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These stories were published Tuesday, June 10, 2003, in Vol. 3, No. 113
Jo Stuart
About us
Measure lacks character checks
Gambling tax proposal would tap bettors, too
By the A.M. Costa Rica staff

A new gambling tax has been proposed in the Asamblea Nacional. Not only would this measure tax the electronic gambling outlets here, but it also would levy a 1 percent tax on those using the gambling services.

A license fee schedule also is proposed, based on the number of people working at the gambling establishments.

The proposal also suggests that the government set up a center of electronic betting in Heredia to take advantage of the communications facilities put there by Intel Corp.

Electronic betting establishments are now working under a temporary tax plan. This proposal would be permanent.

The Ministerio de Economía, Industria y Comercio would have the responsibility  of keeping a registry of electronic gambling establishments. The ministry also would collect the taxes and issue the licenses, under terms of the legislative proposal.

The measure was put forward by Deputy Federico Vargas Ulloa.

The proposal would levy a tax of about $1,000 a year on each employee. Firms with 20 or less persons would pay a little more. Their license would be $25,000. The tax would top out with firms employing 61 or more persons. They would pay $60,000 a year.

Vargas suggests the one penny per dollar tax on electronic betting income. He estimated that the country would get about $1 million a year from the tax, and he suggested that the betting operators would not mind because the money would be paid by the bettors. The gambling operators would simply collect the money, he said.

The legislative measure leaves out a lot of issues that have been a concern to officials. For one, the bill does not provide for any character checks on operators of electronic gambling parlors. Security officials have been concerned by the infiltration of the Sicilian Mafia and other types of organized crime into the 

wide-open world of Costa Rican electronic gambling.

Electronic gambling covers several types of activities. The most common are the sportsbooks where employees take bets via computers and telephones from all over the world. However, more recently electronic casinos have appeared. These may be low-budget setups operating from a motel room near the airport via the Internet. Actual gambling takes place, and bettors elsewhere can see the action and make gambling decisions via the Internet.

The Internet casinos have been criticized because some operators do not pay winnings. Or they cheat. A.M. Costa Rica gets about one complaint a week from betters, mostly from the United States, who have been stiffed by gambling operations said to be located here. Costa Rica may have more than 150 such online casinos, and many of the gambling operations offer all forms from sportsbooks to online casinos.

Right now all an Internet casino needs is a Web hookup, a backdrop that looks like a casino and one or two persons to deal cards or use other gambling equipment.

Other operations use software that simulate slot machines or other types of gambling. These could be located anywhere.

Sportsbooks here employ many bilingual Costa Ricans and native English speakers.

Another problem that may defeat the aim of this newest piece of legislation is the fact that much money wagered through Costa Rican sportsbooks never reaches here and so is beyond the grasp of national taxes. Gamblers frequently maintain accounts at offshore banks far from Costa Rica. Their bets here are merely credits or debits of those offshore accounts.

The Vargas bill is among the first to hit the hopper. More are likely as lawmakers craft permanent fiscal reform measures to take the place of the one-year temporary measures passed last year.

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Green Fund's Jafek disputes idea of Vault bailout
By the A.M. Costa Rica staff

Tom Jafek, operator of the Costa Rica Green Fund, said Monday that his lawyers are preparing a suit against The Vault because he can’t get a list of payments made on his behalf.

Jafek, via an e-mail, said that Roy Taylor, operator of The Vault investment operation, was supposed to pay off some Green Fund investors because The Vault owed the Green Fund money. The amount was some $800,000-plus, said Jafek.

Taylor was quoted in a Monday story saying that he shouldered certain debts for the troubled Green Fund voluntarily in order to help some investors who had money with his firm as well as the Green Fund.

Jafek said that Taylor had an obligation to make the payments "but he refuses to provide us a list of these supposed credits, even though we have asked for it many times."

Jafek did have some good news for his investors:

"The default by the Vault has hurt us just like everything else that has happened in the financial markets, but I want to stress that this does 
not affect our position in terms of repaying our investors. I was on a conference call today, and all items are ready to begin the flow of funds 
just as I stated to your paper about a week or so ago.

". . . A short time from now you will be reporting on our success at paying all our friends off. Please don't forget to report that too," he said.

Jafek is the first official of an investment firm to use the term "default" when talking about The Vault. A story Monday said that some key officers of the firm wanted to buy it away from Taylor to protect their own investments because they did not like the way he was managing the operation.

Taylor said Sunday that times were tight but that he was managing to keep his operation afloat. He also said that he would stop paying the estimated 3 to 4 percent interest to his investors in favor of quarterly or annual dividends. He said this was mandated by Costa Rican regulatory agency.

Jafek was writing from an undisclosed location, probably Panamá.

Lawyers here are setting up client groups to file suit against Jafek because his fund has stopped paying interest.

The Green Fund investment operation was in the Mercedes Tower on Paseo Colon. Lawyers involved with investors said that their clients were promised 3 percent per month but that payments stopped about the beginning of the year. There may be as much as $10 million in investor money involved. 

In a news story May 30, Jafek promised to get the money back to his investors. He said that he pulled out $100,000 before the collapse of Saving Unlimited, another high-interest borrowing operation.

The Vault is the only high-interest operation left standing, to use the words of Roy Taylor. It has let go a number of its employees. But it still has real estate management, condo sales and financial advising services as well as ownership in several restaurants. The international offices are on the Avenida Central pedestrian mall east of Calle 5.

Taylor has credited interest payments to his investment client accounts through May 30, however, he admits to a cash-flow problem and it is uncertain just how available those funds might be.

Pacheco picks Dent who promises to axe budgets
By the A.M. Costa Rica staff

Alberto Dent, who was minister of Hacienda until a year ago, is returning, and he is promising to axe the national budget in all ministries by 5 percent.

He will take over July 1, according to an announcement by Casa Presidencial Monday afternoon.

At the same time, aides to President Abel Pacheco said that Manuel Antonio Bolaños, the current vice minister of Ambiente y Energía will take over as minister of Educación Pública. He starts Monday, and his first job will be to negotiate an end to the strike by teachers.

Dent is the architect of the government’s fiscal reforms. He was considered the leading candidate for the post vacated by Jorge Walter Bolaños, who was unhappy with the government’s favorable position towards a $60 million international bond issue demanded by the Instituto Costarricense de Electricidad. Bolaños had served a year. Dent left the ministry post with the changeover to the Pacheco Administration. He served under Miguel Angel Rodríguez.

Pacheco said that it was a miracle that Dent accepted the job. He came to government service 

from the banking sector, and once served as minister of Agricultura y Ganadaría. He became minister of Hacienda in August 2001 after serving as a presidential adviser.

In addition to an across-the-board cutback in budgets by 5 percent, Dent’s priority will be the permanent fiscal plan that is working its way through the Asamblea Nacional. He advocates tightening up on tax collection.

The announcement said that last year the country registered a 5.4 percent deficit and that the current deficit was running at about the same rate.

Manuel Antonio Bolaños is in line to take the education job as the teachers remain on strike, unhappy about pensions and the ministry’s inability to pay them correctly. He has a reputation as a negotiator and served as a university philosophy professor for 15 years. He takes over from Ástrid Fischel, who left as a result of the teacher strike.

Meanwhile the Ministerio de Educación Pública said Monday that a labor court had declared the teacher’s strike illegal. That means teachers can be docked pay for participating in the strike. It also means that they can be forced back to work as a last resort.

Tourism congress
will begin June 18

By the A.M. Costa Rica wire services

GUATEMALA CITY, Guatemala — New challenges in the travel sector and the hemisphere’s response to sustain its recovery and growth top the agenda for the 18th Inter-American Travel Congress, which opens here June 18. 

The three-day meeting will bring together delegations from Organization of American States member countries and private sector leaders to discuss hemispheric tourism policies, technological advances to spur tourism development and products of greater potential. Cecil A. Miller, director of the Tourism Unit of the Organization of American States, said "the proposals, decisions and recommendations that are adopted during the Congress will provide orientation on the joint tourism policies of the OAS member States."

Underscoring the importance of the central theme of the Congress, "New Challenges in the Travel Sector and Hemispheric Responses to Sustain its Recovery and Growth," Miller, who is from Barbados, noted that the strategic subjects will be approached in order to favor tourism development, analyzing those obstacles that the Americas will face in the near future, and actions to be taken in order to realize general growth and benefit. 

Participants include government representatives from ministries and agencies involved in planning and promoting tourism, hotel and hostelling companies, airlines, cruise lines, promoters and managers of tourist attractions, as well as wholesalers and tour operators, travel agencies, institutional and private investors, chambers of tourism, commerce and industry, and finance press.

The Inter-American Travel Congress was created in San Francisco in 1939 to encourage tourism in the Americas. Its purpose was to perform technical studies, maintain contact among government institutions and the private sector, consider technical cooperation projects, and support the member States in their tourism development activities.

Education institution
planned for Pococí

By the A.M. Costa Rica staff

Lawmakers are studying a proposal to create the Colegio Universitario del Caribe in Pococí in the Province of Limón.

María Elena Núñez Chaves, a deputy, iniciated the project in the Asambela Nacional. The semiautonomous state institution would be subject to the Contraloría General de la República for bugetary matters, according to the proposal, 14.783.

The new school, if the measure passes the legislature, also would be able to make agreements with other institutions in Costa Rica for joint coursework and transfer of student credits.

Microbuses with kids
collide in Desamparados

By the A.M. Costa Rica staff

Two microbuses transporting school children collided early Monday in San Miguel de Desamparado, and eight persons suffered injuries.

One microbus contained students en route to the Colegio María Auxiliadora in San José. The other had local youngsters going to the San Miguel de Desamparado public school.

Little Theatre picks slate

By the A.M. Costa Rica staff

Lisa DeFuso and Liz Howard have been elected copresidents of the Little Theatre Group for the coming year. Vice president will be Sheila McCann Morrison. Treasurer is Shirley Amack. Secretary is Ann Antkiw. Fiscal is Susan Liang. The voting took place at the group’s annual meeting last week.

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Powell seeks unified stand on Cuban repression
By the A.M. Costa Rica wire services

SANTIAGO, Chile — Secretary of State Colin Powell has appealed to regional foreign ministers to take a stand against Cuba's crackdown against dissidents. There is resistance within the Organization of American States to taking up the issue, without also dealing with the U.S. economic embargo against the Fidel Castro government. 

Powell's policy address to the Organization of American States General Assembly here included some of the Bush administration's strongest criticism of the Cuban crackdown, and an appeal to member countries to stand together against the "depredations of the hemisphere's only dictatorship." 

Seventy-five prominent Cuban dissidents were given long prison terms in April on subversion and treason charges, and three men were executed after a summary trial for trying to hijack a ferry boat to the United States. 

Deploring the crackdown by the Castro government, the secretary of State said the Cuban people "increasingly look" to the Organization of American States for help in defending their fundamental freedoms, and reminded delegates of their commitments under the group's 2001 declaration of support for hemisphere-wide democratization. 

"The Inter-American Democratic Charter declares that the peoples of the Americas have a right to democracy. It does not say that the peoples of the Americas, except Cuba, have a right to democracy. I commend the OAS members who stood by their principles and the Cuban people in supporting the recent declaration on human rights in Cuba on the floor of the [OAS] Permanent Council. My government looks forward to working with our partners in the OAS to find ways to hasten the inevitable democratic transition in Cuba," Powell said. 

The declaration condemning Cuba, sponsored by 

Canada, Chile and Uruguay, was presented in the Permanent Council last month, but it has been signed by only half the organization's 34-member countries. 

Most Caribbean member states have not signed the measure, arguing among other things, that Cuba's human rights record should not be debated, as long as the Castro government is suspended from the organization, which it has been for 40 years. 

A senior official told reporters many members of the organization are ready to debate the issue of Cuba, but in a balanced way that includes the U.S. economic embargo and efforts to isolate the Communist government in Havana. 

In his policy speech, Powell also welcomed the agreement late last month for an Aug. 19 referendum on the political future of controversial Venezuelan President Hugo Chavez. He congratulated Secretary-General Cesar Gaviria for his months of work in mediating the accord, and said the United States is committed to working with the organization and the so-called "group of friends" of Venezuela to bolster implementation of the agreement. 

Powell announced a $1 million U.S. special grant, on top of $70 million in U.S. humanitarian aid to Haiti this year, to assist a special mission trying to improve security conditions for elections there. 

He said the government of Haitian President Jean-Bertrand Aristide has failed to fulfill resolutions for an electoral solution to the Caribbean country's political impasse. He said if it has not laid the necessary groundwork for elections by September, then the organization should "re-evaluate" its role in that country. 

The ministers have agreed to call a special summit-level meeting of the organization, to be held in Mexico in November, to deal with threats to the region's democratic institutions posed by the protracted economic slump and financial crises in key member states including Argentina. 

Suspected rebels grab at least 60 workers in Peru
By the A.M. Costa Rica wire services

LIMA, Peru — Authorities say suspected leftist rebels have kidnapped at least 60 workers from a natural gas pipeline camp high in the Andes. 

Officials say many of those taken captive were foreigners, including two Argentines, four Colombians and one Chilean. They say the kidnapping took place early Monday when more than 100 armed men raided the camp operated by the Argentine petroleum company Techint. 

A government statement says the armed forces have been sent in and that authorities are taking the necessary measures to ensure the freedom of the abductees. 

Police believe the Maoist Shining Path rebels were behind the kidnapping. 

It took place in the Tocate area, 600 kilometers southeast of Lima, in the Ayacucho region. Officials say the kidnappers have demanded $1 million in ransom. 

Shining Path was one of Latin America's most feared rebel groups throughout the 1980s. The group was considerably weaker after Peruvian police captured its founder, Abimael Guzman, in 1992. 

Peruvian officials believe several hundred members have fled into the jungle and joined forces with drug traffickers. 

31 journalists listed as dead
World press situation became worse, report says
Special to A.M. Costa Rica

DUBLIN, Ireland — Barring a few isolated improvements, press freedom has worsened internationally in the past six months, with an alarming number of journalists killed and repression increasing in a number of countries, said the World Association of Newspapers in its annual half-year review of press freedom world-wide.

"Vigorous government clampdowns, ongoing and renewed conflict, and premeditated attacks on journalists and their publications signal a widespread deterioration of conditions for media, and a bleak outlook for press freedom in 2003," the group said in a report to its board meeting here.

The year started deadly for journalists covering conflict. The war in Iraq killing at least 13 
journalists. Five journalists have been murdered in Colombia since January in the civil conflict that has killed 
threat advisory
over 30 journalists in the last decade.

In addition, 13 journalists have been killed elsewhere since November 2002 -- Armenia (1), Kuwait (1), Thailand (1), India (2), Ivory Coast (1), Nepal (1), the Philippines (2), Pakistan (1), the Palestinian Authority Territories (2), and Russia (1).  This brings the total during the period to 31 journalists killed.

"Creative measures to reduce press freedom continue to be employed by leaders intent on stifling a free press in many countries," said the report. "Gross violations of freedom of expression in the form of national security laws, terrorism acts and criminal defamation laws have landed scores of journalists in prison and resigned many more to practising self-censorship."

The World Association of Newspapers Board put a special focus on two causes for concern by issuing resolutions condemning wholesale arrests and long-term jail sentences imposed on journalists in Cuba, and on the potential danger to press freedom on the internet emerging from the U.N.-backed World Summit on the Information Society. 

Here is an outline of the report:

In speaking of Latin America, the report said that  from economic pressures in Argentina, to the murder of journalists in Colombia, to the mock one-day trial and jailing of scores of journalists in Cuba, the area faces many challenges to free press in 2003.

The April jailing of 28 journalists in Cuba signals an abrupt turnaround of press freedom gains on the island. Accused by the state of "working with a foreign power to undermine the government," the journalists, including renowned writer Raul Rivero, received sentences between 14 and 27 years.

In Asia, press freedom has shown both improvement and deterioration in the past six months. Imprisonment remains the biggest threat to free media in many parts of the region, with China topping the list with at least 40 journalists known to be in jail.

New press laws criminalizing defamation and the development of a government-dominated Press Council in October 2002 were setbacks for press freedom in Pakistan.

India and the Philippines remain stalwarts of free media in the region, though they are still dogged by sporadic violence against journalists and must contend with simmering ethnic and religious tension. In Nepal, conditions for journalists have improved following the peace accord between government and Maoist rebels in January. Scores of journalists remain in prison, however, and many more continue to be subjected to intimidation and violence.

The Middle East and North Africa continue to rank dismally in the field of press freedom. Criminal defamation laws appear to be the weapon of choice against the media in Morocco, Jordan, Tunisia and Egypt.

Hard-liners and reformers in Iran continue to clash in a country lodged between tradition and modernity, revealing a press freedom situation which reflects its many internal contradictions. An active and critical press is victim to lengthy prison sentences and exorbitant fines for insulting Islam or criticising the Islamic Revolution and its supreme leader.

In Iraq, 13 journalists are confirmed dead and two remain missing. The eradication of Saddam Hussein's despotic rule opens a window to a brighter future for press freedom in the country, though until political stability is reached it is difficult to assess the potential for press freedom.

In Europe, press freedom problems are to be found in the former Soviet Union: in Russia, where intimidation, threats and assaults, mainly from criminal elements, against journalists, and the ongoing war in Chechnya have meant setbacks for press freedom; and in Belarus, which continues to provide an extremely hostile environment for independent media.

In the Central Asian states, politically motivated prosecution, libel suits, official harassment and intimidation, and economic strangulation continue to cripple independent media.

In Africa, civil war, authoritarian rule, arbitrary press laws and economic obstacles constrict many media enterprises, and underline the ongoing uphill battle for press freedom spanning much of the continent.

President Mugabe's stranglehold on the media in Zimbabwe worsens and independent and state-controlled media alike are exposed to official harassment, detention and assault.

Journalists in Eritrea continue to suffer gross violations of their rights, with 18 known media professionals jailed since 2001 at undisclosed locations.

Press freedom in Sudan, Chad, Cameroon, Ghana and Togo is strictly limited by government censorship, arbitrary closure of independent newspapers, and menacing criminal libel laws. The April introduction of a censorship policy in Swaziland banned all national television and radio stations from covering anything that has a negative bearing on the government.

The association has launched more than 85 protest campaigns in over 50 countries since the beginning of the year. The complete list of protests can be found on the WAN web site at http://www.wan-press.info/pages/protests.php3

The Paris-based WAN, the global organisation for the newspaper industry, defends and promotes press freedom world-wide. It represents 18,000 newspapers; its membership includes 71 national newspaper associations, individual newspaper executives in 100 countries, 13 news agencies and nine regional and world-wide press groups.

Press restrictions
approved in Caracas

By the A.M. Costa Rica wires services

CARACAS, Venezuela — The parliament has met in informal session to adopt new procedures intended to allow the swift passage of several new laws, including a measure that would tighten restrictions on news media. 

The lawmakers gathered in tents in a poor neighborhood of supporters of President Hugo Chavez. Opposition members of Congress boycotted the session and said they did not recognize the legitimacy of the vote. 

The new rules will make it more difficult to block legislation supported by the president. The 93 pro-government deputies said they were forced to hold the one-sided session outside the National Assembly to overcome what they called an opposition block on legislation in a key parliament drafting committee. 

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