Scandal in Vitacura: ‘El círculo de Hierro’

Vitacura is the scene of one of the last scandals of 2022. The municipality’s former mayor, Raúl Torrealba, and his former inner circle, are accused of embezzling public funds, money laundering, and other crimes. Authorities are still investigating, while his political party membership is suspended.

Raúl Torrealba is a Chilean businessman and politician, who served as mayor of Vitacura in Santiago for six consecutive terms from 1996 to 2021. On July 22, 2021, his administration was called into question when the municipality’s new mayor, Camila Merino, filed a complaint with the National Prosecutor’s Office alleging fiscal irregularities pointing directly at Torrealba. Since then, the Chief Prosecutor of Santiago Centro has been investigating.

Casting a wider net, the Merino administration filed a second complaint in late August 2021, accusing others of diverting public funds to the personal accounts of Torrealba and other former officials.

More recently, a third complaint was lodged by the Council of Defense of the State (CDE) on Dec. 28. The CDE unanimously decided to file a legal action against the former municipality chief and his inner circle (Renato Sepúlveda, Domingo Prieto, Antonia Larraín, Arnaldo Cañas, and Augusto César Silva) for embezzlement of public funds, fraud, and organized crime. The lawyer in charge of the legal action, Alejandro Espinoza, told La Tercera it is believed that the misconduct reaches back at least 10 years.

The Circle of Iron

Dubbed “El círculo de Hierro” (“the Iron Circle”), the group is accused by the CDE of repeatedly acting together to misappropriate large sums of public funds, including through the use of private companies, Torrealba’s accounts, and simply envelopes of cash.

“The [CDE] is working swiftly and rigorously to exercise all the powers conferred on it by law for the full clarification of the facts and of each of the crimes committed against the Municipality of Vitacura; support the progress of the investigation by the Public Prosecutor’s Office and obtain the highest sentences of those who have criminal responsibility for these crimes,” said CDE President Juan Peribonio.

Read more:

Three wealthiest municipalities in Chile rattled by corruption cases

The mechanism behind the Circle of Iron

Pietro has surfaced as a key player in the investigation. He is Larraín’s great-uncle, a friend of a daughter of Torrealba, the successor of Sepulveda in office, and the director since 2001 of parent company “Vita,” which processed much of the questioned funds. He testified three times in the cause after being disassociated from the corporations Vita Salud, Vita Emprende, and Vita Deportes, all non-profit organizations that operated under the municipality’s eaves and were subsidized by the state.

La Tercera reported that through this testimony Prieto not only gave the prosecution details as to how Torrealba allegedly obtained cash from Vita Deportes but also how there was a connection to the former mayor of Lo Barnechea, who worked in Vitacura for 12 years before winning office in October 2008.

 “These payments for ‘Chilean week’ must have started there by 2016. I remember on a certain day Antonia Larraín called me on the phone and told me that she needed to talk to me, and meeting her at her office in the municipality. I do not remember the position she had at the time, but she was not yet the director of Decom [Community Development]. So she told me that it was necessary to give the mayor Torrealba the sum of CLP$5,000,000 [~US$5,850] in cash, for him to use it,” he said.

As Prieto also testified, this “began with a request from Renato Sepúlveda (former director of community development), who summoned me to his office in the municipality and told me that it was necessary to give money to the chief, referring by such to the mayor Raúl Torrealba, and that it was necessary to give him CLP$3,000,000 [~US$3,510] in cash. I was surprised with that request, I consulted him about it, and he told me it was for the boss, for the Big Boss, that he needed it. That’s what I called Mayor Torrealba.”

Prieto also testified on November 17, 2021 that Felipe Guevara invented the system of diversion of money through entities with legal personality, ” once functional community organizations began to operate. He added that when the former director of community development also left office, he received monthly “CLP$2,000,000 [~CLP$2,340], a sum that came out of Vita Deportes and was backed up with a receipt or invoice issued by a family member of Felipe Guevara.” Guevara, who was also mayor of Lo Barnechea and metropolitan presidential delegate to the Piñera administration, responded that the statement was “sick and totally false.”

The CDE investigation against Torrealba and his circle is active and ongoing and has been since 2021. In the meantime, his political party membership, Renovación Nacional, is suspended.

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