The cabal of Chile's richest family Clan

“Silent waters carry off mountains.“If the winged word of Croatian origin makes any sense, it is in Bolivia as an allegory of the fascist pioneering role of Croatian emigrants, and in Chile as a metaphor of ruthless destruction of the Andes and water scarcity by international mining, in which the country’s richest family, of Croatian descent, plays a leading, if not the central, role.

As geestern reports about Bolivia, a numerically small but very powerful group of family Clans among the nearly 10,000 descendants of Croatian emigrants not only controls the most relevant industrial and financial companies in the east of the country, but also served as the cradle of Bolivian right-wing extremism and fascism of European origin and the driving force of white separatism.

With different estimates, which put the number of descendants at 200,000 to 400,000, the Croatian emigrant scene in Chile, however, exceeds that of Bolivia by twenty to forty times. According to the Croatian government, especially the Chileans of Dalmatian Origin form the third largest Croatian Diaspora in the world after the USA and Bosnia-Herzegovina.

From the centuries-long yoke under the Ottoman Empire to the domination of Austria by the monarchy, the refusal of its independence as a Nation was the main reason for the massive emigration of the Croats to South America. A decisive trigger for the formation of the Croatian Diaspora in Bolivia and Chile, however, is said to have been a plague in the vineyards on the Dalmatian island of Brač. An estimated 90 percent of the Chileans of Croatian origin come from ancestors on the island of Brač.

Their Diaspora is publicly represented by cross – border, renowned families such as Antonio Skármeta Vranicics – from 2000 to early 2003 former Chilean ambassador to Germany-who, however, is best known as an outstanding Latin American writer, winner of the 2014 Chilean Literature Prize and the widely translated author of the novel of the world-famous feature film Der Postmann (1994).

But 40 years earlier, Lenka Franulic was the first journalist in Chile to write an important chapter in South American media history. A further vocational school as well as the National Journalist Award for women are dedicated to her Person. Models and morning program animators of Croatian origin such as Tonka Tomičić Petrić-ex – Miss Chile 1995-and Savka Pollak Tomasevich shine on contemporary Chilean private television.

Chileans of Croatian descent, however, have been working as front women and front men of Chilean politics for decades. An almost legendary figure was the Christian Democrat Radomiro Tomić, who died in 1992. As a member of Parliament for the northern Chilean provinces of Arica, Pisagua and Iquique, and as a later Senator for Tarapacá and Antofagasta, he ran against Salvador Allende in 1970 as a hopeless presidential candidate, but allied himself with the elected president of the Socialist Party, especially as a vigorous advocate of the “Chilenization” (nationalization) of copper deposits, which is why the state Copper Corporation Codelco honored one of its mines with Tomic’s name in 1992.

As leader of the progressive wing of the Christian Democrats, Tomić advocated a Vision that decades later, especially in the midst of the current socio-political upheavals, has not lost its relevance and demands implementation. He said: “My Voice does not hesitate to say it: either the people’s Democratic Revolution serves to give shape to the immense effort of the participating people in the struggle for a new horizon and a new Destiny, or the institutional collapse will severely divide the Chileans among themselves”.

Thirty years after Tomić’s death, Chileans of Croatian origin occupy leadership positions in almost all political parties. This includes the right-Liberal Vlado Mirosevic, representing Chile’s resource-rich Atacama Region, the former general secretary of the Christian Democratic Party and incumbent senator Carolina Goic, and the former student leader and incumbent deputy of the left Frente Amplio Gabriel Boric, as parliamentarian of Tierra del Fuego.

Nitrate, copper, and List: the raw materials of the original accumulation of the Luksics

In the 1930s, already saltpeter-mining and processing had made the Croats Pascual Baburica Soletić one of the richest men in Chile.

However, since the end of the Pinochet dictatorship in today’s Chile, a special Croatian surname has been in charge: it is that of the country’s richest clan, the Luksic clan. His wealth, which fluctuates between US $ 15 billion and US $ 17 billion (Forbes, 2019), is the result of the profit creation with an opaque network of nearly 40 individual companies located domestically under the umbrella of Grupo Quiñenco SA and represented abroad mainly by the mining group Antofagasta PLC. Since the beginning of the new millennium, Iris Fontbona, the matriarch of the Luksic clan and the eighth richest woman on the planet, has been conducting half a dozen individual foundations under the patronage of a certain “Luksburg Foundation”, which monitors and camouflages the family empire’s vast financial assets and Global Holdings.

With investments in noticeably different market sectors such as mining, industry, Finance, Food Processing, media, logistics and luxury tourism, the Luksic empire includes investments in traditional company names such as Hamburg-based Hapag Lloyd, Pakistan-based Tethyan Copper Company as well as in-house brands such as the Elite resort Adriatic Luxury Hotels in Dubrovnik, Croatia.

However, there is a triple irony attached to the Luksic genealogy. On the maternal side, it is inextricably linked to the history of Chile’s main rival Bolivia. In Antofagast – until the end of the 19th century the state capital of Atacama and the largest port in Bolivia – at the beginning of the year 1900 the just 17-year-old and impoverished Croatian Polikarp Luksic Ljubetic, like so many of his compatriots from the island of Brač, went ashore in the new world and married there very soon the Bolivian Elena Abaroa.

She was the granddaughter of Eduardo Abaroa, a wealthy businessman from San Pedro de Atacama and a national hero who defended Antofagasta against the British-funded and armed raid of the Chilean army during the war of the Pacific (1879-1883). The resulting Malice is that the Luksic fortune has been calculated for about 120 years and comes mainly from mining in the 150,000 km2 Atacama Desert-including 400 kilometers of usurped Coast – which was taken from Bolivia and incorporated by Chile.

What benefited the family right at the beginning was the discovery of the world’s largest copper deposit Chuquicamata in the Atacama. “At the right time, in the right place”, the Luksic-Abaroas act as the main suppliers of food and equipment to Chuquicamata and the Mine of the American Anaconda Copper Corp. at this point begins the rise of Andrónico Abaroa and his brothers, who have their children trained in Europe and the USA; an elitist attitude that is rigorously carried out in the Clan into the 21st century.

In any case, a leap in time illustrates the “opportune” business practices of the clan. The Luksic-Abaroas knew how to use the” Mediterranization " of Bolivia – that is, the loss of access to the Pacific. Until the mid-1880s, the Bolivian company Huanchaca operated a 900 km long freight railway, known as Ferrocarril de Antofagasta a Bolivia. Since Bolivia had lost the war of the saltpetre, British agents persuaded the Chilean government to “lease” the port facilities of Antofagasta to them and to transfer the headquarters of the railway to London, where it was renamed “Antofagasta (Chili) & Bolivia Railway Company” in 1888. About a hundred years later, mining giant Antofagasta Minerals-owned by Luksics Antofagasta PLC – bought the railway in 1980, which knows “no limits for entrepreneurial spirit” on this side and beyond all tensions between the two Andean countries.

But back to the beginning. Andrónico Luksic Abaroa-Elena Abaroa’s son and founder of the family empire – is said to have been a rather inconspicuous man who did not love risk; an unspoken family motto that still guides business decisions and reveals a certain “shareholder parasitism” in the group’s stock Policy, which shapes the entire Quiñenco stock network. The Clan founder was one of the few Chilean entrepreneurs who made temporary deals with President Salvador Allende. Between 1970 and 1973, the two agreed to nationalize some of Luksic’s businesses, but after that, the forming Clan withdrew its capital from Chile and began to invest in Argentina and Brazil.

The relationship with the Pinochet dictatorship was not a good one. A legend tells, for example, that the Luksics gave shelter to General Carlos Prats and his wife in an apartment of Viña del Mar, loyal to Allende and therefore hostile to dictator Pinochet. The couple was murdered three years later in Buenos Aires by a bomb attack on Pinochet’s orders. The legend goes on to say that the secret aid provided by the Luksic Clan won the trust of the centre-left Concertación coalition that ruled after the end of the Pinochet dictatorship.

Civil servants on the boards: promiscuity between private and state

Good relations with almost the entire ideological spectrum of Chilean parties are said to be the business empire Luksic successful business principle. The names and Vitae of the CEOs in Luksics Grupo Quiñenco sa confirm the questionable company reputation.

Quiñenco is, among other things, the corporate umbrella over the country’s largest private bank, Banco de Chile, the CCU brewery, which is shared with Heineken, the Ivexans copper cable factory, which is operated with a French partnership, the packaging production TechPach and the fuel company Enex, which has acquired the entire distribution of the Shell brand in Chile. Furthermore, via the shipping company CSAV acquired by the Luksics, with which the family empire has entered not only into international shipping, but also into the corresponding market for freight and Port Logistics. But that’s not enough. Quiñenco owns either all or large shares in the mobile phone, Internet and cable television providers Entel, VTR and Cabletron, in the gas distribution company Lipigas, in hotel chains, yes, even in the again rejected pasta brand Luchetti.

In 2017, the Luksic Clan also decided on a more determined entry into the media market with the 100 percent takeover of the private television station Canal 13, which until then was still 33 percent owned by the Catholic University (PUC Chile). In 2010, Quiñenco had already acquired 67 percent of the station for 55 million US dollars, but due to a lack of creativity, a lack of program concept and fierce competition, this threatened to end, although Luksic Craig’s son Maximiliano served as artistic director since 2015. So Quiñenco flipped another 10 million US dollars on the table, released the PUC Chile from its obligations, but also hundreds of employees from their Jobs. However, with a five-year contract, the television-illiterate Luksics transferred the broadcasting operations of the Spanish group Secuoya.

However, the acquisition of one third of the shares of Banco de Chile 20 years ago caused very unfavorable headlines. At the time, Christian Democratic MPs Pablo Lorenzini and Jaime Jiménez described the approval of a $ 138 million loan by the state-owned Banco del Estado de Chile (BECH) to the already Billion-Dollar and non-creditworthy Luksic Clan as “the most serious case of corruption in the last twenty years”. Since then, Quiñenco and Citigroup, the world’s largest US Bank, whose main shareholders include the BlackRock Group, have shared 58 percent and 29 percent of the former state-owned Chilean Bank, which made profits of $ 884 million in 2017 and managed investments of around $ 55 billion in 2018.

On the executive floors of Quiñenco there are names of numerous former ministers and politicians, from the Pinochet dictatorship to its successor, the Democratic Party alliance Concertación.

The CEO Luksics on the board of Banco de Chile is Christian Democrat Jorge Awad, not coincidentally also president of the Chilean banking association. The head of Ivexans is Alejandro Ferreiro, also a Christian Democrat former minister of Economic Affairs. The socialist Jaime Estévez is also a member of the Banco de Chile board. His appointment to the management of Quiñenco are “coincidences” that were not: under Salvador Allende, Estévez served as Manager of the state copper company Codelco and during the government of the socialist Ricardo Lagos (2000-2006), Estévez held the management of Banco del Estado de Chile (BECH), now known as BancoEstado; “coincidentally” the same Bank that gave Luksic the loan to acquire Banco de Chile. In an exemplary way, Estévez illustrates the Modus Operandi of the Luksic clan, even for less experienced readers in economic policy and criminology: the massive recruitment of former members of the government with the aim of acquiring strategic Insider knowledge for internal business decisions. This was also the case with the nomination of the Christian Democrat, three-time former minister (Economy, Energy and mining) and president of the central bank (2007-2011) of the Concertación, José de Gregorio, and the far-right Oscar Hásbun to the board of the shipping company CSAV and HapagLloyd.

The Israel Lobbyist

Although Christian Democrats and Socialists hold several executive positions, two right-wing radicals are in charge of Quiñenco: Hernán Büchi, former finance minister of the Pinochet dictatorship, as managing director, and Rodrigo Hinzpeter, general director.

Hinzpeter, who is descended from ultraconservative Jewish immigrants, is a controversial figure in Chile. As former minister of the interior in the first government of Sebastián Piñera (2010-2012), he mercilessly put down student demonstrations. As a former Defense Minister (2012-2014), he worked to develop relations with Israel and was one of the first Latin Americans to spread the conspiracy theory of “the threat of Iran to Latin America” in the Israeli Defense Ministry under Moshe Ya’alon.

As a Lobbyist for the Israeli arms manufacturer Elbit Systems, Ya’alon again played the central role in the subsequent sale of drones (UAVs) to Chile for use on the border with Peru and Bolivia. For his part, Hinzpeter is said not only to have served in the Israeli army, but also to have spoken several times for the American Jewish Commission (AJC), an ultraconservative Lobby organization that systematically influences US foreign policy in favor of Israel, as Chilean Journalist Alejandro Kirk reported.

In one case, however, the approach in the “spider web” – as individual media refer to the influence spectrum of the Luksic clan-not only made headlines, but also caused irretrievable, dirty stains on the white vest of Group CEO Andrónico Luksic Craig.

The Caval Case

The political scandal and Chilean criminal case surrounding the company Caval involved Sebastián Dávalos - son of former President Michelle Bachelet (2014-2018) – his wife Natalia Compagnon and Andrónico Luksic Craig as owners of the Banco de Chile.

After several requests by Compagnon, which were rejected by the Bank, Dávalos, as director of the socio-cultural section of the La Moneda seat of government between 2014 and 2015, managed to convince Luksic Craig of the usefulness of a US $ 10 million loan that Compagnon wanted to invest in planned land purchases. The point was that Luksic Craig did not approve the loan until Dávalo’s mother, Michelle Bachelet, had been elected to her second term as president. After evaluation by the judiciary and the media, the CEO hoped for future benefits from the Bachelet cabinet. The fact that the strategy had been prepared for a long time was proved by the statements of Compagnon and Luksic that they had met at least eight times privately. At one of these meetings, according to Luksic, Bachelet’s daughter-in-law is said to have offered kits for mining at extreme heights or her international contacts for the import of fuel to Chile.

A clear case: Dávalos, wife, and Luksic Craig acted in the proven conflict of interest. President Bachelet-who most likely knew little about the Deal – bathed the scandal with a ruinous crash of her popularity and broke off relations with her son and daughter-in-law.

The Minnesota case and Donald Trump’s financial courtship

An even more daring case of lobbying and influence took place in the US state of Minnesota, involving the American Antofagasta subsidiary Twin Metals, which is owned by the Luksics.

Under massive pressure from the local population, the Barack Obama administration had banned a planned Twin Metals Mine in the middle of the Boundary Waters nature reserve, a project that threatened lakes and forests along the border with Canada. However, no sooner had Donald Trump moved into the White House – as reported by the New York Times in June 2019 – than, according to informants of the US government, Twin Metals Minnesota significantly expanded its lobbying work in Washington and donated 900,000 US dollars to Trump’s political base.

Even more. Shortly before Trump took office, the billionaire acquired a $ 5.5 million home in Washington. According to Rodrigo Terrés, managing director of the Luksics family investment fund, the house was bought with the intention of renting it to a” wealthy newcomer". The fact that the purchase was a set-up did not come to light until Trump’s daughter Ivanka moved into the house with husband Jared Kushner and triggered a loud debate in Congress.

Damage to health and destruction of nature are, at least in Chile, media perennials in connection with Luksic investments. The concerns of the people about their health and the protection of the environment have so far left the matriarch Iris Fontbona and Clan vice Luksic Craig cold, they are understood as inevitable collateral damage.

The environmental disasters Antofagasta, Los Pelambres and Alto Maipo

The port city of Antofagasta has been a scene of dramatic air and water poisoning for years. In a report submitted to the Chilean Chamber of Deputies in 2015, the Chilean Medical Association already raised the alarm about the rapid increase in deaths from lung cancer. The doctors determined that water and air around the port of Antofagastas, of which the Luksic group is the largest shareholder, were highly poisoned with heavy metal concentrates due to copper processing and loading. The damage to health had catastrophic consequences: between the years 2000 and 2015, the number of fatal cancer deaths increased by 42 percent; comparatively more than double the 20 percent increase in cancer deaths in the vicinity of Chernobyl.

Publicly strongly criticized, Luksic Craig responded with aggressive dissent on Twitter: “I have already said it, the pollution in Antofagasta is a historical Problem. If they (therefore) want to outsource the port, they must talk to the state, not to me”.

At the same time, Luksic’s mining company Los Pelambres was sued in court by Swiss competitor Glencore. The case escalated so far in 2015 that it strained relations between Chile and Argentina. And for a simple reason. Because Luksic’s Pelambres Mine, located in the border area with Argentina, simply disposed of 50 million tons of toxic open pit residues via the Andean Ridge on the “other side”. But that was Argentine territory and that was where Glencore was active. Despite massive backlash and false claims, Luksics Pelambres lost the trial and had to compensate Glencore and Argentina with $200 million.

A short time later, the Luksic Clan got caught in negative headlines again. This time in the case of Alto Maipo, a joint dam project of the US company Aes Gener and Luksics mining company Los Pelambres in the Andean mountains above the capital Santiago. For years, geologists discouraged this and social movements fought against the construction of the 70-Kilometer tunnel that threatened the El Morado nature reserve, the San Francisco and Morado glaciers, and the main drinking water supply in Santiago, a metropolis of 7 million people. In 2017, after only 40 percent of the project had been completed, Luksic’s Los Pelambres exited Alto Maipo but only because of the huge increase in costs and the alleged losses.

From torture shipping company to intelligence Operation

In the period between the beginning of 2017 and the end of 2019, the Luksic group’s stake in the German shipping company Hapag Lloyd was the focus of the group’s reporting. The focus suddenly changed when Andrónico Luksic Craig stole the show and the cash register at the outbreak of the social revolt in Santiago on October 22, 2019 President Piñera’s offer of a minimum increase in the minimum wage from 300,000 to 350,000 Pesos with the bombastic announcement that from January 1, 2020 no one in his companies will earn less than 500,000 Pesos.

But in January, Luksic Craig hit the headlines with Piñera, not good ones. Everyone remembered the sinister television appearance of the president, who on the evening of October 21 – the day before Luksic’s generous basic salary increase – had startled his compatriots by saying, " We are in a state of war against a powerful enemy!".

The incantation of war was followed by a media campaign of several months by Piñera, according to which the mass social and political uprising was controlled by “foreign agents”. Until a certain secret report entitled “Big Data” was leaked. But the first reaction to the report’s findings was a mass of laughter in parliament, the media and social networks. Instead of alleged agents from Cuba, Russia and Venezuela, The Secret Service agents had actually identified the Chilean singer Mon Laferte, the kitschy South Korean K-Pop Band and individual players of the National Football League as those “international agitators”.

No one in the most embarrassed government of Piñera wanted to take responsibility for the report and its mysterious authorship. But then a Whistleblower came out with a part of the truth: the preparation of the report had been decided in a meeting of the government, the Secret Service, the Luksic group Quiñenco and the Spanish company Alto Data Analytics. The whole truth did not come to Chile until mid-January 2020, when it was revealed that Quiñenco ordered the secret report and Director General Rodrigo Hinzpeter had handed it over to the Piñera government as the quintessential intelligence investigation.

Asked about the scandal on Twitter, where he enjoys half a Million followers, of whom he regularly provides a minority with book Gifts, scholarship awards and sham philanthropic fundraising, Luksic Craig replied with customary cynicism on January 21: “I haven’t seen a report. You, yes? If you have seen him, I ask you to make him public.”

Luksic Craig is a master of juggling and adjustment. In December 2016, the Group Vice-Reporter of leading German Mainstream newspapers invited him to Chile, hosted him at his winery and had his picture taken in front of a Hapag-Lloyd container ship in the port of Valparaíso. It was about the entry of the Chilean Mammut Group into the shipping company Hapag-Lloyd. According to which in the FAZ a multi-page article was to be read in an effortful camouflaged tone of the court reporting with the title “der Clan, der Deutschlands Schiffe steuert”.

Author Marc Felix Serrao did not completely trust the ceremony and wrote in the FAZ article, “you feel a little reminded of the command center of a Bond villain. But that could also be due to the wine.” Serrao typed correctly, but his Intuition was not generated by the wine. If he had done a little research on the Lucsic Clan-as I had suggested to Steffen Klusmann, the editor – in-chief of Manager-Magazin, who had ordered an interview with me that was confirmed at first, but then rejected by Luksic Craig – he would have come across some of the episodes quoted in this long Chronicle and animating to shake his head. But Klusmann didn’t want to know about that either. But it may be surprising today that the city of Hamburg and Klaus-Michael Kühne, as Hapag-Lloyd shareholders, are literally sitting in whose boat they were when they “merged” with Luksic’s in-house shipping company CSAV.

Based at Plaza de Sotomayor No. 50 in Valparaiso, after the bloody military coup of September 11, 1973, the shipping company provided the Chilean navy with its all facilities, including its ships “Maipo” and “Lebu”. Both served as floating prisons for General Augusto Pinochet’s political opponents; the ship “Lebu” even served as a floating torture center. The ship “Maipo”, on the other hand, transferred 380 prisoners from Valparaíso to the concentration camp “Pisagua” in the Atacama Desert, where 500 imprisoned men and women were brutally tortured, raped and at least 20 prisoners murdered. The Luksics were never involved in this horror story, but instead of condemning and distancing themselves from it, they chose the path of concealment.

Luksic Craig, on the other hand, seems to be dazed by his influence and the power of his family over Chile. In response to the threats to people and the environment posed by the dam project on the Alto Maipo, he responded in April 2016 with Freud’s blunder: “I am a powerful person, I exercise a lot of power, of course, but I cannot determine when it should rain in Santiago.”