Update on Chilean Politics

Patricio Navia

August 9, 2004

Just as the municipal election campaign season got underway, revelations on secret bank accounts held by the Pinochet family in a Washington D.C. bank forced Chileans to face once again their troubled past of authoritarian rule. Although the ruling center-left Concertación coalition was initially inclined to transform the dictatorship legacy into a campaign issue, the fact that Chileans are primarily concerned with economic growth, employment, social issues and a growing (if mostly unjustified) fear of street crime will likely disuade the government from such a backward-looking campaign strategy. Because of its embarrasing association with the Pinochet dictatorship, the conservative opposition will go out of its way to stick to its message of crime prevention and growth promotion in order to win, for the first time since the transition to democracy, a democratic election in Chile. Although the race is really 344 different municipal election contests, whomever ends up winning on October 31st will be best position to win the presidential and legislative elections of Decmeber 2005.


The Riggs Bank Accounts and the Pinochet legacy
A recent investigation by the U.S. Senate produced surprising, though not really unexpected, news for most Chileans. Former dictator August Pinochet opened secret bank accounts at the Riggs Bank during the 1990s and accumulated between US$ 4 and 8 million. Because those funds were not reported to Chilean tax authorities and were not previously known by the public, the perception that Pinochet used government funds to increase his personal wealth led many to accuse him of corruption. Although his allies have argued that those funds correspond to private donations collected to help Pinochet after his retirement from the presidency, the fact that they were not reported and that they were secretely held overseas severely weakens that argument. Regardless of the official results of the investigation currently underway, Pinochet’s reputation has been severely damaged. Because Pinochet’s son is also facing an investigation on financial wrongdoings of his own, the family name has now been severely tarnished on corruption allegations.


Yet, the scandal will have a bigger effect on Pinochet’s legacy than on Pinochet himself or on Chilean politics today.  Legally, the investigation can drag on for a long time. At most, the judge in charge of the investigation will charge Pinochet or some of his family members with tax evasion.  Human rights victims will likely try to get some financial reparations directly from Pinochet, but the legal proceedings will last for years.  Although Pinochet will continue to face judicial proceedings on human rights violations and corruption allegations for the rest of his life (he will turn 89 in November), he is unlikely to be placed again under house arrest, like when he was in London between October of 1998 and March of 2000.


Although Pinochet should be credited for the profound economic reforms adopted during his dictatorship that helped make Chile the most successful economy in Latin America in the past 20 years, his legacy of human rights violations and dictatorial rule correctly made him one of the least liked former leaders of the region.  However, up until the secret account revelations, some still argued that Pinochet’s legacy was twofold: good economic reforms and bad human rights record. Now, corruption accusations together with human rights violations allegations constitute Pinochet’s most important legacy.  After these revelations, it will be impossible for his supporters to build him a monument when he dies. Moreover, no politician will be able to make political gains by defending him or even his authoritarian legacy.


The Concertación has used the scandal to blame former Pinochet’s supporters, but conservative parties succesfully distanced themselves from Pinochet during the time he was arrested in London in 1998. If the Concertación falls to the temptation of believing that it can win another election running against Pinochet and his supporters, the Riggs scandal might end up being electorally damaging for the Concertación. Although the Concertación knows that it can no longer win by campaigning against Pinochet, the temptation to go back to its initially successful and unifiying campaign platform might be too hard to resist for many of the oldest Concertación leaders.  Moreover, because the ideological and economic policy outlooks of Socialists and Cristian Democrats are significantly different, the risk of trying to rally their unity behind an anti-Pinochet campaign might be fatally tempting for the leadership of those parties.  At the end of the day, the Pinochet factor should be only an embarrasement for his most ardent supporters, but it should not have any electoral weight in the October municipal contest.



What’s at Stake in the Municipal Elections

When Chileans go to the polls on October 31st, they will elect mayors and city council members in each of the country’s 344 municipalities. Although the contests will be primarily about local issues and local leaders, inevitably there will be conclusions drawn about the electoral strenght of the govenrment coalition and the center right opposition.


If the Concertación clearly wins the election—by getting over 50% of the national vote and winning a handful of the most contested races—the center-left coalition will be best position to win a fourth consecutive presidential election since democracy was restored in 1989. Because his high approval ratings will be undoubtedly considered a contributing factor to a Concertación victory, President Lagos will enjoy a final window of opportunity to advance his legislative agenda and, more importantly, to influence the selection process of the next Concertación presidential candidate.  On the other hand, a Concertación victory will strenghten those who oppose open primaries to select the presidential candidate and will make it more likely that the decision will be made solely by the Concertación party leaders. If that is the case, former president Eduardo Frei stands better chances of winning the coalition nomination. Although he is running very low in the polls, he has enough credibility to put together a strong campaign. If his polling numbers improve, his chances will improve even if the Concertación decides to hold open primaries.


If the municipal election does not produce a clear winner, the Concertación parties will have less leverage to influence the candidate selection process. Open primaries will be the most likely mechanism to choose the Concertación candidate. Although Lagos will also lose influence and there will be doubts about how much his good approval ratings actually help the Concertación, his influence will prevent a division within the government coalition. Because she is currently better positioned in the polls than Frei, and because her main opponents are found in the leadership of her Christian Democratic Party, Alvear will be the most likely winner if there are open primaries within the Concertación.  True, Socialist Michelle Bachelet is currently running ahead in the polls, but she has so far failed to put together a campaign team and to informally raise funds.  Unless Bachelet sends clear signals about her intention to run, Alvear will most likely emerge as the Concertación nominee. True, Alvear’s support and momentum seems to be going down, but the fact that she has been the favorite candidate among most of the leaders of the Concertación for the past years will help her temporarily reduce the negative effect of her decline in public opinion polls.


The third scenario is that of an Alianza victory in the October municipal elections. If that happens, the Concertación will have few options but to take all risks needed to defeat Lavín in 2005. In addition to a much more populist tone in the campaign, the Concertación will most likely nominate the candidate with the best polling numbers. So far, that candidate is Michelle Bachelet.  She will be the sure candidate if her popularity remains high and if the Concertación loses ground in October.  Yet, if Lago’s high approval ratings and the improving economy are not sufficient to help the Concertación win in October, it will be almost impossible for the government coalition to prevent Lavín from winning the 2005 presidential election.


Naturally, although the October municipal elections will help clarify the Concertación’s candidate selection dilemma, many unexpected things can pull Frei, Alvear or Bachelet out of the race before the Concertación makes its decision. If any of them were to withdraw, Interior Minister José Miguel Insulza and Santiago Metropolitan Region Intendant Marcelo Trivelli will likely become Concertación presidential hopefuls of their own. Yet, just as the Riggs account scandal has tempted the Concertación to look to the past in search of campaign issues, the debate over who is the best candidate to defeat Lavín in 2005 will likely divert the Concertación’s attention away from identifying the appropriate campaign issues that can help the Concertación candidate win in December of 2005.