Aaron Schachter: A judge in Chile this week put an end to an inquiry into Augusto Pinochet's overseas accounts. Pinochet was Chile's dictator from 1973 to 1990, and during that time he squirreled away some $26 million in more than 100 foreign bank accounts. The judge said the nine year investigation failed to establish where the money came from or whether Pinochet's relatives helped him hid it. Peter Kornbluh is the author of The Pinochet File and he too is stumped.
Peter Kornbluh: The source of that money has never actually been identified. It is clear that on his paycheck as commander and chief of the Chilean armed forces and president of the republic, he could never have amassed his fortune, and as we know from other documents and from this lengthy investigation, he went to great lengths to hide the fact that he had this money.
Schachter: Now, I want to make it clear that the investigation you spoke of that found this money from Pinochet here in the US was kind of an accident right? They weren't going after him.
Kornbluh: That's right, a special US Senate Committee on Investigations was investigating in kind of the post 9/11 world the issue of whether US banks had enough regulations to ferret out money laundering by terrorists. And they discovered that the Riggs Bank had collaborated with Pinochet to hide what was obviously ill-gotten wealth, $26 million and a 125 secret accounts opened under false names and false passports.
Schachter: False passports, false names, you can just be anyone and open a bank account?
Kornbluh: Well, apparently if you're Augusto Pinochet and you are personal friends with the chairman of the Riggs Bank, Joseph Allbritton, who personally went to Chile and met with Pinochet four times to solicit his money, you can open accounts under false names using intermediaries, falsifying passports with altered photographs on them, using variants of his name–Jose Ramon Ugarte, for example, instead of Augusto Pinochet. And these false names enabled Riggs to tell regulators later after Pinochet was arrested in London in 1998 that they had to no accounts for Augusto Pinochet, and that was part of the effort to hide the fact that they had been holding his money for him for years.
Schachter: So in essence it's like a bar knowing that a kid's going in with a fake ID, but letting him in anyway.
Kornbluh: Well, that's one way of putting it. In this case, Pinochet was the fourth largest personal account holder at the Riggs Bank.
Schachter: So it was worthwhile to break the law.
Kornbluh: It was worthwhile to break the law and Riggs got caught. They were fined, they had to settle a civil suit for $9 million and they were forced to sell themselves to Pittsburgh National Bank, and so then Riggs no longer existed in the aftermath of this Pinochet-Riggs Banks scandal.
Schachter: And did Mr. Allbritton go to jail or was anyone punished?
Kornbluh: The bank was fined and Allbritton had to fork over a million dollars. I mean the story is a little bit more complicated. Not only did Riggs Bank hide Pinochet's funds, but after those funds were frozen by the courts, when Pinochet was arrested on human rights and terrorism charges in London, the bank conspired with Pinochet to secretly give him back as much of the money as they could, and they had secret couriers going from Washington to Santiago, Chile carrying bundles of $50,000 checks. In the end, they returned $8 million to him as he was under investigation in Chile for human rights crimes. And the most important thing about what has happened in Chile this week is that a judge after nine years has been unable to determine where the source of these funds actually came from. There's no doubt that they are illicit. There's no doubt that this was corruption, but the actual mechanism in which he siphoned off money from the military or from the Chilean state has not been found and unfortunately, may never be known now.
Schachter: Is this a major blow to people who wanted to hold him and his family to account?
Kornbluh: You know, I think that Chileans and the world community understand that this is about Augusto Pinochet and not really about his wife and his kids. It is important to remember that the judge charged six of his military subordinates in conspiring with him to embezzle and hide these funds, so the judge has made clear that a crime has been committed here. The main perpetrator of this crime, Augusto Pinochet, is dead and can no longer be prosecuted, but the crime exists and presumably the prosecution for his subordinates that assisted him in ferreting away this money, hiding it in 125 secret offshore bank accounts will go forward.
Schachter: Peter Kornbluh is the author of The Pinochet File: A Declassified Dossier on Atrocity and Accountability. A revised edition of the book has just been released for the 40th anniversary of Chile's coup. Peter, thank you.
Kornbluh: It's been a pleasure.