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The anonymous millions of dollars spent in Chilean campaign donations

Friday, November 15th 2013 - 16:27 UTC
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How much will Sunday's presidential campaign have cost? How much will Sunday's presidential campaign have cost?

It will come as no surprise to Chileans that some of the country’s biggest companies — and richest families — have donated millions of dollars to presidential and parliamentary campaigns this election season. However, until an investigative report was published last week, people were only able to speculate on the matter, as a law passed in 2003 allows donors and donations to remain completely anonymous.

 The Center for Journalistic Investigation (CIPER) revealed the extravagantly wealthy Matte, Luksic, Del Rio, Cuneo-Solari, Angelini and Yarur families are among those who have forked out hefty donations to candidates of their choice, while energy giants Endesa Chile, Enersis and Colbún have splashed the pot with a combined 3.9 million dollars.

Both Endesa Chile and parent company Enersis’ donated 1 million and 2.5 million respectively, while the campaigns to which the companies donated was not disclosed. According to campaign financing regulations, one company cannot exceed a donation of 135.000 dollars to a particular party, though a conglomerate can divide larger donations up among its subsidiaries.

“Our electoral financing law lacks several things,” Daniela Tejada of Ciudadano Inteligente, an organization promoting transparency, told The Santiago Times. “The current spending limits are excessive, the public has no way of knowing who is financing the campaigns and the candidates aren’t supposed to know either — although this is something that we don’t know is definitely true. This can cause conflicts of interests when they are elected.”

The CIPER report shows that Chilean energy company Colbún donated a total of 412,800 dollars to undisclosed campaigns via its subsidiaries Colbún Transmisión S.A. and Río Tranquilo S.A. The energy company — majority owned by the powerful Matte family — is partnered with Endesa in the highly controversial multi-billion dollar Hidro-Aysén mega-dam project that has had a torrid time reaching approval from courts and environmental regulators and is a taboo topic among candidates this election.

The report revealed that retail giant Falabella and home improvement store chain Sodimac — both owned by multinational S.A.C.I Falabella of which the Cúneo-Solari and the Del Río families are shareholders — donated a combined 529,900 dollars to campaigns. CIPER — who accessed all information via notarized board meeting minutes — showed the Yarur family-owned finance company BCI Factoring donated 65,000 dollars during the primary elections, and in a September meeting Diego Yarur Arrasate was given a check to “assign the sum equivalent up to the maximum that the law allows” to the election campaigns. The Luksic and Angelini families made undisclosed donations through their companies Quinenco and Corpesca S.A. respectively.

The Chilean 2003 electoral campaign financing law stipulates that donations can be made in three ways.

Public donations of up to 3,000UF (or 135,000 dollars, where UF is an exchange rate against the Chilean peso that adjusts daily according to inflation and is valued at 1UF to 45 dollars at time of print) can be made to any party and the donor’s identity is available to the general public. Anonymous donations of up to 20UF (900) can be made, though the donor’s identity is restricted to the electoral administrator and the campaign fund collector. Reserved donations — a method chosen by the majority of those investigated by CIPER — cannot exceed 3,000UF (135,000) to one party and the identity of the donor is only known to the electoral administrator. All reserved donations made to a party over one week are pooled and handed to campaign fundraisers in a lump sum.

In March 2013 of this year, Senators José Antonio Gómez of the Radical Social Democrat Party (PRSD), Alejandro Navarro of the Broad Social Movement (MAS) and Pedro Muñoz of the Socialist Party (PS) campaigned unsuccessfully in Congress to eliminate reserved and anonymous donations from the donations system and reduce the donation limit.

“Who does it help more, the candidates or the businesses? I think the answer is the businesses,” Tejada said to Congress. “If a company does not count as a citizen and cannot vote, then why can it promote a candidacy? The answer is surely because it sees an economic incentive for the business. Their intention, from the beginning, is to influence political power.”

Ciudadano Inteligente has set up the website “Quien te financia” inviting presidential candidates to reveal some of the sources of their electoral finances.

Presidential favorite Michelle Bachelet declined to respond, as did the Alianza coalition’s Evelyn Matthei, independent Tomás Jocelyn-Holt, the Equality Party’s (PI) Roxana Miranda and Green Party (PEV) Alfredo Sfeir.

Of the four candidates who did respond, independent Franco Parisi revealed he made a cool 50,000 dollars from the sale of his Porsche — to which he added to a 940,000 bank credit from Banco Estado. Parisi made clear that reserved donations have not and will not figure in his campaign finances. Progressive Party (PRO) candidate Marco Enriquez-Ominami made just over a third of his 1.2 million dollars in campaign financing through reserved donations and the rest in bank loans and personal contributions. Humanist Party (PH) candidate Marcel Claude says he made 11,500 through his “Una Luca por Chile (A Thousand Pesos for Chile)” fundraising campaign, 26,000 in donations and raised 211,000 through bank loans. Claude also stressed that his campaign was not financed by any economic groups.

Candidate Ricardo Israel makes the point that his campaign — and that of the entire Regionalist Party of the Independents (PRI) parliamentary campaign — was solely reached achieved through the Electoral Service (Servel) and loans from Banco Estado.

“We think it is immoral that candidates [waste the amount they do],” Israel said on the site. “Our proposal is that approximately 385,000 be used for a campaign’s entirety, including presidential, parliamentary and regional council campaigns. We think campaign spending should be limited and completely transparent.”

Israel’s suggestion is significantly less than that spent by winning candidates from the major coalitions. President Sebastián Piñera’s 2009 election campaign cost almost 13 million dollars, while former president Bachelet’s 2005 campaign cost around 7.4 million.

By Benjamin Druttman and Angus McNeice – The Santiago Times

Categories: Politics, Latin America.

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