Global Policy Forum

Tax Charges Could Prove to be Pinochet's Downfall


By Antonio de la Jara

August 25, 2005

Former Chilean dictator Augusto Pinochet has escaped prosecution in hundreds of human rights cases from his 17-year rule but tax crimes investigation may prove to be his downfall, like legendary U.S. gangster Al Capone. The once untouchable Pinochet -- 89, ill and rarely seen in public -- is being dogged by charges he and his family hid up to $27 million from tax authorities, using false names and passports to open up to 130 off-shore bank accounts.

On Wednesday the case gained momentum when the Supreme Court threw out a defense motion and upheld indictments of complicity in tax evasion against Pinochet's wife, Lucia Hiriart, and his youngest son, Marco Antonio Pinochet, who is in jail. "This is his Achilles' heel, the big headache for Pinochet and his defense lawyers. Unlike the human rights accusations where it has been tough to prove a link between Pinochet and the crimes of his regime, in this case the numbers don't lie and the case could move forward very quickly," said political analyst Ricardo Israel.

Judge Sergio Munoz, who is probing the bank accounts, wants to indict Pinochet, but must wait to see whether the Supreme Court removes his immunity from prosecution, a privilege of former presidents. Pinochet lost his immunity in other probes but the court must decide the issue on a case by case basis. Israel believes the Supreme Court will let Munoz indict Pinochet, in contrast to previous high court rulings to throw out human rights charges on grounds Pinochet's mild dementia makes him unfit to stand trial.

"This is just like the story of Al Capone. In the end he will be caught on tax evasion, and not because of the worst crimes he committed," socialist congresswoman Isabel Allende, daughter of former President Salvador Allende, told Reuters. Pinochet took power in a 1973 military coup that toppled Salvador Allende. He has been accused of responsibility in the deaths of as many as 3,000 Chileans during his regime between 1973 and 1990, and tens of thousands of torture cases.


Earlier this year, Pinochet paid about 1.2 billion pesos (more than $2 million) in back taxes owed on the money in the accounts. His defense team says the money comes from legitimate sources. In a rare public statement after his wife and son were arrested, Pinochet said he took "all responsibility for the facts being investigated" by Munoz and said his wife and family had nothing to do with the money in the accounts. The scandal over the family's hidden millions has shaken even staunch supporters of the Pinochet regime, especially since Munoz has also questioned retired generals and active-duty colonels." The way things are going, it's looking bad," Rafael Villarroel, president of a group of retired generals, told local television recently. Villarroel called on Pinochet to better explain the accounts.

Because of the amounts of money involved and fake companies discovered in the probe, the head of the Government Defense Council -- which advises the government in legal cases and also assists judges in prosecuting some cases -- suspects money laundering related to arms trafficking. "If the sale of arms was legitimate, there is still the issue of illegal commission payments. But if the sale was illegal, there is the issue of arms trafficking," Clara Szczaranski, president of the Council, said recently.

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