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Sebastián Piñera in October. The leaked documents revealed new details of a controversial deal to sell the family’s stake in the Dominga mining project.
Sebastián Piñera in October. The leaked documents revealed new details of a controversial deal to sell the family’s stake in the Dominga mining project. Photograph: Javier Salvo/AFP/Getty
Sebastián Piñera in October. The leaked documents revealed new details of a controversial deal to sell the family’s stake in the Dominga mining project. Photograph: Javier Salvo/AFP/Getty

Chilean president Piñera impeached over Pandora papers revelations

This article is more than 2 years old
  • Lower house approval vote sets up trial in Chile’s senate
  • Papers revealed offshore dealings of conservative president

Chile’s President Sebastián Piñera has been impeached by the lower house of congress, setting up a trial in the nation’s senate over allegations he favored the sale of a family property while in office.

The vote to impeach passed with the bare minimum of 78 votes needed in the 155-member chamber of deputies, and followed a marathon 20-hour session. Sixty-seven legislators voted against impeachment, including several members of the opposition. Others abstained or were absent.

Piñera is unlikely to be removed by the 43-member upper house, where the opposition has only 24 of the 29 votes needed to oust a president.

But the trial will come in the heat of a general election campaign. The first round of general elections is set for 21 November and Piñera’s term ends on 11 March. Chile does not permit presidential re-election to consecutive terms.

The accusation stems from publication of the Pandora papers, which revealed offshore financial dealings of prominent figures around the world – including Piñera, one of Chile’s wealthiest people.

The leaked documents revealed new details of a controversial deal to sell the Piñera family’s stake in the Dominga mining project.

Quick Guide

What are the Pandora papers?

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The Pandora papers are the largest trove of leaked data exposing tax haven secrecy in history. They provide a rare window into the hidden world of offshore finance, casting light on the financial secrets of some of the world’s richest people. The files were leaked to the International Consortium of Investigative Journalists (ICIJ), which shared access with the Guardian, BBC and other media outlets around the world. In total, the trove consists of 11.9m files leaked from a total of 14 offshore service providers, totalling 2.94 terabytes of information. That makes it larger in volume than both the Panama papers (2016) and Paradise papers (2017), two previous offshore leaks.

Where did the Pandora documents come from?

The ICIJ, a Washington DC-based journalism nonprofit, is not identifying the source of the leaked documents. In order to facilitate a global investigation, the ICIJ gave remote access to the documents to journalists in 117 countries, including reporters at the Washington Post, Le Monde, El País, Süddeutsche Zeitung, PBS Frontline and the Australian Broadcasting Corporation. In the UK, the investigation has been led by the Guardian and BBC Panorama.

What is an offshore service provider?

The 14 offshore service providers in the leak provide corporate services to individuals or companies seeking to do business offshore. Their clients are typically seeking to discreetly set up companies or trusts in lightly regulated tax havens such as the British Virgin Islands (BVI), Panama, the Cook Islands and the US state of South Dakota. Companies registered offshore can be used to hold assets such as property, aircraft, yachts and investments in stocks and shares. By holding those assets in an offshore company, it is possible to hide from the rest of the world the identity of the person they actually belong to, or the “beneficial owner”.

Why do people move money offshore?

Usually for reasons of tax, secrecy or regulation. Offshore jurisdictions tend to have no income or corporation taxes, which makes them potentially attractive to wealthy individuals and companies who don’t want to pay taxes in their home countries. Although morally questionable, this kind of tax avoidance can be legal. Offshore jurisdictions also tend to be highly secretive and publish little or no information about the companies or trusts incorporated there. This can make them useful to criminals, such as tax evaders or money launderers, who need to hide money from tax or law enforcement authorities. It is also true that people in corrupt or unstable countries may use offshore providers to put their assets beyond the reach of repressive governments or criminal adversaries who may try to seize them, or to seek to circumvent hard currency restrictions. Others may go offshore for reasons of inheritance or estate planning.

Has everyone named in the Pandora papers done something wrong?

No. Moving money offshore is not in or of itself illegal, and there are legitimate reasons why some people do it. Not everyone named in the Pandora papers is suspected of wrongdoing. Those who are may stand accused of a wide range of misbehaviour: from the morally questionable through to the potentially criminal. The Guardian is only publishing stories based on leaked documents after considering the public interest. That is a broad concept that may include furthering transparency by revealing the secret offshore owners of UK property, even where those owners have done nothing wrong. Other articles might illuminate issues of important public debate, raise moral questions, shed light on how the offshore industry operates, or help inform voters about politicians or donors in the interests of democratic accountability.

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A contract found by the project, suggested that the first $138m of the sale was made through shell companies registered in the British Virgin Islands.

The documents suggested that the final payment on the mine’s sale in 2011 hinged on the government declining to declare its location in north-central Chile a nature preserve. The government, by that time headed by Piñera, did not do so, despite appeals from environmentalists. But nor did subsequent governments.

When investigators looked into the case a few years later, Piñera said he had not been involved in managing the companies and had not even realized the connection with Dominga.

The president’s office noted last month that Piñera’s first term as president, from 2010 to 2014, had not started when the sale was agreed to, that prosecutors and courts decided in 2017 that no crime had been committed and that Piñera had not been involved. It said all due taxes were paid in Chile.

Piñera’s holdings are now managed in a blind trust, according to the statement.

The national prosecutor’s office has said it is once again investigating the case, however.

In order to get the majority needed for impeachment, the Socialist deputy Jaime Naranjo effectively stalled for 14 hours, reading a series of documents, until deputy Giorgio Jackson was able to enter the chamber to vote following a mandatory quarantine period after testing positive for the coronavirus.

Another deputy voted despite awaiting results of a coronavirus test. He slipped into the building through a side door to avoid health checks.

The minister of the presidency, Juan José Ossa, called the impeachment “a political show, a media show. It’s sad for democracy.”

A pro-government deputy, Andrés Molina, said: “It causes me shame, personally.”

Just before voting, Jackson said: “There are people who think what happened yesterday and today in the chamber is shameful. But I think what is shameful is having a president who speculates.”

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