MercoPress. South Atlantic News Agency

Political financing scandal KO for another Chilean minister

Insunza left the ministry after only four weeks in the post admitting he had received payments from mining company Antofagasta Minerals while lawmaker

The political financing scandal cost the job of another Chilean minister on Sunday when Jorge Insunza, recently named as responsible for relations with the Congress was forced to resign.

 Insunza left the ministry after only four weeks in the post admitting he had received payments from mining company Antofagasta Minerals while he was a lawmaker in the Lower House of Congress. However he denied breaking the law. He will be replaced on a temporary basis by under-secretary Patricia Silva.

“I deeply regret having created a problem for the president,” Insunza said in a statement announcing his resignation. “I profoundly believe in the principle of political responsibility.”

His departure comes one month after President Michelle Bachelet removed the Interior Minister Rodrigo Penailillo, who had also received payments from companies for advisory work.

Prosecutors have asked for two lawmakers from the opposition Union of Democratic Independents to be charged later this month after they allegedly received funds from Banco Penta.

Sluggish economic growth and the financing scandals have pushed Bachelet’s approval rating to a record low of 29%.

In effect the pace of Chile's annual economic growth in April again came in below expectations, prompting the government to say it has “a lot of work to do” to drag the economy back from the five-year low it hit in 2014.

Economic activity rose 1.7% in April from the same month a year ago, far from forecasts of 2.2% as greater added value in services was offset by a drop in wholesale activities, the central bank said on Friday.

The IMACEC economic activity index encompasses about 90% of the economy tallied in GDP figures. On a monthly seasonally adjusted basis, the data was more downbeat with the IMACED showing zero growth in April from March.

“We're growing at a pace that is below what we expected”, admitted Finance minister Rodrigo Valdes.

Chile's economy expanded 1.9% in 2014, its slowest since a 2009 recession, as consumer spending and investment cooled. Economic growth picked up its pace in the first quarter of 2015, expanding 2.4% versus a year earlier.