Milicogate

Milicogate is a corruption scandal involving officers of the Chilean Army and the fraudulent misappropriation of public funds designated by the Secret Copper Law. The scandal was brought to light in 2015 through a series of stories published by journalist Mauricio Weibel in The Clinic. As of March 2019, investigations conducted by prosecutors revealed that at least 6.1 billion Chilean pesos had been embezzled. The name "Milicogate" was coined by The Clinic's creative editor, Francisco Castillo, combining "milico"—Chilean colloquial slang for a military person—with the suffix "–gate", conventionally appended to various corruption scandals. In 1958, during the second government of President Carlos Ibáñez del Campo, the Secret Copper Law was enacted, granting 15% of mining tax revenues directly to the financing of the armed forces, without oversight by either the Office of the Comptroller General or the National Congress. Over subsequent years, the law was amended several times, shifting from 15% of tax revenues to 10% of total sales from Codelco's copper-extraction operations. The scheme relied on fictitious invoices and receipts—not recognized by Chile's Internal Revenue Service—to siphon money through purported purchases of non-existent military materiel. Funds were drawn from surplus balances, such as those arising from currency exchanges between Chilean pesos and US dollars. Invoices for services never rendered were issued by army suppliers, including Frasim (Francisco Huincahue), Raúl Fuentes Quintanilla, and Waldo Pinto. The principal figures within the army were Colonel Clovis Montero and Corporal Juan Carlos Cruz, both of whom worked in army finance.