MercoPress. South Atlantic News Agency

Looking for the Pinochet link in false accounting plea by British arms giant

Former dictator Pinochet had amassed 26 million USD in off-shore accounts

Chilean authorities investigating bribery and embezzlement charges against former dictator Gen. Augusto Pinochet hope a plea bargain agreement between British arms manufacturer BAE systems and judicial authorities in the U.S. and U.K. will provide them with fresh evidence.

Local press reported that Chilean investigators hope to receive information from colleagues based abroad as they investigate BAE payments made to Pinochet, who ruled Chile from 1973 to 1990 as head of a military dictatorship. Pinochet was also Army Commander-in-Chief from 1990 to 1998 and served as Senator-for-Life.

The reports come after BAE reached separate agreements last Friday with the U.S. Justice Department and Britain’s Serious Fraud Office admitting charges of false accounting. The charges relate to payments made by the company to military officials in various countries then considering BAE contracts.

The firm agreed to pay fines to both authorities totalling over US$800 million rather than face further investigations. BAE expressed “regrets” over the issue and accepted “full responsibility for the shortcomings” in a statement on their website.

Last January, Chile’s State Defence Council announced an investigation into payments made by BAE to Pinochet while the former dictator led Chile’s military in the 1990s.
A 2004 report by London based newspaper The Guardian suggested that Pinochet received a US$2.5 million payoff from BAE subsidiary Royal Ordinance in 1997. The payment was part of an attempt to lobby Pinochet into the purchase of BAE missile systems.

This payment is one of several similar deals by which Pinochet is alleged to have amassed a private fortune at the expense of the Chilean state. A 2005 Chilean Supreme Court investigation found that Pinochet held around US$26 million in private off shore accounts, much of it held with the Miami-based Riggs Bank.

At the time of his death in 2006, the former dictator faced charges of embezzling public funds and fraud. Members of the dictator’s family have subsequently investigated on related charges.

One of Pinochet’s former military aides was arrested last year over corruption allegations. While investigations continue, judges also issued a court summons for Oscar Aitken, Pinochet’s former legal representative, in connection with the charges.
Aitken is currently subject to a Spanish court order demanding that he and several other Pinochet associates pay compensation to charities representing victims of the military regime.

The Pinochet family has always denied corruption accusations made against the late dictator, insisting that their private wealth was accumulated thanks to financial prudence and wise investments.

BAE systems are one of the world’s leading arms manufacturers. In 2008 the firm reported sales exceeding 34.4 billion US dollars. The firm’s most recent dealings with the Chilean government came in 2005 when BAE was commissioned to refit and deliver three former royal navy frigates to Chile in a deal worth over 200 million USD.

By James Fowler (Santiago Times)