In the past two weeks, two sets of campaign finance irregularies have surfaced in connection with the Chiledeportes (sports’ ministry) scandal. The first involves the problems with Chiledeportes - that there were irregularities detected with the funding of at least 77 projects and that these were concentrated in the last three months of 2005 - leading to suspicion that they were intended to bolster electoral support for the government given that presidential and parliamentary elections were held in December.
The second irregularity surfaced following the inquiry into the nature of Publicam, a fake business that was one of the recipients of Chiledeportes funds. Publicam also appeared in the electoral accounts of three candidates in December, Guido Girardi a senator of the PPD (a party in the governing coalition Concertación), and Lily Perez and Sebastián Piñera, a senator and the presidential candidate of the opposing RN, respectively. Girardi has said he lied on his expenditure reports and the Publicam funds were used for another purpose (and others are alleging that he has lied on other items in his reports), whle Perez and Piñera have said they had no knowledge that Publicam was a fake company.
Nobody knows how many other similar irregularities may occur in the electoral income and expenditure reports of Chilean political candidates as the legal requirements still allow a significant degree of obscurity (candidates can accept a significant amount of both anonymous donations and “confidential” donations, in which donations are sent to the candidate anonymously via the Electoral Service such that the candidate him/herself doesn’t know who gave them the money) and because the Electoral Service lacks any investigatory powers into the truthfulness in candidates’ reports. These candidates’ expenditures are now being investigated by a separate branch of the government; but as of now, it is not yet clear if Publicam actually performed services for the candidates and what services those may have been.
The Chilean regulation of campaign income and expenditure, ushered in in 2002 and put to test for the first time (in national elections) for the first time in these elections in December, is probably the most-comprehensive in the South America, if not Latin America, though clearly still allows room for improvement. Whether the current scandal results in changes in the regulation of campaign finance in Chile remains to be seen.