Noticias

Municipal Corruption: The Legality Gap

This article first appeared in La Tercera on September 21, 2021.

We are not surprised by one case of corruption when we hear about the next, and then the next. The last few days have been intense, full of revelations, questionings, accusations, and especially, a sense of impunity and lack of control. And as bad as it is to realize (or confirm) that corruption is the order of the day, the glass half full is that at least we are getting to know it.

Corruption exists and will always exist, and it is good that we are aware of it because if we are not aware of its existence, we will remain undaunted by its presence, being unable to prevent it or attack it. And this is fundamental because corruption goes beyond skirting the rules and acting under the table to obtain benefits. Corruption undermines trust, disrupts democracy, the public good, equity and so many other factors.

We are in a deep crisis of trust, which has been accentuated by the news we have heard recently. Now the focus is on the investigation of municipal corruption in the eastern sector, in addition to San Ramón, Maipú, or Viña del Mar.

These days, the first warning was given by the mayor of Vitacura, Camila Merino, who denounced possible irregularities in the payment of subsidies for some “Vita programs” by the administration of the former mayor Raul Torrealba. But everything would be even more serious, because thanks to a self-denunciation, an investigation began to investigate the delivery to the ex-mayor of envelopes with $5 million in cash per month. This would be the beginning of a series of facts that began to come to light.

A report by América Transparente revealed that the municipalities of Las Condes and Lo Barnechea had transferred more than $47 billion to community organizations for security services. And then, we learned of audio that uncovered alleged irregularities in the Communal Union of Neighborhood Councils of Las Condes, which receives a millionaire annual subsidy from the municipality. According to the record, employees were hired who, with prior agreement and without a specific role, had to return part of their salary.

This is when the role of municipal corporations under private law begins to be questioned because although they are financed by the municipalities, they act as independent bodies that buy outside the public procurement system, which opens the door to the payment of overpayments and overpricing; they are also not obliged to render accounts, be audited, make their payrolls of workers or suppliers transparent, nor to be governed by the transparency law. In short, all the conditions are in place for corruption to operate with ease.

Today, there are new aspects in each of these municipalities, and the facts are becoming more serious. In Vitacura, corruption would go beyond the corporations and now the Sustainability Direction is also being investigated for bulky contracts and payments for services that never existed; besides the payment of millionaires over time, even in the middle of the pandemic, as if it were an acquired right.

In Lo Barnechea, Mayor Cristóbal Lira filed a complaint with the public prosecutor’s office and announced an audit of community program subsidies. At the same time, he sent an alert to the Financial Analysis Unit for the contract of an advertising sign. Likewise, the mayor has been in office for almost two years and is only now requesting an audit.

In Las Condes, now the case of the Cultural Corporation has exploded, which would have received $5,500 million from the municipality, being close to $2 billion destined to remunerations, as it seems that nepotism, cronyism, and excessive salaries (even higher than the mayor’s) reigned.

What we see is a similar way of operating: taking the money from projects to the house, hiring ghost employees or people who do nothing to render expenses that did not occur or to demand the return of part of that salary; hiring relatives and friends with large salaries; or paying overtime that turns out to be ridiculous.

In this way, we see that in some aspects the control escapes the work of the Comptroller’s Office since background information is hidden or irregularities are committed under a supposedly legal cloak. We have already seen this in the Itelecom case -which investigates 25 municipalities in the country for contracts for LED lights- where a private company bribed municipal officials who fell into the temptation of easy money.

We must denounce corruption and not turn a blind eye. In this case, it was the mayor of Vitacura who dared to go a step further, denouncing someone from her political coalition (which is very unusual). We cannot depend on facts being known by chance, and that is why it is urgent to demand accountability, implement whistleblower channels, whistleblower protection, greater transparency in contracting and bidding, internal and external audits, strengthen the oversight role of municipal officials and citizens, and have KPIs and management control in municipal corporations as it is done in the private sector.

Granted power used for private gain is corruption, as defined by Transparency International, and in line with its global strategy, we must hold power accountable for the common good.

By: Susana Sierra

Subscribe to our newsletter

Receive montlhy the latest Compliance news from Latin America.