HOW DID GENERAL PINOCHET GET SO RICH?James S. Henry

Most assessments of General Pinochet, pro and con, acknowledge his responsibility for thousands of grevious human rights violations. But there is growing evidence that his criminality did not stop there -- as it rarely does when governments are vested with unfettered authority, whether in the name of “national security,” religious truth, or just raw personal power.

As noted in our lead article on the General’s legacy, only in the last three years have historians come appreciate just how far-reaching and systematic was  his regime's involvement in criminal activity -- partly just because its political opponents had been systematically eliminated, so that there were few limits on Pinochet's power. 

As we’ll see, Pinochet was no exception to the “absolute power corrupts” cliché.

Indeed, there is strong evidence that leading members of his regime were deeply involved in a wide range of crimes for profit, including diversions of public funds, tax evasion, money laundering, bribery, illegal arms exports, falsification of identity documents, drug trafficking, money laundering, and murder-for-profit.

There is also strong evidence that “mi General” and his family profited handsomely from such crimes.

From this angle, Pinochet’s death in early December probably saved him and his family from convictions,  stiff penalties and fines in the six criminal prosecutions and more than 300 civil suits still pending against him – for charges ranging from the misuse of public funds and tax evasion to torture and murder. 

But at least there was a modicum of justice. The General’s extensive crimes apparently contributed to Chile's decision to deny him  an official state funeral.  And -- the ultimate insult -- the Chilean Army also returned his ashes, refusing to bury them at the huge Lenin-like tomb that he’d built for himself at the Escuela Militar.

SOURCING THE MONEY

This evidence provides the key to the puzzle posed by all the recent revelations (especially since the US Senate Permanent Investigations Committee's July 2004 report on Riggs Bank) regarding the large personal fortune that Pinochet and his family accumulated during his 17-year reign – now estimated at at least $31 million in US and Swiss bank accounts and total family wealth of at least $100 million -- plus as much as $211 million more if the October 2006 allegations about 9.62 tons of Pinochet gold at HSBC hold up in the on-going investigation.

BEST BUDDIES

The evidence about Pinochet’s arms deals also helps us to understand another one of his many interesting attributes – why the Baroness Margaret Thatcher, in particular, was so “deeply saddened” by his death.

It turns out that Pinochet was no stranger to arms deals involving British companies like British Aerospace, Rolls Royce, and Royal Ordnance  -- companies that Mark Thatcher, the Baroness' only son, had also worked for as a highly-paid  "intermediario" on huge, lucrative arms deals (for example,  the $40 billion 1985 "Al Yamamah" aircraft deal, which involved hundreds of millions in payoffs. ) Indeed, when Pinochet was detained in London in October 1998, the reason he'd gone there in the first place was not his "health," but to facilitate another arms deal.
 
SCHIZOPHRENIA

Curiously, while even the General’s most ardent admirers acknowledge his many human rights violations, they have been much more reluctant to admit there were other criminal activities.

This is partly because Pinochet carefully cultivated the image of being -- in contrast to all other modern dictators, especially those from Latin America -- an austere Prussian type who eschewed personal wealth and served his country out of sheer dedication to Deus, patria, y honor. We recall all the appeals for help with his medical and legal bills when the General was interned in London in the late 1990s –  appeals that some of his more middle-class followers responded to by dipping into precious life savings and selling off the family jewels.

This schizophrenia about Pinochet’s crimes also derives from the sharp distinction that many of his followers draw between selfless and venal crimes.  In their view -- and, at least initially, that of Chile’s Catholic Church -- even his worst crimes against humanity may have been justified in the name of la causa superior – saving Chile from “godless communism.” 

On the other hand, crimes that smack of personal enrichment, the exploitation of arbitrary power, or insider influence are supposedly taboo.

In practice, of course, these boundaries tend to blur, especially with a regime that held absolute power for nearly two decades – and retained many “protectors” long after that.   

TEMPTATIONS

With economic policy at the regime's disposal; with all judges, police, prosecutors, border agents, imports and exports, multiple arms factories, chemical laboratories, and, indeed, the national copper company (Codelco, Chile’s largest exporter) under its control; with tens of thousands of the “enemies of the state” forced to forfeit their property and flee the country; and with the lives and welfare of thousands of prisoners and their families quite literally up for sale,  the criminal temptations could easily prove overwhelming.

DOMESTIC CORRUPTION

There were several variations on this theme, including kickbacks from rigged privatization deals, bribes, the diversion of public funds, tax evasion, and money laundering.

•     Corrupt Privatization Deals. In 1973-74, and against in the 1980s, the Pinochet regime’s aggressive privatization program also provided lucrative opportunities to extract corruption rents from privileged partners. More than  250 nationalized companies were re¬turned to  their former owners,  and 200 more were sold off at bargain prices.

The big buyers at this fire sale were a handful of closely-held   grupos  like  Javier Vial and Cruzat-Larrain, which owned most of the local banks,  and also had very strong ties to foreign  banks.   

For example,  Javier Vial Castillo, head of the powerful business conglomerate B.H.C., was a strong supporter of Pinochet’s dictatorship and a close friend of  the General, (whose full family name was Augusto Pinochet Ugarte Vial.)

In March 1975 Vial  had paid the soon-to-be Nobel laureate Economics Professor Milton Friedman $30,000 for a five-day lecture trip to Chile, during which he delivered the legendary brutilitarian advice: “If you are going to cut the tail off a dog, you don’t do it an inch at a time.”  

Over the next three years,  Vial exploited his close relationshp with the Pinochet regime to acquire a huge business empire, including Banco de Chile, the country’s largest private bank. Vial used the bank as a kind of private front to borrow heavily from foreign banks like Bankers Trust and Chase,  and then relent the money to acquire and finance more than 60 of his own companies,  including several like Banco Andino that were based in offshore centers like Panama. In three short years, by 1978, Vial had somehow become Chile’s richest man.

The shenanigans behind this fortune became public after Vial’s empire cracked in January 1983, when Pinochet’s monetarist fixed-exchange rate hit the wall.  Chile entered a deep recession,  unemployment  hit thirty  percent,  and the six top private banks and the two largest private “grupos,” Vial  and Cruzat-Larrain,  both folded. In 1997, after a 14-year investigation, Vial was finally sentenced to 4.5 years in jail for bank fraud, and Pinochet’s former Economy and Treasury Minister  Rolf Lüders, who’d also happened to have acquired 10 percent of BHC, was sentenced to four years.  (Vial ultimately served just nine months of his sentence.)

In 2005,  Chile's Supreme Court absolved Vial and other Banco de Chile of responsibility for the fiasco on technical grounds, but Chile had still got stuck with more than $500 million of Vial’s unpaid debts.

This was not reallly surprising to Vial’s foreign bankers -- as Ron Clave, a former Bankers Trust private banker who had personally handled Vial’s accounts in Panama told me, “We knew he was lending to himself, but  no one wanted to pull the plug.”

•    Looting the Treasury. in July 2006, General Manuel Contreraras Sepulveda, the former head of the DINA (Chile’s CIA) who is now in prison for the disappearance of the regime’s political opponents, was interviewed by a judge investigating the 1992 assassination of Colonel Gerardo Huber Olivares, an Army officer  and former DINA chief in the Santiago area. According to Contreras’ deposition, as well as to another Chilean investigation of the Riggs Bank case, another Pinochet routes to personal wealth was the diversion of funds from secret Army reserve accounts that had been established in the US and Canada. 

•    Land Deals. There have been numerous investigations of corruption-ridden land deals involving the Pinochet family. For example, in the El Melocoton case, Jorge Lavandero, a courageous Chilean journalist, documented the fact that "mi General" had acquired a 29-acre estate in San Jose de Maipo, 50 miles from Santiago, and then enhanced the area with more than $2 million of roads and other infrastructure. For his efforts, Lavandero was reported attacked by gang and beaten within an inch of his life.

  – fraud in acquisition of properties – investigated at end of 1980s…..

ARMS TRAFFICKING

The global arms trade also provided strong temptations. Despite their ideological similarities, the military regimes of Chile. Argentina, and Brazil became locked in an arms race in the 1970s. They all decided to develop their own arms industries, partly to avoid being hostage to fickle suppliers like the US, which adopted an embargo against arms exports to human rights violators in 1976, at the peak of post-Watergate outrage over the Nixon Adminstration,  and partly just to cash in on the booming global arms market. 

The result was that by the early 1980s, Chile had become one of the world’s  top Third World arms exporter – often in violation of US law and UN embargos. 

•    Cardoen. With sub rosa US government support in the 1980s, , Chilean arms dealers like Carlos Cardoen Cornejo made fortunes exporting cluster bombs, modified US-made helicopters, night vision goggles and other light weapons to fellow Third World dictatorships like Iraq’s Saddam Hussein, Libya’s Qaddafi, Saudi Arabia’ monarchy, South Africa’s apartheid regime, and even Fidel’s Cuba –  at least in the case of Saddam, with the apparent knowledge and approval of US officials like CIA Director William Casey and Deputy CIA Director (now US Secretary of Defense) Robert Gates, as well as of General Pinochet and other leading members of the Chilean military. 

•    Commission Deals. General Pinochet and his family members also reportedly became personally involved in mediating domestic and foreign arms sales – reportedly working closely with leading arms suppliers like British Aerospace and Royal Ordnance, the Swiss firms SIG, Mowag, and Oerlikon, the French firms Creusot Loire, Thomson Brandt, and GIAT, and the Belgian firm Cockerill Mechanical.

•    Croatia. These deals did not cease when Pinochet left office in 1990. In December 1991, for example, several tons of Chilean arms were located in a warehouse in Budapest, destined for Croatia – in direct violation of a UN embargo. According to the deposition by Contreras, Colonel Gerardo Huber had been murdered on Pinochet’s orders because of his knowledge of the regime’s involvement in cocaine dealing and arms sales. According to Contreras,  when the Croatian arms exports surfaced, Colonel Huber had been forced to resign has head of Foreign Acquisitions in the Army’s Logistics Center. Within a few days, he had been questioned by Hernan Correa de la Cerda, a minister in the democratic government that succeeded Pinochet, and had suggested that General Florencio Tejos, Chief of War Materials, would know all about this arms deal.  As discussed below, Huber also reportedly started talking to Correa de la Cerda about the regime’s involvement in drug trafficking. At the time, of course, General Pinochet was no longer President, but was still head of the Army.

•   Commissions on Own Purchases. In 1998 Pinochet reported received a $4.3 million commission in connection with a $443 million frigate sale by British Aerospace and Royal Ordinance to the Chilean Navy.

> Drugs.

Latin America’s cocaine exports boomed in the late 1970s. While the leading exporters were Colombia, Peru, and Bolivia, the evidence suggests that Chilean gangs also became involved – and that the military assisted with transport, logistics, and even chemistry.

For example, General Contreras has also alleged alleged that that much of Pinochet’s fortune had been derived from drug deals arranged by his son, Marco Antonio Pinochet Liniart (MAPL), in partnership with a former DINA chemist, Eugenio Berrios, and a Chilean of Syrian extraction, Yamal Edgardo Bathich Villarroel.  Bathich and MAPL were both shareholders in a car importer, Chile Focus Motores S.A., that reportedly also dealings with a Colombian drug trafficker, Jesus Ochoa Galvis, of the Ochoa Vasquez/ Medellin cartel. According to Contreras, Huber had been in charge of the Army’s Chemical Complex in Talagrante in the mid-1980s, where Berrios had helped to develop “cocaina negra,” a form of coke in which iron sulfate and other minerals were added so that drug dogs couldn’t detect it.  (In July 2005, Mexican authorities reportedly seized six tons of “cocaina negra” on a Peruvian ship, the “Colibri,” that arrived in Manzanillo, after it avoided detection in five other countries.”) According to Contreras, the cocaine produced by this process was shipped to the US and Europe, where it was distributed by a gang run by Monzer Al Kassar,  Bathich’s uncle and business partner, a Syrian arms dealer who was convicted of drug trafficking in London.

> Murder for Profit

The Pinochet regime did not limit its victims to political opponents – it also frequently turned on former agents and business partners, when it perceived them to pose a threat. Tattling, for sure, was not a life-extending activity.

•    Just nine days after his last conversation with the Minister in January 1992, Colonel Gerardo Huber’s body was found with a single gun shot in the head. According to Contreras, he’d been murdered by members of a unit within Army Intelligence, reporting to one Coronel Manuel Provis Carrasco.  At this point at least five former Army Intelligence (DINE) officers, including Eugenio Covarrubias, its former head, are being prosecuted in Chile.

•    Eugenio Barrios, the DINA’s former chemist, was reportedly assassinated by members of Army Intelligence (DINE) in Uruguay in 1993. Several former DINE officers, including two generals, Hernan Ramirez Rurange and Eugenio Covarrubias (the former head of DINE),  as well as several former Chilean and Uruguayan diplomats, are being prosecuted for his disappearance.

Comments

[william]

Scoop: Here's how The SISMI was to kidnap Carlos Remigio Cardoen.

News is source from the portal of Indymedia to the link:

http://piemonte.indymedia.org/article/6564

Other sensational revelations come to light correspondence from the super-confidential as on the SISMI's agent Altana Pietro was arrested in 2004 by the magistrate Anna Canepa.

In Italy the Nicolò Pollari SISMI's (Italian Military Secret Service) was to kidnap the largest international arms dealer: Carlos Remigio Cardoen Cornejo. Once abducted (pardon 'arrested' … after Abu Omar is not elegant to use some jargon) the arms dealer more dangerous in the world he would have been used as barter with the U.S.A.

Carlos Remigio Cardoen Cornejo is one of “most wanted fuggitive” and international research by the American CIA and FBI for selling disgusting weapons to countries around the world (the weapons are all crap but deadly “cluster bomb”better known as cluster bombs are even more). But the thing that was most angry George Bush Jr was that Cardoen is the trusted provider of Baghdad's rais Saddam Hussein.

We come to our country. What is the role of Italy?

In 2002 the Chilean arms dealer would have to come to Italy. A very secret meeting to be held near Portofino: for precision in the village of San Michele di Pagana, lovely lakeside town close to Paraggi in the beautiful setting of the Gulf of Tigullio. In this enchanting place stands the luxurious summer residence of a prominent lawyer business law firm in Genoa. In Genoa's Court file name of the mysterious lawyer was properly shielded with an "omitted" (so we are able to reveal the name).

The military secret service agent (SISMI) Altana Pietro comes to know of the secret meeting.

Altana Pietro is (as we have seen in the previous installments on Indymedia) is one of the men under Nicolò Pollari General (former Director of Military Intelligence). He is employed as an infiltrator in Genoa in social centers, for spying the Iranians of Irasco (which is currently under a rogatory USA) and to investigate many companies of high finance and important lawyers business (this explains the interest of military intelligence for a certain type of "business lawyer").

As mentioned, near Portofino was to be this summit between: Carlos Remigio Cardoen, his man of confidence in Italy Augusto Giangrandi - person known to the CIA is already arrested and deported from the U.S. for arms trafficking - mysterious lawyer business, and an Italian industrial Mr. Ing. Sergio Pucciarini.

Who is Sergio Pucciarini? It 'a former official of “Decima MAS” (the famous raiders of the special unit of the Royal Italian Navy then merged in Comsubin). The Ing. Pucciarini is CEO and owner of COSMOS Spa of Livorno. Tuscany industry specializing in Submarines manufacturing. For the precision Cosmos has a niche business that interest a lot to Saddam Hussein, and has developed a excellence technologyc know how that allows them to build a prototype of "Minisubmarine" can easily be adapted for use in war. Suitably armed the Minisubmarine can become another deadly weapon (best of “cluster bomb”).

The “Midget submarine MG110LR, SX756/S e SX908/PA” - these are the initials of minisubmarine - becomes the new object of desire of the Rais. Saddam Hussein for some time dreaming of being able to get their hands on these Italians jewels. Would very handy in the war against Iran (in the Persian Gulf Saddam has nothing to tackle the strategic naval forces of the Ayatollah).

Besides Saddam's military advisers familiar with the Cosmos Midget Minisubmarine because they've already seen in action in some drills in Pakistan (Pakistan Navy has also purchased some from Pucciarini). Who better than Cardoen could be used to satisfy the desires of the spicotic Iraqi dictator? Carlos Cardoen, from his office in Santiago, Chile organizes everything.

Together Giangrandi study the Cosmos business and all possible triangulations. In fact export minisubmarines is virtually impossible. The embargo on Iraq is very close (although craps made during the period of "Oil for Food" show the contrary) also transport in pieces is very problematic. Giangrandi has a brilliant idea. Why having to buy every single minisubmarine unit + spare parts + warehouse, and everything else and not directly buy the whole company? It 'a genial idea! On this basis takes off on the deal. In the game there are a lot of money. Many, many money. And almost all in “black”. Black as oil. The dictator does not mind spending. To have the Cosmos company makes available to Cardoen digits to six zeros (in $). The Iraqi crude-oil traded circumventing the UN sanctions with the S.O.M.O. (oil company of Saddam who used the ploy of the great "Oil for Food" to bypass the U.S. Embargo) produces stratospheric profits. At that time many weds businessman become millionaires overnight. Barter Agreements are concluded underhand own with all (remains haunted by Saddam's business also son of UN Secretary Kofy Annan). The off-shore accounts of Saddam overflow of cash that they literally did not see a chance to be spent. The Ing. Pucciarini instead has the water to the throat and has a tremendous need of money. For a (beautiful) handful of billions combines the deal and the Cosmos changing hands. Something less than $ 100 million at the time.

So Cosmos becomes the property of the Tecnologie Marine Italiana and Italtech (a company owned by Giangrandi with silent partner Cardoen) with Augusto Giangrandi as Sole Administrator (to appear Cardoen buyer Cosmos would be in bad taste).

But in the closing of the transaction - during the act of merger of Cosmos in the Tecnologie Marine Italiana - Giangrandi wants overdo, and does come out even companies linked directly to Carlos Cardoen as Cardoen International CIMSA (Rue des Alps, 7 Ginevra - Svizzera), Industrias Cardoen LTDA (Los Conquistadores, 1700, Piso 28 - Santiago del Cile) Inkel Company NV, Swisstech and Swissco (all occurring as guarantor).

Cosmos is paid a 50% cash and a 50% 'black' to get around the tax and (for obvious reasons) so as not to amounts which - both buyers and seller of Cosmos - do not want to appear. For peace of Pucciarini Cardoen and Giangrandi the sign and an informal "bank guarantee" of $ 34 million (two signatures on white paper headline that anyone could write).

At this point refined intrigue. The "cat and the fox" of the duo Giangrandi / Cardoen have a stroke of genius. Cosmos is already in their hands and have only paid half in cash (plus or minus) of the value of the holding of submarines. Officially, the company has already been paid and there are still a lot of money to be paid the balance. If you do not give anything to Pucciarini the "cat and the fox" you can put in your pocket almost $ 40 million.

And so it happens. Pucciarini no longer receives money from the other "black fund" gets very upset and threatened action heavy. First try with good manners (Cosmos ago notify an injunction). He wants his money. But nothing happens. Then back to the famous l business awyer who organized to purpose an arbitration, summoning to court the "cat and the fox" (There is nothing better than an arbitration to handle uncomfortable stories away from prying eyes). But Cardoen and Pucciarini are far from it. They are in Santiago of Chile to enjoy the Pucciarini's millions of dollars.

Carlos Remigio Cardoen but be very careful never to set foot in Italy. Maybe he smelled a trap. Maybe more who knows. What really happened is not possible to know. Only the 007 agent Altana Pietro, the Court of Genoa (and the Military Intelligence Service) know about this ongoing story. What is certain is that the 007 intelligent team of Nicolò Pollari there was very bad. Were not able to get a another chance to capture Cardoen. By the Court of Genoa the confidential Dossier signed "Peter Altana / SISMI" in the meantime has also mysteriously disappeared (maybe just changed cabinet after Indymedia's raids... but which one? Boh).

Nicolo Pollari and Marco Mancini with a bitter taste in mouth then console themselves with the Imam Abu Omar (meanwhile have the impunity guaranteed by the state).

Carlo Remigio Cardoen instead, although still one of the most wanted men on the planet (his picture is among the first signs of "most wanted fugitive" by the CIA and FBI) is still there in Chile, near the capital, who enjoys life at large. Undisturbed as ever. He and his business (first with Pinochet now with the current government). Cardoen continues to be the merchant of death, and manages several hotels (have some resorts). In his free time does the grower, and produces in its Fazenda near Santiago an excellent wine very valuable and appreciated. Very refined and wanted (over him).

The important sommelier they say it's very similar to the fine Italian wine Chianti in Tuscany. Perhaps it is the only honest know how that is successful in export from Italy.