Slumping in the Polls, Chile's President Sebastian Pinera Struggles to Keep Political House in Order

By Witte-Lebhar, Benjamin | NotiSur - South American Political and Economic Affairs, May 13, 2011 | Go to article overview

Slumping in the Polls, Chile's President Sebastian Pinera Struggles to Keep Political House in Order


Witte-Lebhar, Benjamin, NotiSur - South American Political and Economic Affairs


Weighed down by a pair of government scandals that have exacerbated intracoalition rivalries and already cost several administration officials their jobs, President Sebastian Pinera may be longing for the days when his biggest problems came from outside his political circle.

Pinera spent a busy first year in office grappling with a host of external challenges, starting with an magnitude 8.8 behemoth of an earthquake that struck central Chile less than two weeks before his inauguration NotiSur, March 12, 2010.

Now into his second year, the president is facing a very different, though no less taxing, leadership test: keeping his political house in order. Personnel management, Pinera is discovering, is no easy chore, particularly when it involves taming the historic tensions so deeply embedded in his conservative Alianza coalition.

The latest mess to land on Pinera's proverbial doorstep is the "caso Kodoma," a relatively public spending fiasco that is nevertheless causing some big problems for the administration. Kodama, a construction company, is suspected of overcharging Chile's Ministerio de Vivienda and Urbanismo (MINVU) several million dollars for work it did on a Santiago highway project.

Last December, the private contractor presented MINVU with a bill for roughly US$87 million in excess costs associated with the long-delayed road project. Under the guidance of Alvaro Baeza, an attorney and close advisor of then Housing Minister Magdalena Matte, the ministry negotiated the bill down by more than half. In January, Matte signed an order to pay Kodoma US$36 million--an apparently good deal for the government considering the first bill came with a seal of approval from Universidad Catolica researchers.

Tipped off by another MINVU official, however, Matte--suspecting the Kodoma bill was still too high--changed her mind about paying the US $36 million and ordered the government in late February to stop payment. In early April, she turned the matter over to investigators in the Ministerio Publico (MP). The case is also being examined by the Controlaria, the government comptroller's office, which released a preliminary report suggesting Kodoma's final bill was still US$15 million too high.

It remains unclear who is responsible for calculation errors. Nor have authorities determined whether anyone in the government looked to benefit from the aborted transaction. Still, with the case beginning to attract more media attention, Matte made the somewhat surprising decision April 20 to resign her post.

"Although apparently I lose something on a personal level.... I avoid an unnecessary political conflict," Matte wrote in her resignation letter. "I have the conviction, Mr. President, that I did everything a proper person would do in the face of a situation such as the one I had to deal with."

Matte is the fifth Cabinet minister to step down this year, following in the footsteps of Jaime Ravient (defense), Ricardo Raineri (energy), Felipe Morande (transportation), and Camila Merino (labor). Her replacement is Rodrigo Perez Mackenna, who was promoted from the position of intendente (regional governor) for central Chile's O'Higgins Region.

With friends like these

At this point, no one is suggesting Matte did anything wrong other than accept some bad advice from Baeza, a colleague and reportedly close friend long before the two worked together in MINVU. Her decision to take the fall has instead earned her praise--from both sides of the political aisle.

"She offered a lesson," said former President Ricardo Lagos (2000-2006) of the Partido Socialista (PS). "We're in the presence of an honest minister, no question about it." The PS is one of four member parties in the center-left Concertacion coalition, which led Chile for two decades prior to Pinera's inauguration.

Why, then, was Matte so quick to call it quits? At least part of the answer can be gleaned from the parting letter she submitted to President Pinera. …

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Slumping in the Polls, Chile's President Sebastian Pinera Struggles to Keep Political House in Order
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