- The Washington Times - Thursday, March 12, 2009

MIAMI (AP) - Chile’s government has filed lawsuits against four banks claiming those institutions were negligent or had deliberately helped former Chilean dictator Augusto Pinochet conceal about $26 million in public funds allegedly stolen over several decades.

The lawsuits filed Wednesday in federal court in Miami claim the banks were complicit in the alleged theft of the Chilean funds by Pinochet and others reputedly assisting him. The Chilean government seeks an unspecified amount of damages, although that would likely run into the tens of millions of dollars.

Following basic bank regulations and complying with money-laundering rules would probably have exposed many of Pinochet’s hidden accounts, according to the lawsuits filed by Miami attorneys Pedro J. Martinez-Fraga and Tania Cruz on behalf of Chile’s State Defense Council.

“More tragically, some of these financial institutions went beyond mere negligence, and instead chose to knowingly and actively assist Pinochet in concealing the source and true ownership of the substantial funds being deposited into their institutions,” the lawsuits by Chile’s government legal office allege.

The lawsuits were authorized by a July 2008 decree from Chilean President Michelle Bachelet, according to court documents filed Wednesday. The decree states that lawsuits should seek “adequate compensation for acts and omissions of United States banks” stemming from their Pinochet dealings.

The State Defense Council, whose mission is to defend Chile’s interests at home and abroad, said Thursday in Santiago that it would have no comment “as part of the legal strategy.”

Pinochet, one of Latin America’s most notorious dictactors, seized power in a bloody 1973 military coup that ousted Marxist President Salvador Allende, who died in the overthrow. Pinochet embarked on a long campaign to root out leftists, with an official government report concluding some 3,197 people died or disappeared for political reasons before Pinochet left power in 1990. He continued to serve as army commander-in-chief and as a Chilean senator until 2004, dying two years later at 91.

The government lawsuits name Pittsburgh-based PNC Financial Services Group Inc.; Spain’s Banco Santander; Espirito Santo Bank of Portugal; and the Bank of Chile. In the case of the foreign banks, the lawsuits focus on transactions handled mainly by their Miami- or U.S.-based subsidiaries.

A PNC spokesman said the bank wouldn’t comment. The other three institutions did not immediately respond to e-mail and telephone messages left by The Associated Press seeking a response.

Pinochet’s finances have long been the subject of investigations in Chile, the U.S. and elsewhere. Many of the U.S. connections were exposed by a 2005 U.S. Senate probe that brought to light allegations that Pinochet controlled about 50 secret accounts in 10 U.S. banks through aliases, family members and offshore entities.

One such institution was the venerable Riggs Bank in Washington _ acquired in 2005 by PNC _ that paid more than $40 million in fines and penalties for its Pinochet relationships.

The Chilean lawsuits allege Pinochet siphoned public money for personal use through a number of ways, including a government presidential security account, accounts opened in the names of Chilean military officers and commissions from various arms deals _ such as a late-1990s transaction involving the sale of German Leopard I tanks.

No court dates have been set for any of the lawsuits, which were assigned to four different judges but could be consolidated into a single case.

For years, Pinochet’s defense lawyers and family members have said the money was legitimate and the accusations politically motivated. They insist the money came from donations by wealthy supporters worried Pinochet would be persecuted after leaving power.

Pinochet’s wife and grown children were indicted on tax fraud charges in Chile amid a probe of the general’s wealth. Those charges were dropped on a technicality in 2007 for those family members save Pinochet’s younger son, Marco Antonio, who is still facing charges.


Associated Press writer Eduardo Gallardo in Santiago, Chile, contributed to this story.

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