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Housing Minister Takes Breather During Probe

July 11, 2008

Fernando Zumbado, Housing Minister and rector of the government’s social programs, announced he is “temporarily” stepping down from his position while he is investigated for hiring allegedly questionable consulting services for a program aimed at improving living conditions in shantytowns.

“If the report shows he committed very serious mistakes … he will step down,” said Fernando Fernandez, a Housing Ministry spokesman.

Zumbado denies any wrongdoing.

The consultancies in question were paid for from a $1.5 million donation to Costa Rica by Taiwan to improve living conditions in Rincón Grande de Pavas, a shantytown west of San José. The Central American Bank for Economic Integration (BCIE) was responsible for administrating the donation through a trust fund.

The funds were donated in October 2006, months before Costa Rica’s June 2007 decision to break diplomatic ties with Taiwan and establish relations with the China.

Zumbado admitted that, given the nature of the project, the majority of the funds were spent on consulting projects for the Housing Ministry, but denied any misallocation of funds.

Casa Presidencial accepted the temporary resignation stating that Zumbado’s decision would give the Comptroller General’s Office and the Government Ethics Committee “space to objectively and independently study how the funds donated by Taiwan were executed.”

The daily La Nación reported Wednesday that in April 2007, Zumbado had recommended that that BCIE award a $315,000  consulting contract to the International Center for Sustainable Development (CIDH), a non-profit he founded and directed until April 2006, a month before assuming office. A total of 38 firms and organizations received consulting contracts.

According to its Web site, CIDH is a non-profit research institution created to promote sustainable development.

“Faced with this situation my conscience is absolutely clean because I consider we have acted in a correct manner and that the funds have been used for the purpose for which they were offered,” Zumbado stated in a press release issued by the Housing Ministry.

The Comptroller General’s Office is now investigating the Arias administration’s use of a secret $2 million donation by BCIE in 2006. The government has so far spent about half the money on 84 consultants without notifying the Comptroller General or the Legislative Assembly, which normally oversee the use of public funds.

 

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