Bachelet forces out her Cabinet as Chilean political crisis deepens

In an attempt to contain a burgeoning political crisis, Chilean President Michelle Bachelet on Wednesday asked her entire Cabinet to resign while she tries to put together a new team of officials and advisors within 72 hours.

“I have found that an evaluation of multiple factors was necessary, including evaluating my administration as well as deciding who is going to be on my team during this new term,” she said during a television interview on Wednesday night.

For weeks various political sectors had been calling on Bachelet to make profound changes to her government

For weeks, various political sectors had been calling on Bachelet to make profound changes to her government following several investigations into alleged illegal financing of political parties, which have affected institutions such as Congress.

But the Cabinet reshuffle came on the heels of growing scandals involving the president’s own son, Sebastián Dávalos and his wife, as well as her Interior Minister Rodrigo Peñailillo, who is considered Bachelet’s right-hand man.

Corruption and influence-peddling allegations against Dávalos and a host of government and private sector officials have put Bachelet’s approval ratings at an all-time low.

Dávalos, 41, and his wife Natalia Compagnon are being investigated for allegedly using their family influence to profit from a land deal during Bachelet’s presidential campaign last year.

When the news magazine Qué Pasa first published the allegations on February 5 and described Compagnon’s multi-million dollar real estate deals, Bachelet was on vacation with her family in southern Chile.

Peñailillo, who was in Santiago, took charge of the crisis but was later criticized by the president’s inner circle – including her family – for not stressing the severity of the allegations.

One week later, Dávalos was forced to give up his post as his mother’s socio-cultural director at La Moneda presidential palace.

In Wednesday night’s interview with popular television host Mario Kreutzberger – better known as Don Francisco, the presenter of Sábado Gigante – Bachelet explained how she found out about the case involving her son and daughter-in-law.

“They called me on the telephone and told me some things in piecemeal. If they hadn’t, I would have returned to Santiago immediately,” she said.

Bachelet has been criticized for not returning immediately to the Chilean capital, instead waiting weeks to comment publicly about her son and daughter-in-law’s situation.

Until a few months ago, Peñailillo represented a new generation of center-left politicians who are part of Bachelet’s New Majority coalition. He was considered by many as Bachelet’s heir apparent.

But now he faces a crisis of his own.

New allegations surfaced last month that Peñailillo worked for a consulting firm owned by an important political fundraiser and was paid around 245 million pesos by the mining conglomerate Soquimich for work that prosecutors believe he never performed.

Peñailillo represented a new center-left generation and was considered  to be Bachelet’s heir apparent

Run by the former son-in-law of late dictator Augusto Pinochet, Soquimich is at the head of a massive fraud and payoff inquiry involving politicians and private businessmen.

After some half-hearted attempts to prove that he did perform the jobs assigned, Peñailillo gave the Santiago daily La Tercera copies of the studies that he drafted. Nevertheless, his situation has grown worse over the past few days after other media reported that some of the paragraphs in the reports were lifted from a study done by Eurobask in 2009.

In recent days, Bachelet has tried to contain the crisis by announcing strong measures against public corruption and redrafting the 1980 Constitution that was written during Pinochet’s dictatorship.

Bachelet delayed weeks in making Cabinet changes. But even as public pressure continues to grow for Peñailillo to explain his dealings or even leave government, the question that remains is who will take the place of Bachelet's political Golden Boy.