Chile reconsiders military spending provision

SANTIAGO — Momentum is mounting in Chile to abolish a military expenditures law after recent disclosures that military officers used it to generate illegal commissions.

The secret law — only a select group of government officials are allowed to actually read its details — dates to the late 1950s and mandates that 10 percent of all export revenues from the state-owned copper company Codelco are automatically transferred each year to the military, for the purpose of purchasing weapons and equipment.

Following the disclosure of illegal commissions on weapons purchases in the 1990s, the provision has provoked debate. 

Last week a group of lawmakers proposed a constitutional reform that would make defense expenditure subject to annual congressional approval and oversight — the same as the rest of the national budget. Last year, the money transferred to the military under the law totaled almost $1.2 billion, and over the past five years, about $5.3 billion.

Critics say this flow of money isn’t proportionate to Chile’s strategic defense needs and that it prevents Codelco from doing business in bordering countries that don't want their money funneled to the Chilean military.

The debate is also taking place as Chile is teetering on the brink of what is expected to be the worst economic slump in decades. At a time when unemployment is rapidly inching towards double-digit figures, many believe these funds should instead go towards cushioning the impact of a looming recession.

“No one controls military expenditures," said deputy Gabriel Ascensio, a longtime opponent of the law. "We as legislators don’t know how much is spent, how it is spent or on what it is spent."

In January, Chileans learned that former air force chief Ramon Vega — along with at least three other top officers — received up to $15 million in commissions for the $109 million sale of 25 Belgian Mirage warplanes to Chile in the mid-1990s.

A Belgian inquiry into irregularities in a deal with the Chilean air force brought the scandal to light. Now, Chile has opened its own investigation into the commissions. So far, Chilean authorities have indicted four officers on corruption charges and broadened the investigation to several other arms deals.

“It’s a secret law so no one really knows exactly what it says; I’ve never seen the text," said Codelco spokesman Pablo Orozco. "But thanks to Codelco, the armed forces have completely renovated their material: they bought tanks, warships, combat planes."

According to Orozco, a significant portion of the copper money is now financing Chile’s peacekeeping operations in Haiti.

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