San José, Costa Rica, since 1956

Commission Suggests Probing Spanish Loan

A special commission created byPresident Abel Pacheco in May to investigatethe dubious proceedings of executivesof Costa Rica’s Social Security System(Caja) in the purchase of medical equipmentwith a substantial loan from theFinnish government in 2001, has urged theProsecutor’s Office to look into a $40 millionloan from the Spanish government in1997 for the same purpose.Pacheco’s so-called Commission ofNotables includes former president of theSuperior Penal Court Dunia Chacón,Industry Chamber president Rafael Carrillo,former Caja executive president AlvaroFernández and former Finance MinisterFederico Vargas, whom the President asked“to get to the bottom of” the Caja corruptionscandal (TT, May 14).Commission members last Friday saidthat a congressman during the administrationof former President José María Figueres(1994-1998) traveled to Spain to negotiate aloan of $40 million – known as the SpanishProject – for the purchase of hospital equipmentfor the Caja, Al Día reported.THE Caja, which oversees the nation’spublic health-care system, has beenenveloped in a scandal connected to a $32million loan from the government ofFinland intended for medical equipmentpurchases here.Investigations by the press and governmentagents have revealed an intricate webof payments stemming from a $9.2 million“commission” connected to the governmentcontract for the Finnish equipmentpurchase. The commission allegedly wasused to pay government officials and privatebusinessmen, including formerPresident Rafael Ángel Calderón (1990-1994).The first report of corruption in theCaja emerged in April, when La Naciónreported a questionable deal between formerCaja president Eliseo Vargas andOlman Valverde, an executive of the medicalcompany Corporación Fischel S.A.,who rented him a home in the western suburbof Santa Ana for $2,500 a month, abelow-market price for the $735,000 residence,which San José daily newspaperslater reported was purchased with moneyfrom the Finland Project commission (TT,April 23)Former Caja president Vargas, Fischelexecutive president Walter Reiche andFischel lawyer Randall Vargas have beenplaced in prevention detention as theinvestigation continues.THE Caja’s $39.5 million FinlandProject involved the purchase of equipmentfrom Instrumentarium, a Finnishmedical company that is now part ofGeneral Electric (TT, Sept. 10).Instrumentarium’s distributor in CostaRica is Corporación Fischel S.A.Until this week, Instrumentarium hadnot commented on the corruption allegationsin Costa Rica, which sparked a massivegovernment investigation here involvingseveral police raids, including one ofCorporación Fischel’s headquarters in SanJosé (TT, Sept. 24).Last month, Instrumentarium representativesinformed the Finnish governmentthey could not refer to their negotiationswith Corporación Fischel becausetheir contract contained a confidentialityclause.However, Francisco Campos, WalterReiche’s lawyer, informed La Nación thaton Sept. 30, his client authorized KariVisti, director of Instrumentarium, toreveal any necessary information about thecontract.This week, the Finnish company confirmedits payment of a commission worth22% of the Caja’s total investment of$39.5 million.VISTI answered a set of eight questionsformulated by the Finnish ForeignMinistry, including one directly addressingany suspicions he might have of corruptionwithin the company. Visti answered thatfor the moment, there is no evidence tosuggest Instrumentarium’s involvement inthe possible payment of bribes, but said hecannot fully provide an answer until theinvestigation is concluded, La Naciónreported.Gonzalo Pardo, legal advisor forGeneral Electric, told Al Día this weekthat the commission paid to CorporaciónFischel is something “ordinary and naturalwithin the realm of medical business.”Pardo said the commission may seemhigh to those who are unacquainted withthe medical business world, but the distributor’smargin may reach 40% above thetotal value of any given purchase.“The commission was normal, and thatis not where our worry resides. We areworried about how it was distributed,” hesaid, according to Al Día.IN a report issued to the President onOct. 1 about the Spanish Project, theCommission of Notables identified “a personwho occupied a high rank at that time”and “did something very similar to (formerCaja head) Eliseo Vargas” in the FinlandProject, Al Día reported. However, whenAl Día asked commission memberFernández for the name of this personinvolved in the Spanish Project, heclaimed to have forgotten it.The commission considers the SpanishProject “inconvenient” for the Cajabecause of consequences that mirror thoseof the Finland Project: the equipment purchasedis of “low quality and does notrespond to the Caja’s immediate needs,” AlDía reported.The group suggested an investigationof Alvaro Muñoz, the project director,assistant director Mario Saavedra, andoperations manager Dr. Luis Escalante, todetermine where a check for $231,128 wasspent, Al Día reported.The Official Credit Institute of theKingdom of Spain and the Bank of BilbaoVizcaya S.A. drafted that amount for theirproject before the loan was settled on July21, 1997, according to Al Día.Representatives of the Prosecutor’sOffice told The Tico Times that for themoment, they will not offer any commentson the commission’s report regarding theSpanish Project, although it is on theiragenda.IN contrast to Costa Rica, news of thescandal regarding the Finland loan has notbeen widespread in that country, accordingto Finnish reporter Rauli Virtanen, who emailedThe Tico Times this week.However, Finnish Ambassador to CostaRica Inger Hirvela told The Tico Timeslast week her government was “shocked”by the scandal (TT, Oct. 1).The European nation has sent a team toCosta Rica to investigate whether theFinnish government funds were put to useadequately in the purchase of medicalequipment.(Tico Times Reporter Steven J. Barrycontributed to this article.)

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