Oh no, not Chile!

In many Latin American countries, when a police officer stops a motorist, there’s a good chance that money will change hands. This is not the case in Chile; in fact a few years ago, the Carabineros de Chile web site included an advisory to foreign visitors in several languages warning against this practice and here is the English version:

“If you commit a fault or crime during your stay in our country—according to the in force Chilean legislation—NEVER try to bribe a Carabinero, since only trying to perform this action you will incur into a crime. If it is the case you will be detained and the background of the case will be delivered to the court concerned.”

Sadly, the country ranked by Transparency International as one of the least corrupt in the region is groaning under the weight of a recent series of scandals across the political spectrum. There was a questionable land deal by President Michele Bachelet’s son and his wife, known as “daughter-in-law gate,” and the arrests of executives from one of Chile’s largest financial groups on charges of an illegal scheme to finance the right-wing Union Democratica Independiente (UDI) via money laundering and tax fraud. And the former son-in-law of the late dictator General Augusto Pinochet, Julio Ponce Lerou, is under investigation over payments made to rightwing political figures AND some members of Bachelet’s center-left coalition. The New York Times article explains it all:

http://www.nytimes.com/2015/04/10/world/americas/chile-joins-other-latin-american-nations-shaken-by-scandal.html?ref=world&_r=0

The article quotes Chilean political scientist Patricio Navia of New York University, who compares the current crisis with a “trip to the emergency room with some chest pains.” Neighboring Brazil may be having a real heart attack, but doctors would tell Chile that “we’re overweight, not exercising and maybe smoking too much.” The scandals are a kind of warning that “we’ll end up with a heart attack five years down the road if we don’t change our ways now.”

Burn After Reading: Pinochet and the Iranians

Some time ago I wrote about a Freedom of Information request I’d made in 2007, https://notesontheamericas.wordpress.com/2014/01/23/a-long-delayed-freedom-of-information-request/ searching for any documents dealing with the Pinochet regime’s arms sales as part of the research for my second Chile book, The General’s Slow Retreat.  The requested material was not released until five years later, and unfortunately did not contain anything that I could immediately use, especially since the book had already been published.

One of the documents, however, is worth summarizing here, in view of the Iran nuclear talks and the glimpse it provides into the murky world of arms dealing among developing countries. It is the story of the regime’s disastrous attempt to sell cluster bombs to Iran and is largely gleaned from Chilean and Spanish news sources, which broke the story early in 1990, just weeks before Pinochet was due to hand over the presidency to an elected president. And it reads like the plot of a Coen brothers movie.

But first, some background.  In 1984 an Iraqi plane landed at Santiago’s airport to collect a load of cluster bombs produced by a private Chilean arms dealer, Carlos Cardoen, who later accused the army’s munitions manufacturer FAMAE of stealing his technology to make its own cluster bombs. The Iran-Iraq war continued, and the Chilean army decided to see if it couldn’t get in on the action as well.  So in October 1985 one of FAMAE’s affiliates enlisted the services of an international arms broker, Bernard Stroiazzo, and an agreement was reached with Iran to sell 500 of its new cluster bombs at a cost of $14,000 each. As each bomb was estimated to cost around $2,500 to produce, the deal should have been lucrative indeed. But there are serious problems. The declassified State Department document, written by U.S. Ambassador Charles Gillespie, reports that

“During early 1986 on two separate test runs in Iran, the cluster bombs prove defective, destroying one Iranian phantom jet and nearly killing the head of the Iranian air force who participated in the demonstration. After the second incident, the Iranian authorities take middleman Stroiazzo and several Chilean technicians hostage pending financial compensation for Iranian losses.”

The Pinochet regime offers to replace the destroyed Iranian jet with an F-5 aircraft, if the Iranians will also purchase an additional $200 million in military hardware, including more cluster bombs and 15 additional aircraft from Chile. The F-5, however, had been purchased from the United States years before the U.S. Congress imposed an arms embargo on Chile for the regime’s human rights abuses.  To make this transaction, it would need U.S. government authorization, which seemed improbable. In addition, the Chilean air force was not keen to sell off so many of its aircraft and those officers hoping to rebuild ties with Washington were worried about possible repercussions. The head of FAMAE, Colonel Carlos Carreno, was scheduled to travel to Tehran to negotiate the deal, which presumably involves selling the F-5 by covert means. But three days before he is due to depart, the colonel is kidnapped by the Manuel Rodriguez Patriotic Front,  whose earlier actions included an attempt to assassinate Pinochet. The deal with Iran falls apart. The hapless Colonel Carreno reappears three months later in Brazil, holding a rosary and refusing to say anything about his abduction.

Meanwhile, arms broker Stroiazzo somehow manages to escape his Iranian captors and “begins negotiations with Chilean authorities for financial compensation for Iran and for himself.”  An army general who heads the regime’s secret police offers Stroiazzo a potentially lucrative deal to build a toxic waste plant in Chile’s northern Atacama desert, but local opposition to the project causes authorities to back away from the project. Stroiazzo responds by filing a multimillion dollar international lawsuit and the story finally breaks. The document concludes that the political fallout “has some potential for damaging Pinochet’s and other elements of the armed forces’ image, but the incoming government does not appear particularly interested in actively pursuing the matter.”