Housing Minister Resigning As Funding Probe Continues

August 8, 2008

A scandal over the Arias administration’s management of public funds has brought down its first casualty. Housing Minister Fernando Zumbado, under investigation for possibly mismanaging a $1.5 million donation from Taiwan, announced this week that he would resign Aug. 20.

Taiwan donated the money in 2006 to improve living conditions in Rincón Grande de Pavas, a shantytown west of San José, in addition to other ministry projects. Much of the money, administered by the Central American Bank for Economic Integration (BCIE), was spent on consultants and equipment.

Zumbado, however, also recommended that BCIE award a consulting contract to the InternationalCenter for Sustainable Development (CIDH), a non-profit he founded and directed until April 2006, a month before assuming office.

After the daily La Nación broke the story, the Comptroller General’s Office opened an investigation, and Zumbado stepped down temporarily July 10. The Government Attorney’s Office is now deciding whether to file a formal accusation.

Zumbado, the fourth of 19 cabinet members to step down during Arias’ 27 months in office, blamed the press and political opponents for smearing his name and the Housing Ministry’s image.

“Your administration’s social programs mustn’t be compromised by slander and bad faith,” he said in a letter to Arias. “Nor can I be complicit in these evil efforts. I therefore … ask that you accept my resignation.”

The Housing Ministry heads Arias’ fight on poverty, which has brought the president pride and usually good press. The ministry gives money to students as an incentive to stay in school and to poor families to build or rebuild houses.

The Comptroller General’s Office is also investigating the Arias administration’s use of a secret $2 million donation by BCIE in 2006. The government has spent about half the money on consultants without notifying the Comptroller General or the Legislative Assembly, which normally oversee the use of public funds. The administration claims it is not required to do so.

 

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