COSTA RICAN IMMIGRATION DIRECTOR PLANS MAJOR

C O N F I D E N T I A L SAN JOSE 002379 SIPDIS SIPDIS DEPARTMENT FOR WHA/CEN, INL/LP E.O. 12958: DECL: 10/04/2016 TAGS: PGOV PINR PREF KFRD CASC CS SUBJECT: COSTA RICAN IMMIGRATION DIRECTOR PLANS MAJOR REFORMS REF: A. SAN JOSE 1529 ¶B. SAN JOSE 2054 Classified By: Ambassador Mark Langdale for reason 1.4 (d) ¶1. (C) SUMMARY: Costa Rican Immigration Director Mario Zamora recently told us that months of intense work with 2nd Vice President Kevin Casas (a personal friend who also functions as Minister of Planning) were about to bear fruit in the form of fundamental reforms to the information systems and personnel of his institution. Zamora said that the reforms had to be thorough and simultaneous in order to counter the massive corruption he has encountered since taking the helm on May 8, 2006. Zamora has recruited a tough-minded technocrat who played a key role in efforts to use technology to wring corruption out of customs clearance procedures. He also has help from Microsoft Corporation to revamp information systems at Immigration. Working with lawyers from the Ministry of Planning, Zamora has managed to streamline procedures for a "restructuring" of human resources that could replace up to 65 percent of his personnel. By restructuring (and paying severance) rather than firing corrupt employees, Zamora says he was able to strike a deal with unions that avoids years of lawsuits and allows removing enough corrupt employees with sufficient speed to actually make a difference. END SUMMARY. -------------- A New Information System -------------- ¶2. (C) Zamora said that his initial impressions of vulnerabilities in the computer systems at Immigration were confirmed via a diagnostic performed at his request by Microsoft Corporation. The diagnostic revealed that a number of key functions, passport issuance for example, were converted into independent "islands" presumably in the name of transparency, under the current system. Vital cross-checks and internal controls are missing, however, which makes each "island" a lucrative profit center for those who control it. Worse, some key information can be manipulated or deleted without creating any record of the changes or of who made them. Zamora believes the current system is so full of holes that it cannot be salvaged. On October 10, media reported similar problems with residency cards issued by a $2.6 million system acquired for Immigration less than a year ago. Microsoft is encouraging Costa Rica to examine an immigration system the company installed in the Bahamas. Meanwhile, the current system with its "islands" of corruption remains vulnerable. ¶3. (C) Zamora has recruited Alicia Avendano to head the effort to completely revamp the computer systems at Immigration. Avendano is known for her role in implementing a computerized customs clearance system at the Ministry of Hacienda. Over spirited resistance from numerous sectors comfortable with the leaky old paper-based system for customs declarations, Avendano brought an automated electronic system to life that has greatly increased transparency and revenues at Hacienda (called Project TIC@). Avendano's experience and track record at the Ministry of Hacienda should serve her well in facing similar challenges at Immigration. ¶4. (C) Zamora estimates that he will need between $10-15 million to acquire an information system that will meet Costa Rica's needs. The money, he believes, will come from the Central American Bank for Economic Integration (BCIE in Spanish). Zamora told us that an arrangement is being worked out whereby the BCIE will buy the computer equipment and Costa Rican Immigration will rent the equipment from the bank. Zamora said the arrangement was very much in Costa Rica's favor and was vital to the overall success of the reforms since it makes little sense to remove corrupt personnel while the information system remains so vulnerable. -------------- And New People To Use It -------------- ¶5. (C) Corrupt practices are so widespread within Immigration that Zamora has concluded it will be cheaper and faster to restructure the entire personnel system (and pay severance to those "downsized") than to attempt to fire corrupt employees. Zamora's calculation is based on Costa Rica's labor law and back-logged labor courts. Interestingly, Zamora met several times with Albino Vargas, virulent anti-free trader and head of the large public sector labor union ANEP, to broker an agreement that will avoid lengthy lawsuits. Zamora expressed surprise at how anxious Vargas seemed to avoid confrontation. According to Zamora, Vargas said that he could ill afford a battle at the moment on behalf of public employees that "everyone knows are corrupt." Zamora said the meeting he had expected to be long and heated ended quickly and pleasantly after he (Zamora) acknowledged that it would be cheaper to pay severance than to fire corrupt employees. Severance pay was apparently the only deliverable Vargas needed. ¶6. (C) Zamora said he is now working to develop new personnel requirements that will eliminate the most corrupt employees. Zamora hopes to replace up to 65 percent of his workforce in the coming months and invited the Embassy to identify any employees we have concerns about. (Note: we had provided a list to the previous Director, Marco Badilla, which apparently was not passed on. RSO has developed indications of corrupt activities by dozens of immigration officials that will be provided to Zamora. End Note.) -------------- Comment -------------- ¶7. (C) Zamora has shown himself to be an energetic interlocutor with an impressive combination of youthful ambition, private sector know-how, and previous government experience. His willingness to admit the scope of the problem is as refreshing as his plan to address it is audacious. Zamora has come up with creative solutions to a seemingly intractable institutional problem, and he has apparently succeeded in clearing one of the biggest hurdles by avoiding direct confrontation with the powerful public sector union. Politically, Zamora has the full support of the Minister of Public Security and Vice President Casas. Albino Vargas's private eagerness to avoid being seen as defending corrupt government employees is a noteworthy contrast to his public stance against the US-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) which will open state-owned monopolies to private competition. For their part, the unions' leadership was embarrassed over the summer by revelations of perks for union members in the insurance monopoly. LANGDALE