Tax charges dog Pinochet

Antonio de la Jara
The Globe and Mail
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, as it was for legendary U.S. gangster Al Capone.

The once untouchable General Pinochet – 89, ill and rarely seen in public – is being dogged by charges that he and members of his family hid as much as $27-million (U.S.) from tax authorities, using false names and passports to open as many as 130 offshore bank accounts.

The case gained momentum this week when the Chilean supreme court threw out a defence motion and upheld indictments of complicity in tax evasion against Gen. Pinochet’s wife, Lucia Hiriart, and youngest son, Marco Antonio Pinochet, who is in jail.

“This is his Achilles heel, the big headache for Pinochet and his defence 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,” political analyst Ricardo Israel said.

Judge Sergio Munoz, who is probing the bank accounts, wants to indict Gen. Pinochet, but must wait to see whether the supreme court removes his immunity from prosecution, a privilege of former presidents.

Gen. Pinochet lost his immunity in other probes, but the court must decide the issue on a case by case basis.

Mr. Israel believes the supreme court will let Judge Munoz indict Gen. Pinochet, in contrast to previous high court rulings to throw out human-rights charges on the grounds that Gen. 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,” said socialist Congresswoman Isabel Allende, daughter of former president Salvador Allende.

Gen. Pinochet took power in a 1973 military coup that toppled Mr. Allende. He has been accused of being responsible in the deaths of as many as 3,000 Chileans during his regime between 1973 and 1990, and in tens of thousands of torture cases.

Earlier this year, Gen. Pinochet paid about 1.2 billion pesos ($2.64-million) in back taxes owed on the money in the accounts. His defence team says the money comes from legitimate sources.

In a rare public statement after his wife and son were arrested, Gen. Pinochet said he took “all responsibility for the facts being investigated” by Judge Munoz, and said that 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 Judge 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. He called on Gen. Pinochet to better explain the accounts.

Because of the amount of money involved and fake companies discovered in the probe, the head of the Government Defence 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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