US and others gave millions to Pinochet

Timothy L. O’Brien and Larry Rohter
New York Times
December 7, 2004

Gen. Augusto Pinochet, the former Chilean dictator, received multimillion-dollar payments from the governments of several countries, including the United States, during his 25-year tenure as Chile’s ruler and military chief, according to documents recently uncovered during a Senate committee investigation into suspected money laundering at Riggs Bank.

The documents, including General Pinochet’s sworn financial statements, show that he received $3 million from the United States government in 1976 and, in other years, $1.5 million from Paraguay, $1 million from Spain, $2.5 million from China, a combined payment of $2.5 million from Britain and China, and a combined payment of $3 million from Britain, Malaysia and Brazil. From 1974 to 1997, the payments totaled at least $12.3 million.

The documents, originally given to Riggs by the Chilean defense ministry, were verified by a senior Riggs executive assessing the sources of the general’s wealth. The payments from foreign governments were described as “commissions from service and travel abroad.”

General Pinochet, who is 89, assumed control in Chile after overthrowing the elected government of Salvador Allende in 1973. He instituted a police state, oversaw the kidnapping and killing of some 4,000 political dissidents, laid the foundation of a stable economy and kept a tight grip on power until 1990. Until 1998, he remained commander in chief of the military. Now he faces potential charges of human rights abuses in Chile as well as legislative and tax service investigations there of his financial dealings.

In 1976, the year General Pinochet received his payment from the United States, there were two pivotal events for Chile. The intelligence services of Chile and other South American countries agreed on a wide-ranging campaign to kill exiled political opponents. Shortly after that, a former Chilean foreign minister, Orlando Letelier, and his American assistant were blown up in their car on a busy street in Washington, an event that led to a reassessment of the United States’ relationship with the Pinochet government.

Riggs Bank, a subsidiary of the Riggs National Corporation, based in Washington, has been embroiled in federal investigations of possible money laundering and terrorist financing since late in 2002. At that time, investigators began to examine Saudi Arabian Embassy accounts at the bank for possible links to the terrorist attacks of Sept. 11, 2001, a connection that American authorities have since discounted.

Even so, improprieties were uncovered in the overall handling of Saudi accounts at Riggs, as well as in the management of General Pinochet’s accounts. The sources of about $700 million in cash and investment accounts at Riggs controlled by the West African nation of Equatorial Guinea or by some of its leaders have also come under scrutiny, at a time American companies are courting Equatorial Guinea, a growing producer of oil.

In May, federal regulators fined Riggs for failing to comply with bank secrecy laws, and a criminal investigation of the bank and its executives for possible money laundering is under way at the Justice Department. No Riggs officials have been charged with wrongdoing, although a former Riggs executive is the subject of a grand jury investigation into bank fraud.

The Saudis have repeatedly denied any wrongdoing, and the government of Equatorial Guinea has declined to comment. A lawyer for General Pinochet, and for his nonprofit foundation in Chile, declined to comment Monday about the sources of the general’s wealth or dealings with Riggs.

Senate investigators published a lengthy report in July that detailed multimillion-dollar accounts that General Pinochet and his wife, Lucia, held at Riggs. The accounts, valued at $4 million to $8 million, were disguised and moved around the world for years with the cooperation of Riggs officials. The Senate investigations subcommittee released the general’s financial statements about three weeks ago.

An independent Chilean journalist, Patricia Verdugo, first discussed the new documents in public last Friday at a news conference in Santiago, the Chilean capital.

Riggs’s own profile of General Pinochet indicates that he was a customer of the bank since 1985 and that the bank used his will, contracts, financial statements and sales receipts to verify his wealth.

Although General Pinochet never earned more than a modest government salary, Riggs described the source of his prosperity as “family wealth” and a “high-paying position in public sector for many years.”

Chilean government investigators have repeatedly dismissed family wealth or government service as the real sources of General Pinochet’s money in the Riggs accounts. But they have yet to reach a definitive conclusion about the source of the funds.

Among the assets the general disclosed in his financial statements were “100,000 volumes of books,” “savings in various financial institutions,” royalties from books and real estate investments.

Editors’ Note: December 10, 2004:

An article in Business Day on Tuesday about a financial investigation into Gen. Augusto Pinochet, the former Chilean dictator, reported that he received multimillion-dollar payments from foreign governments, including that of the United States. The information was based on recently released United States Senate documents detailing General Pinochet’s finances, as well as on interviews with others involved in the investigation. While the Senate documents indicate that General Pinochet received payments in connection with official business he conducted in foreign countries, they do not identify the source of the payments in some cases. The article should have allowed for the possibility that some payments may have come from nongovernmental sources.

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