Corruption in Chile
In Transparency International's 2024 Corruption Perceptions Index, Chile was ranked number 32 among the 180 countries in the Index, where the country ranked number 1 is perceived to have the most honest public sector. It was ranked 6th among the countries of the Americas, behind Uruguay, Canada, Barbados, the Bahamas and the United States.
In that index, Chile was given a score of 63 on a scale from 0 to 100. For comparison with regional scores, the best score among the countries of the Americas was 76, the average score was 42 and the worst score was 10. For comparison with worldwide scores, the best score was 90, the average score was 43, and the worst score was 8.
According to a 2021 study, the regions of Ñuble, Los Lagos and Aysén are the most susceptible suffering nepotism and elite capture.
Corruption in Chile
In December 2005, the mayor of Quillota, Luis Mella, alleged the government's Job-Making Program paid political allies for work that was not performed. The Public Ministry and the comptroller then initiated parallel investigations into the potential illicit use of public funds. Although earmarked for employment programs, these resources were possibly diverted to the political campaigns of Socialist Party and Party for Democracy candidates in the Fifth Region during the 2005 congressional elections. The PGE investigations revealed that individuals paid to do public works actually spent their time campaigning for political parties.Further investigations revealed that funds were also misused in other Fifth Region counties. Many midlevel public officials in the regional government, such as the former regional ministerial secretary of labor, were formally investigated, and several local officials were removed.
The government took remedial steps to control public employment programs, dismantling the PGE and designating three government agencies to manage recruitment of public works employers and workers and payment of wages.
In October, a government audit revealed financial irregularities in Chiledeportes, a national program to promote amateur and professional sport activities. Opposition political figures charged that the funds had been diverted into the national political campaigns of ruling party figures, while the organization's director characterized the issue as "a common crime."
The government removed all 13 Chiledeportes regional directors and initiated a broad-based investigation to determine the extent and nature of potential fraud or mismanagement. Congress created an investigative committee in February, and prosecutors brought charges of tax evasion and falsification of documents against some individuals. Executive, congressional, and judicial investigations were ongoing at year's end.
The Freedom of Information Act requires the government and its agencies to make all unclassified information about their activities available to the public. All government ministries and most public agencies have Web pages. In 2005, the NGO Participa released the results of a far-ranging survey, which found that national and local government agencies failed to respond to 69 percent of requests for information and provided incomplete or otherwise deficient responses to 14 percent of requests.
2006–2007 Chilean corruption scandals
The 2006–2007 Chilean corruption scandals were a series of events that affected the Chilean governing Concertación coalition in 2006 and 2007.Chiledeportes
In October 2006, it was discovered that 90% of the projects of Chiledeportes, the government's sports organization, had some sort of anomaly: either initiatives that were never started or false and nonexistent identities. The investigation into this mystery led to the arrest of Juan Michel, a prominent member of the Christian Democrat Party. Later, it was discovered that much of the money that went to Chiledeportes' Valparaíso Region branch was used to finance the political campaigns of Concertación members, mainly those of Party for Democracy deputies Laura Soto and Rodrigo González Torres. Twenty people were arrested because of this misuse of government funds.Publicam
The crisis continued when it was discovered that Senator Guido Girardi, of the Party for Democracy, had used false bills from a nonexistent company, Publicam, in order to justify his campaign expenses to the Servicio de Impuestos Internos. Some of the members of Girardi's campaign team, among them his lawyer, Dante Leoz, were arrested and accused of financial fraud. Girardi himself is currently under investigation, but there have been no charges. He has denied charges of corruption, but admits that he should have studied his campaign expenses more carefully.Senator Fernando Flores, who leads the more liberal faction of the Party for Democracy, temporarily suspended his membership in the party, saying that it was ruled by a corrupt "gang". He later decided to rejoin, but in 2007, he resigned from the party permanently.
The right-wing opposition likened the Chiledeportes and Publicam cases to previous corruption scandals that took place during the administration of Ricardo Lagos. Former presidential candidate Sebastián Piñera said the scandals proved the government had few qualms about committing electoral fraud and intervention. Likewise, former presidential candidate Joaquín Lavín said that the victory of Lagos by a razor-thin 2.62% margin in 2000 could have been due to election fraud. No proof was ever given for such a claim.
Whistleblowers
The crisis deepened when Edgardo Boeninger, a Christian Democrat and former minister secretary general of the presidency, said in an interview with influential Chilean newspaper El Mercurio that "since the beginning of the Concertación it was thought that, since the private sector's money favored the right-wing parties, it would not be illegitimate to receive public money.".His declarations were supported by former deputy Jorge Schaulsohn, founder and former president of the Party for Democracy. Also in an interview with El Mercurio, Schaulsohn said that during the time he presided over his party, all four parties of the Concertación coalition received money from the government. Additionally, Schaulsohn reported that government money had also been used to directly finance the campaigns of Concertación candidates. He accused the government and the Concertación of an "ideology of corruption".
Lastly, former president and deputy of the Socialist Party Gonzalo Martner, in another interview with El Mercurio, declared that Schaulsohn's accusations were correct, and that "public resources were used to finance the activities of the political parties ".
All the leaders of the Concertación denied the charges of Boeninger, Schaulsohn, and Martner. However, in El Mercurio, former president Patricio Aylwin acknowledged that some ministers in his cabinet had been paid extra money that came from government reserved funds, though he denied the charges of an "ideology of corruption". Other former government officials agreed with these three whistleblowers.
Crisis in the PPD
Although all the parties denied receiving money from the government, only the Party for Democracy took action against the whistleblowers. The Supreme Tribunal of the party requested that Schaulsohn testify and present evidence of corruption. Instead, Schaulsohn wrote a report stating his opinions. On December 28, the Tribunal decided to dismiss Schaulsohn from the party. This act caused outrage among many Concertación members, some of whom likened the Tribunal's decision to Stalin's purges. Many wondered why Schaulsohn had been dismissed but no such action was undertaken for Girardi, who is under investigation by the police for corruption. Former Minister of Public Works Juan Etcheberry resigned in protest of the "Stalinist" action of the Tribunal in dismissing Schaulsohn.Senator Flores was one of the prime opponents of the Tribunal's decision. Because of the influence he wields in the party, it was expected that if he resigned, many other members, including more than a few deputies, would resign with him. Flores spoke with Schaulsohn at length during the time both of them stayed in the United States in the New Year. His conferences with the Party of Democracy's president, Sergio Bitar, came to nothing. He then launched an independent political organization called Chile Primero in what many believed to be a prelude to his resignation. He finally submitted his resignation in the morning of January 9, 2006.
Effects
Former president Michelle Bachelet, who belongs to the Concertación, has said little regarding the corruption scandals. Meanwhile, former president Patricio Aylwin has been the only one to acknowledge that there might have been corruption during his government, although he insists that if there was, it was not an "ideology" as Schaulsohn described it. Former president and current president of the Senate Eduardo Frei has denied there was corruption during his government, and former president Ricardo Lagos has done likewise.The presidents of the four Concertación parties have all denied that their parties received or have ever received money from the government. The Socialist Party President Camilo Escalona was particularly enraged by Schaulsohn's remarks, and threatened to sue him for libel. Sergio Bitar of the Party for Democracy said he would not interfere with the Tribunal's decision to dismiss Schaulsohn, although he remarked it would've been better if he had not been dismissed. After Flores' resignation, Bitar declared that he had done "everything possible" to maintain party unity and that any "responsibility" lay on those who voluntarily left. Bitar maintained he hoped to have positive relations with Flores despite the latter's resignation. The next day, Flores's supporter and deputy Esteban Valenzuela also resigned.