MercoPress. South Atlantic News Agency

Scandal rocks President Lagos administration

Chilean president faces a scandal threat that could tarnish the last nine months of his six year administration following investigations into several million US dollars government contracts to close relatives and friends.

The contracts involve environment consultancies with the Public Works ministry and financial advising to the all powerful Copper Corporation. The contracted companies belong to Mr. Lagos brother in law Hernan Duran and the current Chilean ambassador in France Hernan Sandoval a close friend of the president.

President Lagos currently in an official visit to several European countries ordered the Minister of Public Works Jaime Estevez to remain in Santiago so he can be present at the Congressional hearing this Tuesday.

Mr. Estevez will have to explain why his ministry ordered the payment to a Gescam company the equivalent of five million US dollars for environmental assessing in several major capital investments undertaken with public funds.

With the December presidential campaign about to officially begin and the ruling coalition candidate leading in the opinion polls, the opposition anticipated it will demand a special investigation committee to look into the matter.

"We'll wait for the Courts to decide", said president Lagos from Sweden regarding the alleged irregularities in the contracts. "If there are suspicions from an ethical point of view or whether there has been inside influence, then who ever is involved must be sanctioned", added the president.

"It's a contract won in an open international bid", Mr. Duran told the press in Santiago.

Actually the case dates back to over two years ago when a Judge began investigating the private advisory jobs held by several officials from the Public Works Department, who had contracted those companies and now employed them.

The former Public Works minister had to spend several weeks in jail and was finally set free but the investigation continues.

The conservative opposition this week also released information linking Gescam with Codelco, the world's leading copper producer, through 16 advisory contracts equivalent to almost a million US dollars.