The accord signed by representatives of the government with the communications industry seems to provide union members with a decision-making role in national affairs, including the negotiations for a free trade treaty with the United States.

In one of the agreements, this one signed in the early morning hours, the government promises to set up integrated commissions headed by ministers to consider the country’s future. Unions would be represented in such bodies.

The accords were among those designed to end the strike by the Instituto Costarricense de Electricidad, known as ICE, and were negotiated by Ricardo Toledo, the new minister of the Presidencia.

There were a flurry of meetings Thursday at Casa Presidencial as ministers and President Abel Pacheco tried to figure out exactly what they had given away. There even was a rumor that Alberto Trejos, minister of Comercio Exterior and the principal negotiator for a free trade treaty, had resigned. He did not, but he did complain that he was not consulted by Toledo with respect to the free trade treaty clause.

Pacheco spoke on television Thursday night and said he was profoundly satisfied with the ICE agreement, but he did not mention the controversial clause. He did say that an oversight commission that had been demanded of ICE would be made up of members of ICE’s own board and would report their findings in 90 days.

There also is a strong belief among some ministers that the agreement with the unions is unconstitutional because it alters the form of government. So a court challenge is possible.

The next round of free trade talks with the United States will be from June 16 to June 20, and the agreement is far advanced. The text has not been made public, but there is a chance that the unions will push their new powers to demand an inside look at the draft documents, particularly as far as communications goes.

Meanwhile, striking teachers reported no progress in their discussions with the government Thursday and the strike by some 50,000 educators might go into next week.

Luis Enrique Villalobos Camacho, in a letter to a judge, claims police and prosecutors appropriated $250,000 that was in his office when it was raided last July 4.

He also makes a defense of his company and business and claims he became a fugitive because his life had been threatened. Various investor groups have hired investigators to find the former financier.

The letter in the name of Villalobos says:

"Do you know, Honorable Judge, that when the Prosecutor raided the San Pedro Mall offices they took more than US$250 thousand dollars, or the equivalent to more than one hundred million colons, and that there is no resolution in the file, nor any record that indicates who has that money or where it is?  Where is that money?"

He was writing to Judge Francisco Sanchez who is supervising the investigation of his high-interest operation and the Ofinter S.A. money exchange house.

The letter does not have a return address. Villalobos has been a fugitive since last November. And the letter generally states all the defenses that have been raised on his behalf by investors here who think he will return and pay back their money.

The letter was release this morning by  the United Concerned Citizens & Residents of Costa Rica, an investor group generally favorable to the Villalobos brothers.

"The Prosecutor's Office has made a complete mess, has created a storybook of assumptions, there are enormous errors that have been committed and that my lawyers will reveal later at the appropriate time, and what is worse, several procedures and constitutional and legal rights have been violated in our detriment," said the letter.

In his defense, the letter says: "I am certain of one thing, the term of the investigation can be extended for the Prosecutor for another 20 years and he will never be able to link us with money laundering or drug traffic because I swear by Our Lord that we have never been involved in any of that. I am also certain that with regard to the crime of illegal financial intermediation, with which there has been a desire to incriminate us, after we were publicly torn apart with the allegations of legitimization of capital, there are serious confusions enormous ambiguities and imprecision in the amounts, mistaken figures regarding the number of investors and many other aspects that my lawyers shall demonstrate in a timely fashion."

The letter also says: "Your Honor, today I find myself like a fugitive, not because I want to evade justice, but because on the basis of the imprudent way this investigation has been conducted, I was threatened with death and it is my interest to remain alive that perhaps some day with the help of God I may honor my obligations, like I have always done.  This investigation and the manner in which it has been conducted has destroyed my honor, the trust, and entrepreneurial efforts of many years, has completely destroyed my family, has deteriorated my health and has hurt many good and honest people, but I know that above all men is my God, in whom I trust, and know that he will help me so that when it is time all the truth will come out."

The letter also says that Villalobos brother Oswaldo has no relationship with the high-interest borrowing operation run in an adjacent office at Mall San Pedro. A recent report by the Judicial Investigating Organization said that the borrowing and the money exchange operations were really one business and that Oswaldo was one of four persons who controlled the whole business. The report also catalogues several million dollar money transfers that it said were designed to hide the original source of the money.

The letter also points out that the judge has turned down nearly 100 percent of the motions submitted by Oswaldo’s defense team.

The letter also says that the raid caused serious economic damage to a number of businesses linked to the Villalobos brothers.

Said the letter: "You may not understand what one feels when a person who is trustworthy has to stop fulfilling his obligations with his creditors due to circumstances that are beyond his control. In my case, the first thing the Judicial Authorities did was close down bank accounts, freeze the funds, 
deprecate my name and that of my brother to 

However, Villalobos makes no mention of a secret room full of money that two investors have said prosecutors missed in their July 4 raid. One is Henk Guichelaar of Longview, Texas, who maintains a presence in Internet discussion groups.

According to a story here May 21, Guichelaar, in an e-mail May 9 to a disaffected investor, said that Villalobos was trying to  distribute September interest payments to his many investors when he got wind that a second raid would take place. He added:  "A truck was backed up against the door to his ‘vault’  which opens to one of the parking levels  at Mall San Pedro and our interest money (and  then some) was taken to a safe place where it is  to this day." The existence of the so-called vault or strong room was confirmed by another investor with close ties to the Oswaldo Villalobos defense team.

The English version of the letter was posted to the Web site of the United Concerned Citizens & Residents of Costa Rica. A Spanish version also was made available. 

Although they announced last Sunday that they had gotten it, investors supporting Luis Enrique Villalobos Camacho took a week to release the text of a letter they say the fugitive financier wrote.

The United Concerned Citizens & Residents said in an e-mail message that their lawyer, José Miguel Villalobos Umaña, would be filing a writ of habeas corpus shortly. "We truly understand the anxiety caused by the delay in the filing of the writ of habeas corpus which had been planned for earlier this week," said the e-mail.

The letter said to be from Luis Enrique Villalobos was being included in the legal papers.

The group has yet to explain why the letter was delivered to lawyer Villalobos if it is to be given to a judge. Luis Enrique Villalobos and his brother, Oswaldo, both have teams of lawyers working on their behalf. 

The lawyer from the investor group is supposed to be taking steps to speed the investigatory process, but more and more he seems to be a defender of the Villalobos brothers, who closed their high-interest borrowing operation Oct. 14 with perhaps $1 billion in investor funds on their books. They paid the predominately North American investors about 3 per cent a month on investments of $10,000 or more.

Luis Enrique fled, and Oswaldo showed up for a November court hearing where he was detained. Both men are being investigated for fraud and money laundering allegations. Presumably the habeas corpus request is directed to freeing Oswaldo. Such a request is merely a plea to a court to verify that a suspect is being held legally. 

It is highly unusual for a defendant in a criminal action to communicate directly with a judge. Usually that is done by the accused’s own lawyers. Although the group has not discussed the issue, there must be some way to verify that the letter came from Luis Enrique Villalobos. 

Messages in Villalobos’ name have appeared before. The last verified public message came to A.M. Costa Rica Jan. 1 via an e-mail sent by an intermediary, an employee of Oswaldo. 

It also is highly unusual for a lawyer who is not employed by an accused individual to file a habeas corpus on his behalf. There is a high degree of probability that the Villalobos letter actually came from or through the hands of his lawyers before it was given to lawyer Villalobos. 

The United Concerned Citizens & Residents are those people who generally believe that the Villalobos brothers were run out of business by an intrusive government and the once the government drops charges against the brothers they will resume their operation, pay back interest and continue the monthly payments on which many of their creditors depended. That view is reflected in the letter.

One problem is that some 600 individual investors have filed claims against the Villalobos operation, and these claims are likely to make the government continue their prosecution.

By now the Villalobos Brothers owe some nine months of back interest to their investors. That would be about 30 percent of investments or some $300 million based on a presumed total of about $1 billion.

Investigators have accused a notary of drawing up a phony legal paper to make himself the overseer of several properties. The man then mortgaged the properties for about 100 million colons, investigators said. That’s about $250,000.

The investigation resulted in three raids of lawyers offices, one in Guápiles, one in downtown San José and the third in Cot de Oreamuno de Cartago.

The Judicial Investigating Organization identified the man who was arrested by the last name of Rodríguez and said he was detained last week in Cot de Oreamuno. The case was handled by the Sección de Fraudes.

Once the man had prepared the false legal document showing he had control of several properties by substituting himself as the legal representative he appeared before two notaries to complete the legal documents for the loans, said investigators.

The case began when someone filed a complaint with the Judicial Investigating Organization.

Immigration captures
illegal street vendors

Immigration police took to the highways to check out the vendors who work the roads selling food, toys and cases for cellular telephones.

In addition to the highways in the vicinity of Juan Santamaría Airport, Policía Especial de Migración check highway routes in Hatillo, San Sebastián, Paso Ancho, Y Griega, Zapote, San Pedro and Guadalupe.

In all, they said they questioned 25 foreigners and found seven who did not have proper documents. Of these, two were found to be in the country illegally and were deported to Nicaragua.

Chile’s free trade pact
to be signed today

MIAMI, Fla. _ Chile is set to sign a free trade agreement with the United States today, becoming the first South American country to do so. 

Chilean Foreign Minister Soledad Alvear and U.S. Trade Representative Robert Zoellick will sign the accord during a ceremony here. 

The agreement is the product of years of negotiations that were concluded in December. The accord will lift or lower tariffs on as much as 85 percent of goods from both countries. 

Bilateral trade now stands at around $6 billion annually, and Foreign Minister Alvear said that the figure could grow by one third in five years as a result of the accord. 

Some observers see the pact as the first step toward the creation of a broader trade group, called the Free Trade Area of the Americas, that would include 34 countries in the Western Hemisphere. Work on the hemispheric trade zone is expected to be completed by 2005. 

The U.S. - Chile free trade agreement must still be approved by the U.S. Congress before it can take effect. The United States also belongs to the North American Free Trade Agreement, known as NAFTA, which includes Canada and Mexico. NAFTA went into effect in January 1994 to lift barriers to trade among the three nations.

Venezuelan lawmakers
scuffle in chamber

CARACAS, Venezuela — The National Assembly erupted in a brawl Wednesday between supporters and opponents of President Hugo Chavez. 

Lawmakers traded insults and punches in the scuffle, which occurred moments before scheduled discussions on proposed changes to Assembly debates. As a result, Assembly President Francisco Ameliach suspended the session until today. No injuries were reported in the incident.

Opposition lawmakers say the government is pushing for a system in which it can force legislation through without debate.  Meantime, supporters of Chavez rallied outside the Assembly building, shouting insults against the opposition.

A poll released Thursday shows that 64 percent of Venezuelans would vote President Hugo Chavez out of office in a recall referendum.

The results of the poll conducted by Datanalisis come one week after President Chavez's government agreed to a deal with his opponents for a possible vote. The agreement has set the stage for referendum organizers to collect the signatures required for a vote later this year.

Opposition leaders have accused Chavez of ruining the economy and trying to model the oil-rich country on communist-run Cuba. The president says his enemies seek to undermine his self-styled revolution.

SANTA CLARA, Calif. — Intel Corp. Thursday provided an update to the company's business outlook for the second quarter, which ends June 28. The firm has manufacturing facilities in the Central Valley. The outlook said income would be slightly less than anticipated.

Intel said it expects revenue to be between $6.6 billion and $6.8 billion, as compared to the previous range of $6.4 billion to $7.0 billion. Demand for communications products remains soft. 
 

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. Lawyers Adolfo Rojas Breedy Breedy Abogados S.A. —Attorneys-at-Law— Since 1957. Best experience in: • Real Estate Transfer of Title and Title Search • Business • Investments • Commercial & Civil Litigation • Corporate Law & finance • Capital markets Law • International Taxation (506) 233-7203/221-0230          breedy@racsa.co.cr Web page:  www.breedy.com INVESTMENT RECOVERY CENTER Learn how to best protect your interests in the Villalobos case. Explore your options at http://www.irccr.net Also, we invite you to join one of the most active discussion groups on the case.  Find out what people who care are saying. Join at irccr-subscribe@yahoogroups.com 232-8/16/03 Arcelio Hernández Mussio, Lic. Attorney at Law, Notary Public Official Translator Corporate, Criminal, Constitutional, Family Practice. Property title searches and transfers. Official English/Spanish translation & interpretation We also offer the following services in association with Morning Star Investments CRI, S.A.: *Real Estate Investment opportunities *Money Management *Accounting Services e-mail: legalxpt@racsa.co.cr           Web: www.forovial.com Cell: 365-3088  132-5/29/ KEARNEY-LAWSON & Asoc.       Lic. Gregory Kearney Lawson,  attorney at law Villalobos and Savings Unlimited Collections *Investments  *Corporations  *Real Estate Sales in Costa Rica *Tax Shelters  *Immigration *Intellectual Property     *Business procedures *Family and Labor Law     *Locate People *Private Investigations        Ph/Fax: 221-9462, 841-0007 gkearney_lawson@hotmail.com attorneykearney@yahoo.com Real estate agents MARGARET SOHN  of Carico 15 years Costa Rican real estate experience Member of the Costa Rican Real Estate Association, Lic. #1000  Member, Costa Rican-American Chamber of Commerce info@realtorcostarica.com www.realtorcostarica.com (506) 232-5016 home   (506) 233-8057 office  (506) 382-7399 cell  229-8/9/03 Investigators Empresa de Investigadores Internacionales S.A. Telephone (506) 280-5217  FAX (506) 280-5120 P.O. Box 297-2100 Costa Rica Cédula Juridica #3-101-097681-32 investigators@prodigy.net johnniechaverri@policeone.com 112-5/18/03 Web Design Personalized Web Design •Hosting •Promotion •Logo Design Prices so reasonable they will astound you Call for a quote:  220-4602 www.alegria-webdesign.com We have over 12 years international experience 214-7/14/03

LONDON, England — The British government is scheduled to announce Monday whether Britain is ready to join the common European currency, the euro. The government has set five key economic tests to determine whether joining the euro would be good for the British economy. 

Chancellor of the Exchequer Gordon Brown will report to parliament Monday on whether the British and European economies are sufficiently well aligned for the move to make sense. After a cabinet meeting on the subject Thursday, Brown said the government will not do anything that would put British economic stability at risk.

"This has been a wide-ranging, detailed and comprehensive discussion. We are now in a position to announce our decision to the House of Commons on Monday," he said. "And I look forward to the debate in the country that will follow it. Everything that we will do in this matter will be in the national economic interest."

Brown has said Britain's "national economic interest" includes ensuring that joining the euro would increase employment, offer investment opportunities and secure financial services, and allow Britain enough flexibility to respond to the ups and downs of the European economy.

Britain is one of three nations that do not use the euro, of the 15 EU countries.

Prime Minister Tony Blair has said his government is committed to bringing Britain into the euro, but he has left the timing open, and most analysts in the media here expect Monday's announcement to be, in essence, "Yes, but not now."

The current slow growth in countries that use the euro appears to be a key factor. 

But Professor Richard Layard of the London School of Economics says the rate of growth in Britain is no different than in the rest of Europe.

Layard said he believes that although Britain is economically secure now, the future of Britain's economy lies with the euro.

"I think it would be very bad for the British economy if we don't join quickly, because the situation is no longer the same as it was before the European countries formed the euro," he said. 

But at an organization called The "No" Campaign, manager James Frayne, says Britain's currency barrier is not significant, because Britain trades more with countries outside the euro zone, such as the United States. 

"If you actually look at where Britain does its business, we actually invoice more of our trade in dollars than we do in euros," he said. "The euro has been incredibly volatile against the dollar, so you're not eradicating currency risk by joining."

Frayne says the costs of joining the euro far outweigh the benefits, and he fears Britain would have to give up too much of its power. "Clearly, 

"The benefits of joining in terms of trade, investment and growth far outweighs these," said activist Nick Canning from the organization, Britain in Europe. He says joining the euro is vital for Britain's future.

Some euro-skeptics in Britain worry that the expanding power of the European Union will eventually lead to the merger of today's European countries into one new country. They believe that possibility becomes stronger if Britain joins the euro. But Canning says such fears are unfounded. 

"That's the idea that a single currency inevitably leads to a single state," he said. "There's no example in history of countries that have shared a currency that have then gone on to find — to become a single state. There's also no economic rationale for why sharing a currency means you suddenly have to share political institutions, and become a single country."

There is also a psychological element to joining the euro. France has given up the franc. Germany has given up the deutschmark. And other euro members have given up their longtime currencies, the lira, the peseta, the drachma and many others. But many people in Britain are not ready to give up the pound. In central London, software engineer Lee Brownhill says he is ambivalent about the economic issues involved in Britain joining the euro, but in his heart he is against it.

"A lot of it, I guess, would be just being used to the pound, the English pound," he said. "The Queen being on the note, and I guess, yeah, from that angle, with, certainly with the sovereign being on the notes that, I think, forms some of our national identity, really."

Chances are Brownhill will not have to worry about losing that bit of British identity anytime soon.

The British government's long-awaited announcement on Monday is expected to be something of an anti-climax. Experts widely believe the government will say the time is not yet right for Britain to adopt the euro, although that remains its long-term goal.

In addition, political analysts say, if the government does not move on the euro now, it will not be able to do so, until after the next parliamentary elections, which must be held by 2006. And if the Conservative Party unseats Labor in that election, any British move to the euro could be postponed indefinitely, because the Conservatives oppose the common currency. 

MEXICO CITY, México — Mexican President Vicente Fox is trying to deflect criticism from what most people believe should be his natural allies — business leaders. The disagreement between the Fox government and some influential industrialists comes just weeks before an important election.

While President Fox was in Europe this week trying to drum up trade agreements and more investment for Mexico, some prominent business leaders back home were grumbling about the slow-growth economy. They say the pro-business Fox should be doing more to stimulate private sector activity in what they describe as a stagnant economy.

Spokesmen for Fox's National Action Party and his government are defending the administration, noting that there are already signs of improvement and blaming the current sluggishness on the worldwide slowdown of the past few years. They also argue that more economic growth could come from an opening in the state-controlled energy sector and other reform proposals that are stuck in Congress. President Fox and his supporters are hoping for a stronger hand in this after the July 6 mid-term elections, in which new members of Congress will be chosen.

Interior Minister Santiago Creel says the critics should listen to international financial institutions that have given Mexico high ratings.

He says it is sad that people outside the country seem to have a better vision of Mexico than those within the country. He says Mexico has never had ratings from international agencies as high as it now enjoys for its investment opportunities.

The spat with business leaders began a few weeks ago when some Mexican executives criticized the government's handling of the economy. But it took on more steam on Tuesday of this week when Dioisio Garza, president of the Mexican conglomerate Grupo Alfa, attacked the Fox government at a business meeting in the northern 
city of Monterrey. He said the slowdown in Mexico 

could not be blamed entirely on external factors and that there is much the government could do to reduce regulations and costly paperwork. He said this would not require congressional approval.

The New York-based Merrill Lynch financial company has reduced its growth expectations for Mexico this year to 1.9 percent from its previous standing of 2.3 percent. But Merrill Lynch analysts say they are maintaining their expectation of 4 percent growth for next year because Mexico's growth should follow that of the U.S. economy, which the company sees in a recovery mode. 

Merrill Lynch also expects the Mexican peso to weaken slightly in the weeks ahead as a result of what the company refers to as "political noise" surrounding the July 6 election. The peso currently trades at around 10.5 to the dollar and Merrill Lynch sees it slipping to just over 11 to the dollar this year. 

Thursday marked the United Nations' World Environment Day, and this year, the global body set water as the theme. For Asia, water conservation holds special importance.

The United Nations says if nothing is done within the next 25 years, half of all people on the planet will not have enough fresh water for drinking and farming needs.

And while shrinking water resources threatens everyone, Asia's massive population growth puts it in special danger.

In Southern Asia, the United Nations says some 220 million people saw improved access to fresh water over the last decade. But it adds such progress was outstripped by population growth and so, now even more people do not have enough water.

Tim Higham, of the U.N. Environment Program's Asia-Pacific office, says that pressure on Asia's water resources will probably get worse over the short term.

"The region has the lowest per capita availability of fresh water because of the high population, and the countries that already suffer from water stress or scarcity would include Bangladesh, India, Pakistan, and the Republic of Korea [South Korea]," he said. "And as population and consumption increase, so will that pressure on those water resources."

Higham says water conservation efforts in Asia and elsewhere should focus on agriculture, which consumes some 86 percent of fresh water usage.

In the face of mounting water problems, the U.S. office and countries across the continent are using this year's World Environment Day to study the situation and discuss possible solutions.

In China, the government took the opportunity to admit to a massive water-quality crisis.  In its annual assessment, China's environmental authority reported that pollution levels from more than 40 percent of the nation's main river monitoring stations failed to meet even the lowest government standards.

Xie Zhenhua, director of China's State Environmental Protection Administration, says the problem is especially serious in the reservoir formed by the newly built Three Gorges Dam. Water quality there, he says, will almost certainly continue to worsen. Xie adds that society, and the news media in particular, has a role to play in policing compliance with China's environmental laws.

"We welcome our news organizations, our media, to strengthen our country's environmental supervision," he said. "Your criticism in particular has shown the problems for us to work on. This is the biggest support, the best form of supervision."

As U.N. Secretary-General Kofi Annan reported in his annual World Environment Day message, one in six people today lacks regular access to safe drinking water — a problem that will only grow without strong action.