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These stories were published Tuesday, Nov. 18, 2003, in Vol. 3, No. 228
Jo Stuart
About us
Revised tax plan could hurt foreigners here
By the A.M. Costa Rica staff

A revised tax plan for Costa Rica would give newly arrived foreign residents a break, but the complexity of the plan could have some negative effects.

Lawmakers are discussing the permanent tax plan in committee now, and the government is expected to make some concessions in its proposal for a universal tax.

Analysis on the news

As it stand now, the government wants to tax both individuals and corporations on any income regardless of where the income originates. This is similar to the way the United States taxes its citizens. Canada does not tax its citizens for money they earn while residents overseas. That is the way the Costa Rican tax system is now.

A number of corporations have opposed universal taxation because their firms would be hit with tax bills on money generated by foreign subsidiaries. Revisions in the proposed law are being proposed to let companies take in and pay out some foreign income without paying Costa Rican taxes.

When the universal taxation plan was proposed earlier, proponents said that foreign residents here probably would not be affected much because they were being taxed on their income elsewhere. The idea was that foreign residents would get some type of credit for income taxes paid elsewhere. This still is the plan.

However, some foreign residents might still have to pay. A U.S. citizen, for example, who has

a portfolio in U.S. tax-exempt municipal bonds could end up being hit with taxes here on this interest income. And tax rates for individuals are expected to range from 5 percent to 35 percent. Tax-free bonds are a useful way for wealthy U.S. citizens to avoid taxation there. But because no taxes was paid in the United States, full taxes would be due here.

Then there is the possible case of a U.S. citizen who works in a third country but is a Costa Rican resident. As a U.S. citizen, this individual would not have to pay U.S. taxes on the first $80,000 of annual income. That’s U.S. law. But the money would be taxable by Costa Rica.

Some U.S. pensions are not fully taxed because the government there considers part of the monthly payment to be a return of principal. Costa Rica might require payment on this untaxed portion.

Ministerio de Hacienda officials are considering giving newly arrived foreigners several years free of paying taxes on income from their home country. This would give the new arrivals a chance to organize their affairs.

However generous this plan appears, the proposal stands a good chance of being torpedoed by a court ruling that would question why special deals are being enacted for certain people.

When the new fiscal plan passes, even many deputies may not know what the law contains because the administration is pressuring the legislature to approve the measure before Christmas break.

Lawmakers probably will not pay a lot of attention to unintended consequences to foreign residents.

New campaign allegation questions bond issue
By the A.M. Costa Rica staff

Campaign financing broke into the news again Monday when Humberto Arce alleged that the Partido Unidad Social Cristiana used a phony bond sale to hide campaign donations.

Arce of the Bloque Patriótico Parlamentario is on the commission set up to investigate campaign funding irregularities in the election that made Abel Pacheco president.

Arce said that Unidad Social Cristiana, Pacheco’s party, reported an income of some 48 million colons (then about $140,000) from the phony bond sale and used the pretext of the bond sale to recycle and camouflage secret income.

Arce said in a release from the Asamblea Nacional that the bonds were issued by Banco Interfin, but the officers of the bank thought that the bonds were an internal financial mechanism of the party. The phony bond sale was used to fool the Tribunal Supreme de 
Elecciones, the Contraloría General de la 

República and the legislative commission on which Arce serves, the lawmaker said.

The method described by Arce presumes that the party sold the bonds to itself in a way to legitimize the cash that  it had gathered from other sources.

Lawmakers will have a chance to question a top Unidad Social Cristiana party member today. Miguel Angel Rodríguez, the former president, is scheduled to appear before the commission.

The investigation by the legislative commission shows that the two major parties, Unidad and Partido Liberación Nacional, used aggressive fund-raising methods that might have crossed the legal line.

Unidad appears to have had a parallel fund-raising committee outside the normal party structure. Donations appear to have come from certain Panamanian businessmen and also from Taiwan, although the government of that country denies any official donations.

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U.S. setting up rules
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Special to A.M. Costa Rica

WASHINGTON, D.C. — In a step towards implementation of the Hague Convention on intercountry adoption, the United States has published regulations on the accreditation of U.S. adoption providers to give services in and with Hague Convention member countries. 

The public comment period on the regulations has been extended by 30 days to Dec. 15. Comments may submitted in hard copy or electronic format.

The development is important to Central America because many adopted children come for there to U.s. parents..

The United States supports "transparent, consistently applied adoption processes that provide strong safeguards for the welfare and interests of children, birth parents and adoptive parents," said a State Department announcement Monday.

The Federal Register announcement on the deadline extension appeared on Nov. 13. For information on the deadline extension go to: http://www.regulations.gov/freddocs/03-28544.htm

The Hague Convention and the Intercountry Adoption Act codify the U.S. Government's long-standing efforts to ensure that the best interests of adopted children remain the focus of all intercountry adoptions, said the announcement.

The departments of State and Homeland Security work actively to eliminate illegal activities in the adoption process and facilitate the appropriate, legal international movement of adopted children, the annoouncement said.

The Departments of State and Homeland Security will be working closely together during the coming year to craft new regulations to implement the Intercountry Adoption Act's expanded definition of "adoptable children," and address procedural changes and new responsibilities that will be assumed in order to make Hague implementation a reality, the announcement said. 

Bus from border
was rocket equipped

By the A.M. Costa Rica staff

Most passengers on a bus from the Nicaraguan border to Liberia didn’t know that someone had hidden more than 8,000 hefty fireworks in the cargo compartment.

But a dog trained to sniff out explosives found the material during a police inspection at Santa Cecilia on the Interamerican Highway.

Fuerza Pública officers said that whoever hid the illegal fireworks was taking a big risk because the explosive material had the capacity to catch on fire and cause burns.

Police are on a campaign to crack down on illegal fireworks, and most illegal material is smuggled across international borders.

This is the fourth stash of illegal fireworks uncovered by police in the last week. Such explosive devices are traditional around Christmas and New Years, but police are trying to duplicate their record of last year when no child suffered burns from fireworks.

The inspection campaign is being supported by public service announcements on radio and television.

U.S. Senate is asked
to OK cybercrime pact

Special to A.M. Costa Rica

WASHINGTON, D.C. — President George Bush has asked the U.S. Senate to approve ratification of the Council of Europe Convention on Cybercrime, which he said is "the only multilateral treaty to address the problems of computer-related crime and electronic evidence gathering."

The convention "requires parties to criminalize, if they have not already done so, certain conduct that is committed through, against, or related to computer systems," Bush said in submitting his request to ratify the convention Monday. The offenses include forgery, fraud, child pornography, and certain copyright-related offenses.

He added that the convention also requires "parties to have the ability to investigate computer-related crime effectively and to obtain electronic evidence in all types of criminal investigations and proceedings." By improving international cooperation, the convention would help deny safe havens to criminals, including terrorists, who can cause damage to U.S. interests from abroad using computer systems." 

Massive investment
predicted for energy

By the A.M. Costa Rica wire services

PARIS, France — The International Energy Agency, a multilateral research organization based here,  says the world oil and gas industry will require $4 trillion of investment during the  next three decades to maintain current levels of production. 

 The agency calls its report on energy investment a  wake-up call for governments. A central  conclusion is that while energy demand  worldwide will grow by 67 percent in coming  decades, supplies are unlikely to rise at the same  pace. The result could be much higher energy  prices and economic slowdown.

 The agency says foreign direct investment is  critical to boosting oil and gas production. At  present it says 65 percent of world oil  production is off-limits to foreign investment. It says China, Russia, and Iran do not  encourage foreign investment in their oil and gas sectors, while Kuwait, Mexico and  Saudi Arabia are closed to foreign investors. 

In the case of Mexico, agency chief Claude Mandil says $77 billion of investment is  needed just to maintain current oil production. The Mexican gas industry, he says,  requires nearly as much investment.

"Gas sector investment in Mexico will total $64 billion, $2.1 billion per year," he  said. "70y percent of that investment will be required in exploration and  development. And foreign investment will be required in Mexico in order to attract  this [amount of capital]."

 Mandil spoke at an energy forum organized last week by Washington's Center for  International and Strategic Studies. 

 Mexico's reformist president Vincente Fox has been trying without much success to  streamline the country's state-owned oil company and overturn a decades-old ban on  foreign investment in the oil and gas sector. Mexico, which does not belong to  the Organization of Petroleum Exporting Countries, produces more than three million barrels of oil per day and half of its  production is exported, most to the United States. 

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Heads of state asked to lean on Fidel Castro
Special to A.M. Costa Rica

SANTA CRUZ, Bolivia — A group that defends media freedom and imprisoned journalists worldwide has urged heads of state in Latin America, Spain, and Portugal to press the regime of Cuban dictator Fidel Castro to release 75 political dissidents,who earlier in 2003 were arrested and sentenced to up to 28 years in prison.

The group Reporters Without Borders said in a statement at the opening of the two-day Ibero-American Summit held here, that the dissidents were working to "build democracy and the rule of law" in Cuba. Such work corresponded with the final declaration issued at the 2002 Ibero-American summit, said Reporters Without Borders. The imprisoned dissidents include journalists, human rights activists, trade unionists, librarians and political activists.

The media group, with international headquarters in Paris, called on the Latin leaders attending the summit to "stick to your promises and make human rights your main focus," adding: "We know several of you who have suffered under repressive regimes will be especially concerned to do this." The imprisonment of the 75 dissidents increased the number of political prisoners in Cuba to more than 300 people, said Reporters Without Borders.

Among those imprisoned was Cuban journalist and poet Raul Rivero, who was sentenced to 20 years in prison after what the group called a "sham trial at which defense rights were not respected." Rivero was accused of publishing his articles outside the country and of meeting U.S. diplomats in Havana. Reporters Without Borders said that "neither of these actions are crimes in a democracy."

Cuba's crackdown against the dissidents sparked 

worldwide condemnation of the action. U.S. Secretary of State Colin Powell, for example, issueda May 4 denunciation of Castro's regime for jailing people "who choose to speak their own mind." Powell said Cuba is an "anachronism" in the Western Hemisphere and on the "face of the earth."

The European Union adopted a resolution Sept. 4 reiterating its condemnation of what it described as the flagrant violation of civil and political rights in Cuba, and called for the immediate release of all political prisoners in the country. 

The 15-member community of Caribbean nations known as Caricom also joined the outcry by calling for clemency for the 75 dissidents. Caricom's foreign ministers expressed their "concern at the conduct" of the trials of the dissidents and said they were "deeply disturbed" by the severity of the jail sentences meted out.

The Organization of American States and the United Nations issued their own joint statement, expressing "profound regret and grave concern" regarding the lengthy prison sentences the defendants received after less than a week on trial. The two organizations said the arrests and jailings "constitute a severe erosion of the right to freedom of opinion and expression" in Cuba.

Reporters Without Borders also announced that Cuban independent journalist Bernardo Arévalo Padrón was freed after serving six years in jail. Arévalo Padrón was jailed for "insulting" President Fidel Castro and Vice President Carlos Lage. 

Reporters Without Borders said that Arévalo Padrón, head of the former Linea Sur Press, has put an end to his family's suffering. But he had to serve his full sentence, without any reduction. The [Cuban] authorities made him pay a heavy price for criticizing them."

U.S-Brazilian compromise a surprise at trade talks
By the A.M. Costa Rica wire services

MIAMI, Fla. — Trade negotiators are examining different sets of proposals aimed at reaching a compromise on the creation of a Free Trade Area of the Americas by the end of next year. The talks are taking place under the heaviest security ever seen in Miami.

Deputy trade ministers from 34 countries in the Western Hemisphere are trying to reach agreement on language that would be included in a Declaration of Miami to be issued by trade ministers at the conclusion of the talks later this week. The declaration would outline steps to create a hemispheric-wide free trade zone by the end of next year.

So far the talks have focused on disagreements between the United States and Brazil over U.S. price supports for American farmers that Brazil views as unfair, and U.S. demands that Brazil enact reforms in the areas of investment and intellectual property rights.

Negotiators for the two countries have reportedly reached a compromise that would create a set of common principles for countries to follow in a Free Trade Area of the Americas, but at the same time allow individual countries to choose which specific trade rules they wish to follow.

Deputy U.S. Trade Representative Ross Wilson says compromise is the key to any agreement. "There have been discussions about what are the right mechanisms to provide flexibility to accommodate different countries' sensitivities," he said. "I think the way I would leave that today is that those discussions are ongoing."

Ambassador Wilson says any compromise reached in Miami would not be a retreat from efforts to 

create a full free trade area. According to media reports, however, the reported agreement between the United States and Brazil has angered other nations at the talks, such as Canada and Chile.

Richard Mills a spokesman for the U.S. Trade Representatives Office says the negotiations are difficult but there is a common view in Miami that a free trade area would benefit countries in the region.

"This is a negotiation involving 34 countries. That means it is extremely complex and extremely difficult at times to reach commonality in the quickest fashion," he said. "It is a hard task, but it is something that we believe is an important goal for this hemisphere. That is a view that is shared by others, and that is why, day in and day out, countries are negotiating and working to open their markets and become more integrated."

Business trade groups at the meeting oppose allowing countries to opt out of specific trade rules in the proposed free trade area. When the FTAA was first outlined at the Summit of the Americas in 1994, it was proposed as a full free trade zone eliminating nearly all tariffs and trade restrictions among every country in the hemisphere except Cuba.

Groups opposed to the creation of a Free Trade Area of the Americas are preparing for large-scale protests later in the week. A coalition of labor unions, environmentalists and anti-globalization activists say they expect tens of thousands of protesters at a demonstration Thursday. Many already have arrived.

Police sealed off much of downtown Miami as the talks got under way, in a bid to prevent large-scale violence that has marred other recent trade talks in cities around the world. 

A personal report on the investigation
Flight 800 shows that bad science is dangerous 
By Graeme Sephton*

Bad science is dangerous. When bad science is produced by government, the consequences can be dire. Whether it occurs in relation to a transportation tragedy or via interference in a government agency’s mission, the public interest is the most likely interest to be neglected or even betrayed. 

Two examples, recently reported on, are the Bush administration’s interference in the Environmental Protection Agency (EPA). In the first case, the administration suppressed and misrepresented evidence from the EPA regarding the dangerous nature of the pollution and fall-out from the WTC Towers in the first few weeks after 9/11. 

The second case has much more sweeping implications: the administration’s inference in the EPA that forced employees to suppress evidence about CO2 and its contribution to potentially catastrophic global weather disruption. Despite its mandate to protect the public interest, the EPA succumbed and submitted to the government’s agenda. 

It is important to realize this is not a political partisan problem. The "bad science" problem described below was orchestrated during a Democrat administration. The framers of our constitutional checks and balances could never have anticipated the possibility of the ubiquitous, homogenous and easily manipulated mass media available to media-savvy administrations today. 

Nor is it merely an abstract constitutional problem. For example, by suppressing or distorting meteorological science, we unnecessarily invite a future of unanticipated consequences, like the French heat wave that killed over 11,000 people in August 2003. 

In 1996 TWA Flight 800 exploded on a summer evening off the beaches of Long Island, in very suspicious circumstances. Within a year, as many citizens recognized that there was something seriously going wrong within the official investigation, scores of loosely affiliated researchers set out to find out what went wrong. The symptom’s of a seriously compromised investigation were numerous and compelling. 

Whistleblowers associated with TWA, within and peripheral to the official investigation were threatened and indicted by the FBI: Capt. Terry Stacey and Jim and Liz Sanders. Others working with Suffolk County Medical Examiner and involved in victim identification and autopsies reported being seriously intimidated by the FBI. 

Important evidence was reported as going missing. The FBI suppressed and withheld some of the most critical evidence. They withheld from the coroner, Dr Charles Wetli, all the forensic lab data they derived from analysis of the foreign objects removed during autopsies. 

Telltale explosive residues were detected extensively throughout the aircraft and then explained away. The agency withheld most of the eyewitness evidence from the National Transportation Safety Board (NTSB) for more than two years after it had closed its own investigation and handed "control" of the investigation over to the NTSB. The CIA was placed in charge of an animation to explain away the scores of witnesses who had described and sketched a missile-like object rising from the water towards the doomed 747. 

In August 2000 the NTSB released its final conclusion that the center fuel tank had exploded, perhaps due to a possible arcing wiring problem. In the 96 percent of the aircraft that was salvaged — with nearly all the wiring — no physical evidence of any arcing was ever found despite an excruciating effort to do so. It should be noted that electrical sparks and arcing have a very distinctive signature; they leave pits and weld marks on the wires or whatever two metallic surfaces might be involved. That fortunately doubles the chance of finding sparking evidence. None was found. No other 747 center fuel tank has spontaneously exploded before or since. 

Many of those citizen researchers who have worked on this for over five years believe that theabundant evidence about the cause of this 

About the author

The author is a member of Independent Researchers Organization investigating the Flight 800 crash and an engineer at the University of Massachusetts, Amherst. This month he won an appeals court ruling that may compell the FBI to turn over certain documents. The FBI has been fighting him since 1998. Sephton believes that certain pieces of debris taken from bodies of Flight 800 passengers are consistent with pellets from missile warheads. More information is available at http://www.foiac.org/index.htm

explosion will eventually come out and a more objective evaluation will then be possible. Most independent researchers believe that the evidence that has been released to date points to some sort of missile event. While that conclusion might still be contentious, it can be said without fear of contradiction, that there is compelling evidence of an inadequate, incomplete and compromised investigation. 

We believe that the sooner the whole case is reviewed the better for everyone. It will only be at that point that the urgently serious problem of government interference and manipulation of public interest science can then be properly addressed. 

The story of the independent researchers efforts and successes is a fascinating one. Some of the researchers have spent their lives serving aviation in one way or another. Capt. Ray Lahr made every effort to obtain the crash simulation calculations from the NTSB. He even traveled to Washington a few times from his home in California. 

His calculations, and other aeronautically trained experts, proved that there was some serious miscalculation in the published NTSB simulation results. But the NTSB refused to hand over their calculations. Capt. Lahr eventually had no other recourse than to sue the government under the Freedom of Information Act for the data and the calculations, an expensive and tedious process that takes years. 

Via a similarly frustrating course of events, the author also ended up suing the FBI for the forensic lab data that the agency withheld from the coroner, Dr Wetli. The chief medical officer for Suffolk County, New York, had legal jurisdiction and the mandated responsibility for determining cause-of-death. It sets a dangerous precedent for the FBI to withhold such critical forensic evidence from such an official with jurisdiction. 

Dr Tom Stalcup, a experienced research physicist and chairman of the Flight 800 Independent Researchers Organization has also made many trips to Washington and in May 2002 he submitted a formal request to the NTSB to reopen the investigation to address problems with the original effort. 

See: the request petition HERE!

The NTSB is obliged to reopen such investigations when new evidence or problems are identified. Dr Stalcup provided a report that meticulously documented 10 major lapses and severe inadequacies in the official NTSB report. 

Our scientific tradition insists on peer review of any important or complex research to weed out potential mistakes and even subtle biases. It is only via such open review processes that scientific results gain credibility and objective truth can assert itself. The NTSB’s refusal to allow such detailed review is totally out of step with that honorable and rigorous tradition that has advanced us to our present knowledge of things. 

Un-reviewed science has little credibility, can easily be manipulated, and is potentially bad science. And bad science is dangerous science. 

* This article is printed by permission of Mr. Sephton

Jo Stuart
About us
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