A.M. Costa Rica

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San José, Costa Rica, Wednesday, April 28, 2004, Vol. 4, No. 83
Jo Stuart
About us
Eliminating rentista and global taxation
Expats asked to help fight two changes in law
By the A.M. Costa Rica staff

The expat community is being asked to unite and support government efforts to eliminate the immigration status of rentista and a proposal to tax money earned outside the country by residents here.

Both actions, contained in separate pieces of legislation now before the Asamblea Nacional, will, if passed, have a big impact on the North American and English-speaking community living here.

Ryan Piercy, in an e-mail to rally support, called the measures a recipe for disaster for Costa Rica. He is the executive director of the Association of Residents of Costa Rica, an organization made up of expats and those who would like to live here.

Piercy said that he had met with the representatives of Costa Rican-American Chamber of Commerce, AMCHAM, which also is opposing the tax legislation.

"We are looking to collect support letters in respect to both actions (even though the consensus of many is nothing will change) as soon as possible," said Piercy. "If you feel that either or both of these moves will affect the continued arrival of foreign investment into Costa Rica, please contact us asap."

He said that the legislation will affect Costa Rican’s too, and urged expats to write letters of support and to solicit such letters from any local charities to which they may donate.

The rentista category allows someone regardless of age to gain residency here by showing they are of good character and have at least $60,000 in a bank or other approved institution. The rentista agrees to bring $12,000 a year into the country and convert it to colons.

Some government officials see this category as a way for undesirable persons to buy residency. In most cases they are not talking about North Americans, although some criminals from there have used that category. Officials are concerned by the possible use of this category by active criminals from South America and elsewhere in the world.

The taxation proposal, called global taxation, is part of the massive tax reform package that the legislature is expected to adopt soon. Those who live here would have to declare as income money earned elsewhere in the world.

North Americans face the possibility that their pensions from their home countries will be taxed, although the government has said it will try to make provisions for taxes paid elsewhere. Both measures have been extensively reported by A.M. Cost Rica.

On guard
in Limón

Police guard the access to a home in Limón that was raided Tuesday morning as officials broke up an alleged gang in what they said was the most important anti-drug action in  years.

In all, seven persons were arrested Tuesday. Officials said they were part of a ring that shipped hundreds of kilos of heroin to the United States and Canada. 



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Sarapiquí River now
educational focus

Special to A.M. Costa Rica

The Sarapiqui Conservation Learning Center and El Centro Natural de Selva Verde have announced a pilot project focusing on the health and equilibrium of the delicate Sarapiqui River an important resource and attraction within the tropical rainforest of the Sarapiquí region. 

The Watershed Conservation Project will support environmental education and community-based conservation initiatives which are designed to conserve temperate and tropical watersheds through an innovative water monitoring system.

Costa Rican Marisol Mayorga has developed this project to complete her master's thesis at the University of Wisconsin at Stevens Point. 

"The goal of this exciting project is to develop a water-based environmental education program, which motivates visitors. . .  to understand the community water issues and perform actions leading to the conservation of the Sarapiquí River," said Ms. Mayorga, adding:

"I have always felt a sense of responsibility in giving back to my home. This project will enable tourists, students, and community members to feel a sense of responsibility in protecting our natural world."

Along with many in the area, the Sarapiquí River has become the victim of urbanization, agriculture, and other threats such as the construction of hydroelectric dams, said the conservation learning center. Watershed conservation is a long-term venture which will provide invaluable information regarding existing or emerging water quality programs, involve the community in the development of new skills, gather information to design specific pollution prevention or restoration programs, and fortify the community organization capacity, fostering the ultimate goal of promoting citizen action in the preservation and conservation of the river, said the center.

"Water is the key to life on earth. It is clear that water is a natural resource that will be one of the most critical environmental issues in the next decade," said Andrea Holbrook, president of center Board of Directors.

Since its inception in 1995, the center has fostered education, environmental conservation, artistic expression, and responsible tourism in the rural communities of Costa Rica. The center also connects visitors and residents through ecotourism activities, such as, service projects, cooking and dance classes, and environmental learning.

Caja raises frozen
by new executive

By the A.M. Costa Rica staff

The Caja de Seguro Social will freeze salary raises and launch an investigation of the health agency's relationship with Corporación Fischel over the last two years.

That was the decision Tuesday of the new executive president of the Caja, Horacio Sollano, who appeared at a press conference with President Abel Pacheco.

There have been reports that executives of the Caja, which runs the government health services here, were in line for 180 per cent raises.

Solano said that he would present both decisions as motions to the Caja board of directors at its next meeting.

Fischel, the drug company, is in the spotlight because one of its managers purchased and then rented a $735,000 home for the man who held the top Caja post before Solano. 

The former Caja head, Eliseo Vargas Garcia, had rented a five-bedroom home in Santa Ana from Oman Valverde Rojas for $2,500 a month. Vargas resigned from the Caja last week, as did Valverde from Fischel. The pharmacy firm does millions of dollars of business with the Caja, mostly in providing drugs.

The rental relationship was disclosed Wednesday by La Nación, the Spanish language daily.

Solano, the former medical director for the Caja, said that an external commission wold be formed of skilled professionals to study what purchases had been made from Fischel. As yet there is no evidence of irregularities in purchasing.

Solano to SINART

By the A.M. Costa Rica staff

Belisario Solano has been named to head the Sistema Nacional de Radio y Televisión, SINART. He had been vice minister of Gobernación and supervised among other agencies the Dirección General de Migracíon y Extranjería.

Solano is a lawyer and journalist by trade. He will take over the troubled communications organization May 1.

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Oswaldo Villalobos remains jailed awaiting decision
By the A.M. Costa Rica staff

Despite hand-wringing, prayers and anger from his supporters, Oswaldo Villalobos, one half of the so-called "Brothers" borrowing operation, remained in jail Tuesday night.

Some creditors of the former Mall San Pedro operation have been watching the calendar carefully in the hopes that Villalobos would be set free.

However, a spokesperson for the Poder Judicial said Tuesday afternoon that the prosecutor in the case, Walter Espinoza, had filed additional papers. The exact nature of those papers was not known to the spokesperson, who said they either were a request to extend the preventative detention of Villalobos or the preliminaries for a causa penal, a criminal charge.

The summary of the contents of those papers will be available today.

Some of the estimated 6,600 persons who gave the Villalobos Brothers money believe that Costa Rica is the villain in the case because investigators raided the operation and froze the brothers’ local bank accounts July 4, 2002.

Many of these same support hope that, absent 

criminal charges, Oswaldo and his brother, Luis Enrique, an international fugitive, will return to their practice of paying 3 percent a month  interest and also validate the deposits that these creditors made over the years.

The Villalobos brothers had about $1 billion on their books when Enrique vanished Oct. 14, 2002. Prosecutors have seized cash and property amounted to about $7 million.

Oswaldo was jailed the following month for preventative detention while the prosecutors sorted out the evidence. He was allowed to spend some of that time in a clinic. But the judge in the case ordered him back to jail for a period that was listed as ending Tuesday.

Espinoza and other members of the judicial branch have been criticized repeatedly by José Miguel Villalobos Umaña, the lawyer for an informal group of creditors. He has done interviews and made television appearances in the hopes of spiking the judicial process.

José Villalobos is the former minister of Justicia in the Abel Pacheco cabinet who was fired, in part, because of his opposition to a proposed maximum security prison that would be supervised by his ministry. He has said repeatedly that he will run for president as an independent.

New program aims to help Latin poor save money
Special to A.M. Costa Rica

WASHINGTON, D.C. — A new program has been created to promote savings and investments in poor rural areas in Latin America and the Caribbean that receive remittances from the United States and elsewhere.

A creation of the Inter-American Development Bank and the United Nations, the $7.6 million program will help credit unions and micro-finance institutions in low-income rural areas of the region provide better service for sending and receiving money transfers, also known as remittances.

The goal is to assist local rural communities by harnessing what the development bank says is "the development potential of remittances." The development bank said that in 2003, emigrants from Latin America and the Caribbean sent about $38 billion back to their home countries, an amount that far surpassed foreign aid to those nations. Remittances typically help beneficiary families to buy food, pay bills and raise their standard of living.

The new program is not intended to discourage the use of remittances for consumption. Instead, it provides more opportunities for remittances to generate savings, realize development potential, and spur investments in rural areas, where poverty tends to concentrate.

Many of the immigrant workers in the United States have incomes that are barely above the poverty line in their countries of residence, yet they send substantial shares of their pay home, 

U.S. Treasury Secretary John Snow told a congressional committee last month.

For example, Snow said Latin American immigrants in the United States typically earn less than $25,000 annually, yet they send, on average, $2,000 back home each year. 

In addition, the immigrant often pays high transfer fees to send the funds home. Once this money arrives at its destination, Snow said, "limited access to or knowledge of financial services often restricts the recipients' options" for saving or investing the funds for such purposes as education expenses or small business enterprises.

The development bank said its new program launched in conjunction with the United Nations will support non-governmental organizations, foundations, and other not-for-profit groups that provide services to boost rural productivity and incomes, such as training for micro-entrepreneurs, and marketing rural products or handicrafts. Local governments and agencies will also be eligible.

In addition, expatriate groups, known as "hometown associations," will be encouraged to play a leading role in local development by providing access to investment resources, advanced technologies, and new markets in their host countries.

Development bank President Enrique Iglesias said that he expects the program to "capitalize on the strengths" of his organization and the United Nations "to make remittances a true tool for development."

Blind human rights activist convicted of offending Fidel Castro
By the A.M. Costa Rica wire services

HAVANA, Cuba — The government has sentenced a blind human rights activist to four years in prison for offending President Fidel Castro and other disorderly conduct. 

The sentences of nine other dissidents tried alongside activist and lawyer Juan Carlos Gonzalez Leiva were not immediately known Tuesday. 

Cuba had arrested the 10 more than two years ago in central Cuba, where they were at a hospital to 

protest an independent journalist's treatment by police. The activists were found guilty of various charges, including offending Castro and resisting arrest. 

They are the first dissidents to face trial since last year, when the government sentenced about 75 dissidents to terms ranging from six to 28 years. 

Earlier this month, the United Nations Human Rights Commission issued a resolution saying it "deplored" those detentions, and called on Cuba to respect civil rights.

Tovar discounts reports that paramilitary leader's wife is coming
By the A.M. Costa Rica staff
and wire reports

Costa Rica has not received any asylum request from the wife of murdered Colombian right-wing paramilitary leader, according to Roberto Tovar, foreign mininster.

Tovar was asked about the situation after the weekly Consejo de Gobierno Tueday. He discounted reports that the woman, Kenya Gómez, is seeking to come here as rumors. She is the wife of Carlos Castaño, leader of the Autodefensas Unidas de Colombia, a rightwing group associated with the military in Colombia’s long civil war.

In another situation involving Colombia, the government there says the United States is 

seeking the extradition of a rebel commander to face drug trafficking charges. 

Colombian officials say Jorge Briceno of the Revolutionary Armed Forces of Colombia, or FARC, is wanted for manufacturing and plotting to import cocaine.  Briceno, also known as "Mono Jojoy," is reported to be the highest-ranking member of the rebel group sought by the United States for drug trafficking. 

FARC leaders deny any involvement in drug trafficking, but have admitted taxing farmers who produce coca, the raw material for cocaine.

The United States provides Colombia with hundreds of millions of dollars of military aid each year to combat the cocaine trade and rebels.

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These policemen creeping through a street in Limón are in the process of making part of the biggest heroin bust in years at the Caribbean port.

In all, seven persons were arrested Tuesday. Officials said they were part of a ring that shipped hundreds of kilos of heroin to the United States, Canada. 

Ministerio de Gobernación, Policía y Seguridad Pública photo
Drug police bust Limón heroin exporting ring
By the A.M. Costa Rica staff

Anti-drug police raided homes in Puerto Limón starting at 6 a.m. Tuesday and captured seven individuals they said ran a heroin network that moved hundred of kilos of heroin into the United States and Canada.

To emphasize the importance of the police action, Rogelio Ramos, minister of Gobernación,  Policía y Seguridad Pública, traveled from San José to be present at the raids.

Investigators had been on the case since December 2002, and some 127 kilos (280 pounds) of heroin had been confiscated as agents closed in on the gang by grabbing the persons who were carrying the drugs.

The arrested individuals, all residents of Puerto Limón, have the last names of Wrigh, Cunnigham, Forbes, Lindo, Gardner, Simpson and Harvey, officials reported.

Simpson, the last man captured, ran to the home of a friend to warn him of the raids, but police had gotten there first and made the arrest, they said.

All the men face possible charges of international drug trafficking and a penalty of some 20 years in prison.

Ramos said the gang sent heroin north using workers on cargo boats and cruise ship 

passengers, thereby giving Costa Rica and the Port of Limón a bad name in the eyes of the world.

The investigation started in Panamá Dec. 15, 2002, when agents of the U.S. Drug Enforcement Administration arrested a man and woman who were carrying 16 kilos (35 pounds) of heroin. Both were from Limón.

The investigation showed that the gang was active in New York, Miami, Ohio, Texas and Delaware. From the United States heroin was shipped to Canada, officers said.

In all 30 persons, including those detained Tuesday, have been jailed as presumed members of this gang, officials said. A ministry report said that the gang also was active in the Costa Rican cocaine trade.

In addition to using couriers who went by boat from the Caribbean, the gang also used persons traveling by sea from Puntarenas, officials said.

Many of the arrests were made in the United States over the last two years by the U.S. Drug Enforcement Administration. In one case, said officials, three brothers named Slaughter, were picked up in Cleveland, Ohio. They are U.S. citizens.

Officials did not state the origin of the heroin moved by the group, but Colombia is producing heroin now in addition to traditional sources in Asia.

Venezuela's Citgo picks Houston as new home
By the A.M. Costa Rica wire services

Houston, Texas, has won and Tulsa, Oklahoma, has lost in a bidding war over the headquarters of Citgo Petroleum, a refining and distribution company that is owned by Venezuela's state-run oil company. The move will begin immediately, but will take three years to complete.

Over the next three years Citgo executives will find a building to house their headquarters in Houston, and will move 700 of the 1,000 jobs from the current location in Tulsa. Citgo's chief executive officer, Luis Marin, says the move makes sense for his company because 90 percent of its vendors and customers are also based here.

Marin says the move is part of a very long-range plan to expand Citgo's future operations. "We are the only corporation that can guarantee to be in this business for the next 100 years," he said. "Our decision is based on the future. We are making the decision looking to the future."

Citgo announced in August that it was considering a move to Houston, setting off a several-month-long competition between Houston and Tulsa, where local officials wanted the company to stay. The State of Texas also played a role. Gov. Rick Perry invited Marin and some of his company executives to the American football spectacular called the Super Bowl, which was held in Houston Feb. 1. There has been no official announcement yet as to what incentives Houston and the State of Texas may have given Citgo to cinch the deal. 

Citgo already operates a refinery in the Houston area under a joint venture with the Lyondell Chemical Co. Citgo also operates more than 13,000 gasoline stations in the United States and asphalt refineries in New Jersey and Georgia. Overall the company employs around 4,000 people. 

The company is owned by Petroleos de Venezuela, the South American nation's government-owned oil company.

Jo Stuart
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