Case File

Caso Mirage

Author
World Peace Foundation
Published on
November 7, 2020
(updated September 12, 2022)
Image
Image Source: Flickr/Creative Commons, Rob Schleiffert.
Image Source: Flickr/Creative Commons, Rob Schleiffert.

Contents

Contents

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Introduction

Introduction

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During its protracted and delicate transition to democracy during the 1990s, Chile struggled to enforce new anti-corruption norms in an environment of lingering military prerogatives. The “Caso Mirage,” a kickbacks scandal involving the purchase in 1994 of twenty-five second-hand Mirage combat jets from Belgium, demonstrated the existence of cozy and lucrative relationships between arms dealers and senior air force officers that survived the end of the Pinochet era. Simultaneously, the Mirage scandal, which cost the Chilean state USD 15 million in commissions, cast a light on the transnational nature of arms corruption and the important role of intermediaries such as Lt. Gen. Jacques Lefebvre, a suspect figure in a separate Belgian political finance and arms sales scandal of the late 1980s, who enjoyed a second career as a sales agent for Belgium’s military equipment made redundant by the end of the Cold War. The tangled network of shell companies and secret bank accounts uncovered in the course of the Belgian and Chilean investigations also highlighted the importance of multi-jurisdictional prosecutorial cooperation in fighting international corruption schemes.

Case Details

Case details

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Seller country
Belgium
Seller company
SABCA (currently owned by Dassault Group and Fokker)
Buyer country
Chile
Goods category
Aircraft
Equipment sold
25 Mirage-5M “Elkan” combat aircraft
Deal value
USD 114 million
Sum involved in corruption
USD 15 million
Start year
1994
Outcome status
Trial Closed - Some Convictions

Actors

Actors

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  • Ramón Vega Hidalgo– head of the Chilean Air Force (1991-1995) and later an appointed senator (1998-2006); suspected of misappropriating USD 2.8 million in public funds. Arrested in 2009; released due to ill health and died in 2014.

  • Lt. Gen (retd.) Jacques Lefebvre – chief of staff of the Belgian Air Force (1985-1988) and founder of Europavia. Committed suicide in 1995.

  • Jaime Estay Viveros – former head of the logistics command of the Chilean Air Force. Convicted of embezzlement of public funds; received a 100-day suspended sentence and fined CLP 7.5 million.

  • Bernard Van Meer – son-in-law of Ramón Vega.

  • Carlos Honzik – Chilean arms dealer and key intermediary on the Mirage deal.

  • Patricio Rojas – Chilean defence minister at the time of the deal’s signing.

Allegations

Summary of Corruption Allegations

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Of the USD 39 million in modernization costs which Chile paid to SABCA, a large commission worth USD 15 million was in turn paid out to Lefebvre’s consultancy firm, Europavia. In March 1995, Lefebvre committed suicide after being implicated in a separate political controversy surrounding an arms procurement scandal in Belgium. Belgian investigators uncovered evidence of the USD 15 million commission associated with the Chilean deal among his papers. Lefebvre’s records revealed that the USD 15 million was divided up among several Belgian and Chilean agents involved in the deal. The general himself took a three percent cut of the commission, a SABCA representative in Chile named Francisco Smet d’Olbeck was assigned ten percent, a Paris-based aeronautics consultant received one percent, eight percent was sent to an anonymous account in Miami, and the remainder was transferred to a company with the name Berthier Investment Inc. The resulting investigations would firmly establish that the ultimate recipients of these funds were intermediaries and FACh officers, while several close associates of high-ranking civilian officials also benefited.

Timeline

Timeline

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1994
  • JulThe FACh signed a USD 114 million contract for 20 jets modernized to the Mirage-5M “Elkan” standard, plus five additional jets for spare parts.

Outcomes

Investigation Outcomes

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1999
  • JanChilean deputy Nelson Ávila brought to light suspicions of kickbacks related to the deal based on Lefebvre’s documents.
2003
  • Belgian investigating judge approached Chilean counterparts for legal assistance in determining the controllers of the accounts into which Europavia had transferred funds.
2009
  • Ramón Vega was arrested and placed in detention pending trial, however, he was released for health reasons.
2010
  • A parliamentary commission investigated the Mirage deal and released its report. It held that former presidents Eduardo Frei and Patricio Aylwin, their defence ministers Patricio Rojas and Edmundo Pérez Yoma, respectively, were responsible for failing to prevent the corruption associated with the deal.
2017
  • FebJaime Estay, the former head of the Logistics Command of the FACh, was found guilty of misappropriation of public funds and given a suspended 100-day prison sentence and fined CLP 7.5 million.
2018
  • President Sebastián Piñera introduced a plan to phase out the Copper Law while maintaining a link between copper revenues and arms procurement over a twelve-year transition period.

References

References

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