One of the biggest corruption scandals in Chile — Caso Penta — is still unfolding as prosecutors doggedly follow the money.
The case started in 2012 as a tax fraud investigation against a former official of Chilean Internal Revenue Service, Ivan Alvarez. It now involves charges of bribery, money laundering, and tax evasion against a former deputy Secretary of Mining, as well as the founding partners of the Penta Group (one of the leading financial holding companies in the country), and local politicians.
Between 2007 and 2010, more than 120 taxpayers allegedly used the services of the former tax official Alvarez to obtain fraudulent tax refunds of $30 million. Names connected with this part of the scandal include the Penta Group and its management and owners (Carlos Delano, Carlos Lavin, Hugo Bravo, and dozens of other executives).
In 2014, investigators found that the Penta Group had donated money to political campaigns of members of the Independent Democratic Union (IDU) party and to two presidential candidates’ campaigns. Among the beneficiaries were many well known members of the IDU, including Pablo Zalaquett, a former mayor of Santiago.
A year later, the IDU apologized for “any actions of its members relating to the financing of their election campaigns.”
At the same time, Paul Wagner, an ex-deputy Secretary of Mining, was charged with money laundering, tax evasion and bribery, and he resigned from IDU.
Wagner was accused of receiving payments from Carlos Delano and Carlos Lavin of the Penta Group while he worked for the government.
Delano, Lavin, and Wagner are currently under house arrest and waiting for trial.
The ongoing investigations and arrests are slowly but surely revealing a tangled web of alleged graft among some of Chile’s leading business people and politicians.
Elena Lazareva is a former lawyer for Transparency International-Russia and alumna of the University of California School of Law. Prior to starting her legal career, Elena worked as a business journalist in Russia and received her degree in journalism from the Lomonosov Moscow State University.