Chile’s Bachelet names new cabinet amid scandal

Chilean President Michelle Bachelet named a new cabinet Monday, seeking to turn the page on a corruption scandal involving her son that risks derailing her ambitious reform agenda.

Five days after making a surprise announcement that she had asked her entire cabinet to resign, Bachelet unveiled her new line-up of ministers, sacking five, including interior minister Rodrigo Penailillo, a close ally who was also her chief of staff.

“Today it’s time to give new impetus to the quality of our government,” said Bachelet, Chile’s first woman president.

Penailillo will be replaced by Jorge Burgos, who was previously defense minister.

Bachelet, 63, also replaced finance minister Alberto Arenas with the head of the national bank, Rodrigo Valdes — the first time a Chilean leader has sacked a finance minister since the end of the Augusto Pinochet dictatorship in 1990.

In all, 18 ministers kept their jobs, four of them reassigned to different portfolios.

Bachelet had previously announced that Foreign Minister Heraldo Munoz would keep his post — a key job with Chile in the midst of a border dispute with Bolivia at the International Court of Justice.

Bachelet’s efforts to overhaul the education system, pass new labor and tax laws, and change the constitution inherited from Pinochet have all but ground to a halt since accusations emerged that her son and his wife used political influence and inside information to make $5 million on a shady real estate deal.

The Socialist leader’s popularity has plunged to 31 percent, the lowest level of her two presidential terms.

She denies any knowledge of the deal and has not been implicated in the case. But the scandal has been damaging for a politician who has roundly condemned inequality and the privileges enjoyed by the Chilean elite.

Another scandal has also emerged involving tax fraud and illegal campaign contributions by some of Chile’s largest companies, shaking the confidence of a country that prides itself on transparency and sound management.

That scandal has tainted the opposition as well as the government.

But Penailillo, who was close to Bachelet and had been dubbed her “political son,” recently admitted he was involved in a case of irregular campaign financing, spreading the stain to the heart of the president’s cabinet.