This article first appeared on La Tercera on July 11, 2019.
The seriousness of the fraud committed within the Army is indisputable. And the role of the authorities of that institution, especially the actions of the Commanders-in-Chief (R) Juan Miguel Fuente-Alba and Humberto Oviedo, surpasses the plot of any fiction novel.
Regarding Oviedo -formalized by Judge Romy Rutherford for embezzlement of public funds and misuse of reserved Army expenses- I will not delve into details, since he is still in process after the Constitutional Court suspended the investigation.
What I am interested in talking about is the Fuente-Alba case and the importance of the role that companies play in our society so that these situations do not continue to occur.
A few weeks ago Fuente-Alba was indicted for money laundering. Let’s agree that it is surprising -not to say suspicious- that in just seven years the retired uniformed officer has tripled his assets: from almost $410 million declared in 2008 to around $1,426 million at the end of 2015, only 9 months after leaving office.
According to the background of the investigation, his fortune grew bulky with the complicity of his wife, Ana María Pinochet. She would have been key in the scheme by operating as a figurehead, acquiring properties and luxury cars with the money that all Chileans pay through taxes, and that goes to the reserved expenses of the Armed Forces.
In this case, the reserved expenses of the Army would have been taken by a public official – Fuente-Alba – to satisfy his whims and those of his spouse. Thus, probably made a personal interpretation of the Oath of Allegiance, which he made when he joined the institution as a cadet. Instead of “To serve the country faithfully”, he decided to serve the country and its citizens.
We may never know the reasons for this case, but the important thing is to understand how he laundered assets through the purchase of goods, including real estate and automobiles. Fuente-Alba would have paid large amounts of money in bills, and the companies did not question their origin. It is doubtful that a person appears in a business of high amounts and takes out of his pocket 218 million pesos in cash -the equivalent of 10,900 bills of 20,000 pesos-. And so on.
Although not all companies are obligated subjects of the Financial Analysis Unit (UAF), all companies should look after the welfare of the national economy and prevent fraudulent situations, for example, by preventing the purchase of goods with large sums in cash.
The case of Fuente-Alba at the level of the institution, of the country, is shameful. However, looking at it from the other side, i.e. from the companies, should make us reflect on the crucial role they play in the economy. With adequate internal controls and transparent operating regulations, companies are essential to curb corruption from the first signs of it. By raising the appropriate red flags, if there are any unusual actions.
The cash payment for the goods acquired by Fuente-Alba should have been the first sign that something was done irregularly. Why did nobody do or say anything? Where are the mechanisms of the companies that offer products and services of high monetary value, so as not to be involved -passively or actively- in open acts of corruption?
Last year, reports of suspicious operations of money laundering and/or terrorist financing increased by 28.5% compared to 2017, according to the Financial Analysis Unit (UAF). And from 2016 to 2017 there had already been an increase of 16%. This being the case, it is very relevant that the private sector assumes its role in society. It is not just about accumulating profits. It is time to take off the blindfold and see corruption as a reality that is embedded in our society and that can strike at the least thought-moment.
We must be prepared.
At this point, the internal processes of companies, against corruption, should not even be an issue, they should be our shield to stop any threat that jeopardizes the proper functioning of society.