FISCHEL-CAJA SCANDAL:
Eliseo Vargas Fingers Calderón
The Fischel-Caja scandal took on a new twist as former president of the Caja Costarricense de Seguro Social (CCSS), Eliso Vargas, talked to prosecutors on Tuesday to make a deal for a change in his housing arrangements and charges dropped against his daughter, in exchange for more incriminating information.

Vargas is preventive detention in the Cocorí jail in Cartago, but soon could be home under house arrest and all investigations will be dropped against his daughter for receiving a Toyota Rav4, paid by the Corporación Fischel from funds received in connection the the us$39 Million dollar loan from Finland.

Vargas told prosecutors that former president Rafael Ángel Calderón tried to hide the deposit of us$520.000 dollars in Panama paid form the Finnish loan.

In an interview that took some 12 hours, Vargas, detailed to prosecutors how Calderón attempted to mask the movement of the funds as part of a sale of stock in a Miami hotel.

Vargas also told prosecutors that it was Calderón who showed him how to funnel funds to U.S. accounts and that an aide to former Panamanian president, Mireya Moscoso, helped in opening the Panamanian accounts.

The statement by Vargas also indicated that Calderón was very worried about covering up the payments made through the Sultana company in Panama and had dealings with Fischel president, Walter Reiche Fischel, over the movement of the funds.

According to Vargas, it was Calderón who decided how the "commission" would be split up and who got what. Calderón paid out us$300.000 to himself, another us$300.000 to Gerardo Bolaños (Calderon's law firm partner) and another us$300.000 to Juan Carlos Sánchez.

Vargas got us$600.000 for his part, being told by the former president that he deserved double the amount of the others, since he had been a deputy in the Legislature and then president of the CCSS.

Vargas, who has been in preventive detention since September 7 and who may soon see more liberty, also told prosecutors that he received a payment from Alcatel. Through his friendship with Rodrigo Méndez, an engineer at the Instituto Costarricense de Electricidad (ICE), he met Edgar Valverde, the them president of Alcatel Costa Rica.

Vargas said that he was promised a "good" commission if Alcatel was able to get the ICE contract to install 400.000 GSM cellular telephones lines in Costa Rica, a contract that Alcatel did get and was worth us$149 million dollars.

Former president Rafael Ángel Calderón is to appear before the Fiscalía this morning (Thursday) to answer questions over the new allegations by Vargas and could see the investigation place preventive measures against the former president, as the case with former president Miguel Angel Rodríguez who is under house arrest in the ICE-Alcatel scandal.

Calderón told the press that his is hurt by the allegations by Vargas, a man he had helped with his career and personally.

Gonzalo Castellón, Calderón's lawyer, says that the possibility exists that his client (Calderón) may face stiffer measures against him following the meeting this morning with prosecutors. He told the press that his client will walk in the main doors of the 'Tribunales' in San José like any other citizen, referring to the way former president Rodríguez was escorted in handcuffs, as a common criminal, following his arrival to Costa Rica last Friday.

Internal court house security has been intensified for this mornings appearance by the former president and additional security measures are in place to avoid the disorder around and inside the court buildings last week with the arrival of Rodríguez.
 

PRESIDENTIAL SCANDAL:
Taiwan's Impact of Costa Rica Scandal Widens
The Taiwan legislative foreign affairs committee yesterday temporarily froze an annual secret budget to South and Central America nations, demanding that the Ministry of Foreign Affairs (MOFA) provide a clear explanation of Taiwan's donations to former Costa Rican president Miguel Angel Rodríguez.

KMT legislator Bill Sun, who initiated the freeze, argued that MOFA has failed to provide an explanation of the situation, which might lead to more damage to Taiwan and its ties with Costa Rica.

Costa Rican prosecutors confirmed that they are investigating alleged payments by the government of Taiwan into accounts controlled by former president Miguel Angel Rodríguez, who allegedly received US$200,000 in 2001 from the Foreign Ministry and another US$200,000 in 2002 from the Taiwanese Embassy in San Jose.

Furthermore, there are reports that a Panamanian company controlled by Rodriguez allegedly accepted two separate donations of US$500,000 each and that Taiwan had provided a total of US$1.4 million in political donations to Rodríguez over three years.

The MOFA, which submitted an explanation of Taiwan's contributions to its Costa Rican counterpart Tuesday, has denied making any political donations to former president Rodríguez, but has not made proper disclosure of such.

The MOFA also said that it had allocated US$200,000 for a personnel-training project and international conferences in 2001 and 2002, after the Foundation for Liberty and Human Development in Costa Rica sent a letter to Taiwan's embassy seeking a donation of US$1.2 million, to defray the cost of seminars and training."

The MOFA, however, claimed that it was unaware of the source of the remaining US$1 million that was supposedly donated to Rodríguez's Panamanian company.

Rodríguez's lawyers, however, said that the amount of US$200,000 dollars sent in 2001 and 2002 to the foundation was a personal loan to the then president.

Taiwanese banks arranged to loan Rodríguez the money through the government in Taipei, lawyer Rafael Gairod said.

The MOFA yesterday declined to comments on the statement by Rodríguez's lawyers.

Sun emphasized that the Legislature is seeking to exercise damage control to ensure that Taiwan's image would not be further tarnished as the case continues through the legal process.

To protect Taiwan's image, Sun said, a special committee was needed to investigate the case.

He said yesterday that he was not satisfied with the MOFA's explanation, which left many uncertainties concerning the secret budget, which would be again reviewed by the Legislature's foreign affairs committee today.
 

Abengoa Loses Costa Rican Contract
Spain's Abengoa SA 's Inabensa SA unit has lost a €162.4 Million Euro contract in Costa Rica due to bribery charges facing ex-president of the country Miguel Angel Rodríguez, El Mundo reported, without citing a source.

According to El Mundo, Abengoa's alledged involvement in the bribery allegations facing the ex-president has led the Instituto Costarricense de Electricidad (ICE) to cancel a contract to build the Miramar de Puntarenas power plant.

Inabensa has been accused of making a us$100,000 payment to Rodríguez for awarding the company a contract to lay underground power cables in downtown San José, a project that is coming to the end of it's two construction phase.

The contract was awarded to Inabensa when Rodríguez was president.

Inabensa said it 'has never made payments to public servants in order to improve chances of winning a contract,' denying any involvement in a bribery scandal surrounding the ex-president of Costa Rica.

Four e-mails published in the Spanish daily Al Día newspaper is incriminating Inabensa in paying Rodriguez for awarding the company the contract.  Al Día cited unnamed judicial sources on Sunday, however, as saying that the judge has refused to accept the e-mails as evidence, calling them 'spurious.'

The Abengoa unit said it was awarded the power line contract because 'the second bidder offered a substantially higher price than Inabensa.'

Amid the allegations contractor Inabensa, as well as telecoms firms Alcatel and Ericsson have been removed from the list of government suppliers.

The awarding of telecoms contracts in Costa Rica has always been somewhat mysterious, with a number having been won and then subsequently lost again. However, the mounting publicity surrounding this scandal could have serious consequences for Ericsson and Alcatel throughout the region.

For example, the president of Honduras, Ricardo Maduro, has said that the country will begin an investigation into the conduct of Alcatel in relation to contracts awarded to it by state-owned, fixed-line incumbent Hondutel. Any more allegations against the company could see it blacklisted in one of the fastest-growing telecoms regions in the world.

More Protected Areas and Planted Forests in Latin America and the Caribbean
Less natural forest cover, but more protected areas and forest plantations, and an increased share of international trade in forest products are expected by 2020 in Latin America and the Caribbean.

This is the conclusion of an outlook study to be published at the end of the year by the UN Food and Agriculture Organization (FAO).

The forecasts were presented for discussion to country representatives at the Latin American and Caribbean Forestry Commission this week in San José, Costa Rica.

"The challenges and opportunities of the expected changes call for greater participation of communities and local government in forest management, better property rights regulations, improved intraregional trade and development of systems for a better flow of information," said Mr. Merilio Morell, an FAO forestry expert, at the meeting.

Country representatives at the meeting recognized the need for coordinated follow up actions and programs in response to the outlook forecasts.

"The future of forests in the region in the coming decades depends on how countries react to, and what kinds of actions they take in view of these expected changes," Morell said.

Natural forest cover is expected to continue decreasing between now and 2020, according to the study. It is expected to shrink from 964 million hectares in 2002 to 887 million hectares in 2020 or 47 percent of the total land area of the region.

Planted forests are forecast to increase from 12 million to over 16 million hectares. Protected areas are also likely to expand.

Already between 1950 and 2003, protected areas increased from 17.5 to 397 million hectares, reaching 19 percent of the region's total area and 23 percent of the world's protected areas. Between now and 2020, new protected areas are expected to be created in the region, including mega parks and biological corridors.

Participating countries shared success stories on this topic at the meeting in San José.

Costa Rica reported how forest cover in the country increased from less than 30 percent to 47 percent in a little more than a decade thanks to its National Fund for Forest Financing. The Fund spends a 3.5 percent in tax charged for the use of fossil fuels to support land owners and local communities to maintain protected areas, plant trees and manage their natural resources.

Uruguay and Cuba also described how their policies helped slow down and reverse the deforestation rate.

"To guarantee protection and sustainable use of forests the multiple benefits and services provided by forests have to be valuated in monetary terms by those who benefit," Mr. Morell said.

"Forests not only offer timber and non-wood forest products such as fruits and natural medicines, but also contribute to ecotourism, the conservation of watersheds and biodiversity, and to the mitigation of climate change. All this should be valuated to raise funds needed to pay for conservation of forests," he said.