Nazis, child abusers, or just good, clean-living workers?

Police move in on Chile's secretive and controversial 'Dignity Colony'

Some call him "the professor" for his knowledge and oratory. Others call him "the doctor" for his surgery in the local hospital and wartime experience as a medical orderly in Hitler's army. The German orphans he raised in Chile are encouraged to call him "our eternal uncle" to emphasise their lack of parents.

Whatever they call him, Paul Schaefer is now an old man on the run widely suspected of being a serial child abuser and active Nazi sympathiser. He is accused of heading a "state within a state" at the sinister "Colonia Dignidad" and what was once a horrific rent-a-torture chamber on this ranch in southern Chile.

Following years of outrage among Chileans, notably as the country began to flirt with democracy, police moved into Dignity Colony on Tuesday as snow fell on the pines and peaks east of the main gate. The carabineros gave the impression they were searching for Mr Schaefer as well as for illegal arms reputedly stockpiled.

After several days of tension this week, many Chileans fear that the ranch lands, in the fertile foothills of the Andes, 220 miles south of Santiago, could become "Chile's Waco", a reference to the bloody attack by United States federal agents on the Davidian sect in Waco, Texas in 1993. Apart from child abuse and kidnapping - allegedly including the snatching of children from Germany - the ranch's 300 or so German residents have also been accused of trafficking in arms. They deny all such charges as "lies, fantasies and communist propaganda", specifically blaming Chilean and German socialist politicians, and say they are just hard-working folk.

Perhaps embarrassed by its long-time name of Colonia Dignidad, the 35,000- acre ranch's 300 or so German residents now refer to it as Villa Baviera, in Spanish, or Bavariaville. Not only does the landscape resemble Bavaria, but the German colonists do not hide their affinity with Bavaria's conservative Christian Social Union Party.

Human rights groups and those who fled the "colony" have spoken of a concentration-camp regime, with dogs trained to attack the genitals of intruders, and vigilante groups to keep outsiders away. Young defectors have accused Mr Schaefer and other group leaders of giving them mind-numbing drugs to prevent them from rebelling, leaving or telling their tales to outsiders.

Adding to the continuing allegations of child abuse, witnesses are increasingly coming forward to describe collaboration between the colony and General Augusto Pinochet's military regime of the Seventies and Eighties.

At that time, opponents of General Pinochet were taken to the remote area and dumped into underground torture chambers for electric shock treatment to Wagner or Mozart, according to accounts from eyewitnesses, including repentant Pinochetagents. German-speaking doctors reportedly administered drugs to torture victims.

The governments of Chile and Germany call Mr Schaefer their most-wanted man. They say he is wanted in both countries for multiple child abuse, child kidnapping and sodomy. His Colonia Dignidad, they say, is a den of iniquity whose mostly German residents are forced to work for no pay and whose children are forced into homosexual sex.

Mr Schaefer was a medical orderly in Hitler's army, became pastor of his own Lutheran sect in the Bonn area in the Fifties and fled on bail in 1961 after being charged with sexually abusing children at a youth home.

The Chilean police could hardly have used a more softly-softly approach when they entered the ranch on Tuesday, describing their incursion as "a visual inspection". Liberal Chileans were embarrassed and outraged, insisting the police "sightseeing tour" made a mockery of Chile's would- be democracy and showed that the German colony was in cahoots with at least the military branch of the police. They noted that the carabineros' commander, Julio Poo, had greeted a German leader of the colony by his first name at the colony's barbed wire fence. "The police made this look like a courtesy visit, not a raid," said Jaime Naranjo, a socialist MP. "This is just like Colombia, where the drug traffickers have a network of support and protection. They have two airstrips on this colony, for God's sake." Indeed they do.

The "colony" increasingly looms as a new threat to Chile's still-sensitive democracy, with the government of Eduardo Frei and his civilian police pitted against the traditional military establishment headed by General Pinochet.

Former Chilean intelligence agents and their victims have attested that the German colony was used by the general's military regime, after the 1973 coup that overthrew and killed the Marxist president Salvador Allende, to torture, kill and experiment on leftists. Some later identified Mr Schaefer as "the doctor", saying he had spoken German and administered drugs to study their effects on torture victims. General Pinochet himself was said to be a good friend of Mr Schaefer.

The colony's German farmers and Chilean supporters insist Mr Schaefer is simply a hard working German immigrant and devout Protestant who sees nothing wrong with people working the land 14 hours a day, seven days a week, with no recompense other than the land's yields. He went underground because he fears a witch-hunt against him, they say.

A rare glimpse this week inside the perimeter of the colony showed women working, dressed Quaker like in calf-length frocks and black stockings.

Reaching the colony requires a rough 45-minute drive over a pot-holed gravel path east of Parral. While many of the 20,000 townsfolk of Parral criticised "Los Alemanes" (the Germans), those farmers nearest to the colony are protective of them because of vital mutual trade, and their own free use of the colony's hospital and school.

Critics say the hospital and school are simply a charitable front to shield something more sinister. Some believe it is child abuse, others arms trafficking, but no one comes up with any more proof than has emerged from colony defectors.

Some Chileans say Mr Schaefer is an illusory figurehead. They believe he and his followers may have been placed as a diversion to attract attention from what may have been a long untouchable refuge for former Nazis or Nazi sympathisers.

"I first visited them in the Sixties. My first surprise was the air strip, then the walkie-talkies every 100 yards," said Osvaldo Murai, of the Chilean magazine Ercilla. "I thought 'what are they trying to hide?'.

"Later, it occurred to me that the Israelis were hunting all sorts of ex-Nazis throughout South America and what a good place to hide this would be."

Figurehead or no, Mr schaefer is on the loose. Most likely, in this huge area of southern Chile that he has controlled for three and a half decades.

Mr Schaefer and a handful of friends set up Dignity Colony in 1961 after he fled the child abuse charges in Germany. Five years later, the first reports of abuse began to emerge after a teenage orphan, Wolfgang Mueller, fled the colony.

Last night, Mr Mueller, now in his forties, repeated his allegations to reporters and expressed astonishment that the Chilean authorities had still taken little or no action. "I think it's a real scandal," he said. "I remember the first night I arrived. Mr Schaefer abused me. I was just 12 years old but I had to stay all night in his bed."

Also 12 years old when he arrived here with Mr Schaefer was Herr X, a German who reluctantly spoke to me. "I was one of the first half dozen to come here in '61," he told me in strongly accented Spanish. "He practically educated me. We grow wheat here, and corn ... we do mechanical work. We're self-sufficient. The criticisms of our lifestyle are pure fantasies, spread by German politicians."

"I can honestly say I've never seen people who respect life more than the inhabitants of this colony," added Jaime Mora, a local engineer, and a member of the so-called Circle of Friends who support the Germans. "They love life."