Trending

Newsletter

Chilean President’s Son Accused of “Influence Trafficking”

By: Belén Marty - @belenmarty - Feb 11, 2015, 12:06 pm
Sebastián Dávalos, son of Chilean President Michelle Bachelet, participated in a meeting with Banco de Chile in which his wife secured a US$10 million loan for her company Caval Ltd.
Sebastián Dávalos, son of Chilean President Michelle Bachelet, participated in a meeting with Banco de Chile in which his wife secured a US$10 million loan for her company Caval Ltd. (La Tercera)

EspañolNew evidence emerged on Monday to suggest that Sebastián Dávalos, son of Chilean President Michelle Bachelet, secured a multimillion dollar payment for his wife’s company in exchange for influence over government policy.

Banco de Chile confirmed on February 9 that Dávalos and his wife, Natalia Compagnon, participated in a meeting on November 6, 2013, in which they requested a CHL$6.3 billion (US$10 million) loan for a company half-owned by Compagnon.

The loan to the Exportadora y Gestión Caval Limitada firm was approved on December 16, 2013, one day after Bachelet won a second term in office, but the news only came to light on Friday, February 6, in an article published by local magazine Qué Pasa.

The loan was ostensibly designated for the purchase of three parcels of land in the Machali area, central Chile, which were put up for sale after local authorities changed construction regulations. The land was purchased for resale to forthcoming housing projects in the region.

“In relation to the publications in the media about a loan made by Banco de Chile to the Caval Ltd. company, we can inform that the details of said loan, like those of any other, are at the availability of the Superintendency of Banks and Financial Institutions,” the bank said in a press release.

According to the financial institution, the meeting, which took place at the bank’s headquarters, was “part of the kind of activities that the vice president of Banco de Chile carries out daily with clients.”

With regard to the approval of the loan, the bank indicated that “given evaluation for taxation, guarantees and risks, the credit committee of Banco de Chile judged that the conditions for issuing the said loan were met in the normal time frame for this kind of activity.”


“Banco de Chile document approving Caval loan on 12/16/2013, one day after elections.”

With regard to the scandal that has emerged in recent weeks over the presence of the president’s son at the meeting, Banco de Chile director Jorge Awad told local daily El Mercurio that the loan’s approval “was done according to the credit norms that the bank has defined for these kinds of operations, that always have solid guarantees.”

“In my opinion, this activity, through the declarations that have been made at executive level, will be perfectly cleared up in the coming days,” he added.

Sergio Bustos Baquedano, a Chilean who claims to have worked for the Caval firm, meanwhile told Qué Pasa that he had organized the meeting between Bachelet’s son and Banco de Chile Vice President Andrónico Luksic.

“As the Caval company had very little capital, it needed to go the highest levels of the bank to get the credit. I asked for an audience with Mr. Luksic for Mrs. Compagnon and Caval general manager Mauricio Valero. I spoke with two secretaries of the vice president, María Teresa Errázuriz and Ximena Valenzuela, to request the meeting. They told me that there wouldn’t be any problem in holding a meeting,” Bustos said.

“They told me that Mr. Luksic would prefer it were Mrs. Compagnon accompanied by Sebastián Dávalos, her husband. They said that Mr. Luksic would view it very favorably,” he added.

Calls for Investigation

The opposition, represented by José Manuel Edwards of the National Renewal Party (PRN), called for an investigation into the controversial loan. Edwards described the deal as a possible case of “influence trafficking.”

“The parliamentarians of [opposition coalition] Alliance are evaluating which legal actions we’re going to present against President Bachelet’s son and his spouse for influence trafficking,” he told press.


“Here lining up outside Banco de Chile waiting for my #BacheletLoan for CHL$6.5 billion. I have faith!”

Edwards further called on the Superintendency of Banks and Financial Institutions to explain how the “biggest loan in the history of Chile was made to an SME [small or medium enterprise] with capital of CHL$6 million [US$9,500].”

“I asked how an SME could secure a meeting with the owner of Banco de Chile and receive a loan a thousand times greater than the company’s assets,” he added, also demanding that the government make known any connection to the issue.

“This is a genuinely shocking case of a lack of transparency. We demand transparency from President Bachelet, her relatives, and [governing coalition] New Majority,” Edwards concluded.

Official Support

Marcelo Schilling, a deputy with the Socialist Party (PS) to which Bachelet belongs, played down the importance of the debate around the loan.

“My impression is that the right is seeking anything it can throw at the New Majority, the government and the president, after the political ruin it’s become after having received illegal campaign financing from the Penta Group,” argued Schilling.

“It gives the impression that this is a somewhat desperate reaction to reverse their fall in opinion polls,” he added.

Translated by Laurie Blair. Edited by Guillermo Jimenez.

Belén Marty Belén Marty

Belén Marty is the Libertarian Latina, a journalist based in Buenos Aires, Argentina. She has lived in Guatemala, Jordan, the United Arab Emirates, and the United States and is a former candidate for local office with Argentina's Libertarian Party. Follow @BelenMarty.