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These stories were published Tuesday, April 29, 2003, in Vol. 3, No. 83
Jo Stuart
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Give your 
opinion about 
Luis Enrique Villalobos!

By the A.M. Costa Rica staff

Is Luis Enrique Villalobos Camacho a cad or a victim? Here is your chance to say what you think.

There are about 6,500 investment accounts in the former financier’s books. Rival investor groups are claiming the allegiance of the silent investors.

Lawyer says reward now $1,500


We think it is time to poll readers to see what they think. The opinion of the investors is decidedly mixed. But which opinion dominates? Which view has the most support?

You can express your opinion by sending a blank e-mail to one of the e-mail accounts we have set up. Do not include any text because no one will read the e-mails. We will just count them.

But please put in the subject line "from investor" if you invested money with Villalobos. Put "from non-investor" if you did not.

Please, Just one e-mail message from any single e-mail account.

If you think that Luis Enrique Villalobos just took the money and ran, send your e-mail to:


If you think that Luis Enrique Villalobos is an honest man who has been put out of business by a greedy Costa Rican government, send your e-mail to:


If you are uncertain but think that international arbitration would be a good way to get Costa Rica to compensate investors for their loss, send your e-mail to: 


If you are fed up with the whole story and do not care what happens, send your message to:


We will tabulate the e-mails at the end of two weeks and publish the results. We also will discard the e-mail messages.

Investment firms agree to $1.4 billion fine for fake ratings
By the A.M. Costa Rica wire services

NEW YORK, N.Y. — U.S. securities regulators have approved a settlement forcing 10 of Wall Street's biggest investment firms to pay $1.4 billion to settle allegations that they issued biased stock ratings to attract investment banking business. 

The final settlement, one of the largest penalties ever imposed by securities regulators, is based on a tentative agreement reached in December 2002 between regulators and some of the nation's most prominent investment firms, including Goldman Sachs, Morgan Stanley, and Merrill Lynch.

The investigation of the firms was spearheaded by New York Attorney General Eliot Spitzer, who says e-mail evidence demonstrates that the firms knowingly supplied investors with fraudulent market analyses.

Spitzer says that false valuations proved so profitable to the firms that supervising 

executives consistently ignored such e-mails, and continued to authorize the dissemination of biased research. The only loser, he says, was the individual investor. 

"Research had been subjugated to the needs of the investment bankers, and, as part of this triangular relationship, CEO'S were also the beneficiaries, because they received shares in hot stocks . . . ," he said. "In this triangular relationship, everybody won, except the investor." 

Spitzer says most of the money will go toward the restitution of funds lost by private investors. He says, however, that the restitution process will be long and cumbersome. 

The most heavily-penalized firm, at $400 million, is Salomon Smith Barney, followed by Merrill Lynch and Credit Suisse at $200 million, Morgan Stanley at $125 million, and Goldman Sachs at $110 million. Because the settlement is the result of a civil and not a criminal suit, no one will go to jail, officials said.

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Ticos testy when their interest is at stake
Protest will grow because the economy doesn't
By the A.M. Costa Rica staff

As the economic situation worsens, more public protests, including some laced with violence, will continue to dominate the news.

Fishermen in Puentarenas last week won concessions over fuel from the government after two days of violence. One man died, possibly as a result of the violence. Police used tear gas. Fishermen blocked the Inter-American highway.

An analysis on the news

The unhappy protestors were taking a page from the book of rice growers who blocked a main San José street in front of the Asemblea Nacional for a week last year to protest the importation of a U.S. shipment.

The blockage turned violent when rice growers tried to stop trucks carrying the U.S. grain in Puntarenas.

Costa Ricans generally avoid confrontation, according to the tourist guides. But when their economic ox is being gored, the Tico takes to the streets.

Taxi drivers have organized caravans to protest the mandatory inspection program and, lately, unlicensed competition.

All indicators point to a decline in the general economy and an increase in the deficit of the central government.

The Unión Nacional de Productores Agropecuarios was out in force along Avenida 2. More than 2,000 

persons marched Monday protesting the proposed
free trade treaty with the United States. They carried their case to Casa Presidencial in Zapote 
where representatives met with President Abel Pacheco. More talks are scheduled May 8.

Teachers will continue their protest today, the traditional monthly payday. Not all teachers have been getting their money. So instead of being in school, many teachers also will march to Casa Presidencial to bring their case to Pacheco.

The Ministerio de Educación Pública claims person or persons unknown messed up the computer with the payroll data. But some teachers have not been paid since school began two months ago. Others have gotten strange numbers on their pay checks. And others won the lottery with unexpected windfalls. The ministry seems unable to fix the problem.

Pacheco will be meeting with his cabinet this morning, as is the custom on Tuesday. How the teachers plan to get there has not been announced, but a march is the most likely scenario. 

Most Costa Ricans remember the three weeks of "Combo" street protests that took place when former President Miguel Ángel Rodríguez tried to break up the Instituto Costarricense de Electricidad. The protesters for the most part were employees, family members of employees or students.

These protests were just rehearsals if economic predictions hold true. Breakdowns in government services, runaway inflation and similar ills could lead to loss of savings and financial crunches of the type experienced by Argentina. And that’s when Ticos will show their aggressive side.

Powell says U.S.
studies Cuba policy

By the A.M. Costa Rica wire services

WASHINGTON, D.C. — Secretary of State Colin Powell says the Bush administration is reviewing its Cuba policy in response to a recent crackdown on pro-democracy dissidents there. 

Related story HERE!

Secretary Powell gave no details of the review Monday but said the assessment comes in light of what he described as Cuba's "deteriorating" human rights situation. 

Powell said Cuba's imprisonment of people trying to exercise basic human rights illustrates the nature of what he termed the regime of President Fidel Castro. Secretary Powell also said he hopes the world will now see the regime for what it is — an aberration in the Western Hemisphere. 

Secretary Powell made his remarks just two days after Pope John Paul II wrote to President Castro, urging clemency for 75 political dissidents jailed for up to 28 years for treason and subversion. 

The pope's letter also expressed "profound pain" over the execution of three men convicted of hijacking a ferry with the intent to sail to the United States. 

President Castro said the firing squad executions were meant to deter armed efforts to leave the island by Cubans expecting to receive what he called a hero's welcome in the United States. 

Ruling party keeps
reins in Paraguay

By the A.M. Costa Rica wire services

ASUNCION, Paraguay — Former education minister Nicanor Duarte Frutos has won his country's presidency, extending the ruling Colorado Party's 56-year-long grip on power in the impoverished South American nation. 

Duarte Frutos won nearly 38 percent of the vote, elections officials said, compared to 23 percent for former Vice President Julio Cesar Franco, of the Liberal Party, and 22 percent for businessman Pedro Fadul. 

Claiming victory Sunday, Duarte Frutos promised his supporters he would rebuild Paraguay's image and revive its economy, suffering from the worst crisis in decades.  Rival candidates had criticized the government for failing to deal with unemployment and the country's other economic problems. 

Landlocked Paraguay is one of the poorest countries in the Americas. Official corruption has been a major problem for years, and the nation has suffered from nearly continuous political turmoil since dictator Alfredo Stroessner was ousted in 1989. 

Duarte Frutos, a 46-year-old lawyer, is to succeed President Luis Gonzalez Macchi for a five-year term beginning Aug. 15.   Voters also cast ballots Sunday for vice president, 45 seats in the Senate and 80 in the House.

SARS reported corraled
outside of China

By the A.M. Costa Rica wire services

BANGKOK, Thailand — A World Health Organization official says SARS outbreaks in Hong Kong, Singapore, Vietnam, and Canada have peaked, but the worst is yet to come in China. 

David Heymann, the World Health Organization chief of communicable diseases, said SARS has peaked in Hong Kong, Singapore, Hanoi, and Toronto. Hanoi appears to have stopped the outbreak completely in Vietnam, the organization said. 

Heymann said the situation is different in mainland China. "The SARS outbreak is of significantly high magnitude in China, and our concern is that it may also be spreading to western provinces where there is a less strong health system than there is in the rest of China," he said. 

His comments were made here, the day before an emergency summit on SARS called by the Association of Southeast Asian Nations.  In Hong Kong, which has the world's second-largest outbreak, the number of new cases each day continues to fall. 

The city reported 14 new cases, its lowest daily increase in more than a month.  Earlier this month, international health experts warned the situation in Hong Kong was dire, with 40 or more new cases appearing each day. 

China has announced 290 new suspected cases of SARS. The country has reported a total of 3,100 cases, with 139 deaths. WHO officials in Beijing say they are still awaiting crucial information from Chinese authorities, despite a promise for more open reporting. 

The disease causes a serious and sometime deadly form of pneumonia. It has infected about 5,000 people worldwide, killing at least 300.

New NASA  satellite 
to study new stars

By the A.M. Costa Rica wire services

NASA has launched a small satellite to explore the mysteries of how stars and galaxies form. 

NASA's Galaxy Evolution Explorer, abbreviated as GALEX, began its mission on a Pegasus rocket, dropped from the wing of a jumbo jet high over the Atlantic Ocean. Minutes later, it separated from the rocket to enter a nearly 700-kilometer (420-mile) orbit.

GALEX is carrying a telescope that will scour the heavens with the most sensitive ultraviolet light detectors ever built. They will scan for the invisible light given off by galaxies dominated by young, hot, short-lived stars. Mission scientist Christopher Martin, of the California Institute of Technology, said this is just the kind of galaxy that might be in the process of forming stars.

"By comparing the ultraviolet brightness, we can determine how fast a galaxy is forming stars," he added. "Then by looking at many, many galaxies at various times in the cosmic history, we can put together a picture of the history of star formation in the universe."

A key question astronomers hope the telescope will help answer is how long ago heavy elements such as iron formed. These are the elements that make complex molecules and life on Earth.

The GALEX spacecraft is to begin gathering data after a one-month test phase and is scheduled to operate for 28 months.

Economic ministers
study grim statistics

By the A.M. Costa Rica wire services

PARIS, France — With a largely disappointing short-term economic forecast to discuss, finance and trade ministers from the world's richest countries were to meet here today.

The two-day ministerial meeting follows a mediocre global report card which last week predicted economies of many member countries will continue to struggle this year, before picking up steam. Overall, the report downgraded the economic-growth forecast for industrialized nations to 1.9 percent in 2003, from its previous 2.2 percent assessment. 

Ministers from the 30 industrialized countries that belong to the Paris organization will talk about the factors limiting growth, along with other economic issues. 

Several factors are seen dragging down short-term economic growth, including fears of higher oil prices and terrorist attacks, along with the possible impact of a new form of pneumonia, known as Severe Acute Respiratory Syndrome. 
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Lawyer seeks more funds for Villalobos reward
By the A.M. Costa Rica staff

A San José lawyer has gone public with a reward offer. The amount is $1,500 for information leading to the arrest of the fugitive financier.

The lawyer, Gregory Kearney Lawson, said the reward offer has been active for a couple of months but now it is being announced to the public and investors are invited to contribute.

"Those who pitch in to make this reward pool bigger will also be the first who will benefit from the information," said Kearney, who is one of a handful of lawyers who have been active in representing investors.

"The idea is to located him in order to propose an out-of-court agreement which would benefit both  investors and Villalobos," Kearney added. "If this is not possible, other action will be taken."

A.M. Costa Rica offered $500 for information leading to the arrest of Villalobos until April 15 when the offer was withdrawn.

Kearney said anyone interested in participating can contact him at klick@yahoogroups.com or attorneykearney@yahoo.com. His telephone 

number is 221-9462. He has set up an account at Banco Nacional for the funds, he said.

Villalobos closed up his Mall San Pedro office Oct. 14 and vanished with some $1 billion in investor funds on his books.

Investigators raided the office July 4 in search of information for Canadian authorities and also to further their own investigation. Villalobos offered investors up to 3 percent per month interest, although he never really explained adequately how he generated the returns to justify such a rate.

Some investors believe that Villalobos disbursed most of the money by running what amounted to a ponzi scheme whereby longer-term investors are paid with newly acquired funds. Other investors believe that Villalobos closed up shop because the investigation made it impossible for him to do business in Costa Rica. This last group believes that the bulk of their investment is safe generating interest in undisclosed locations. 

Villalobos generated respect among his investors, in part because of his association with the International Baptist Church and his outwardly Christian attitude.

Ashcroft lauds rule of law as Latin cornerstone
Special to A.M. Costa Rica

WASHINGTON, D.C. — The rule of law is an essential foundation for democracy, human rights and open markets, and the U.S. Department of Justice is actively engaged in promoting the rule of law in Latin America, says U.S. Attorney General John Ashcroft.

"The rule of law is the essential cornerstone to building the community and civil structures so important to freedom and prosperity's enduring strength," Ashcroft said in remarks Monday to the Council of the Americas' 33rd Washington Conference.

 Ashcroft defined the rule of law as effective law enforcement, an absence of corruption, respect for human rights and a strong independent judiciary.

The attorney general said the Department of Justice has long promoted the rule of law in Latin America through direct assistance in law enforcement operations as well as training and technical assistance to hemispheric law enforcement officers and judicial officers.

Ashcroft cited U.S. support for Plan Colombia — the Colombian government's strategy to enact sweeping political and economic reforms, with a focus on curbing drug trafficking and narco-terrorism — as the most well-known and comprehensive effort to encourage legal reform in the region. He noted that the Department of Justice is providing direct assistance in law enforcement operations in Colombia and is engaged in numerous projects to improve the country's operational capabilities. 

These projects include the training of prosecutors to focus on maritime interdiction of drug shipments; the creation of asset forfeiture, money laundering and anti-corruption task forces; and the development of a program to investigate and prosecute kidnapping and extortion cases.

The Justice Department is also assisting in ambitious legal reforms of the Colombian Criminal Code and Criminal Procedural Code, he said.

Ashcroft cited the November 2002 indictment of four men in a $25 million drugs-for-weapons scheme as evidence of the strong law enforcement relationship between the U.S. and Colombia and noted that fugitives are routinely extradited to the United States as part of cooperative efforts.

In addition to support for Colombia, Ashcroft noted that the U.S. Department of Justice is providing assistance to other countries throughout the Americas.

Ashcroft said the United States continues to reinforce the implementation of the Inter-American Convention Against Corruption and supports programs bolstering law enforcement and assisting legal reform throughout the region.

The council also heard from Colin Powell, the U.S. secretary of state. In order to balance security needs with the interests of business and commerce, U.S. officials and their regional counterparts must "work together on borders and immigration to make sure we welcome legitimate travelers while screening out terrorists and criminals," Powell said.

The most ambitious current project, according to Powell, is the proposed Free Trade Area of the Americas, which would establish a free-trade zone linking all the democratic nations of the Western Hemisphere. 

"Two years ago, at the Quebec Summit of the Americas, our presidents and prime ministers committed themselves to creating, by January 2005, a free-trade area that would create greater prosperity for nearly 800 million people in 34 countries," Powell said. He indicated that the Bush Administration "places a high priority" on completing ongoing treaty negotiations.

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