Duro juicio del comportamiento del mandatario según la diplomacia norteamericana

“Piñera maneja tanto los negocios como la política hasta los límites de la ley y la ética”
"Algunas de sus acciones, como prestar dinero a empresas ficticias, parecen cruzar claramente la línea de la incorrección legal. Otras veces, sin embargo, parece más una víctima de las circunstancias, de la negligencia o de la inmensa vastedad de su fortuna", señala uno de los cables elaborados por la embajada de EE.UU. y que fue filtrado por Wikileaks.

por El Mostrador

La mala opinión que tenía la embajada de Estados Unidos del Presidente Sebastián Piñera cuando éste era candidato, quedó al descubierto este lunes luego que el diario español El País diera a conocer el contenido de tres cables diplomáticos filtrados por Wikileaks.

“Hombre de negocios competitivo y político que tiende a tomar riesgos, Piñera ha estado vinculado en el pasado a un número de cuestionables acciones sobre sus negocios, pero los votantes parecen relativamente desinteresados por estas acusaciones”, sostiene uno de los informes emitido en septiembre de 2009 y que se atribuye a Carol Urban, por entonces la número dos de la legación estadounidense.

La diplomática alude a la acusación por uso de información privilegiada que hizo el senador DC Eduardo Frei contra Piñera durante un debate presidencial realizado por esos días, oportunidad en la que citó un informe de Transparencia Internacional (TI) que indicaba que en julio de 2006, cuando Piñera era uno de los propietarios de LAN, compró tres millones de acciones varias horas después de recibir un informe financiero de la compañía que no había sido publicado.

Otra vez la “prensa conservadora”
Pero lo que llamó la atención de la embajada es que Piñera salió airoso de la acusación, pese a que en su momento debió pagar una multa de 700.000 dólares tras ser acusado de “abuso de información privilegiada”. Esto luego que acusara a TI -se indica- de actuar por motivaciones políticas, gatillando la salida de uno de los miembros de la organización.

Y para explicar este giro se mencionan tres factores: un admirable equipo de campaña deseoso de pasar al ataque, la mediocre estrategia comunicativa de su oponente y la ayuda de la “prensa de Santiago, generalmente conservadora”.

Los préstamos del Banco de Talca a “falsas compañías”
El informe se refiere al período 1979-1980, cuando Piñera fue director del Banco de Talca. “Como muchos otros bancos de la época -y no muy diferente de la reciente crisis financiera de Estados Unidos- el Banco de Talca concedió muchos créditos arriesgados, que inicialmente generaban apreciables beneficios, pero finalmente llevaron a la bancarrota”.

“Sin embargo, Piñera y otros directivos del Talca fueron más allá de las típicas actuaciones inapropiadas de la época. Además de los créditos dudosos que aprobaron, también crearon docenas de falsas compañías, les concedieron créditos del banco y usaron esos fondos para comprar más acciones del banco”, agrega.

Y concluye que “tenaz y competitivo, Piñera maneja tanto sus negocios como su política hasta los límites de la ley y la ética. Algunas de sus acciones, como prestar dinero a empresas ficticias, parecen cruzar claramente la línea de la incorrección legal. Otras veces, sin embargo, parece más una víctima de las circunstancias, de la negligencia o de la inmensa vastedad de su fortuna”.

Críticas a Bachelet, actitud elitista y tibio anti pinochetismo
Otro cable también dan cuenta del encuentro de Piñera el 13 de marzo de 2008 con el entonces ex embajador de EE.UU. Paul Simons y su consejero Juan A. Alsace, oportunidad en la que el mandatario afirmó que Michelle Bachelet “es una buena mujer, pero mala presidenta”. El informe contextualiza que Piñera había sido derrotado en la elección presidencial de 2005 contra Bachelet por 54% contra el 46% de los votos.

En el informe diplomático se indica que Piñera consideraba que el sello de los gobierno de la Concertación era el de la “incompetencia y corrupción” pero advierte que “se queda corto a la hora de ofrecer soluciones”, respecto a las cuales no ahonda, quedándose sólo en vaguedades.

También destaca que “Piñera, que se graduó en Harvard, hizo ostentación de su lado elitista”, sostenía que parte del problema de la educación en Chile era que los siete principales responsables del Ministerio de Educación poseían una pobre formación y no sabían hablar inglés. Y de hecho afirmó que esos siete funcionarios se formaron en “escuelas mediocres”.

En su reporte, los diplomáticos consideraron que Sebastián Piñera tenía una tibia posición respecto al fallecido ex dictador Augusto Pinochet, aunque omitiendo el hecho que votó en su contra en el plebiscito de 1988.

De hecho destacaron que Piñera consideraba que la Concertación había hecho bien en continuar con la política económica de Pinochet y lo justificó con una frase que los diplomáticos citaron textualmente: “Uno no destruye las pirámides porque se hubieran perdido vidas al construirlas”.

“Esta actitud caballerosa hacia el abuso sobre los derechos humanos del régimen de Pinochet es uno de los talones de Aquiles del centro-derecha, una actitud que no casa bien con la mayoría de votantes de centro-izquierda”, indica.

La voltereta de los cables
Pero luego de ganar las elecciones en enero de 2010, otro cable redactado por Carol Urban definió a Piñera como un “anti-Pinochet centrista”.

Con su llegada al poder, los cables se moderaron. De hecho, el último que lo alude señala que “en el pasado forzó los límites de su política y sus negocios, pero ha movido sus ingentes inversiones para evitar conflictos de intereses”.

Y también destaca algunas virtudes, como el hecho de trabajar siete días de la semana y ser una persona “inteligente y decidida”.

“Quiere controlar cada detalle, desde el contenido de un discurso hasta la posición de las cámaras y las luces”, resalta. Y también se le retrata como un presidente de los que toman bien las riendas.
Y el diario El País concluye que “en el fondo, eso es lo que ocurrió nueve meses después con el rescate de los mineros: el presidente organizó el equipo de salvamento, probó la cápsula donde subirían los 33, y a punto estuvo de bajar él mismo a la mina”.

Cable de la Embajada de EE UU en Santiago sobre la actitud de Piñera ante Pinochet
Cable de la Embajada de EE UU en Santiago sobre los intereses privados de Piñera
Cable de la Embajada de EE UU en Santiago sobre Piñera




ID: 146148
Date: 2008-03-17 14:08:00
Origin: 08SANTIAGO249
Source: Embassy Santiago
Classification: CONFIDENTIAL
Dunno:
Destination: VZCZCXYZ0000
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C O N F I D E N T I A L SANTIAGO 000249

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/12/2018
TAGS: PGOV, PINR, PREL, CI
SUBJECT: CHILE'S "NEXT PRESIDENT" WILL PROPOSE A "NEW
DEAL": A TAD EARLY FOR COMPARISONS TO FDR


Classified By: E/Pol Counselor Juan A. Alsace for reasons 1.4 (B) & (d)

------
Summary
-------

1. (C) Billionaire businessman and all-but-certain 2009
opposition presidential candidate Sebastian Pinera told the
Ambassador that the center-right - led by him - has a
"wonderful opportunity" to win the 2009 presidential
elections, given the "incompetence and corruption" besetting
the governing Concertacion coalition. Pinera described
President Bachelet as a "good woman, but bad president,"
whose foreign policy on issues such as Venezuela is contrary
to Chilean interest. He painted Bachelet as wrong on
domestic priorities, particularly education, but also labor,
innovation and public security, all of which contributed to
"voter fatigue" with Concertacion, now in power for nearly
twenty years. Pinera is short on offering solutions,
however. Moreover, he acknowledged his confidence is based
on current political realities (as he sees them), "which are
always subject to change." End summary.

2. (U) The Ambassador paid a call March 13 on Sebastian
Pinera who, as the center-right candidate, ran against
President Bachelet in 2005, losing by 54 to 46 percent. The
billionaire businessman - he made his nut in the
telecommunications, credit, and aviation industries - is
gearing up for another run in 2009, and is the presumptive
candidate of the opposition Alianza. The Ambassador was
accompanied by E/Pol Counselor.

------------------
Back to the Future
------------------

3. (C) Pinera said that 20 months before Chileans head to
voting booths to replace Michelle Bachelet, the opposition
has a "wonderful opportunity" to win the 2009 presidential
elections. "All polls," he claimed, show Chileans "losing
hope" and tired of the Concertacion, now in power for nearly
20 years. Current problems - energy shortages, corruption
and incompetence - are the result of failed Concertacion
policies. Moreover, giving the opposition a turn in power
would be good for democracy. When E/Pol Counselor noted
Bachelet had seemingly arrested her drop in polls (she has
recently rebounded from the high 30's to the mid-40's),
Pinera attributed it to her personal charisma, but insisted
her policies remain unpopular.

4. (C) The Ambassador asked if the Alianza would present new
ideas or resort to negative campaigning; Pinera replied the
Chilean press "never focuses on the positive." For example,
he had the day before presented a plan on energy
diversification but was only questioned afterwards on his
views about alleged misuse of funds at the Ministry of
Education. Pinera noted there is internal disagreement
within Alianza as to campaign strategy. Senator Allemand (of
Pinera's moderate right Renovacion Nacional (RN)) militates
for "total war" against the Concertacion. Joaquin Lavin, of
the hard right Union Democratica Independiente (UDI), and who
Pinera defeated in 2005 in first round presidential
elections, before going on to lose to Bachelet in the second,
is for a more conciliatory stance. Pinera said he would opt
for a "New Deal" approach, maintaining the opposition's
traditional role as "fiscalizador" (watchdog), while also
seeking areas for cooperation. (Comment: Pinera may have
decided on this tack after seeing Lavin recently resurrect
himself in the polls by claiming to be a
"Bachelitista-Alianzista," who would work with Concertacion
for the common good, an approach Chileans apparently
appreciated. Still, when E/Pol Counselor noted Lavin's rise,
Pinera said Lavin had "bloomed for a day only.")

-----------------------
Bachelet Not Up to Task
-----------------------

5. (C) Pinera claimed to have "600 professionals" (300
purportedly with advanced degrees) working on what a Pinera-
led government would do in areas of education, health, and
energy. But when the Ambassador pressed for specifics,
Pinera replied only that his efforts "aren't politics," and
repeated that the current government wasn't delivering. He
said President Bachelet is "a good woman, but bad president."

On foreign policy, Pinera criticized her for her "too close
ties to Chavez," including having wanted to support (in 2006)
Venezuela's campaign for a UNSC seat. Chavez had been wrong
on the Ecuador-Colombia dispute, sought close ties to Iran,
and is a destabilizing force in the region. All of Chavez's
positions are contrary to Chilean interests. Pinera
continued that had he been President he would have told
Ecuador's Correa (who was in Santiago March 9-12) that "Yes,
the issue of sovereignty is important, but so also is
combatting terror."

6. (C) On domestic issues, Pinera panned Bachelet's efforts
on education reform, noting that much money had been spent
"but not well." The GOC is incorporating "bad practice" from
the fully subsidized public school system into the
semi-subsidized private system, despite the fact that the
latter has shown better results with less resources. Part of
the problem, according to Pinera, is that "the top seven
persons in the Ministry of Education have poor backgrounds in
education and none speak English." (Comment: The
Harvard-educated Pinera flashed his elitist side here, noting
these seven had all attended "mediocre schools.") Pinera
also panned Concertacion policies on labor, innovation, and
public security, adding that Bachelet really "doesn't believe
in free trade or open economies." In short, he concluded,
the GOC has no working agenda.

7. (C) The Ambassador noted that the Embassy is working with
the GOC on energy cooperation, including diversification and
energy efficiency strategies. Pinera said he is in
disagreement with environmental groups seeking to block
construction of major hydroelectric projects in Patagonia.
Chile needs "to double its overall energy generation capacity
in the next ten years." That said, it is also necessary to
recognize the legitimate concerns of the environmentalists.
A good approach would be to restructure the Patagonia project
to partially accomodate the environmentalist -- by taking
measures such as stringing power lines to "bypass" around
environmentally sensitive or especially scenic areas, and
partially reducing the footprint of the dams. While these
measures would add "ten percent" to the cost of a project,
they would reduce environmental impact "by a third," while
remaining profitable for investors.

------------
I Am the Man
------------

8. (C) E/Pol Counselor asked if the October 2008 municipal
elections would be a harbinger of results for the 2009
presidential and parliamentary elections. Pinera replied
that in 2004, Alianza had "been in the ascendant" but that a
poor showing in the municipals that year had hurt the
opposition in the 2005 national elections. While he did not
expect Alianza to win the 2008 municipals, he believed
Alianza would do well, lessening any negative impact in the
2009 national elections. Pinera dismissed any possibility of
the UDI putting up a credible presidential candidate,
predicted there would be no primary to select the opposition
nominee, and said flat out he would be the Alianza candidate
in 2009. He supposed Concertacion would put up either former
President Lagos or OAS SecGen Insulza against him, but noted
he ran 12-15 percent ahead of both in the polls.
Nonetheless, he acknowledged, "in politics, anything can
change."

-------
Comment
-------

9. (C) The numbers may look good for Pinera today and given
Concertacion's current difficulties (a loss of majority in
both houses of parliament, a new round of corruption
allegations, public concerns over a spike in crime), he has
every right to be confident. But in an aside on economic
policy, Pinera also revealed his vulnerable flank, commenting
that Concertacion's having maintained the Pincohet regime's
economic policies was wise: "You don't tear down the
pyramids because you lost lives building them." This
somewhat cavilier attitude towards the human rights abuses of
the Pinochet regime is one Achilles heel of the center-right,
a stance that does not play well with Chile's majority
center-left voters, and one which Concertacion will be sure
to use as it paints Pinera as a business lackey and Pinochet
sympathizer. As Insulza pointed out in a recent interview,

Pinera is currently "running alone." That will change
shortly, as Pinera himself implicity understands. End
comment.

SIMONS


ID: 229217
Date: 2009-10-09 15:43:00
Origin: 09SANTIAGO867
Source: Embassy Santiago
Classification: CONFIDENTIAL
Dunno: 09SANTIAGO755
Destination: VZCZCXRO0994
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DE RUEHSG #0867/01 2821543
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O R 091543Z OCT 09
FM AMEMBASSY SANTIAGO
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INFO WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 03 SANTIAGO 000867

SIPDIS
STATE PLEASE PASS TO WHA/BSC, INR/B
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA

E.O. 12958: DECL: 2019/10/09
TAGS: PGOV, ECON, KCOR, CI
SUBJECT: CHILE: Conservatives Beat Back Skeleton in Pinera's Closet

REF: SANTIAGO 755

SANTIAGO 00000867 001.2 OF 003


CLASSIFIED BY: Carol Urban, Deputy Chief of Mission, State
Department, US Embassy Santiago; REASON: 1.4(B)

1. (SBU) Summary: Eduardo Frei attempted to taint presidential
challenger Sebastian Pinera with renewed allegations of insider
trading. Pinera's skilled campaign team flipped the issue into a
referendum on the NGO that reported the incident. A competitive
businessman and politician prone to taking risks, Pinera has been
linked to a number of questionable actions in the past and is
likely to continue to face questions about past business deals, but
voters seem relatively unconcerned by these charges. End Summary.



Insider Trading Allegations Resurface...

--------------------------------------------- ------



2. (U) A highly motivated businessman willing to take risks,
Alianza presidential candidate Sebastian Pinera is no stranger to
scandal. The most recent accusations of impropriety surfaced
during a televised presidential debate on September 23, the first
major debate of this election cycle. Assigned to talk about
corruption, Concertacion candidate Eduardo Frei avoided speaking
about a series of fairly minor scandals that have tainted his
coalition's reputation and instead accused Pinera of insider
trading, citing an annual and worldwide Transparency International
report issued that day. The report noted that in July 2006, while
president of LAN Chile, Pinera purchased 3 million LAN Chile shares
just hours after receiving the company's latest and unpublished
financial report. Chile's Securities and Exchange Commission
investigated the transaction and charged Pinera with "abuse of
privileged information" in 2007. Pinera paid a USD 700,000 fine
and stepped down as president of the company, but denied any
wrongdoing. One claim is that the purchase had been programmed
before he obtained the company's financial report, and that his
mistake was not cancelling the purchase after he obtained the
information.



...but Attention Shifts to the Accuser

--------------------------------------------- ---



3. (U) In response to Frei's charge during the debate, Pinera
reiterated his denial of any illegal activity and demanded that
Frei apologize. Immediately following the debate, Pinera advisors
accused Chile Transparente, the local arm of Transparency
International, of political bias. In the following week, the topic
spurred a polemic debate--not about Pinera's actions, but rather
about the accuracy and objectivity of the report. One board member
of Chile Transparente, the local arm of Transparency International,
very publicly resigned from the organization amid the clamor.
Amidst the daily headlines questioning the objectivity and
management of the previously respected organization, Pinera's
alleged insider trading was all but forgotten.



Pinera on the Lam?: Alleged Financial Fraud in the 1970s

--------------------------------------------- ----------------------
--------



4. (C) Frei's debate offensive marks the second time that old
accusations of Pinera misconduct have resurfaced during the
presidential campaign. In July 2009, a Pinochet-era Justice
Minister stated that she had intervened on Pinera's behalf to
obtain an injunction that would prevent Pinera from being served
with an arrest warrant (reftel). This revelation related to
charges stemming from Pinera's tenure as general manager of the
Bank of Talca from 1979 - 1980, a period when there was little
oversight or regulation of Chile's banking industry and many banks
and bank executives enjoyed considerable success, often through
shady dealings. Like many other banks of the time--and not unlike
the recent financial crisis in the U.S.--the Bank of Talca made
many very risky loans, which initially led to handsome profits but
ultimately led to bankruptcy. However, Pinera and other Talca

SANTIAGO 00000867 002 OF 003


executives went beyond the typical improprieties of the day. In
addition to the bad loans they approved, they also created dozens
of fake companies, gave these companies loans from the bank, and
then used the funds to buy more bank shares. They profited again
when the government stepped in and bailed out the banking sector --
and its shareholders -- while the loans to fake companies were
written off and Pinera and other executives did not have to repay
the principal.



5. (U) In April 1982, a judge ordered Pinera's arrest. Pinera
went into hiding for 24 days in order to avoid being formally
served with the arrest warrant. His lawyers placed an injunction
on the case, which was heard by the Supreme Court. The injunction
was accepted and the case dismissed. The charges were never
investigated.



Links to a Price-Fixing Pharmacy

------------------------------------------



6. (U) More recently, Frei also attempted to highlight the
(relatively weak) link between Pinera and a 2008 price-fixing
scandal. In December 2008, Chile's National Economic Prosecutor's
Office sued three pharmacy chains for USD 15 million each, alleging
that they had colluded to raise the price of more than 200
medicines by as much as 200 percent in 2007 and 2008. In March
2009, one of the firms, Farmacias Ahumada agreed to pay a USD 1
million fine in exchange for having the charges dropped. The same
month, the press reported that Sebastian Pinera owned 2 per cent of
that retail chain via his investment fund, Santa Cecilia. Pinera
confirmed that he owned a small stake in the company, but claimed
he was unaware of these holdings, saying that he was "just like
millions of Chilean investors and individuals whose pension funds
hold stakes in the company." Pinera promptly sold his shares.



How About Frei?

---------------------



7. (C) Concertacion candidate Eduardo Frei's past has also come to
haunt him during this year's presidential campaign. In 1994,
then-President Frei pardoned Angel Vargas Parga, a drug trafficker
convicted of smuggling half a ton of cocaine into Chile. While
Frei claimed that he was motivated by Vargas' good behavior in
prison, opponents allege that Vargas' well-connected Christian
Democrat family was the real reason behind the release. (Note: A
longtime Frei confidante and advisor told us recently that
then-Justice Minister Soledad Alvear made the decision to pardon
Vargas. Frei was not involved in the decisionmaking and found out
after the fact, but has to defend the decision nonetheless. End
Note.) Alianza has also accused Frei of being improperly involved
in managing his investments during his presidential term.
Nonetheless, Frei--who is widely viewed as solid, respectable, and
frankly a bit boring--seems to have fewer skeletons in his closet
than his opponent.



Do the Voters Care?

--------------------------



8. (SBU) Chilean voters seem relatively unconcerned by the
allegations against Pinera. Polls suggest that voters see
corruption as a real problem in Chile, but don't rate tackling
corruption as a top priority. In an August poll by Ipsos, 53% of
those surveyed said that Chile was a corrupt country. However,
polls consistently show that voters' top concerns are unemployment,
crime, health, and education; corruption lingers near the bottom of
the list. Moreover, Pinera's image as an astute businessman seems
to be reflected in how voters see his strengths vis-a-vis Frei's.
Frei comes out slightly ahead of Pinera in measures of perceived

SANTIAGO 00000867 003.2 OF 003


honesty, while Pinera has a wide lead in terms of perceived
intelligence and ability to assemble a good political team.



The Forgotten Skeleton in Pinera's Closet: "Pineragate"

--------------------------------------------- ----------------------
-------



9. (U) Other potential minefields in Pinera's political and
business history remain and may surface during the presidential
campaign. The most significant of these stems from a 1992 phone
conversation in which Pinera discussed strategies to destroy
political rival Evelyn Matthei. The call--which featured Pinera
using coarse language and referring dismissively to Matthei as a
little girl--was secretly recorded by military intelligence and
passed to television-station owner Ricardo Claro, a business
magnate and Pinera rival. It aired on Chilean television in August
1992 when Claro made a surprise appearance on his station's public
affairs show. The ensuing scandal, referred to as "Pineragate,"
exposed Pinera's scheming; the fractious divisions within the
right; and continued military interference in politics. The
scandal torpedoed both Pinera and Matthei's hopes for the 1993
presidential election, and led to a rift between the two that has
only recently been repaired.



Comment

-------------



10. (C) Driven and competitive, Sebastian Pinera pushes both his
businesses and his politics to the limits of the law and ethics.
Some of his actions--such as lending money to fictitious
companies--seem to clearly cross the line into legal impropriety.
At other times, though, he seems more to be a victim of
circumstance, carelessness, or the sheer vastness of his fortune.
Disparaging your political opponent in a private telephone
conversation or investing in one troubled company amidst a diverse
portfolio hardly seems surprising for a hard-charging businessman
turned politician. These charges have aired at various times in
the past, and when they have resurfaced during this campaign have
had relatively little impact on the general public, which seems to
see them as a mix of old news and business as it used to be. What
is particularly noteworthy about the latest episode is the way the
tables have been completely turned to focus on the shortcomings of
the manner in which Chile Transparente managed the report, rather
than the underlying charges of insider trading. Such a reversal
can be attributed to three things: an impressive Pinera campaign
team eager to go on the attack, Frei's lackluster communication
strategists, and the generally conservative Santiago press. End
Comment.
SIMONS


ID: 245038
Date: 2010-01-22 20:29:00
Origin: 10SANTIAGO25
Source: Embassy Santiago
Classification: CONFIDENTIAL
Dunno: 09SANTIAGO755 09SANTIAGO867 10SANTIAGO19
Destination: VZCZCXRO5697
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FM AMEMBASSY SANTIAGO
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RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
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RUEHC/DEPT OF LABOR WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 04 SANTIAGO 000025

SIPDIS
STATE FOR WHA/BSC, INR/B, WHA/EPSC
STATE PLEASE PASS TO USTR KKALUTKIEWICZ, EBRZYTWA, JKEMP,
CSMOTHERS,
COMMERCE FOR DPAREKH, KMANN
LABOR FOR ILAB--CGAY
STATE PLEASE PASS TO FEDERAL RESERVE TOM CONNORS
TREASURY FOR BLINDQUIST
PENTAGON FOR OSD--MLENIHAN
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA
AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC
AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE

E.O. 12958: DECL: 2020/01/22
TAGS: PGOV, PREL, ECON, CI
SUBJECT: Meet Chile's President-Elect, Sebastian Pinera

REF: A. SANTIAGO 19; B. 09 SANTIAGO 755; C. 09 SANTIAGO 867

CLASSIFIED BY: Carol Urban, Charge, State, US Embassy Santiago;
REASON: 1.4(B)

1. (SBU) Summary: Chile's president-elect, Sebastian Pinera, is a
savvy, Harvard-educated billionaire and former senator known to
work seven days a week. Although described by some international
press as "right wing" and sometimes compared to Italy's
scandal-prone Silvio Berlusconi, neither is accurate. Pinera is an
anti-Pinochet centrist who will be challenged to satisfy his broad
Alianza coalition which spans from the center to the far right. He
has pushed the envelope in his political and business dealings in
the past, but is now moving his substantial investments into blind
trusts to avoid conflicts of interest. His unquestioned devotion
to his wife of 30-plus years and his Catholic faith provide little
fodder for personal scandal. End summary.



2. (U) In the historic January 17 election, Chilean voters selected
opposition candidate Sebastian Pinera as the next president of
Chile, beating his opponent, former president Eduardo Frei
Ruiz-Tagle, by a three point margin. Pinera will be the first
conservative to lead Chile since the Pinochet dictatorship
(1973-1990) and the first conservative to be democratically elected
president since 1958. (See Ref A for more elections analysis.)



The Billionaire President

--------------------------------



3. (U) The son of a civil servant/diplomat, Pinera grew up in New
York, Belgium, and Chile. He studied Business Administration at
the Catholic University of Chile in Santiago, where he received the
Raul Iver Award -- the highest distinction possible. In 1973, he
went as a Fulbright scholar to Harvard (where his older brother
Jose also studied) and earned a Masters and Ph.D. in Economics.
Pinera speaks English reasonably well, though it is a bit rusty.
(See Ref B for details about his family and additional biographical
information.)



4. (U) Upon his return to Chile in 1976, Pinera worked for the
World Bank, the Inter American Development Bank (IDB), and the UN's
Economic Commission for Latin America and the Caribbean (ECLAC) on
projects designed to reduce poverty in Latin America. In the
1980's, Pinera moved into the private sector, where he demonstrated
his ability to successfully navigate financial markets. After
making a small fortune as a financial advisor, Pinera started
Tolten, a homebuilding business. The success of this company
provided the capital to invest in other business ventures, among
them Bancard -- the corporation that introduced credit cards to
Chile. Bancard brought Pinera more wealth and he continued to
invest in a variety of Chilean industries.



5. (SBU) Pinera prides himself on being a self-made billionaire.
In 2009, Forbes ranked him number 701 on a list of the world's
richest people, with a fortune of USD 1.3 billion. Among his most
noteworthy acquisitions are a 26 percent stake in the leading South
American airline LAN, a 13 percent stake in iconic soccer team Colo
Colo, and full ownership of television station Chilevision. Pinera
has promised to place his assets in a blind trust before assuming
the presidency, and press accounts state that he is currently
working to sell his shares in LAN.

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Pining for the Presidency: Fourth Time's a Charm

--------------------------------------------- --------------------



6. (SBU) Pinera's political career began with his campaign for
senator in eastern Santiago in 1989 as an independent supporting
the center-right National Renewal party (RN). After winning the
election, he officially aligned himself with the party. During his
eight years as senator, Pinera gained the respect of his colleagues
for his work on a variety of issues, including on the Senate
Finance Committee. In a vote of his peers, Pinera was chosen as
one of the two best senators for the period of 1990-1998. He did
not run for reelection. Pinera became president of the National
Renewal party in 2001 and successfully shifted the party towards
the center during his mandate.



7. (SBU) Leading Chile has long been Pinera's dream. His first
attempt, in 1992, ended prematurely when a secretly recorded phone
call was released showing him colluding with a journalist to
undermine his rival, Evelyn Matthei (Ref B). He was RN's
presidential pre-candidate in 1999 but stepped aside so his Alianza
coalition counterpart, Joaquin Lavin of the Independent Democratic
Union (UDI), could run unhindered. (Lavin lost to Ricardo Lagos by
a small margin in the runoff.) In 2005, Pinera decided to run as
RN's presidential candidate, splitting the Alianza coalition, as
Lavin was running again as the UDI candidate. Pinera edged out
Lavin in the first round -- generating resentment in the UDI -- but
then lost by seven percentage points to the Concertacion
coalition's Michelle Bachelet in the runoff. After his loss,
Pinera quickly shifted his sights to the 2009 presidential
campaign.



Where Do Pinera's Loyalies Lie? With the Center, Center-right, or
Right?

--------------------------------------------- ----------------------
-----------------------------



8. (SBU) Growing up in a Christian Democrat family--his father was
one of the party's founders--influenced Pinera's early political
leanings. He speaks openly about how Christian Democrat Eduardo
Frei Montalva -- President of Chile from 1964-1970, a friend of his
father's, and father of his main presidential opponent Eduardo Frei
Ruiz-Tagle -- influenced his political beliefs. Pinera attributes
his own shift away from the center-left Christian Democrats to
their "backwards" economic policies.



9. (SBU) Pinera has an uneasy relationship with Alianza coalition
members from the far right. Unlike many in his conservative
Alianza coalition, Pinera voted "No" in the 1988 plebiscite, the
option that voted down eight more years of military rule by
Pinochet and paved the way for the democratic transition and
elections in 1989. More recently, his outspoken criticism of
Pinochet, support for civil unions for gay couples, and backing of
the day-after contraceptive pill have made Chile's far right
uncomfortable. In an effort to appease the far right, Pinera gave
a speech during his campaign to a large group of retired military,
promising to bring an end to "eternally" pending human rights abuse

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cases against the military.



10. (SBU) Throughout his campaign, Pinera billed himself as a
centrist and promised to continue many of President Bachelet's
popular social policies. Since his victory, he has promised to
work with the outgoing Concertacion government for a smooth
transition. Advisors Rodrigo Hinzpeter and Cristian Larroulet
recently had their first meeting with outgoing Interior Minister
Edmundo Perez Yoma. Analysts are anxiously awaiting the
announcement of Pinera's cabinet -- scheduled to be announced in
February -- and whether or not he will include former Pinochet-era
officials in high level government positions.



No Stranger to Scandal

------------------------------



11. (SBU) In addition to the infamous phone call which ended his
1992 presidential bid, Pinera has been linked to a number of
financial and political scandals over the years. He is alleged to
have been involved in shady financial dealings while general
manager of a bank in the late 1970s and to have evaded a resulting
arrest warrant in 1982. In 2007, he paid a USD 700,000 fine to
Chile's equivalent of the Securities and Exchange Commission for
insider trading but never admitted culpability. A shrewd
businessman, Pinera seeks any advantage possible in business or
political dealings, often getting close to the limits of ethics or
legality. (See Ref C for more on Pinera's scandals.)



A Hard-Driving Businessman Striving for a Softer Image

--------------------------------------------- ----------------------
-----



12. (C) Pinera is known for his rigor, intelligence and dedication.
He works seven days a week and sleeps little. He expects to have
several hours notice before a meeting so that he can do his own
research and be an informed audience. He will listen and consider
an opinion he considers substantive, but will interrupt and even
ask someone to leave if he feels they are not making a valuable
contribution.



13. (C) Pinera makes high demands on his staff but rewards
loyalty. In remarks to close advisors at an election night party,
he told them that he would need their intelligence, hard work, and
obedience. A micro-manager, he wants to be in control of every
detail, from the content of a speech to the camera position and
lighting. Press reports have speculated that he may make life
difficult for his cabinet members given his broad knowledge and
hands-on leadership style.



14. (C) As a presidential candidate, Pinera tried to eschew his
billionaire image and show his human side. He campaigned
tirelessly around Chile, calling himself the "locomotive," and he
embraced new social networking technology like Facebook and
Twitter. Despite his efforts to cultivate a "man of the people"
image, he surrounds himself with elite businessmen and academics

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and continues to pilot his private helicopter to his vacation
homes.



Chile's New First Family: The Pinera-Morels

--------------------------------------------- ------------



15. (U) Pinera has been married for over thirty years to Cecilia
Morel Montes and they have four adult children: Magdalena,
Cecilia, Sebastian and Cristobal. Pinera is surrounded by family
advisors. His younger sister Magdalena ("Pichita") runs his
charity, the Future Foundation, and his daughter Magdalena
("Manena") was a key player in the campaign and is an important
advisor for his transition team. His sons also worked on the
campaign and appeared in press conferences and other public events.
Pinera is a practicing Catholic. His uncle, Bernardino Pinera, is
a priest.



16. (SBU) Pinera's wife, Cecilia Morel, studied social work at the
Carlos Casanueva Professional Institute and has worked in the
social assistance sector for the past twenty years. She founded
the Enterprising Women Foundation which works to help young women
in a low-income area of Santiago by providing professional
development training and consulting for micro-enterprises. As
First Lady, Morel proposes to develop a housing improvement program
for Chile's rural areas, a network of after-school centers for
children with learning disabilities, and a sports program for at
risk youth.



Comment

-------------



17. (C) Pinera, a highly educated and wildly successful
businessman, brings a substantial change to Chile after 20 years of
Concertacion rule. Intelligent, hard-working, and determined,
Pinera will be a hands-on president. Since he owes his election to
votes from both the center-left and the right, he will have to
strike a careful balancing act to maintain his promise of
continuity with Bachelet's progressive policies while keeping his
supporters on the far right happy as well. End Comment.
URBAN


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