US embassy cable - 05SANJOSE2787

UNCLAS SAN JOSE 002787 
 
SIPDIS 
 
WHA/CEN 
EB FOR WCRAFT, BLAMPRON 
EB/IFD/OIA 
EB/CBA 
L/LEI 
L/EB 
WHA/EPSC FOR KURS, LGUMBINER 
STATE PASS TO JUSTICE FOR M MENDELSOHN 
STATE PASS TO SEC FOR INTERNATIONAL AFFAIRS 
STATE PASS TO COMMERCE FOR  K NICKERSON AND TBARLOW 
STATE PASS SEC-ENFORCEMENT RGRIME 
 
E.O. 12958: N/A 
TAGS: KCRM, KCOR, BEXP, ETRD, EINV, ECON, PGOV, CS 
SUBJECT: COSTA RICA REPORTING ON OTHER FOREIGN BRIBERY 
ALLEGATION 
 
REF: A) SAN JOSE 02661; B) SAN JOSE 02679; C) SAN JOSE 03308 
 
1.  Summary.  It has been a year since the story of scandal 
broke out and there is no sign yet of any criminal charges. 
On September 28, 2004, the influential daily, La Nacion 
disclosed the details of a `bonus' paid by the French 
telecommunications company Alcatel (see reftel A). 
According to their investigative report, former President 
Miguel Angel Rodriguez and Jose Antonio Lobo, then a board 
member of the state electricity institute (ICE) had shared 
the $2.4 million bonus between them.  End Summary. 
 
2.  Former President Miguel Angel Rodriguez (1998-2002) was 
recently released from house arrest and will not be allowed 
to travel while an ongoing investigation of bribery and 
corruption continues.  In October 2004, he was arrested 
after he resigned from his post as newly-elected Secretary 
General to the Organization of American States (OAS) and 
returned to San Jose to answer to charges that he had 
received over $1 million in kickbacks from the French firm 
Alcatel in connection with two contracts totaling $258 
million awarded to Alcatel by the Costa Rican Electricity 
Institute (ICE). 
 
3.  Lobo had admitted his responsibility and provided 
details that were shared with the daily La Nacion.  He 
explained how one transaction was wired electronically to a 
company Rodriguez set up in the U.S. called A y Z (see 
reftel B).  The first payment was made in cash directly to 
Rodriguez in his office and subsequent payments were also 
paid between Lobo's wife to Rodriguez' wife using a Florida 
bank account. 
 
4.  Two other former presidents have also been accused of 
corruption while in office (see reftel C), however 
according to the Chief Prosecutor(Fiscal General) Francisco 
Dall'Anese, only the Rodriguez case involved the use of 
United States Bank accounts.  Alcatel transferred the $2.4 
million to an account in Panama under the name of Lobo's 
wife.  The trail began with Alcatel's accounts in a New 
York branch of ABN Amro to an account in the name of 
Servicios Notariales Q.C. with the Cuscatlan International 
Bank in the Bahamas (see reftel A). 
 
5.  Comment: If wrongdoing is proved, Alcatel could face 
the risk of fines from courts and U.S. financial watchdog, 
the Securities and Exchange Commission (SEC) which 
intervened because Alcatel's American depositary shares 
trade on the New York Stock Exchange. This week, France, 
which launched its own investigation last July, sent a 
judge and two police detectives to conduct interviews with 
the principals in Costa Rica. 
LANGDALE