Head of Chile right-wing party resigns amid campaign finance scandal

SANTIAGO (Reuters) - The head of Chile’s right-wing UDI party, a bastion of support for late dictator Augusto Pinochet, resigned on Wednesday, becoming the first political casualty of a campaign finance scandal that has left Chileans feeling betrayed.

Charges of bribery and tax evasion were formally pressed a week ago against the owners of financial firm Banco Penta, in a probe that has sucked in business leaders and politicians alike.

Prosecutors say they have evidence that fake receipts used by Penta’s owners to dodge taxes were used to make illegal campaign finance contributions, mostly to the UDI party.

Faced with criticism for his handling of the scandal, which has dented Chileans’ trust in politicians, UDI’s president Ernesto Silva said he was stepping down from his post.

“The UDI needs to be united ... however, in recent days some party leaders have questioned and affected that unity,” Silva said in a televised speech.

“Under these circumstances, I’ve made a really difficult decision. ... I’ve presented my resignation as the president of the UDI.”

The party is already tarnished in the eyes of many Chileans by its links with the 1973-1990 dictatorship but retains a bedrock of support in the country. However, it has seen its popularity slide in recent weeks as the events of the Penta scandal have filled local newspapers and broadcasts.

The center-left government of Michelle Bachelet has struggled to capitalize on her opponents’ woes, with her family also embroiled in a separate scandal.

Last month, her son resigned from his position as head of her charitable foundation after accusations that he and his wife used political connections to get privileged access to a bank loan.

Reporting by Anthony Esposito; Editing by Jonathan Oatis