Development: On 4 July a Santiago guarantees judge announced that Carlos Alberto Délano and Carlos Eugenio Lavín, the founders of Penta, a Chilean financial group, as well as Pablo Wagner, a deputy mining minister (2010-2012), would face an abbreviated trial procedure in relation to the illegal campaign finance case involving Penta.
Significance: In a decision likely to enrage anti-corruption activists, Justice Daniel Aravena ruled that the two Penta founders would be sentenced for tax offenses rather than the initial charges of bribery and money laundering while, Wagner would be sentenced for the additional charge of illicit enrichment. The case known as ‘Pentagate’ broke in October 2014 and had, along with other illegal campaign finance scandals such as that involving mining company Sociedad Química y Minera SA (SQM), proven highly damaging for both the centre-right Chile Vamos coalition which is now in government led by President Sebastián Piñera as well as the former leftist Nueva Mayoría coalition government led by Michelle Bachelet (2006-2010; 2014-2018).
- The case involved the creation of a trail of fictitious invoices that allowed companies both to channel funds to political parties and at the same time to evade taxes fraudulently.
- A further source of outrage for anti-corruption groups has been Aravena’s decision to exclude from the proceedings the state defence council (CDE) (a public agency that defends, represents, and provides legal advice to the Chilean state over its proprietary and non-proprietary interests), and NGO Ciudadano Inteligente which had filed the bribery accusations. It is accepting Chile’s tax administration (SII) as the only legitimate plaintiff in the case.
- Manuel Guerra, the Santiago prosecutor leading the case against the three, had said in June 2016 that he would not accept an abbreviated trial procedure that would exclude the bribery accusation, stating at the time that as the case affected public probity, it was “effectively non-negotiable”. On 4 July he retracted, saying that it was not possible to prove these accusations. He has received the public backing of attorney general Jorge Abbott.
- Ciudadano Inteligente’s deputy director Colombina Schaeffer has slammed Aravena’s decision to exclude the NGO from the proceedings as illegal and a breach of their right to be plaintiffs.
Looking Ahead: Aravena is due to announce sentences for the three men on 9 July.