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Two Top Officials Resign

Amid controversy and for reasons still not entirely clear, on Monday and Wednesday, the heads of two of the country’s most important public institutions resigned.

President Abel Pacheco, who named successors almost immediately, assured Costa Rica the recent controversies would not affect his ability to steer the country in the right direction.

“There will be no changes in the government’s polices,” Pacheco said on Wednesday night, following an emergency Cabinet meeting. “We are one team; we share one philosophy… If ministers leave, we’ll name other ones. No one is indispensable, not even me.”

The two resignations bring to 26 the number of high-ranking officials – ministers, vice-ministers and executive presidents of autonomous institutions – to resign, be fired or transferred since Pacheco took office in May 2002.

ON Monday, Germán Serrano, executive president of the National Insurance Institute (INS), resigned.

On Tuesday, Pacheco said he requested the resignation because Serrano had disobeyed orders by moving forward with a controversial project to build panoramic elevators at INS’ main headquarters in downtown San José. On Wednesday morning, Serrano went public, firing back against the President, saying he was ordered to resign for his views against the Central America Free-Trade Agreement with the United States (CAFTA).

Also on Wednesday, Eliseo Vargas, executive president of the Social Security System (Caja), announced his resignation during a press conference.

The unexpected announcement came hours after the daily La Nación published a front-page article reporting Vargas was renting a luxury home at half its value from Olman Valverde, financial manager of the parent company of Farmacias Fischel, one the Caja’s main suppliers.

ADDING to the commotion, the Prosecutor’s Office of the Judicial Branch began investigating a controversial trip by top officials of the Costa Rican Electricity and Telecom Institute (ICE) last October to the Czech capital of Prague.

The officials – Telecommunications Sub-Manager Alvaro Retana and ICE board members Hernando Pantigoso and José Antonio Lobo – were accompanied by Ricardo Taylor, a representative of telecom firm Ericsson, which at the time was involved in, and later won, a $130 million bid to supply ICE with 600,000 new cell phone lines.

The officials in question maintain there was no relation between the trip and the bid’s results.

ANALYSTS say the week’s events reveal weaknesses in the Pacheco administration.

“The resignations jeopardize the government’s image,” said political analyst Rodolfo Cerdas, a member of the Center for Political and Administrative Research and Training (CIAPA).

“The resignations, in addition to the investigation of the ICE officials, raise suspicions that a large number of murky goingson the President is not aware of are taking place inside his administration,” Cerdas said.

José Miguel Villalobos, a former justice minister and the first minister to be fired by Pacheco, said the latest happenings reveal much about the President’s personality and the way he governs.

“I don’t believe these events signify a resurgence of ethics as the Pacheco administration’s direction,” he said.

ON Tuesday, Pacheco attributed Serrano’s resignation to a dispute between the two regarding the proposed elevators at INS’ main offices, estimated to cost approximately ¢1.2 billion ($2.82 million).

The elevators would have provided visitors to the JadeMuseum on the building’s 11th floor with a breathtaking view of the Central Valley.

The President has blasted the elevators, calling them an unnecessary expense, particularly when the government is attempting to reduce the budget deficit (TT, April 16).

He said his administration had asked Serrano if it was possible to cancel the construction and Serrano said that it was not.

The government later discovered the project could be cancelled.

That’s why Serrano was asked to resign, Pacheco said, adding that his administration was canceling the elevator project.

SERRANO denied lying to Pacheco about the elevators, claiming they never talked about the possibility of canceling them. He also recalled that Pacheco had originally been in favor of the elevators.

He said the real reason he was fired was for criticizing the way Costa Rica negotiated the proposed opening of INS’ insurance monopoly under CAFTA (TT, Jan. 30).

The INS Workers’ Union (UPINS) this week defended Serrano, concurring that CAFTA was the real reason behind the firing.

CAJA chief Vargas resigned saying he did not want the government to be held accountable for his personal actions. He admitted renting the house was a “mistake,” but said he was innocent of wrongdoing.

“I don’t want to jeopardize my fellow Cabinet members or the President by maintaining my post,” he said in his resignation letter.

Pacheco called the decision “brave” and commended him for having done “an excellent job.”

La Nación reported Vargas was renting a house in the Valle del Sol Condominium in the western San José suburb of Santa Ana from Valverde for $2,500 a month, while similar houses rent for $5,000.

La Nación reported yesterday that Valderde also resigned from his post.

Legislative deputies from various political parties demanded a full probe of the situation.

PACHECO named Luis Javier Guier, head of INS between 1990 and 1994, as Serrano’s replacement.

Dr. Horacio Solano, a surgeon and the Caja’s Medical Manager since 2002, took over Vargas’ job yesterday. Several legislators questioned Solano’s appointment, claiming that, as a Caja insider, he might not be impartial to the Fischel controversy.



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