Political Risk Analysis - Quick View: Corruption Allegations Threaten Pi?era Campaign - 02 OCT 2017


The Latest: On September 26 the attorney general's office announced the launch of investigations into irregular payments linked to the 2009 election campaign of former president Sebastian Pinera. The investigations centre on potentially illicit funds from Sociedad Quimica y Minera (SQM), a Chilean mining firm that has previously been accused of providing illegal campaign funding to candidates from both Pinera's Chile Vamos coalition as well as the ruling Nueva Mayoria coalition.

Implications: The current allegations could be extremely damaging for Pinera's candidacy and our long-held view that he will win November's presidential election. Pinera has been at the centre of several corruption allegations in the past, and is seen by many Chileans as embodying the corrupt political establishment. The prosecutors are reported to be investigating a number of different payments made by SQM, suggesting that the cases may continue to trouble Pinera throughout the remainder of the campaign.

What ' s Next: For the time being, we maintain our view that Pinera is the favourite to win the presidency. However, we will closely watch polling over the coming weeks for evidence that the most recent allegations are negatively impacting his popularity. Pinera's current lead in the polls is substantial, but when combining the support for the leading leftist candidates, Alejandro Guillier and Beatriz Sanchez, the margin becomes much narrower. As a result, Pinera cannot afford to see his support dip significantly below current levels if he hopes to win December's run-off against either Guillier or Sanchez.

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