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Pandora Papers: Five most important details about the Piñera-related deal

There was no conflict of interest and all was done according to the law. Furthermore, President Sebastián Piñera was not even aware the mining project worth millions of dollars was sold by his sons to his childhood-friend. Whether the Chilean presidents defense on Monday is true or not, there are some important details in the Pandora Papers about Piñeras offshore activities left unanswered.

The Pandora Papers, revealed by the International Consortium of Investigative Journalists (ICIJ) and analyzed in Chile by CIPER and LaBot, show how Chilean President Sebastián Piñera hid assets overseas in the British Virgin islands. On the islands, a tax haven used by billionaires all over the world, President Piñera had several companies.

Thanks to profitable tax schemes on the island, a large part of the sale of the Dominga mining project, which was in the hands of his family company and sold to child-hood friend Carlos Délano, was handled there. In an immediate statement and later a press conference, President Piñera denied all accusations. Some important details remain unanswered – details that could have severe political or even legal consequences if not taken seriously by the presidency.

Also read:

Pandora Papers: Piñera denies conflict of interest

Use of tax haven for donations

As pointed out by Piñera during his press conference on Monday, he gave up his assets when he became president in 2011 to avoid conflicts of interest. Those who received his companies and shares in companies like Lan Airlines, Chilevisión, and Entel, were his wife Cecilia Morel and his children. The donations received by the president’s children were transferred to companies on the British Virgin Islands. In Chile, large donations and the transferring of companies to family members comes with a 25 percent tax. Among the assets was the Dominga mining project, later sold to Délano.

Closing of plant in the mining area

While executives from both companies were negotiating the sale of the Dominga mining project, Piñera announced the closing of a thermoelectric power plant in the area where the mine would be built. Chilean news website El Desconcierto had access to correspondence between the two parties that shows that (coincidentally) Piñera around the same time cleared the area for unknown reasons. Thermoelectric power plants are an important part of Chile’s energy supply. Why close them?

Read more:

Dominga Mining Project could spell disaster for vulnerable wildlife 

The environmental status of the Dominga zone

Another detail that remains unaccounted for is the environmental status of Dominga, and how that status is tied to the payments Piñera’s children received for selling the project. In the contract is a clause that states that the third payment will only be made if the area of the project does not become an “exclusion zone, a national park or natural reserve.”  Thus, the final decision about the viability of the project was in hands of the Piñera administration, which ended up not giving environmental protection, thus ensuring the deal could be concluded. But there was no conflict of interest, the president said.

Not signing the creation of a protected area

That the area was not declared an exclusion zone, is remarkable. Chilean news source El Mostrador showed that the creation of a marine protected area was already approved under the Bachelet administration, several days before she handed over power to Piñera. The only thing the new head of state needed to do was sign the decree. To this day, it has not been signed. The same goes for the Escazú treaty, which would give protection to the area and a voice to those living around the area. The Bachelet administration was one of the promoters behind the treaty. Why did the next president not sign it?

Not aware of the deal

In both declarations, from La Moneda palace and the president himself, it was argued the president was not aware of the deal. This might be the case. No one knows. However, the deal involved US$150 million dollar and was between his children and his best friend. The president almost certainly needs to provide a more detailed explanation, especially with a possible constitutional accusation looming.

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