Gambling scandal puts top secret Chilean fund in jeopardy

Chile manages a confidential fund for weapons, and one of its top operatives might have blown its cover by gambling it away.

A still unidentified administrator of a top secret weapons fund for Chile’s military might have exposed the entire operation by pocketing $3.5 million in government savings and spending them on a lavish lifestyle.

Gambling, horse racing and foreign travel are quoted among the expenses that were financed with public resources.
Journalist Mauricio Weibel, who investigated and uncovered the operation is sure this case is the first in a series of many corruption scandals inside the Chilean government, and specifically its military administrators. “Every day we see information of larger cases and our feeling is that this is only the beginning of a long investigation about corruption and fraud within the armed forces,” Weibel said.

The fund has its origins in Augusto Pinochet’s dictatorship, who was responsible for issuing a law that guaranteed the military would receive 10% of the total sales made by state owned copper mining company Codelco.

The amount contained by the fund is still unknown, however, with copper prices sky-rocketing during much of the past decade, it is most likely a hefty amount.

Speculation around the topic has suggested that it was through this fund that Chile was able to update its military, navy and air force in the last few years, despite a fluctuating economy.

Estimates lead Chilean lawmaker Jaime Pilowski to thinking that even after all these purchases, there might still be somewhere around $6.6 billion deposited there, almost 3% of the country’s GDP. It is an abomination that in times of democracy this law operates under such secrecy,” said Pilowski in a written statement.

Following the reveal, prosecutors are now looking to cast a wider net into the military, and expect former commander-in-chief Juan Miguel Fuente-Alba to fall in a $400,000 corruption scandal.

Defense Minister Antonio Gomez reacted to the news and admitted that military spending cannot be handled the way it was before. “This is the moment to make changes," he said, “To get out of this situation, we can’t take shortcuts or deny reality. The first step is to recognize the mistakes and the negligence that led to this situation.”

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