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Pinera struggles to balance business interests and public duties

Is a rough first week a sign of troubles to come for Chile's right-wing president-elect?

Sebastian Pinera and his wife Cecilia celebrate after Pinera won the presidential election in Santiago, Jan. 17, 2010. (Ivan Alvarado/Reuters)

SANTIAGO, Chile — In his first week as president-elect, Sebastian Pinera was already getting into trouble.

When his shares in his airline LAN — the largest in the country — skyrocketed the day after the Jan. 17 elections, he was blasted for not having sold them before then. In just four days, his stocks shot up more than 140 percent, leading the Santiago Stock Market to suspend transactions several times.

Immediately after winning the presidential elections, breaking a 20-year hold on power by the center-left Concertacion coalition, the right-wing billionaire’s business interests were thrown into the spotlight.

A shrewd financial investor, Pinera made his fortune in the 1980s introducing credit cards to an avid consumer market, and was later president of Chile’s first investment bank. He smartly placed the many eggs in his basket across the entire economy and is now owner of LAN airlines, the popular soccer team Colo Colo and the television station Chilevision. He also has minority shares in energy, health clinics, finance, lumber, mining, food, retail, construction and vineyards, just to name a few.

With a bill that would regulate a president’s patrimony still languishing in Congress, Pinera decided last year to hand over the management of part of his property to four different trusteeships, but excluded LAN, Colo Colo and Chilevision from this decision.

He then promised to sell his shares in LAN by March 11 when he takes office, but said he will hold on to the soccer team and transfer the administration of his property in Chilevision to a non-profit foundation. Pinera announced a general shareholder’s meeting on Feb. 5 to decide on the sale of LAN.

“It isn’t normal for him to have been elected president without having resolved this problem before. He has to solve the issue of his shares in LAN and above all, in Chilevision, because this involves him in the congressional debate on digital television. That is already creating a conflict of interest that could have been avoided,” said Senator Carlos Ominami.

This same issue prompted his second blunder in the week. When reporter Ivan Nunez, of the Pinera-owned TV station, went to interview the president-elect with a group of journalists, he was greeted with an order: no questions on LAN allowed. Nunez picked up his things and walked out, but for journalists, this may be a signal of things to come.

“This incident confirms one of the main concerns during the campaign regarding the perils posed by Mr. Pinera’s business interests and his public duties,” said Abraham Santibanez, president of the Journalists Association.