Costa Rica Coffee Guide

Finland Shocked by Caja Scandal

October 1, 2004

THE Finnish government hasannounced it is assembling an investigativeteam to inspect the public hospitalsand clinics that were supposed to havebeen outfitted with equipment using a loanit awarded Costa Rica’s Social SecuritySystem (Caja).The $32 million loan, commonlyreferred to as the “Finland Project,” wasdesigned to update medical equipment atCaja hospitals. It took center stage in apublic scandal when several high-levelCosta Rican government officials wereimplicated after news reports that theyallegedly received hundreds of thousandsof dollars in “commissions” from the loanmoney.“We are very upset,” said IngerHirvela, Finish ambassador to Costa Rica.“We had the impression there was nokind of abuse (in the Caja). We were promotingthis loan – we wanted to open themarket in Central America for this kind ofloan.“So, we were quite shocked this happened,”she told The Tico Times this week.INSTRUMENTARIUM’S MedkoMedical, the Finnish firm that won the bidto provide the Caja with the equipment,said 98% of the equipment is in place, afact the Finnish government wants to verify,Hirvela said in a phone interview fromher office in Mexico.Finland is assembling a team of inspectorswho will spend two weeks here makingunannounced visits to the sites, she said.Hirvela said the Finnish government hashad high esteem for the Caja – until now. Ithad stopped loan negotiations with othercountries for similar projects after discoveringevidence of corruption there, Hirvelasaid, and chose the Caja and Costa Ricabecause of its previously reputable image.She said her government is investigatingtwo things – claims the Caja projectwas not properly managed and accusationsof widespread corruption here.The Finnish government has not beenable to see the contract Instrumentariumhas with the Costa Rican pharmaceuticalcompany Corporación Fischel, which distributedthe hospital equipment boughtwith the loan. Business privacy laws havekept it out of sight, but Instrumentariumhas asked Fischel to give permission tomake it public, Hirvela said.MEANWHILE, under court order,former Caja executive president EliseoVargas’ wife and four children moved outof the luxury home in Santa Ana, west ofSan José, where they have lived sinceOctober of last year. The home is now incustody of the Prosecutor’s Office.Vargas has been in jail since early lastmonth serving a six-month preventivedetention order while allegations againsthim are investigated. He is suspected ofbribery and illicit enrichment.Revelations that Vargas was renting theluxury home at half its value from the exfinancialmanager of Corporación Fischelled to Vargas’ resignation from the Cajaand an investigation that resulted in hisarrest.The funds used to purchase the housecame from Panama-based MarchwoodHoldings Inc., a corporation presided byWalter Reiche, executive president ofFischel, who is also in preventive custody.ON Monday, Vice-Minister of FinanceJosé Armando Fallas, who is also in chargeof the Direct Taxation Agency, told thedaily Al Día the bank accounts of all thoseinvolved in the Caja-Fischel scandal wouldbe opened and investigated. As part of theinvestigation, their bank records will becompared with the income they reportedon their tax returns, he said.On Tuesday, the daily La Naciónreported that Emilio Bruce, president ofthe board of directors of CorporaciónFischel, said he believed the sale of Fischelwould be a “good” way to overcome thecrisis the company is facing.Bruce said he has received severaloffers in the past weeks from parties interestedin acquiring Fischel. He said offersmust surpass $10 million – the value of theshares the company has sold to investorson the financial market.

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