SANTIAGO -- On Apr. 8, 2004, days after the private doings of Blackwater were first dredged up to international consciousness by an angry Fallujah mob, Chile's soon-to-be President, Michelle Bachelet, made her own public-private declaration as Donald Rumsfeld's subaltern parallel: Chile's Minister of Defense. Hers was a declaration not of war but of independence. On Sept. 10, 2001, Rumsfeld may have known nothing of immanent attacks on the Pentagon as he declared his privatized war against the government bureaucracy, but on Apr. 8, 2004, Bachelet made the following declaration knowing full well that a Chilean subcontractor had just provided Blackwater USA with its first crack batch of ex-Chilean special forces in Iraq.

"These are individual decisions," Bachelet was reported to have said. "Here they have no connection to the State, not requiring opinion or suggestions, or anything, because it was under the standard of individual liberties. And it's a private company, North American," she added. [My translation]

In effect, on behalf of Chile's left-centered coalition government and in the name of economic "liberty," the rising Socialist minister (already a virtual candidate to replace termed-out President Ricardo Lagos) was officially declaring her government's independence from abuses in the Chilean private sector that had been or might be committed against its citizens because of U.S. involvement in Iraq.

How could this be? When the executive branch of the U.S. government first chose to invade Iraq, back in 2003, Chile happened to be sitting in the U.N.'s (one rotating seat of an otherwise permanent) Security Council. As the Security Council's dominant member, the U.S. was actually caught stealing Chile's internal diplomatic emails as the vote was approaching (a transgression notably underreported in the U.S.). In the end Chile, bravely, voted against the U.S. invasion.

The story of Chile's involvement with Blackwater begins in 2003, when Blackwater's neo-con founder, Erik Prince, a former U.S. Navy Seal, was discovered by his Chilean parallel: Jose Miguel Pizarro Ovalle, an avid supporter of then-ex-dictator Augusto Pinochet and an ex-Chilean special forces, himself, of dual U.S.-Chilean citizenship. Investigative journalist Jeremy Scahill, who interviewed Pizarro extensively for his new book, said that Pizarro had done some arms-business consulting and some CNN commentating before. Yet, when he first saw Blackwater's Dismal Swamp training facility Pizarro had an experience roughly equivalent to Saruman's first laying eyes on Sauron's Dark Tower. Pizarro soon built his own little version of Dismal Swamp near the shores of Lake Rapel south of Santiago.

Pizarro then put ads in Chilean newspapers and began running what would become a shifting web of subcontracting entities that employed among others Miguel Martinez Ovalle -- a man ousted from the Chilean military for "mental instability" and a CIA agent according to Chilean legislator Alejandro Navarro. As a subcontractor for Blackwater, Pizarro began recruiting from the Chilean military and federal police. By the time Bachelet made her comments, Pizarro had provided, by his own admission, some 750 Chilean forces to Blackwater and other private military firms operating in Iraq. Those troops, according to Scahill, were the first international forces Blackwater admits to using.

Today in the small, regionally powerful nation of Chile, the Iraq War is not even news. The Chilean government has by and large turned a blind eye to what amounts to a continuing exportation of Chilean military training based on Chilean military traditions. And if that's not enough, most of these privatized troops, should they get injured, will be entitled as retired members of Chile's military or federalized police, to perpetual medical care at the expense of, you guessed it, the Chilean people.

At a moment when the Iraq War itself hardly gets page-12 mention anymore in any major Chilean newspaper, the "mercenary problem," as it's referred to, has leached beneath the public eye completely. The last printed mention of Pizarro or Chile's relation to Blackwater in the Chilean Press came in April, 2006, when a subcontractors' training camp was discovered to be training dogs, notorious in Chile (as in Iraq) for their frequent application in acts of torture. Yet even this brief appearance in the news cycle was made mostly for poking editorial fun at the expense of Navarro -- the former Socialist congressman now senator whose legal action brought it to light -- for allegedly trying to make political hay.

Indeed, the only government action ever taken against Pizarro, or Blackwater, has been done "unofficially," through the legal actions of Navarro and his fellow congress member Antonio Leal, both veterans of the radical anti-Pinochet student movement centered around the University in Concepción, or through the one expose of Pizarro’s training facilities produced by the privatized government television station (roughly the corporately-dependent equivalent of the US's Public Broadcasting System) in 2005.

In Chile, the legislative branch has virtually no power of the purse and was particularly disempowered by the current national constitution Pinochet forced through by fraudulent plebiscite in 1980. Even so, Navarro and Leal were kept from acting as official agents of their government, resorting instead to ongoing filings in Santiago's criminal courts. The first of these, in 2004, following Bachelet's statement, accused Blackwater of violating a constitutional provision maintaining that "investments not be in contradiction of morals, public order, or national security." Their filing also cited a dictatorship-era anti-vigilante law forbidding active recruitment at Chilean military or federal police facilities.

Some months later, with the same Santiago court, Navarro and Leal filed what amounted to a restraining order against Pizarro on behalf of two Chilean mercenary brothers who accused Pizarro of "physical and psychological torture" against a third brother then still deployed in Iraq. (He is now back in Chile working as a private investigator.) In May 2005, the court upheld Navarro and Leal's complaint, legally censuring Pizarro and his associates for illicit behavior.

Some months after that, the government television network ran its expose on Pizarro's Lake Rapel paramilitary camp. Pizarro maintains they used only toy guns and that the camp was for "evaluating" troops not training them. The government did issue a statement standing by the network's story.

Nonetheless, to date, Bachelet's 2004 comments stand as Chile's only official position on Blackwater and "the mercenary question." How could this same apparently principled country have become so indifferent to the U.S.'s deepening human rights disaster in Iraq and to the continuing, unreported "private" involvement of its own citizens in that disaster?

Beneath the more obvious answer to the first half of that question -- the U.S.'s diminishing hegemony in the world—the deeper, more endemic answer is: It could, does and must through the politically unchallenged power of private enterprise (in Chile no less than the US) conduct its own business, however sordid, legally exempt from the will of its people. In short, without that one, little sordid bit of consent, Chile's current democratically-elected government would not be allowed (by powers within Chile as well as without) to govern.

Of their nation's diplomatic stand against the U.S. invasion of Iraq, most Chileans would simply relegate that to "the past." Chileans may not want to chat with an American about their countries' shared past, but that doesn't mean they have forgotten. Take a number if you're interested; sit down in the office of your favorite Chilean bureaucrat and wait. The past between Chile and the U.S., if you care to wade through that bureaucracy, accumulates shallowly below the surface like an overloaded cesspool of, well, blackwater. Of their nation's ongoing private involvement in the "mercenary problem" of Iraq, even progressive Chileans would be forced to concede, "that’s old news;" far less pressing today than the growing social unrest surrounding the privatized fiasco of their "public" transportation system and the privatized failure of their "public" school system.

For the past 18 years, Chile's democratically instituted "Concertacion" government governs, as the previous government did, through a public-privatizing free-trade consensus. Like its predecessor the Concertacion shares this consensus with parallel U.S. administrations, despite profound political disagreements. Once upon a time those disagreements were between a subaltern military dictatorship of Pinochet in Chile and a moderate Republican hegemony of President Nixon. Today, the progressive-Socialist Concertacion dutifully shares its neo-liberalism with the fundamentalist-conservative Bush administration.

Through the hole of that ongoing free-market consensus -- closed only briefly between 1970 and 1973 -- the U.S.'s recent Iraq-related micturition against Chilean sovereignty falls like so many dribbles on the sunken mountains of older and far more egregious extrusions.

On Sept. 11, 1973, a U.S. elected Nixon administration actively abetted the violent overthrow of Chile's own democratic government, which led incidentally to the murder of Chile's equally elected President, Salvador Allende. Adding insult to injury, the Nixon administration under Henry Kissinger then helped to not only install but to meaningfully support the ensuing military dictatorship that would become responsible for the documented torture of at least 35,000 Chilean citizens over the next 17 years. (Thirty-five thousand refers to egregious and legally documented acts of torture inflicted on Chilean nationals; most agree more than 100,000 were actually tortured, and this in a country whose entire population is just 15,000,000: almost equal to that of Los Angeles County.)

As with the far more minor national infringements still tolerated regularly in Chilean-U.S. relations today, Pinochet's terror was conducted beneath the shallow topsoil of a free-market consensus. In such appalling historical context, today's troubled U.S. movements are fomenting civil war in Iraq -- the U.S.'s naive horror over dogs and waterboarding and extreme renditions that many Chileans once experienced first hand -- seem to leave many Chileans nonplussed. This may help explain the Concertacion government's tacit willingness, for the most part; to politically tolerate its own free-market's involvement in this latest U.S. misadventure as just one more bizarrely sad fact.

Then-Defense Minister Bachelet's unquestioned and virtually assumed deference to the market following the U.S. invasion of Falluja in 2004 reflects the political realities of Chile's transition back to democracy: The price of Chile's ticket, as it were, was the Concertacion's unconditional support for the free market and privatization. Bachelet's capitulation, a capitulation in which she and the Chilean government no doubt believe, takes on added poignancy when one considers that she is, herself, the imprisoned daughter of a purged general under Pinochet. Her government is replete with deputies, ministers, and senators who were even more egregiously tortured than she; some, like Congressman Antonio Leal, by the same techniques of dogs and waterboarding now being documented at Abu Graib and Guantanamo.

As for much of the rest of the world, Chile’s choice to "freely" submit to the neo-liberal line of University of Chicago economist Milton Friedman -- a line that entered "realpolitik" through the torture-state dictatorship of Augusto Pinochet and now comes full circle in Blackwater -- must present itself today as the lesser of two evils. Chile, if it wishes to remain a "democracy," has no choice.