Ericsson Asks Costa Rica Court To Restore $130M Contract
The Swedish telecommunications company Ericsson said Wednesday it is asking Costa Rica's top court to restore a $130 million contract that has been nixed by the national Contraloría General de La Republica (Comptroller's office).

The action comes against the background of official investigations into possible kickbacks or favors by several companies to two former presidents and other officials.

In a news release, Ericsson denied wrongdoing and said it was appealing to the Constitutional Court for an injunction to save its contract with the Instituto Costarricense de Electricidad (ICE).

"The contract is perfectly valid," the company said.

On Monday, ICE announced it was dropping its appeal of a decision by the comptroller's office to reject the contract for 600,000 cellular telephone lines.

Ericsson said it wouldn't make further announcements, pending legal inquiries, but it denied paying bribes or favors to officials.

It said it "vehemently" condemned acts of corruption "since Ericsson, on a national and world level, is a company known for its business ethics and rectitude."

ICE legal director Giovanni Bonilla said that the contract was being annulled and that the Institute would start seeking new arrangements for the lines.

He said it also has started legal steps to bar Ericsson from future government business.

Former ICE director Jose Antonio Lobo testified recently that the local manager for Ericsson, Ricardo Taylor, had paid the luxury hotel bills for at least three officials during a trip to Switzerland.

Lobo is also under investigation in connection with payments to his wife's bank accounts from the French company Alcatel, which won a $149 million contract in 2001 to install cell phone lines.

Lobo said that some of that money went to former Costa Rican President Miguel Angel Rodriguez, who last month became secretary general of the Organization of American States.