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(506) 223-1327        Published Thursday, March 23, 2006, Vol. 6, No. 59          E-mail us    
Jo Stuart
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High court rejects way tax plan was approved
By the A.M. Costa Rica staff

The constitutional court rejected the proposed tax plan Wednesday because of the way members of the legislative assembly passed it the first time. The court did not take a position on the plan itself.

In short, the court said the fiscal plan should have been approved by a two-thirds majority instead of a simple plurality when lawmakers voted Feb. 16.

Some 15 deputies who opposed the plan filed twin motions with the Sala IV constitutional court. The decision of unconstitutionality Wednesday was unanimous among the seven high court magistrates, although there were differences on certain parts.

Legislative leaders knew they could not get a two-thirds favorable vote for the massive tax plan, so they changed the rules to permit a majority vote on the tax package. When the vote came some 32 deputies were for the plan instead of 38 that would have constituted a two-thirds majority.

The tax plan now goes back to the Asamblea Legislativa where not much is expected to happen until May 1 when a new set of deputies are sworn in. That group is dominated by members of Acción Ciudadana and Liberación
Nacional, both organizations that favor the tax.

However, party leaders have not said if they would try to revitalize the measure. The court decision is a blow to president-elect Óscar Arias Sánchez who was hoping to build his government around the funds generated from the tax plan.

As the tax package moved toward approval, some new information came out. For example, officials said they would float bonds based on the anticipated income from the tax package.

The bonds would be used to pay off the $2.8 billion foreign currency debt accumulated by the Banco Central. That was like putting a third mortgage on a house.

After the package had been passed the first of two required times, reporters found that the measure contained a 10 percent capital gains tax that no one had mentioned earlier.  That caused some concern among upper class Costa Rican families and reverberated through the country's real estate market.

The tax plan also called for universal taxation in that those who live here would be taxed on income made all over the world. There also is a problem of security because taxpayers would have to give an accounting of their holdings.

Family continues tradition of flights to Ecuador from San Diego
By the A.M. Costa Rica staff

Teodoro E. Gildred will be recreating a flight next week that his father took 75 years ago from San Diego to Quito.

Gildred, the former U.S. ambassador to Argentina, will be bringing his sons, Ted III and Stephen, and Eric Lindbergh, grandson of aviation pioneer Charles Lindbergh.
The trip is being billed as a goodwill flight, and the aircraft of choice will be a Swiss-made Pilatus PC-12 turboprop instead of the Ryan Brougham monoplane the elder Gildred used 75 years ago.

Costa Rica is involved because the flight will overnight at Juan Santamaría airport either Monday or Tuesday. The flight is backed by

Teodoro E. Gildred flanked by sons

the Institute of the Americas in partnership with the San Diego Aerospace Museum. The trip is 4,200 miles. More information can be found HERE!

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Lawyer on Milanes case
faces apathy, suspicion

By the A.M. Costa Rica staff

A lawyer who is trying to assist former investors with Luis Milanes and his Savings Unlimited is facing suspicion and the scrutiny of people who have been burned in the past.

The Savings Unlimited case should be an easy one. Milanes used the casinos he operated as backing for investors. He took them through the casinos, said the money they gave him would go into the casinos and even had a special deal for those who wanted to invest in slot machines.

But there has been little movement by prosecutors, although three of the associates of Milanes were jailed for a time.

The long time fiscal or prosecutor on the case, Amelia Robertson, has been rotated elsewhere, and the lawyer, María Elena Gamboa Rodríguez, said she believes the case will be resolved — one way of the other — this year.

But she doesn't care about jail for those who are running the casinos now. She doesn't even care about jail for Milanes if he should come back.

Her primary goal is to get a settlement for the handful of investors who have contracted her services.

She is a latecomer to the scene. Another lawyer gained a number of clients by claiming he had taken possession of a great sum of money belonging to Milanes in Panamá. That was more than three years ago. and not one who signed up with the lawyer has seen any money. They are unhappy.

Ms. Gamboa's goal is to freeze the casino management and get a receiver appointed. The casinos represent nothing more than a stream of money, but the casinos, including the Casino Europe in north San José, are believed to be cash cows.

Milanes creditors generally are not buying the idea. An Escazú meeting drew about 30 persons, but few opted to pay a retainer. Milanes took about $200 million from his customers.

Ms. Gamboa said that to prosper, a case must be filed properly under Costa Rican law. She said she has questions about the paperwork filed by the other lawyer, who has about 200 clients.

Milanes creditors have maintained a low profile. Many think that a criminal case is bound to fail because Milanes cleaned out his office when he fled in November 2002.

Like Enrique Villalobos, Milanes paid about 3 percent a month interest on deposits. Unlike the religious Villalobos, Milanes was a gambling man who had an eye for the ladies.

Involved in the case now is José Milanes, the brother of the Savings Unlimited head, and several others who worked in the office or with the casinos.

Some also believe that Milanes was secretly associated with Villalobos. Villalobos gave his creditors Bibles. Milanes introduced them to young ladies. This kind of market segmentation makes sense, and some who worked for Milanes also had worked for Villalobos.

Enrique Villalobos is a fugitive. His brother, Oswaldo, faces fraud, money laundering and illegal banking charges in a trial sometime this year.

The announcement that Ms. Gamboa would be handling the Milanes case for investors prompted strong reactions from anonymous Web site posters who normally denigrate those who do not profess faith in the Villalobos brothers. This, too, suggests that there might be some link and that the posters are working with defendants in both cases.

Web site helps citizens register

Special to A.M. Costa Rica

U.S. citizens 18 years old or older on Nov. 7 are eligible to vote in the 2006 midterm Congressional elections, said the Overseas Vote Foundation 

The organization said that U.S. citizens can register from overseas and receive a ballot in their overseas mailbox.

The organization has set up a Web site that permits   citizens to register,

Deputy totals finalized

By the A.M. Costa Rica staff

The Tribunal Supreme de Elecciones ratified the list of national deputies Wednesday. The Partido Liberacion Nacional has 25. Partico Accion Ciudadana has 17. Movimento Libertario has six. Unidad Social Cristiana has five. Four other seats went to minor parties. The results had been expected.

Our reader's opinion
Ticos will have chance
in capitalistic system

Dear A.M. Costa Rica:

It was refreshing to read the letter regarding CAFTA that was written by T. Harrison.  Seems like most letters are written by extremely bitter and uninformed people. Guess that it is fortunate that people who hate the U.S. have someplace to go.  We can only hope they don't return.

Some of the Gringos that I met when I lived in Costa Rica were men that I would never want to be associated with. The nice ones were never found in downtown San Jose sitting around making crude remarks to the passing ladies. Overall, I suppose, just a somewhat "normal" assortment of people.

It would be great to believe that the next few generations of Ticos will be better educated and have the opportunity to prosper in a capitalist Costa Rica where individual achievement is recognized and rewarded. Socialism creates nothing but stagnant growth and bureaucracy.

Good Luck Costa Rica!
Ken Holdeman
DeBary, Fla.
Professional Directory
A.M. Costa Rica's professional directory is where business people who wish to reach the English-speaking community may invite responses. If you are interested in being represented here, please contact the editor.

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San José, Costa Rica, Thursday, March 23, 2006, Vol. 6, No. 59


These guys want to have YOU over for dinner
By the A.M. Costa Rica encore

Few views are grander than the universe laid out across a clear Costa Rican sky. But as you take in the magnificence, the no-see-ums are munching on your body.

The little flying insects are common in Costa Rica from the highest mountain to the most deserted beach. They reward their dinner guests with bites that itch like crazy and last for days.

But a little study shows that some of these creatures also are responsible for pollinating cocoa trees. No bugs, no cocoa pods and no chocolate. The larva are as hungry as the adult female and dine on certain water pests.

The Instituto Nacional de Biodiversidad here is an authority on the environment, and these experts say the biting flies (Family Ceratopogonidae) are restricted to four species of the genera Leptoconops here and Culicoides with 111 species. But the institute also warns that many Costa Rican insects are still unknown to science.

So that fly quietly munching on your leg could be a new species.

Spanish speakers call these pests purrujas, and English speakers know them as midges, sand flies or no-see-ums because they almost always get away without being seen. Some are so small that they fit through screens that stop bigger insects. Sometimes they swarm.

Generally the biting flies resemble mosquitoes. Some bite during the day, and many do so at night. But like the mosquito, it always is the female. The male may be out pollinating cocoa trees.

The University of California at Davis, Calif., another agricultural and environmental center, reports that no-see-ums will bite humans, domestic and wild animals and birds. They also may feed on other insects.

The female has small mouthparts, not the big lance of Mrs. Mosquito. The insects should really be called

Graphic courtesy of Bohart Museum,     
University of California at Davis      

chewing flies because the female injects a little saliva into the small wound to help keep the blood flowing. Several hours later the bite turns into a small red spot that itches intensely, said a report from Davis.

Some tropical species can transmit diseases of tiny worms, so repellent and tight-fitting clothes are recommended. Some species are not put off by bug spray.

Clear nights and a lot of outdoor activity increases the exposure of humans to these flies, although each only has a short lifespan, perhaps two weeks. But there seldom seems to be a shortage.

Around dwellings, the number of biting flies can be reduced by eliminating stagnant water and decaying vegetable matter where the larvae dwell, according to entomologists at the University of Georgia.

If someone really wants to know what administered that bite, the Instituto Nacional de Biodiversidad has an extensive online key to help with identification of the known species.

You need to see Costa Rican tourism information HERE!

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San José, Costa Rica, Thursday, March 23, 2006, Vol. 6, No. 59

'Fair trade' plan seems to be changing coffee market
By the A.M. Costa Rica wire services

Small farmers make up three-fifths of the world's 25 million coffee producers, but typically they receive the smallest portion of the industry's profits. That is slowly beginning to change as a profit distribution scheme known as "fair trade" is finding wider acceptance across the industry.

Coffee is the world's second-most traded commodity, generating a greater level of income than any other unfinished product except petroleum. But the distribution of that income has become the focus of increasing concern in recent years.

"Traditionally coffee has had positive economic benefits primarily at the consuming side, and the producing side has often been left behind," says Rick Rhinehart, head of operations at the Groundwork Coffee Co. in Los Angeles. They import from growers around the world, and use a policy called fair trade to try to end income disparities, especially for coffee growers.

"Our goal is to create a much more equitable distribution so that the producing communities feel the same economic benefit as the consuming community and see the same kinds of impacts on quality of life that we see on the consuming side," he says.

Those benefits are perhaps most apparent at large coffee distributors such as Starbucks Coffee of Seattle, Washington, one of America's 500 largest corporations. Starbucks is a global company with plans to eventually operate some 25,000 outlets around the world. But, says its president, Orin Smith, his firm is also committed to helping coffee growers get a better deal.
"We have made a pact with our customers that we will provide them with very high quality coffee, but we will charge a very high price. This is important for us but it is equally important for the farmers, because that high price enables us to pay the farmers the highest price for their coffees of any buyer in the world."

Starbucks says it channels those higher prices through "preferred providers,"  suppliers who can demonstrate that the small farmers who produce the crop do indeed receive above market payments as intended. But fair trade campaigners, like Mario Monroy of Mexico, question whether the system is working, as it should.

"It (Starbucks) doesn't actually know who the money is going to,” he says. “And if you want to pay a fair price, it has to also mean that you are concerned about who the money goes to and making sure the money goes straight to the coffee-growers."

Mexico, where Mr. Monroy campaigns, is the world's fifth-largest coffee producer. But the same concerns that farmers have there are shared in premium coffee growing nations from Guatemala to Ethiopia. Seeing that they receive the payments they deserve often comes down to personal relationships.

"And we try and work directly with the farmers, or the farm communities, often with co-ops, and to pay a premium for things like organically produced coffee,” says Rick Rhinehart. “So our model looks at identifying those factors that contribute to sustainable high prices. And the No. 1 factor of course is quality."

That focus on quality also spills over to promoting better, more sustainable environmental practices among small farmers.

U.S. names 50 Colombian rebels as coke smugglers
By the A.M. Costa Rica wire services

The United States is charging 50 members of Colombia's largest rebel group with using the proceeds from the sale of $25 billion worth of cocaine to finance their anti-government operations at home.  

The indictment targets 50 members of Colombia's main leftist rebel group, the Revolutionary Armed Forces of Colombia, or FARC.

The FARC has been fighting the Colombian government for more than 40 years and has been branded a terrorist group by the United States and the European Union.

The indictment was made public in a federal court in Washington and announced at a news conference by Attorney General Alberto Gonzales.

"This is the largest narcotics-trafficking indictment ever filed in U.S. history and fuels our hope to reduce narco-violence in Colombia and stem the tide of illegal
drugs entering our country," Gonzales said.

According to the indictment, the FARC provides more than half of the world's cocaine and is responsible for 60 percent of the drug that enters the United States.

U.S. officials allege that the group uses the proceeds from $25 billion worth of drug sales around the world to buy weapons in its fight against the Colombian government.

"We believe these men are responsible for not only manufacturing and exporting devastating amounts of cocaine, but enforcing their criminal regime with violence.  For instance, the indictment alleges that farmers who did not comply with FARC rules were shot, stabbed and even dismembered alive," Gonzales said.

Gonzales says three FARC members are in custody in Colombia and that the United States will seek their extradition.  He says the other 47 remain at large, probably in FARC jungle strongholds inside Colombia.

Jo Stuart
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