Vol. 12, No. 2,856W - The American Reporter - March 18, 2006

Reporting: Costa Rica

by Jay Brodell
American Reporter correspondent
San José, Cota Rica

SAN JOSÉ, Costa Rica, Oct. 3, 2004 —- Pressure is growing here for former Costa Rican president Miguel Ángel Rodríguez, a leading economist and now the Secretary-General of the influential Organization of American States, to resign from post at the O.A.S., a hemispheric counterpart of the United Nations.

A native of Ecuador, Rodríguez, 65, has officially held the O.A.S. job for only two weeks, but has rapidly become involved in a complex and growing scandal involving kickbacks on Costa Rican government contracts.

The major headline in La Nacion, the major Spanish-language daily here, said Saturday that there was clamor for Rodríguez to resign. On Sunday, President Abel Pacheco said Rodríguez should resign if he could not adequately explain himself. In the headlined report, Pacheco vowed, "We are going to free Costa Rica from corruption."

Rodríguez, most recently a professor at the University of California at Berkeley, was president of Costa Rica from 1998 to 2002 when the contracts were negotiated. He earned a doctorate from the UC Berkeley in 1966 with a thesis on how the demand for money shapes so-called "political economies."

The scandals involved a $39 million loan from the government of Finland so the country's government hospitals could purchase equipment. Also involved is a $260 million contract with the French firm Alcatel to upgrade the country's cellular telephone service.

Until last week, Rodríguez was outside the swirl of the scandals that have been under investigation since June. At least 11 officials or ex-officials have been placed either in jail or under house arrest.

One of those being held is José Antonio Lobo, who had been a director of the national telecommunications monopoly, the Instituto Costarricense de Electricidad, known as ICE.

Rodríguez admitted Thursday that he had received $140,000 loan from Lobo to advance his candidacy for the hemispheric job he now holds. But Lobo has said the money was part of some $1.4 million that his wife received as part of the commission upon approval of the cellular telephone contract, according to local press reports.

The admission was made to Channel 6 Repretel, which broadcast a telephone call with Rodríguez live as part of its 7 p.m. news show. Rodríguez was in Washington, D.C. Rodríguez was unclear as to when the personal loan was made. "In 2002 or 2003," he said.

Both Repretel and Channel 7 Teletica revealed that the Lobo's wife paid the money to the wife of Rodríguez, Lorena Clare Facio. Lobo's wife, a U.S. citizen, got the $1.4 million payment after Alcatel sent it via intermediaries, including a bank in the Bahamas, according to the same local press reports.

Alcatel won a $260-million contract to provide upgraded GSM cellular telephone service in Costa Rica. Complaints have been made about lack of coverage and lack of dial tones.

Lobo told prosecutors that Rodríguez demanded 60 percent of the "gift" from Alcatel, the daily La Nación reported.

Lobo also said that money indirectly from Alcatel was used to pay off some $14,000 in credit card debt run up by Rodríguez. Lobo served as minister of housing for Rodríguez before being named to the board of the telecommunications company.

Another director of the Costa Rican telecommunications monopoly also appears to have received a $1.2 million payment.

Rodríguez was president when the seeds of the scandal involving Finland were planted. The national assembly in December 2001 agreed to accept a $39 million loan from Finland on the condition that the money be used to purchase medical equipment from firms in Finland.

The loan generated an undisclosed $9 million commission for politically connected officials and the head of a leading pharmaceutical company, Corporación Fischel. Two executives of that company now are under investigation and one is in jail

A judge prohibited Rafael Ángel Calderón, another former president, from leaving the country because of his apparent involvement in the loan deal.

Medical professionals said they did not really need all the equipment purchased with the loan.

Rodríguez embarked on a face-to-face campaign to win the five-year post of secretary general. He made personal visits to most of the leaders of the nations of the hemisphere. Following Costa Rican tradition, he sought a consensus, and he was elected unanimously last spring.

The nation's chief prosecutor, Francisco Dall'Anese, characterizes Rodríguez as a witness and not a suspect, but noted that the job with the Organization of American States does not provide him immunity against prosecutor in Costa Rica.

Current president Pacheco, appears to have accepted $100,000 from Alcatel for his 2001-2 campaign. He says he is unaware of the specifics, although others who worked on the campaign confirm the payment.

Costa Rican law forbids taking donations that big or taking donations from foreigners or foreign firms. Plus the Alcatel payment never was reported to the national election commission as the law requires.

The Organization of American States has as 35 nations as members, all the countries in the Western Hemisphere except Cuba. The organization is designed to strengthen cooperation and advance common interests and lists a number of agencies under its jurisdiction, including the Washington-based Pan American Health Organization.

Jay Brodell is Editor of A.M. Costa Rica and has contributed to The American Reporter since 1995. Reach him at editor@amcostarica.com, or visit http://www.amcostarica.com

Copyright 2006 Joe Shea The American Reporter. All Rights Reserved.

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