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Costa Rica embroiled in funds scandal

August 8, 2008

The government is seeking to fend off corruption allegations following the resignation of its scandal-hit housing minister, Fernando Zumbado.

Presidency Minister Rodrigo Arias told a legislative commission yesterday morning “there’s nothing to hide” regarding $2 million in Central American Bank for Economic Integration (BCIE) money that the government funneled into consultancy accounts.

 

Arias, President Oscar Arias’ brother, said he was speaking “to refute statements by certain people that have rashly pointed at the president for managing secret funds or secret checkbooks” with BCIE cooperation money.

The president, responding to a recent report in the daily La Nación, said the money went to 54 people and firms working in areas such as communication, law and public management.

Housing Minister Fernando Zumbado, under investigation for possibly mismanaging a $1.5 million donation from Taiwan, announced earlier this week that he will resign Aug. 20.

Taiwan donated the money in 2006 to improve living conditions in Rincón Grande de Pavas, a shantytown west of San José, in addition to other ministry projects. Much of the money, administered by the Central American Bank for Economic Integration (BCIE), was spent on consultants and equipment.

Zumbado, however, also recommended that BCIE award a consulting contract to the International Center for Sustainable Development (CIDH), a nonprofit organization he founded and directed until April 2006, a month before assuming office.

After the news broke, the Comptroller General’s Office opened an investigation and Zumbado stepped down temporarily July 10. The Government Attorney’s Office is now deciding whether to file a formal accusation.

Zumbado, the fourth of 19 cabinet members to step down during Arias´ 27 months in office, blamed the press and political opponents for smearing his name and the Housing Ministry´s image.

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