Tank sale lands 2 Chile generals in jail

SANTIAGO, Chile, Aug. 6 (UPI) -- A Chilean court has sent two retired Chilean army generals to jail and triggered calls for an investigation in the Netherlands over charges that hefty bribes changed hands in a 1998 purchase of 200 Leopard tanks for the Chilean armed forces.

The court determined there was sufficient evidence to prosecute Gen. Luis Iracabal Lobos and Brig. Gen. Gustavo Latorre over the circumstances leading up to the disappearance of $600,000 during the purchase of the tanks from Dutch defense supplier RDM.

However, the circumstances in which the money went missing remain a mystery. For instance, it is not clear whether the men were offered the money for their role in the sale or if they siphoned it off during the transaction.

Lack of clarity over the manner in which the money went missing has led to calls for an investigation by the Dutch government to determine the role played by RDM.

RDM sold the tanks to Chile for $63 million in 1998. But when the tanks arrived in Chile they were found to be in "a deplorable state" and were earmarked for replacement by 2006, Chilean media reported.

The reportedly poor condition of the tanks at the time of their delivery and the circumstances in which they were sold to Chile by RDM has aroused interest in the Dutch establishment, in particular anti-corruption campaigners and politicians, including former Defense Minister Joris Voorhoeve, Dutch newspaper De Telegraaf reported.

The imputation that RDM paid bribes for the sale of their tanks must be investigated in the Netherlands, Voorhoeve said.

The two former officers' alleged involvement in suspected corruption came to light as Chilean investigators examined overseas bank accounts of Chile's late dictator, Gen. Augusto Pinochet. His accounts had been frozen as part of his indictment on tax evasion charges, but following his death in 2006, investigators looked into the accounts and found nearly $28 million stashed away.

As part of the trial, Chilean investigators plan to interview key political officials of the time, including former Defense Minister and current Interior Minister Edmundo Perez Yoma and his deputy and now a member of the Constitutional Court, Mario Fernandez.

In the Netherlands, the Public Prosecutor's Office told Radio Netherlands Worldwide there could be no grounds for prosecution of any Dutch entity involved in the deal because, at the time of the alleged bribery in 1998, there was no Dutch law against offering bribes to officials overseas. Legislation to make such practices illegal was introduced only in 2001.

Voorhoeve was joined in the calls for a Dutch investigation by Socialist Party parliamentary member Krista van Velzen, but the Public Prosecutor's Office ruled this out.

Gerben Smid, a lecturer in criminal law at Erasmus University Rotterdam, told the radio network there had been no successful prosecutions under the new anti-corruption legislation since it was introduced in 2001.

Public Prosecutor's Office spokesperson Marieke van der Molen told the radio it was often difficult to secure evidence in foreign countries in corruption cases. While dozens of cases have been considered, none have come to court, she said.