FORMER COSTA RICAN PRESIDENT SENTENCED FOR CORRUPTION

UNCLAS SAN JOSE 000852

SIPDIS
SENSITIVE

DEPT FOR WHA/CEN, INR

E.O. 12958: N/A
TAGS: PGOV PREL PINR KDEM CS
SUBJECT: FORMER COSTA RICAN PRESIDENT SENTENCED FOR CORRUPTION


1. (U) Former Costa Rican President Rafael Angel Calderon-Fournier
was sentenced on October 5 to five years prison on corruption
charges. The Second Circuit Court of San Jose found that he had
accepted bribes to secure a contract for medical equipment between a
Finnish firm and the Costa Rican government in 2004. The court also
ordered Calderon to pay restitution of the embezzled funds.
Calderon plans to appeal the sentence to the Third Chamber of the
Supreme Court. Calderon held the presidency from 1990 to 1994.


2. (U) The Attorney General's Office had charged Calderon with two
counts each of bribery and embezzlement involving the Social
Security System. Investigators claimed that Calderon devised a
scheme to push through the Legislative Assembly a bill to purchase
$39.5 million in medical equipment. In return, the former president
and accomplices received approximately $8.6 million in commissions.
In October 2004, former President Calderon was placed in pretrial
detention for 5 months and then under house arrest for seven months.
He was released in October 2005. The preliminary hearings were
held in 2007, and the trial began on November 3, 2008. Calderon
pleaded not guilty, saying that the money was payment for
consultations, not a bribe. Prosecutors called for a prison
sentence of 24 years.


3. (SBU) Despite the charges against him, Calderon was the Social
Unity Party's (PUSC) candidate for president in the 2010 elections.
Following the verdict, he withdrew from the race. PUSC has until
October 23 to name another candidate. Still, some other parties may
benefit from disaffected voters who might have supported Calderon.
The most likely is the Citizens Action Party, which profiles itself
as the ?anticorruption? party; polls show its presidential candidate
currently in second place. Alternatively, some political analysts
suggest that National Liberation Party candidate Laura Chinchilla or
Libertarian Movement candidate Otto Guevara could attract voters who
would have voted for Calderon but are not hard-core PUSC
supporters.


4. (U) Two former presidents, Miguel Angel Rodriguez (1998-2002) and
Jose Maria Figueres Olsen (1994-1998),have been under investigation
in other cases of suspected corruption. Rodriguez was arrested and
placed in pretrial detention in October 2004, upon his return to
Costa Rica after resigning as Secretary General of the Organization
of American States. He was later released awaiting a trial which
has yet to be scheduled. The arrest stemmed from charges that
Rodriguez had received kickbacks from a foreign telecommunications
company in exchange for government contracts. In October 2004, a
third former President, Figueres Olsen admitted receiving $900,000
dollars in consulting fees from the same foreign communications
company implicated in the kickback scheme involving Rodriguez;
however, Figueres denied any wrongdoing. Despite requests from the
Legislative Assembly for his return, Figueres has remained abroad.
In October 2007, the Attorney General's Office closed the case
against Figueres for lack of evidence.

BRENNAN