much from his government salary and pension. He is not known to have had any other source of income.

“If the funds are from a private source ... then the only problem would be the payment of taxes,” Szczaranski said. “If the money comes from public funds, then a variety of crimes might be involved.”

Pinochet attorney Pablo Rodriguez said that “all of these funds can be explained perfectly well,” coming mostly from savings, interest and campaign donations made during two plebiscites on his rule in the 1980s.

“He is an absolutely honest man who has not participated in any act of corruption,” Rodriguez said.

But the Senate report suggests that Pinochet’s secret fortune might turn out to be even greater. A Riggs internal memo uncovered by the investigators estimated Pinochet’s net worth at between $50 million and $100 million.

Riggs officials set up and helped Pinochet move funds to assorted offshore accounts and changed the names on the accounts so they would not show up in electronic searches, the report said. In 2000, Riggs paid a banker to travel from Washington to Chile to deliver cashier’s checks to Pinochet, who is now living in a seaside hamlet outside Santiago, the capital.

“These kinds of [banking] operations are typical of money laundering,” Szczaranski said. “In criminal organizations, they are used to create a separation between an individual and his money.”

The revelations have been a blow to the conservative parties that still see Pinochet as a patriotic hero who saved the country from anarchy with his 1973 coup. The center-right is hoping to return to power in next year’s presidential election.

“We feel a sense of unease, worry and pain,” said Alberto Cardemil, of the National Renovation party, who was once subsecretary of the interior under Pinochet. “These are serious allegations that leave open many questions that must be answered.”

The news of Pinochet’s wealth has also divided his family, with one group of relatives apparently accusing Pinochet’s wife and one of his sons of keeping them in the dark about his millions.

The revelations also have implications in pending human rights cases against Pinochet in Chile. Since he returned to the country in 2000, his attorneys have argued that he should be spared prosecution because he is suffering from dementia brought on by age and illness.

At the same time, the Senate report showed, he was repeatedly discussing his financial affairs with Riggs officials, an image at odds with his supporters’ portrayal of him as a frail, forgetful man.

*

Times staff writer Tobar reported from Buenos Aires and special correspondent Vergara from Santiago.