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Chilean Military Factory FAMAE Faces Investigation Over $1 Billion in Irregular Payments

The Comptroller General of the Republic detected financial irregularities at FAMAE, including $1,000 million in improper indemnifications and procurement failures. Authorities have ordered an administrative investigation and referred evidence to the Ministry Public for potential legal action.

La Era

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Chilean Military Factory FAMAE Faces Investigation Over $1 Billion in Irregular Payments
Chilean Military Factory FAMAE Faces Investigation Over $1 Billion in Irregular Payments
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The Comptroller General of the Republic detected financial irregularities at the Army Factory and Workshops, known as FAMAE, according to final Report N°750 of 2025. The audit reveals improper indemnification payments exceeding $1,000 million alongside procurement failures during the 2022 to 2024 period. Authorities have ordered an administrative investigation and referred evidence to the Ministry Public for potential legal action.

According to pauta.cl, the audit identified that 63 workers received indemnities despite being separated under mutual agreement terms. This specific causal does not legally require compensation payments, yet the organization processed them anyway. These collective payments totaled more than $1,000 million during the reviewed timeframe.

Four individual recipients received amounts surpassing $100 million each, which contravened standard compensation caps. adnradio.cl reported that these payments exceeded the corresponding years of service established by law. The Comptroller noted these specific cases as significant deviations from financial protocols.

The report further highlighted irregularities regarding the rehire of these same officials without a selection process. Some workers were recontracted immediately into the same positions they previously held. This practice bypassed standard recruitment and selection procedures mandated by public administration rules.

Procurement issues also surfaced regarding a laser machine purchased in August 2023 for $70,042,181. pauta.cl states the acquisition occurred via direct contract without verifying provider exclusivity. Officials failed to compare offers or conduct a technical financial analysis before approval.

Operational deficiencies emerged shortly after installation, with the equipment failing within four months of use. The machine remained inoperable as of April 2025 due to repeated technical malfunctions. This lack of warranty enforcement prevented the entity from claiming responsibility from the supplier.

The Council of Defense of the State now holds the case for further legal determination regarding the state's interest. The Superior Council of FAMAE must instruct an investigation to determine administrative responsibilities. This step ensures compliance with public accountability standards within the defense sector.

These findings raise questions about oversight within Chilean state defense companies managing significant public funds. Similar audits in recent years have flagged procurement inefficiencies across various government corporations. Transparency remains a priority for the current administration seeking to restore institutional trust after past scandals.

Future monitoring will likely focus on whether the Ministry Public initiates criminal proceedings against responsible officials. Stakeholders will watch for the release of the administrative investigation results from FAMAE. The outcome could influence budget allocations for military industry modernization projects. Furthermore, the Council of Defense may review internal control mechanisms for future acquisitions.

Ultimately, the audit underscores the necessity for stricter financial controls in state-owned defense enterprises. The Comptroller continues to enforce accountability measures to protect public resources. Continued scrutiny is expected as the case moves through legal channels.

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