San José, Costa Rica, since 1956

Corruption Scandals Implicated Ex-Presidents

THIS will go down in Costa Rican historyas the year corruption scandals putformer Presidents behind bars and catapultedthe country into the internationalspotlight in ways no one expected.It all began simply enough. On April21, the daily newspaper La Nación reportedthat Eliseo Vargas, executive presidentof the Social Security System (Caja), wasrenting a luxury home for half its valuefrom the financial manager of one of theCaja’s suppliers.Vargas resigned within hours. That wasthat, it seemed.It wasn’t.BY November, the story had triggeredmassive investigations that includeddozens of police raids, incited a nationaluproar, caused a wave of high-level resignationsand threatened to tarnish the country’sreputation as the relatively corruption-free “Switzerland of CentralAmerica.”Many say Costa Rica will never be thesame again.“This is the end of Costa Rica beingexceptional,” political analyst LuisGuillermo Solís told The Tico Times inSeptember – before the worst of the scandalshad even been uncovered.None of the suspects in the two largestcorruption cases under investigation by theProsecutor’s Office have been convicted.However, several, including ex-PresidentsRafael Ángel Calderón, Jr. (1990-1994)and Miguel Ángel Rodríguez (1998-2002),are serving preventive detention orders.THE two largest scandals under investigationby the Prosecutor’s Office involvealleged illegal payments to governmentofficials from foreign companies with contractsin Costa RicaIn the Caja case, Calderón, currentlybeing investigated on charges that includeaggravated corruption, is accused of mastermindingthe distribution of a $9.2 million“commission” on a $39 million Cajamedical equipment purchase in 2001.Vargas’ now-infamous luxury home isamong the other gifts the former Caja chiefallegedly received.In the other case, officials from theCosta Rican Electricity Institute (ICE) arealleged to have received illegal paymentsfrom representatives of global telecommunicationsgiant Alcatel, which won a $149million contract with ICE in 2001.The ICE-Alcatel case broke in lateSeptember when La Nación reported JeanPhilp Gallup, wife of former ICE boardmember José Antonio Lobo — who alsoonce served as Rodríguez’s HousingMinister — had received $2.4 million fromAlcatel.WHEN Lobo testified before prosecutorsin October, he said Rodríguez received60% of the Alcatel “prize.” Rodríguez,who had recently been elected as the firsteverCentral American Secretary Generalof the Organization of American States(OAS), stepped down from the post afteronly a month in office to return to CostaRica and face the allegations.An international capture order wasissued, and the former President wasarrested and handcuffed as he stepped offthe plane, with most of the country watchinglive television coverage of the historicevent.Although Rodríguez was initiallyplaced under house arrest, a judge laterordered him moved to the penitentiary LaReforma, outside San José, for the remainderof his six-month preventive detentionorder. At year’s end, he remains there in anindividual cell, near Calderón, who wassent to La Reforma Oct. 22.The Tico Times requested interviewswith Rodríguez and Calderón, but bothdeclined.A third ex-President, José MaríaFigueres (1994-1998), who has admittedto receiving payments from Alcatel for“consulting services” he provided in2001, resigned from his post as head ofthe World Economic Fund in October. Atpress time he remained in Switzerland,despite attempts by the LegislativeAssembly to bring him back to testifyregarding allegations that the paymentswere contingent on Alcatel obtaining thegovernment contract.THE allegations against Calderón andFigueres are particularly crushing to CostaRica’s two major parties, the SocialChristian Unity Party (PUSC) and theNational Liberation Party (PLN), becausethe two leaders’ fathers, who were bothPresidents themselves, are political legends.Figueres’ father, José “Pepe” Figueres(1948-49, 1953-58, 1970-74) founded theLiberation Party, and Rafael ÁngelCalderón Guardia (1940-1944) is creditedwith the institutionalization of many ofCosta Rica’s social guarantees, includingnational health care.Some analysts predict the parties’ totalcollapse, not just because of the corruptioncases but also because of already existingvoter discontent with the national leadership.At any rate, the cases have opened thedoor much wider for new parties thathave formed in recent years, and this yearseveral new faces announced their intentto run in the 2006 presidential elections.

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