Costa Rica News Digest, Sept. 28

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>>Costa Rica News Digest<<
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TODAY'S CONTENTS
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*Scandal Widens: Second Vice President Implicates
President


*News Digest


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FEATURE ARTICLE
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*Scandal Widens: Second Vice President Implicates
President

The Fischel-Caja scandal appears to have opened the
proverbial
"Pandora's Box".

ALCATEL Contract Payoffs

A report by the daily Spanish newspaper La Nación
yesterday told
the story of how the wife of former Instituto
Costarricense de
Electricidad (ICE) - the state owned monopoly on
telecommunication
and power - José Antonio Lobo, received US$2.400.000
dollars from
ALCATEL, the French firm that was awarded the
contract to install
GSM service in Costa Rica.

According to the La Nación, the money was transferred
from an account
held by Jean Philp Gallup and paid to the wife of the
former ICE director.

La Nación says it has banking documents to back up
it's claim, as well
as other banking documents that shows a transfer of
US$1.200.000 dollars
paid to Bosques del Olimpo, held by another former
ICE director, Joaquín

Alberto Fernández Alfaro. Again, the transfer came
from ALCATEL.
Fernández received US$26.000 personally.

The transfers were made from the Cuscatlán
International Bank in
the Bahamas from an account held by Servicios
Notariales Q. C.

That account, according to the banking documents, had
received
deposits in March, June and October of 2003, for a
total of
US$9.600.000 dollars, all coming from the Alcatel CIT
en el Banco
ABN Amro, in New York.

La Nación was able to confirm that ALCATEL and
Servicios Notariales
Q. C. signed a contract to bid on the public tender
for GSM service
in Costa Rica.

The La Nación report says that Luis Fishman, second
vice president
of Costa Rica, confirmed that he received US$100.000
from ALCATEL as
a contribution to President Abel Pacheco's political
campaign.

Fishman told La Nación that he co-ordinated the
arrival of the funds
with Luis Gabriel Castro, who is president of the
Porter Novelli company.

Castro admitted to La Nación reporters that he did
meet with the
manager of ALCATEL and Pacheco at Fishman's house,
however, he could
not recall if the political contribution was ever
completed.

The Instituto Costarricense de Electricidad (ICE)
awared the French

telecommunications giant, ALCATEL, a contract for
US$258.000.000
dollars over the past three years.

In August of 2001, ALCATEL was awarded the contract
to install 400.000
GSM cellular telephone lines, in a contract that was
worth
US$149.000.000 dollars.

According to Pablo Cob, president of ICE, ALCATEl was
awarded another

contract in May of 2002 to install a fixed line
telephone station in a

contract valued at US$109.000.000 dollars.

According to Cob, José Antonio Lobo and Joaquín
Alberto Fernández,
were members of the board of directors that approved
the ALCATEL
contracts.


"Spanish Loan" Being Questioned

Yesterday, Channel 7 news "Telenoticias" reported
that some in the
medical profession are now asking authorities to
investigate the US$40

million dollar loan by the Banco Bilbao Vizcaya and
the government of
Spain.

Many heads of departments at several public hospitals
have complained
about problems with the equipment purchased with the
Spanish loan.

Doctors at the Hospital México as well as the
Hospital San Juan de
Dios have complained that they were not asked them
their opinion on
the type of medical equipment their hospital needed
and the equipment
that was installed, and that they had problems with
the equipment
functioning properly.

According to the Telenoticias reports, Dr. Longito
Soto, a surgeon at

Ophtalmology is complaining that "it was a long and
bitter experience.

Nothing came for a long time and then we were never
asked what we
needed...".

Another doctor, Dr. Dorado, tells the story at
Ophtalmology at the

Ophtalmology where the equipment received by the
hospital was faulty,
of poor quality and broke down easily and not due to
abuse.

The news channel included many other similar stories
told by
doctors at various CCSS hospitals about the equipment
purchased with
the Spanish loan.


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DISCUSSION
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NEWS DIGEST
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*Dalai Lama's Message of Peace

Costa Rica supports the values of peaceful conflict
resolution,
spiritual renewal and harmonious coexistence preached
by the Dalai
Lama, President Abel Pacheco told Tibet's spiritual
leader.

"We Costa Ricans feel honoured and touched by your
presence," Pacheco
said during a lunch the two shared yesterday - the
second day of the
1989 Nobel Peace Prize winner's visit to Costa Rica.

Present at the luncheon was former Costa Rican
president and 1987 Nobel
Peace Prize winner Oscar Arias, and religious leaders.

This is the second time the spiritual leader of the
Tibetan Buddhist's
has visited Costa Rica where he will hold talks and
workshops for four
days.

Costa Rica shares a very special ideological vision
with Tibet.

Just as Tibet gave up warfare as a national policy
centuries ago,
Costa Rica today is the only nation on the planet
that is totally

demilitarized, thanks to the vision and initiatives
of its former
president Oscar Arias.


*Constitution court asked to settle dispute

The minister de Obras Públicas y Transportes took the
unusual step
Monday of asking the constitutional court to resolve
a conflict with
the Contraloría General de la República.

A spokesperson for the Poder Judicial characterized
the action as not
very common but allowed under the jurisdiction of the
court, the Sala IV.

Ovidio Pacheco is the minister of Obras Públicas.

The filing says that a conflict exists between the
criteria that the

Contraloría issued earlier this month and the
ministry. Alex Solís, the

contralor, said that there were unconstitutional
aspects to the contract
that the ministry had with Riteve S y C, the vehicle
inspection company.

Monopolies are illegal in Costa Rica, and Solís said
that Riteve
approached a monopoly. However, he stopped short of
trying to void the

contract.

In another development related to Riteve, the company
said that its
Nicoya inspection station would be closed today
because the local power

company is doing some line work.


*ICE Board Members Who Went to Prague Fired


The Constitutional Chamber of the Supreme Court (Sala
IV) on Friday
rejected an injunction filed by former Costa Rican
Electricity
Institute (ICE) board members José Antonio Lobo and
Hernando Pantigoso,
which sought to overturn a decision by President Abel
Pacheco to fire
them from ICE's board.

As a result of the ruling, the Lobo and Pantigoso
have stepped down.

The board members, along with Alvaro Retana, who
recently stepped down
from his post as head of ICE's telecommunications
division, have been at
the center of a controversy that started last October
when they traveled
to Prague, Czech Republic, with Ricardo Taylor, the
top Costa Rican

representative for Swedish telecom firm Ericsson,
when they were
scheduled to attend a global telecommunications
conference in Switzerland.

At the time, Ericsson was involved in and later won a
$130 million
public bid to provide ICE with 600,000 new GSM
cellular telephone lines.
The contract was signed in June.

In July, the Comptroller General's Office rejected
the contract,
citing 28 objections to it (not including the trip).
Last week,
Comptroller General Alex Solís ordered the bidding
process to be
started again from the beginning.

After legislators from the Libertarian Movement Party
denounced the
trip to Prague, the Executive Branch, the Legislative
Assembly and
ICE all began investigating the matter.

On July 20, Pacheco fired Lobo and Pantigoso because
of alleged

irregularities connected to the trip (TT, July 23). A
week later on
July 27, he named engineers Jorge Gutiérrez and
Francisco Lay to ICE's
board of directors.

On Aug. 3, a day before ICE was to announce the
results of its
investigation, Retana resigned as ICE's head of
telecommunications.

Lobo and Pantigoso, however, filed an injunction
before the Sala IV,
claiming the President's Cabinet lacked the authority
to investigate
and fire them.

The Sala IV agreed to study their case, thereby
suspending the decision
to fire them.

Friday's court ruling resulted in the immediate
firing of Pantigoso
and Lobo and gave Pacheco the authorization to
reinstate his previous

appointments. The new board members will likely be
sworn in during
today's weekly Cabinet meeting.


*Monsanto Says it Left To Increase Efficiency

A representative of genetically modified organism
(GMO) and
agrochemical giant Monsanto confirmed yesterday the
company has
closed its offices in San José and moved its Central
American
operations to Colombia and Mexico.

The closure, which happened in April, was announced
and championed
last week by environmental groups as a victory in
their battle against
GMOs. However, Manuel Rivas, Monsanto's manager of
product development
in Central America, said yesterday the decision to
leave was made to
increase efficiency – not in response to pressure
from anti-GMO groups.

Rivas also confirmed the U.S.-based company has
withdrawn its
request from the Costa Rican Ministry of Agriculture
and Livestock
(MAG) for permission to plant genetically modified
corn in Costa Rica.

“It is not a priority market, because of the small
size of the
cultivation,” Rivas said. He said the company would
instead look to
Honduras and Guatemala for cultivation of modified corn.

However, Rivas said Monsanto officials may in the
future resubmit
their request to grow the controversial crop in Costa
Rica. He also
stressed normal Monsanto business continues in Costa
Rica, primarily

distribution of the company's herbicide Roundup.

GMOs are crops that are genetically modified by
scientists to exhibit
certain traits, such as disease or herbicide
resistance. Many of
Mansanto's genetically modified products are “Roundup
Ready,” meaning
they are resistant to the herbicide the company
produces.

Opponents say GM crops have unknown health risks and
could contaminate
the genetic material of nearby crops through the
natural spread of
seeds from gene-modified plants. They claim
genetically modified corn
has already severely contaminated crops in Mexico.



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