Beyond Cisco and the Fisco: Alcatel in Banana-Republican Hell

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The Casas-Sánchez memo to Arias: “Some urgent actions to animated the Yes on CAFTA campaign. First and foremost: A media blitz based on “fear, uncertainty and doubt.” And “vote Quimby or you will lose your job” rallies with employees, to be concealed from elections authorities (because they are illegal). Kevin Casas is under investigation for illegal use of public funds to benefit the “Yes” campaign. He stepped down from his post as VP and Minister of Planning.

Alcatel has a history of attempting to influence Costa Rican politicians. Connections going back to José María Figueres, another former president, forced him to step down from his position as second-in-command of the World Economic Forum in Geneva on October 29. His resignation came after accusations arose of a $900,000 bribe he received from the corporation during his years of public service in Costa Rica. Alcatel supposedly had invested $800,000 in companies linked to Hernan Bravo, director of the ICE from 1998 through 2004. In return, Bravo saw to it that the company was awarded two more large contracts to develop cell phone lines, the most recent contract reportedly being worth $149 million. In a rather ironic twist, current Costa Rican President Abel Pacheco, the most vocal critic of Rodríguez during his abbreviated stint as OAS Secretary General, has yet to explain the undeclared $100,000 donation to his presidential campaign by Alcatel. In all, authorities believe that Alcatel has paid a total of $4.4 million to various Costa Rican officials, resulting in its being assigned a near monopoly of telecommunication services in the country.EMILY ALVES and MICHAEL JOHNSON, December 2004

I am now officially hooked on Fraud Digest.

It is one of those incredibly simple and useful bLAWg projects, like that attorney who annotates SEC and SRO enforcement cases in the securities industry — it must be here in my blogroll somewhere, what was that called? — that give citizen journalism a good name.

All it really is is a clipping service, collected and commented on by somebody who demonstrably knows what the hell they are talking about. (Unlike, say, this blog.)

I keep saying I have this sense that the Cisco case in Brazil is probably the tip of the iceberg, and that there are signs that increased focus on such Hobbesian business practices is a regional, not a local, trend.

See

I base that partly on what the feds here said about the Panamanian law firm that set up a lot of these tax shelters for big tech and other types of company (and Augusto Pinochet) throughout Latin America:

One of the theoretical advantages of regional integration, after all, is pooling efforts to curb corruption and generalized Sino-Paraguayan plundering of the regional economy.

I also keep wondering whether the Foreign Corrupt Practices Act might someday get dusted off and actually used. See also

The case of an Ohio-based fruit-importing multinational found paying off people on State Dept. lists of designated terrorist organizations, for example.

Another case in point:

On June 7, 2007, a former Alcatel CIT executive pleaded guilty to participating in the payment of more than $2.5 million in bribes to senior Costa Rican government officials in order to obtain a mobile telephone contract from Costa Rica’s state-owned telecommunications authority, in violation of the Foreign Corrupt Practices Act (FCPA).

The vice-president of Costa Rica had to resign recently over violations of campaign law after a memo leaked in which he advised the President of Costa Rica on how they could get around elections commission rules to conduct a “Vote Quimby or you will lose your job” campaign. See

TV Futura here in Brazil ran an astonish “happy talk” propaganda piece by a Globo journalist about the utopian incorruptibility of Costa Rican democracy. Ran it on the night before the referendum.

See

I thought this was pure, gabbling propaganda and happy-talk bullshit.

Credible skepticism about that rosy picture can be readily located, and credible skeptics are available to be interviewed by anyone wishing to present a balanced view of the issue:

Buy my Francophone 4G gizmo and I will pay you a kickback:

Christian Sapsizian, a French citizen, entered the plea in federal court in Miami, before the Honorable Patricia Seitz. Sapsizian pled guilty to two counts, conspiracy and violating the FCPA, from a superseding indictment returned on March 20, 2007. The remaining counts will be dismissed at the time of sentencing, scheduled for December 20, 2007. As part of his plea, Sapsizian has agreed to cooperate with law enforcement authorities in their ongoing investigation. Until November 30, 2006, Alcatel was a French telecommunications company whose American Depositary Receipts (ADRs) were traded on the New York Stock Exchange.

It was acquired by Lucent.

Sapsizian was employed by Alcatel or one of its subsidiaries for more than 20 years. At the time the corrupt payments were made, Sapsizian was the company’s deputy vice president responsible for Costa Rica.

Funneled through consulting firms:

Sapsizian admitted that from February, 2000, through September, 2004, he conspired with co-defendant Edgar Valverde Acosta, a Costa Rican citizen who was Alcatel’s senior country Officer in Costa Rica, and others to pay more than $2.5 million in bribes to senior Costa Rican officials in order to obtain a mobile telephone contract on behalf of Alcatel. The payments, funneled through one of Alcatel’s Costa Rican consulting firms, were made to a director of Instituto Costarrisence de Electricidad (ICE), the state-owned telecommunications authority in Costa Rica, which was responsible for awarding all telecommunications contracts.

In February 2007, La Nación reported that Alcatel failed to perform on at least half of the contracts it was awarded.

And what happened to the bribe recipient?

What was his name, anyway?

Was he convicted of the bribe-taking?

There is controversy, as they say, on the subject.

Yes, we know who got the payoff.

But he was reportedly never charged for it.

Escaped prosecution in exchange for incriminating one of the “senior officials.”

The senior official in question, meanwhile, was the former president and secretary-general of the OAS, and his trial was described by some observers as “a lynching” and “highly irregular.”

The report is from the anonymous blogger at Cerditicos (WordPress.com), but it deserves Englishing for a fact-check, as a potential reality-based antidote to the Globo-al happy talk.

Cuando se hicieron del conocimiento público los actos de corrupción que rodearon la contratación del ICE, con la empresa ALCATEL, el Dr. Rodríguez ocupaba el cargo de Secretario General de la Organización de Estados Americanos, puesto al que había aspirado Costa Rica en cuatro oportunidades, fracasando las cuatro veces. En el caso de Rodríguez la elección fue unánime.Rodríguez podía haber permanecido en el exterior, hasta que los cargos que se le hicieron hubieran prescrito, como lo hizo en su oportunidad el hoy presidente de Perú Allan García.

When the acts of corruption surrounding the ICE contract with ALCATEL came to light, former president Rodriguez was Secretary-General of the OAS, a post which Costa Rica had tried to obtain four times, without success. In the case of Rodriquez, he was elected unanimously. He could have remained out of the country, until the statute of limitations had run on the charges against him, as Peruvian president Alan Garcia had once done.

Sin embargo, estuvo anuente a presentarse al país a dar cuenta de sus actos, creyendo que en este país había justicia. Para su desgracia, no tomó en cuenta que su venida al país iba a servir para satisfacer las ansias de protagonismo de un Ministro de Seguridad y un Fiscal deseosos de darse a conocer, al precio que fuera y de un presidente hipócrita, que se valió de este hecho para desviar la atención sobre su mediocre gobierno.

He agreed, however, to return and give an account of himself, believing there was justice to be had in Costa Rica. To his sorrow, he failed to take into account that his return would satisfy the eagerness of a Ministry of Security and prosector who were eager to make a name for themselves at any price, and of a hypocritical president who used the incident to distract attention from his mediocre government.

De esa forma, el Dr. Rodríguez, al llegar al país, fue exhibido en forma humillante, en un acto circense como el más peligroso de los delincuentes. Todo esto fue orquestado desde la Casa Presidencial, siendo el ejecutor el Ministro de Seguridad de ese entonces Rogelio Ramos Martínez, quien fue el que autorizó el ingreso de periodistas a un área totalmente restringida del aeropuerto. De esta forma todo el mundo pudo ver a Rodríguez esposado y custodiado por agentes del Organismo del Poder Judicial. Por este acto Ramos Martínez fue condenado posteriormente por la Sala Constitucional.

Thus Rodriguez, arriving in Costa Rica, was exhibited in a humiliating fashion, in a circus-like atmosphere, as if he were a dangerous criminal. All of this was orchestrated from the presidential palace and executed by Ministry of Security Ramos Martínez, who whothe one who authorized journalists to enter a restricted area of the airport. In this way everyone was able to see Rodriguez handcuffed by agents of the judiciary. The Supreme Court later condemned Ramos for this act.

Este acto no fue obra de la casualidad. Rogelio Ramos quería a toda costa ser candidato presidencial de su partido, pero no era apoyado por la cúpula, la cual aparentemente pretendía que otro de los imputados, Eliseo Vargas, fuera el sucesor de Calderón y Rodríguez dentro del partido.La ambición del señor Fiscal, no se contentaba con este puesto, sino que aspiraba a llegar a magistrado, como posteriormente se demostró, aunque al final tuvo que retirarse en forma poco elegante de la contienda.El presidente Pacheco, necesitaba de un escándalo para distraer la atención, y que el pueblo olvidara, aunque fuera por un rato, el desgobierno que Pacheco realizaba.

This was no accident. Rogelio Ramos wanted to be his party’s presidential candidate, but was not supported by its leadership, which apparently favored Vargas to succeed Calderón and Rodriguez inside the party. ….

En el momento en que Rodríguez fue detenido y enviado a la cárcel, el Fiscal General manifestó que había pruebas contundentes en su contra. Sin embargo transcurrieron más de mil días para que la Fiscalía presentara las acusaciones ante un Juzgado.Aparentemente la detención de Rodríguez estaba basada únicamente en las declaraciones de uno de los principales imputados, José Antonio Lobo Solera, con quien la Fiscalía hizo negociaciones inaceptables.

At the moment Rodríguez was arrested and jailed, the state prosecutor said there was overwhelming evidence against him. It took the Fiscalia more than 1,000 days to present those charges before the court, however. Apparently, the detention of the former president was based solely on the word of one of the principle defendants, Lobo Solera, with which the Fiscalia had made unacceptable deals.

Como se necesitaban más pruebas testimoniales, tanto en este caso, como en el escándalo de la Caja Costarricense de Seguro Social, dos de los imputados que se habían negado a prestar colaboración con el señor Fiscal General, fueron detenidos en la cárcel de Cocorí, donde fueron brutalmente sodomizados por un grupo de reos, ante la pasiva mirada de funcionarios de Adaptación Social. Fue esto una desgraciada casualidad o una forma de ablandarlos, por medio de la humillación y la tortura, para que declararan lo que la Fiscalía necesitaba?.

[tktktktk]

Pero aún faltaba una irregularidad más. Como el Poder Judicial no contaba con fondos suficientes para llevar a cabo la investigación, ya que seguramente se habían gastado en pagar horas extra a agentes del Organismo de Investigación Judicial, para proteger la valiosa vida del señor Fiscal, y para servirle de niñera a sus hijos, se recurrió al Instituto Costarricense sobre Drogas. Este ente estatal, administra fondos provenientes del decomiso de bienes y dinero provenientes del narcotráfico, pero que por ley tienen un fin específico. La lucha contra en tráfico de drogas y el lavado de dinero. Sin embargo, al revisar los cargos de la Fiscalía contra todos los imputados ninguno de ellos fue acusado ni por narcotráfico ni por legitimación de capitales. Por tanto este traslado de fondos a nuestro criterio fue totalmente ilegal. Aquí vuelve a aparecer otra casualidad. El Director Ejecutivo del Instituto Costarricense sobre Drogas, es un funcionario de la Fiscalía, que se encontraba disfrutando de un permiso sin goce de salario, para ocupar el puesto de máximo jerarca del Instituto.

[tktktktk]

El último eslabón de esta cadena de irregularidades lo constituye el no haberse presentado cargos contra José Antonio Lobo Solera, miembro de la Junta Directiva del Instituto Costarricense de Electricidad y quien tenía todo el poder para impulsar cualquier prebenda para ALCATEL. Está probado que él, usando las cuentas corrientes de su esposa recibió más de dos millones de dólares por parte de la transnacional francesa. Sin embargo no ha pasado ni un minuto en la cárcel y su esposa ni siquiera se incluyó entre los imputados. La explicación que se ha dado es que el Fiscal General llegó a un acuerdo con Lobo, para no acusarlo a cambio de que sirviera de testigo contra el ex presidente Rodríguez.Este ha sido el sistema de trabajo de la Fiscalía General. Primeramente contra el directivo del ICE Bravo Trejos, se siguió una farsa de juicio, en el que por lo menos fue condenado a tres años de cárcel, pena que nunca descontó, a cambio de dar información a la Fiscalía y ahora ni José Antonio Lobo ni su esposa son acusados, a pesar de haber recibido y canalizado, fondos provenientes del soborno de funcionarios públicos. No son acaso culpables tanto Bravo como Lobo, de haber recibido dádivas para aprobar una contratación, que nos perjudicado a todos los costarricenses, que hemos estado condenados a recibir el pésimo servicio que nos brinda la red de telefonía móvil de ALCATEL. Puede llamarse justicia a un proceso plagado de irregularidades?Sin embargo, nada podemos hacer.

[tktktktk]

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