MercoPress. South Atlantic News Agency

Bachelet under fire because of her son's privileged access to funding for real estate speculation

Bachelet’s government confirmed details of the loan, saying it was legal, and the president’s son, Santiago Davalos, released a declaration of financial interests

Chilean President Michelle Bachelet is coming under fire with complaints her family got privileged access to a bank loan for a land deal. Chile’s Que Pasa magazine reported that a company half-owned by Bachelet’s daughter-in-law, Natalia Compagnon, received a 10 million dollars loan from Banco de Chile during the 2013 presidential campaign.

 The Caval company had faced delays in getting a loan from other banks. But Banco de Chile agreed after Bachelet’s son and his wife met with its vice president, Andronico Luksic, one of Chile’s richest men.

The money went to buy land for about 10 million, and months later it’s being sold for about 15 million.

Bachelet’s government confirmed the details of the loan this week, saying it was legal, and the president’s son, Santiago Davalos, released a declaration of financial interests on Wednesday. But opposition congressman Nicolas Monckeberg said it wasn’t enough, and called for Davalos to resign as head of a charitable foundation.

The controversy could hurt Bachelet’s image since she campaigned to fight against inequalities.

“The way in which her daughter-in-law’s company got the credit is all about unequal access. So what Bachelet says is opposite to what her family does,” said Patricio Navia, a Chilean political scientist at New York University.

Corruption levels in Chile are among the lowest in South America, according to Transparency International. But trust in politicians has been eroded by a money laundering probe of a company, Penta Group, accused of illegally financing a right-wing party.

“If you think about this particular case, it’s only $10 million. There are suspicions that the president’s family had access to privileged information and they made a couple of million dollars. So compared to other countries, this is peanuts,” Navia said. “But in a country where corruption is not widespread, these types of scandals really have an effect.”

Bachelet, who is on vacation, has yet to comment. But some members of her center-left administration have acknowledged that her family got privileged access, while insisting the loan was legitimate.

There’s no doubt that not everyone has access to the president or vice president of the bank,” acting Finance Minister Alejandro Micco told local radio ADN.