TRANSLATION ON LATIN AMERICA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP09-00956R000105640029-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 30
• Document Creation Date: December 23, 2016
• Document Release Date: August 1, 2013
• Sequence Number: 29
• Publication Date: March 26, 1973
• Content Type: REPORT

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wa
JPRS L/4451
26 March 1973
STAT.
TRANSLATIONS ON LATIN AMERICA
(GUO 7/73)
JOINT PUBLICATIONS RESEARCH SERVICE
GOVERNMENT USE ONLY
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LATIN
AMERICA
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NOTE
Items are complete textual translations of the original
except when designated excerpt(s) or sullunary, when the
overall heading "News Briefs" is used, or when editorial
compression or compilation is obvious, as in the case of
biographic lists and editorial reports.
The contents of this publication in no way represent the
policies, views, or attitudes of the U.S. Government.
COPYRIGHT LAWS REQUIRE THAT DISSEMINATION OF THIS PUBLICATION
BE RESTRICTED TO U.S. GOVERNMENT RECIPIENTS.
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U.
BIBLIOGRAPHIC DATA
SHEET
1. Report No.
JPRS LI 4451
2.
3. Recipient's Accession No.
4. Title and Subtitle
TRANSLATIONS ON LATIN AMERICA
(GUO 7/73)
5. Report Date
26 March .1973
6.
7. A uthor(s)
B. Performing OrganizAi ion Pep,.
No.
9. Performing Organization Name and Address
Joint Publications Research Service
1000 North Glebe Road
Arlington, Virginia 22201
10. Project/Task/Work Unit No.
11. Contract/Grant No.
12. Sponsoring Organization Name and Address
As above
13. Type of Report & Period
Covered
14.
15. Supplementary Notes
16. Abstracts
The serial report contains articles on political and sociological developments
in major areas of Latin America, as reported primarily from Latin American news-
papers and periodicals. It also includes information on major segments of Latin
American economy, geography, culture, and ethnography.
17. Key Words and Document
Political Science
Sociology
Economics
Culture
Ethnology
Technological
Geography
17b. Identifiers/Open-Ended
17c. c:osim Field/Group
Analysis. 17a. Descriptors
Inter-American Affairs
Ecuador
Argentina
Guatemala
Bolivia
Guyana
x Brazil
Haiti
Chile
Honduras
Colombia
Mexico
x Costa Rica
Nicaragua
,
Cuba
Panama
Dominican Republic
Paraguay
El Salvador
Peru
Terms
5D, ,5C, 5K
Uruguay
Venezuela
18. Availability Statement
U.S. Government Users Only
Sold by NTIS, Springfield, Va. 22151
19. Security Class (This
Report)
UNCLASSIFIEP
21. No. of Pages
27
.3-6. Security Class (This
Page
UNCLASSIFIED
22. Price
FORM NTIS-35 (.10-70)
USCOMM-DC 40329-P71
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BRAZIL
JPRS L/4451
26 March 1973
TRANSLATIONS ON LATIN AMERICA
(GUO 7/73)
CONTENTS
,PAGE
Bishops Fear New Attacks on Church
(Opiniao, 26 Feb-4 Mar 73) 1
News Briefs
Diplomatic Mission to Africa 2
COSTA RICA
jReaction to Robert Vesco's Press Conference
(La Nacion, 8 Mat 73) 3
(i: New York Attorney Seeks Legal Action Against Robert Vesco
(La Nacion, various dates) 8
Charges Filed Alleging Fraud, by S. A.
Judge Throws Out Legal Action Against Vesco,
by S. A.
I Will Prosecute Anyone Who Defames Me: Vesco
(La Nacion, 7 Mar 73) 14/
SEC Urges That Vesco's Investment Activities Be Halted
(La Nacion, 28 Feb 73) 17
Special Commission Continues Investigation of Mutual Fund Firms
(La Nacion, 13 Feb 73) 20
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CONTE4S (Continued) Page
It Lawyer Testifies in Vesco Hearing
(La Nacion, various dates) 22
Vesco Investments Explained to Commission
Fournier Explains Further Concerning Vesco, by
Fernando Fournier Acuna
News Briefs
More Investment Plans 25
a
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BRAZIL
BISHOPS FEAR NEW ATTACKS ON CHURCH
/Xrticle; Rio de Janeiro, Opiniao, Portuguese, 26 February - 4 March 1973,
p 4/
"Will there be justice for the Death Squadron?" With this question
the CNBB /Conferencia Nacional dos Bispos de Brazil; National Conference of
Brazilian Bishops/ last Friday revealed the subject of a document received
recently by the CNBB in which an attempt is made to show that "a new attack
against the Church and some of its members is being prepared in Sao Paulo."
The plot revealed by the bishops would have as an objective, according to
the document, "the defense of a person and group against a number of very
serious accusations."
Deliberately omitting the origin of the charges, the CNBB note states
that the "person" and the "group" considered antiterrorist heroes, receive,
and have received all types of protection and various privileges because they
were 'unjustlyl?' accused of belonging to the 'Death Squadron." In eccle-
siastic circles it is believed that the threat to the Church may come from
Delegate Sergio Paranhos Fleury, responsible for various successful opera-
tions by the security organizations.
For the CNBB this new attack against the Church can also be seen in
the number of statements made by "illustrious personalities of high and
political standing, defending and praising the criminals, or attacking
witnesses and the complicity of the Church, which is once more accused of
being involved in subversions." All this, says the document, is because
two star witnesses in the Death Squadron trial are priests.
COPYRIGHT: Opiniao, Rio de Janeiro, 1973
CSO: 4201-P
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RRAZ.I.11
NEWS BRIEFS
DIPLOMATIC MISSION TO AFRICA -- Sao Paulo, Visao, Portuguese, 26 Feb 73,
p 15
The announced Argentine diplomatic expedition to West Africa, with
the Argentine foreign minister following in the footsteps of his Brazilian
colleague, is interpreted in Brasilia as a clear demonstration that our
neighbors to the south are not prepared to fall behind. Although the
interests of Argentina in countries such as Zaire, Senegal, and the Ivory
Coast are minor, this action will at least serve to show the Brazilian
Government that the Casa Rosada is not neglecting its diplomacy.
CSO: 4201-P
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COSTA RICA
REACTION TO ROBERT VESCO'S PRESS CONFERENCE
grticle; San Jose, La Nacion, Spanish, 8 March 1973, p f
"He Uses Violence"
Deputy Rafael A. Valladares Mora said yesterday, "I do not wish to
comment on the publicity display of Robert Vesco in his televised presen-
tation, since as chairman of the committee, I wish to maintain a moderating
position that is consistent with the lofty investigation that has been en-
trusted to us. In reply to your questions, however, I can say that what
struck me was the expression of bullying in his press conference."
He subsequently added, "There is no doubt that talking about cracking
heads indicates that he uses violence as they did in Chicago in the 1930's.
There is nothing for us to do but call Mr Vesco's announcement that he will
request lifting the immunity for deputies an act of boasting. Strange do-
ings, friend Sancho, and it would appear that we have not heard the last of
this Mr Vesco in Costa Rica."
"Simple Bullying"
To Liberationist legislator Angel E. Solano Calderon, a member of the
investigation committee, "the words of Robert Vesco are simply an expres-
sion of bullying that merits no comment by a Costa Rican legislator." De-
puty Licentiate Jorge Solano Chacon, also a member of the investigation com-
mittee, said that he preferred to make no comment on the matter, "in order
to avoid distortions. lam a member of the committee, and it is there where
the speaking must be done."
"He Does Not Know What This Nation Is"
Deputy Oscar Saborio Alvarado said that "it was no foreigner who came
to change the constitution of Costa Rica and to deprive the members of the
first power of the republic of immunity."
He then added, "Amendments of the Magna Carta cannot be bought with
the money of the mutual funds. Now it turns out that the turkey is firing
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at the hunter, and the accused is saying what it is that he is going to de-
mand of Costa Rican deputies. The same thing that happened to the 1856 in-
vaders is happening to Mr Vesco, who has a total lack of knowledge of what
this nation is. He and the leader of that war were brought to Costa Rica
by political interests, but an English frigate saved Walker's life, and that
opportunity does not present itself every day."
Saborio Alvarado continued, "He comes to make threats about cracking
heads in our country, and for this he travels and appears in public accom-
panied by a bodyguard. This gentleman should be careful about cracking the
head or touching an humble Costa Rican! When it is a matter of manifesta-
tions of manhood, he should keep in mind that the simplest Costa Rican has
this just as he does, and that at the time for hoisting the banner of na-
tional honor, all of us shall be there. Thus, Mr Vesco should keep his
bragadoccio to himself and take care to measure carefully the ground that he
treads, as otherwise he could expose himself to a real surprise."
We are reproducing below parts of a statement by Dr Longino Soto Pa-
checo (the dots represent portions omitted by La Nacion):
"Last night we Costa Ricans who witnessed the 'show' of Mr Robert Ves-
co received notification not only that he enjoys the friendship of the exe-
cutive power, but also that he dares to intimidate and threaten the first
power of the country, the legislative power, in the person of certain of its
members.
"He confessed the former in his speech, and this is confirmed by the
fact, published in the newspapers, that members of the press office of the
presidency made a gift to him of his appearance on the costly radio and tele-
vision network. And they accompanied him at the Hotel Costa Rica, so that
we Costa Ricans could take note that the protection was 'official' and so
that Mr Vesco would feel at ease doing what he has not done in the United
States, where he has problems with the Federal Securities Commission (SEC).
"It was truly unfortunate that his advisers did not accept my sugges-
tion that I be permitted to appear with Mr Vesco to answer certain questions
before the Costa Rican public, which would certainly have clarified his position
with respect to what he is charged with and his antecedents. When I re-
ceived a letter a few weeks ago from a Mr Caldart, director of one of the
companies of Mr MacAlpin -- in which they took the liberty of suggesting to
me what I should do -- I replied that I did not accept an insolent sugges-
tion from a stranger with respect to my actions in matters which, as a de-
puty, I considered important for the country.
"Today I must tell Mr Vesco and his advisers that I do not accept
threats of any kind from anyone, and that nothing will keep me from bring-
ing to a conclusion the investigation in which I am engaged -- no matter who
likes it or dislikes it, whether they are natives or not, and whatever the
position they occupy, economic or political. The position for the domestic
press last night was insulting, when they gave an interview saying on what
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matters questions could be asked and on which they could not. El Diario de
Costa Rica published a valiant editorial on 7 March which responded very well
to the feelings of we Costa Ricans who feel that our honor and our freedom
have been breached when this gentleman, whose only asset is that of being a
millionaire, attempts to lay down the path to be followed even by the first
power of the nation.
"He has knocked on the wrong door, and even though he enjoys the
friendship and protection of the honorable President of the Republic -- with
whom he is connected by very strong commercial bonds, since he has done bus-
iness with him for many millions of dollars -- he will not prevent my bring-
ing out into the public what I consider to be proper for my country. In his
unfortunate speech last night, he threw into our faces the fact that he has
helped SNAA and INVUlInstituto Nacional de Vivienda y Urbanism(); National
Institute of Housing and Urbanism7 by buying 5 million dollars worth of bonds
from them. What a great help! With an agreement for retroactive purchase.
And these institutions will have to be in dire straits to ask him to buy
these securities. . ? Help Costa Rica with these alms! They received help
when, with the aid of Mr Figueres, they obtained the custody of over 60
million dollars from the Supreme Court of Justice of the Bahamas, where they
were located when Arawak, the fiduciary of these securities, asked to be re-
lieved of its obligations because of the poor shape being taken by the af-
fairs of these 'large and important investors.' And in view of the natural
impotence of not having another fiduciary, the Anglo-Costa Rican Bank was
submitted from here to obtain the permission of the judge and to avert the
liquidation of the company, and the return of what remained to its legal
owners.
"When the Anglo Bank, in a laudable action, rejected this attempt,
the President hurried to send the letter -- which many persons do not under-
stand without an explanation -- requesting Judge Smith of the Supreme Court
of Justice to accept Sion Plaza instead of the Anglo Bank as custodian of
all these securities and funds in the amount of many millions of dollars...
Everything was transferred immediately to a society formed two days pre-
viously for the express purpose of receiving and not acting as custodian
for so many millions. This action was carried out by the President of Cos-
ta Rica in that capacity, and not as Jose Figueres, from whom they had bor-
rowed or bought stock in their companies with these or similar funds in the
amount of millions of dollars.
"This is the money that is going to save Costa Rica from underdevel-
opment. Are these the entrepreneurs who, with their connections in Costa
Rica, are going to change the flow of money from investors toward the poor
countries?. . . I would have liked to finance an hour following that mas-
querade last night, since they did not answer any questions, in order to
explain to Costa Ricans the . . . the gyrations of these 'investors,' be-
cause I consider their presence and their activities in our country very
dangerous. . ."
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We Shall Never Accept His Lack of Respect
Statements of Licentiate Jenaro Valverde Marin which we are reproduc-
ing in part. The dots indicate portions that have been omitted by the man-
agement of the newspaper;
"We Costa Ricans have felt indignant in the face of the series of
disrespectful and high-flown statements of multimillionaire Robert Vesco. .
who, utilizing his economic power, attempts to come to us and present him-
self in Costa Rica as the fourth member of the Holy Trinity. We are not the
ones who have invented the story of Robert Vesco. . . It is the great news-
papers with international prestige that report on the maneuvers of this fi-
nancier of a new mark. Also the Security Commission of the United States,
a prestigious commission trusted by all U.S. investors, has made a lengthy
charge against Mr Vesco. Nevertheless, Robert Vesco would have us believe
from his speech that the SEC is an unimportant commission that is unscrupu-
lously attempting to detract from his prestige, probably because it is jeal-
ous of him. This is not so, gentlemen.
"Mr Robert Vesco is one of the many financiers who have carried out
operations in the international field. . . that have given rise to the trials
with which we are familiar and which are going on in the United States. It
is not Mr Robert Vesco who can show us the path that we should follow in Cos-
ta Rica. It is not Mr Robert Vesco with his dollars and investments -- which
are far from being what the country needs -- who is going to lay out for us
the objective which we must choose. We can never accept Mr Robert Vesco's
failure to have respect for the first power of the nation.
"Now he is threatening not only Costa Ricans in general, but also
deputies. No, Mr Vesco, you are not going to intimidate any Costa Rican'...
Why does he carry a Costa Rican passport? Why does he want to come to Costa
Rica? What exactly is it that has happened in the United States and in other
countries of the world? Why does the world press speak negatively of you?
It is not precisely as I indicated in the beginning, because you represent
the fourth member of the Holy Trinity. No, Mr Vesco. . your threats will
not silence us.
"Neither are we going to be silenced by the persons whom you paid to
write the unfortunate article that you read on television and radio. These
so-called Costa Rican citizens -- we already know them and we know what they
are capable of for a few cents, of putting themselves in your service to
protect your harassed interests, with total lack of concern for the prestige
of Costa Rica. Mr Robert Vesco . . . had an opportunity. He achieved a
result that was favorable for him, but to the detriment of a number of in-
vestors all over the world. And he should not come now to tell us that he
is Saint Nicholas, the protector of Costa Rica; that he comes from the United
States out of concern to see that savings are channeled from the large coun-
tries to the small ones; and that the SEC has no interest in such a propo-
sal ? ? ?
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"We are quite familiar with the international institutions such as
the IDB and the IBRD, and many other United States banks, that are prepared
to make available to us the funds which we need. You are not the one, Mr
Vesco, who is going to change the problem of income distribution in the world
. . . We accept your challenge. And it will not be you, an unknown for-
eigner . . . who leads the Costa Ricans. You cannot threaten us with dis-
continuing your investments in Costa Rica. It will be a happy time when you
stop doing so. This is not the right kind of money for our country."
Jenaro Valverde Marin
Deputy
Private Secretary of R. Vesco Is a Cuban
In the story on the press conference given yesterday by Mr Robert
Vesco, Mr J. Raul Espinoza, the private secretary of Mr Vesco, was called
a Puerto Rican. He is a Cuban.
6202
CSC): 4200-W
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COSTA RICA
NEW YORK ATTORNEY SEEKS LEGAL ACTION AGAINST ROBERT VESCO
Charges Filed Alleging Fraud
grticle by S. A.; San Jose, La Nacion, Spanish, 1 March 1973, p 47
This morning, Simon Nusbaum, an attorney from New York City
who represents thousands of investors allegedly cheated by the
mutual fund firms controlled by Robert Vesco, will appear before a
San Jose penal judge to ask that legal action be taken against
Vesco and his firm. Several deputies will be witnesses.
In the course of his presentation before the legislative
commission that is investigating the activities of the mutual fund
firms and Vesco in the country, attorney Nusbaum insisted that imme-
diate action should be taken against Vesco on behalf of the thousands
of persons involved and in the interest of Costa Rica's prestige
abroad, inasmuch as it is thought that civil action in the United
States could be delayed due to the unique attitude taken_by_Vesco
and his firm before the SEC (Security Economic Control Lsic/) and the
group of lawyers advising him.
Refusal To Testify
Nusbaum took a firm stand, saying that one of the ways in
which Vesco was paralyzing the action of the SEC consisted of re-
fusing to testify before that body, basing his refusal ?on the Fifth
Amendment of the Constitution of the United States, which allows a
person not to answer legal questions if he believes that his testi-
mony may subject him to a criminal trial. Anticipating that things
might "get hot" in the United States, Vesco fled to Costa Rica in
case the matter should go to the criminal courts, attorney Nusbaum
said.
Grounds for Action
The legal representative of the persons whose OIS gic, pre-
sumably IOS; expansion unknown7 investments are involved told the
members of the commission that they should immediately accompany
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him when he appeared before a local judge tomorrow, because after
that it might be too late. "I only want you to be present when
I present the evidence I have against Vesco and his firm."
When Deputy Jorge Solano Chacon told the attorney that here
no judge could initiate legal action concerning a crime committed
outside of the national jurisdiction, Nusbaum said:
"That aspect has been duly examined and studied; there are
grounds for believing that one can proceed. Mr Vesco has a Costa
Rican passport. Consequently, this is not a 'one-way street.' Further-
more, some of the things of which he is accused and of which I have
evidence were committed by his associates in this country and they
have injured persons in Costa Rica. Everything seems to indicate
that we do have legal jurisdiction for proceeding," he said.
Three Deputies
During a brief discussion, the investigating commission
agreed to appoint legislative members Dr Longino Soto Pacheco, Rafael
A. Valladares Mora (chairman), and Angel E. Solano Calderon to accom-
pany attorney Nusbaum at his private appearance before the judge to-
day. "I am informing Vesco of my intentions, but these are risks
one must run instead of allowing this country to become an inferno
if measures are not taken against these investments," he said.
2.5 Billion Dollars
After complaining that the SEC and the lawyers representing
persons harmed by "Vesco's empire" had not taken joint legal action
in the United States, prompted by the belief ?that the SEC "had its
own methods that were more effective," Nusbaum said, speaking
through his interpreter Mario Ulate, that "after Vesco took control
of the IOS...in 1969, he had control...of 2.5 billion dollars, but
that sum dropped to 750 million. Due to the means...he used, Vesco
cannot make use of those holdings in Costa Rica or in any part of
the world, no matter how powerful he might be."
Banking Commission in Luxembourg
"In order to give you an idea of Vesco's special system of
operation," Nusbaum added, "I might cite the case of a banking com-
mission in Luxembourg, which is working to move 120 million dollars
back into that country, money which was transferred from a bank
there to the Bahamas. The problem is that the bank also belongs to
Vesco."
He later pointed out that the groups of lawyers he repre-
sented had an advantage over the SEC because that organization only
has jurisdiction in the United States, while they could initiate
action in many countries whose citizens had been affected. "While
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I try to protect the interests of my clients, I shall also try to
help them to avoid similar dangerous situations with respect to
certain investments made abroad," Nusbaum said.
Friends Here
In another part of his presentation, the investors' legal
counsel said that before accepting the invitation from the investigat-
ing commission to appear before it, he considered at length the con-
sequences of that type of public appearance, "especially," he said,
"because many of my plans go beyond the information to Vesco himself.
I believe that the decision or decisions made by this commission
may have influence on the attitude taken in the United States, since
this is a democratic country, a legal paradise as well, and they
know that there. Consequently, I do not believe that Vesco will be-
gin to move money already here, since he would disillusion his friends
and he does have friends here."
Evidence
"The evidence against Vesco and his group of masterminds fills
20,000 pages," Nusbaum said, "and many of those pages are already in
your hands. I do not believe that any judge from a democratic coun-
try can ignore this. Consequently, I firmly believe that legal action
taken here will help to get criminal action started in the United
States, since the SEC civil court is paralyzed by the constitutional
aspects of the Fifth Amendment which I mentioned. It will also help
to prevent Vesco from transferring here half of the ICS resources
still in the Bahamas." Following his appearance, attorney Nusbaum
spoke privately with members of the commission.
Judge Throws Out Legal Action Against Vesco
/Article by S. A.; San Jose, La Nacion, Spanish, 2 March 1973, P g
Yesterday, first penal court judge Atilio Vincenzi rejected
the accusation against Roberto Vesco presented that same day by Simon
Nusbaum, the attorney representing a group of allegedly cheated in-
vestors. The judge said there was a lack of legal grounds and the
legal office was immediately notified of the same.
The decision was based on Articles 6 and 8 of the Penal Code,
which state:
Article 6. Legal action may be instituted in the case of pun-
ishable acts committed abroad and Costa Rican law may then be applied
when:
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1) their results occur entirely or partially within the na-
tional territory;
2) they were committed by persons in the service of Costa
Rica and not tried where committed due to diplomatic or functional
immunity; and
3) they, are perpetrated against Costa Rican citizens or
their rights.
Article 8 says:
"In order for the crimes mentioned in Article 5 to be prose-
cuted in Costa Rica, only government action is required. With re-
spect to crimes included in Articles 6 and 7, the criminal must be
within the national territory..
"In addition, in the cases included in Article 6, action is
taken on the basis of the complaint of the defendant, and in the
case of Article 7, penal action may only be initiated by the compe-
tent organs."
Article 5 speaks of crimes committed outside the territory
and Article 7 pertains to international crimes.
Attorney Jose Roberto Steiner, representing the public prose-
cutor, said that "due to the fact that the resolution rejecting the
accusation is well-founded, no appeal is possible. In view of this,
and since a simple accusation is involved, the matter will be closed."
Attempt To Stop Activities
In the opinion of legal advisers intimately linked with the
American attorney Simon Nusbaum, by presenting his accusation against
Roberto Vesco in the first penal court of San Jose, Nusbaum had hoped
that if the accusation were accepted and when the court once had
very broad power, it could paralyze Vesco's activities in the country,
which is deemed to be the first positive step of the thousands of
persons allegedly cheated and now represented by Nusbaum.
Budding Political Disagreement
The accusation was presented by attorney Nusbaum at 1000 hours
yesterday morning before the clerk of the first penal court, Gerardo
Calvo Picado, and witnessed by members of the press. The commission
investigating the activities of the mutual funds firms in the coun-
try and Robert Vesco had, on Wednesday afternoon, appointed a group
to accompany attorney Nusbaum at his appearance. Out of the five
members of the legislature appointed, Attorney Guillermo Jimenez
Ramirez, Dr Longino Soto Pacheco, Rafael A. Valladares Mora,
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attorney Edgar Arroyo Cordero, and Angel E. Solano Calderon, only the first
three, who represent different opposition groups, were present at the hear-
ing.
Unofficial sources contend that with respect to the "Vesco case," a
political disagreement was brewing, and it was said that the absence of
legislators Arroyo Cordero and Solano Calderon, who represent the National
Liberation majority wing, had to do with a preconceived position relating
to the affinity between certain mutual fund officials and official sectors
or ones close to them because of joint investments in the country.
Thousands of Victims
In the course of his accusation, which was made verbally and which
was recorded by court clerk Gerardo Calvo, New York attorney Nusbaum said
that he "was making it on behalf of hundreds of thousands of victims all
over the world."
Loan
Nusbaum said in his presentation that "in the loan that Vesco made
out of IIT [expansion unknown] funds to the San Cristobal Industrial Agri-
culture Company for 2.15 million dollars, a so-called commission of 150,000
dollars was paid to a middleman who had brought Vesco to Costa Rica. He
gave it to Clovis McAlpin, who in turn presented it to important-persons who
own the San Cristobal company. I am leaving written proof of the so-called
loan in the form of photostatic copies that I am attaching to the original,
and I am also providing proof of payment of the...150,000 dollars. This
proof is a sworn confession of a Mr R. P. made when he was questioned by
the SEC (Securities Exchange Commission) in New York. When the SEC inves-
tigator asked R. P. the amount he was paid, he said 150,000."
Money to Local Companies
Continuing with his charges, Nusbaum said that "the most important
part of the operation in Costa Rica was the formation of six companies and
the transference of very large sums of money to these companies, in addition
to Vescoss action to establish residency here. One of his attorneys, Howard
Cerny, told the SEC in sworn testimony that Vesco is trying to establish
the center of his operations in Costa Rica and Cerny came to this country
to set this up with the law office of Facio-Fournier-Canas."
Operations in Costa Rica
Nusbaum said that the "detailed allegations concerning the opera-
tions of Vesco and his group in Costa Rica are contained in charges filed
before the New York Federal Court and they are shown in even more detailed
form in the civil charges of the SEC (he turned over the respective docu-
ments). The operations in Costa Rica have also been described in detail
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in the most respectable financial newspapers in the United States, inclu-
ding the Wall Street Journal and others.
"The situation is changing," Nusbaum continued, "because the SEC has
indicated that instead of closing the civil case, it will probably submit
it to a criminal court immediately."
Vesco May Disappear
The New York attorney said that "due to the fact that many of the
assets mentioned are here, and due to the great danger that Mr Vesco might
disappear from the United States and Costa Rica, since there are still
large sums in the Bahamas and most certainly in other countries as well,
we ask the court to aid the victims by taking immediate protective action."
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COSTA RICA
I WILL PROSECUTE ANYONE WHO DEFAMES ME: VESCO
[Article, San Jose, jon Spanish, 7 March 1973, p 2]
North American financier Robert Vesco, on his first appearance at
a national press conference, stated that he will prosecute anyone who
defames him. "I will do it."
He arrived at Hotel Costa Rica for his first press conference two
hours late, about nine P.M.
He said, (and it was obviously apparent), "I am very angry because
shortly before appearing on TV tonight false reports were circulated that
criminal charges had been filed against me by the U.S. attorney general.
I have just telephoned New York and I can assure you that that report is
a tremendous lie."
Vesco had been accompanied to the fifth floor by a great number
of people, some of them government employees and other foreigners.
Ne are going to start legal action against those persons who said
I had been criminally prosecuted. The politicians are taking advantage
of this situation."
He added visibly angry that, "We are not going to tolerate this any
longer and tomorrow (today), I will present strong charges."
He said that, "It seems as if they want to turn everything into a
political issue, but what they are doing is undercutting the chances for
other investors to come to this country."
"What they accomplish with their attitude is to diminish the number
of new investors."
Vesco said that he will ask for the lifting of congressional immunity
from some deputies to proceed with his accusation. "I will turn over to
my lawyers the necessary papers for the charges."
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The press conference was held standing up. Vesco who is 38 years
old, appeared interested in answering questions, and at times showed a
spark of good humor.
He was asked the extent of his investments in Costa Rica and to
itemize them one by one.
Vesco said the amount invested in Costa Rica is, "$25 million
or more. But I have no detailed knowledge of each investment." He said
that it has been invested in government bonds, housing programs, and ICE
[Costa Rican Institute of Electricity].
He was asked about his trial in Costa Rica, but immediately it
was explained that it was not a trial but a special commission which is
carrying out an investigation.
Vesco took advantage of the incorrect phrasing of the question to
say, "There is no trial, but there could be if I hit somebody on the nose
if they continue to say atrocities."
He confessed that "The plan I had for Costa Rica was to invest about
$50 million. Some of these millions for example to be invested in the
lumber business, but I find too many problems here," he indicated in a
sorrowful tone.
He was told that there is a summons for his appearance to testify
before the special legislative commission on 21 March. "I did not know
that I had to appear on 21 March," he indicated. Later he asserted, "With
great pleasure I will appear before the investigating commission."
The questions turned to the investigation that the Legislative
Assembly is conducting about Vesco.
"It seems to me that if they are going to investigate they could
ask us some questions so that we could give them some explanations and so
that they could have some information. I believe that if they are in-
vestigating us they should take it under consideration."
The reporters were warned that Mr Vesco would not answer questions
about the New York trial which the international press has discussed at
length. The reporters were told that any question concerning the Federal
Exchange Commission charges against Vesco would not be answered.
To the question about why he invests in Costa Rica or as we say
around here, in exchange for what? Vesco answered philosophically, "In
exchange for nothing, did I invest or want to invest in this country. My
interest was to live here and settle here with my family."
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Later he said that he realized that his children cannot go to school
here, and that when he telephones long distance the operators know many
things because they have read it. That there is too much scandal here.
"I am free to enter, travel or leave the U.S. I have no problems
in my country. I am going to return in a few days."
He avoided reference to the worldwide commentary based on information
that many of his funds are the results of deals. In that respect he stated
that the fact is that the U.S. resents the fact that funds are being in-
vested in underdeveloped countries, like Costa Rica, for example. They
wanted these investments to be made in the U.S.
The question as to where did his funds come from and how did he
accumulate such a fortune, he avoided answering also.
About whether there are mutual funds in Costa Rica, he laconically
answered, "No." But later wanting to expand on the question said that the
funds came.from the Bahamas, banks, real estate, his friends, etc. "But
I have no detailed knowledge of the investments."
He smiled for the first time that evening when he said: "No, I
am not the Messiah." He had been asked if he considered himself the
Messiah of Costa Rica.
Vesco again complained about the "sensationalism in the use of his
name." "There are many investors who want to come to Costa Rica, but
they are going to change their minds. It is unfortunate to have such
a scandal. I believe that to report news one has to make sure first of
what he says or writes is true."
He had some praise for Costa Rica. "This country is beautiful. It
has great natural beauty. It is a pretty place. It is too bad about the
scandals."
"Of course I met with President Figueres. It would be nonsense to
think I would come to Costa Rica and not meet with the Chief of State. Of
course I met with him."
Vesco had words of praise for Figueres, "very courteous, very
cordial. I hold him in great esteem."
After the press conference he left for his home at Escazu escorted
by two cars in front and two following.
Today he departs for the U.S. and will return to testify before the
Legislative Assembly Commission next 21 March.
Vesco leaves here a public relations office under the direction of
Mit J. Raul Espinoza, a Puerto Rican.
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COSTA RICA
SEC URGES THAT VESCO'S INVESTMENT ACTIVITIES BE HALTED
/Article; San Jose, La Nacion, Spanish, 28 February. 1973, p 2g
The special commission investigating the activities of mutual
funds firms in the country has decided to invite Gordon McAlpin, a
resident of the United States, to appear before it. It will inform
the Executive Branch of its decision, so that if there is any legal
obstacle to his entry into the country, it may be removed "in order
to carry out the mandate bestowed on the investigating commission
by the entire legislative assembly," according to statements made
by the chairman of that body, Deputy Rafael A. Valladares Mora. The
petitition will be addressed specifically to the Ministry of Public
Security, since on another occasion, Gordon McAlpin, a brother of
Clovis McAlpin, an investor residing in Costa Rica, was prevented
from entering the country. "We wish to emphasize our interest in
having Gordon McAlpin appear before 12 March, at which time the
hearings come to a close," Valladares Mora said.
Former President's Appearance
Deputy Valladares Mora said that the former President of the
Republic, Otilio Ulate, had expressed his interest in appearing be-
fore the commission when the period of the presentation of evidence
and the appearances are coming to a close, in order to testify
about the activities of mutual fund firms. Many other persons af-
fected by the operations of firms established in the country will
make their appearances before the commission in the days to come in
order to add documents to the voluminous file opened, whose weight
already exceeds 10 pounds.
To Criminal Courts
Yesterday afternoon, Deputies Longino Soto Pacheco and Edgar
Arroyo Cordero, members of the commission who went to the United
States and the Bahamas in connection with their investigatory duties,
gave a preliminary report.
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Deputy Soto Pacheco said that legal circles close to the
Securities Exchange Commission have the impression that the civil
procedure involving Robert Vesco that will begin in New York on
5 March will be moved from the civil to the criminal courts.
"Mr Vesco has been called before the Securities Exchange Commission
(SEC) eight times," he said, "and he has not said a single word."
No Further Investments
Dr Soto Pacheco also said that "SEC officials had urged them
to see that the Costa Rican Government stop Vesco's investments in
the country. In short, pressure was exerted to ensure that he be
prevented from buying anything more here. The SEC wants the funds
that left the Bahamas transferred back into the jurisdiction of those
islands, since it says that Sion Plaza Inc., the company founded here,
is not able to back such large sums. It is also afraid that Vesco,
in one grand move, might have bank paper deposited in order to show
that he is covering investment responsibilities."
Judge in Bahamas Removed
In the course of his report, Deputy Longino Soto said that
in the file made available to him in New York, there is a letter
from the President of the Republic, Jose Figueres, in which he re-
commends that a judge in the Bahamas be granted a trust over funds
transferred into the country to the Sion Plaza firm. "We were sorry
to see that letter in the New York file. We were later informed
that the judge in the Bahamas had been removed from his post."
Vesco and McAlpin
Deputy Oscar Arroyo Cordero said that "in Costa Rica, people
had been led to believe that with respect to mutual funds, Vesco and
McAlpin were separate individuals, but the file examined by us in
the United States shows that there are many connections between them
and that they are closely associated. I have the impression that
this is going to be a lawsuit that will last many years, especially
when the Vesco case moves from the civil to the criminal courts.
There will be appeals, legal maneuvers, teams of lawyers who are
already working, and so on."
Nixon's Nephew Vesco's Lawyer
Deputy Arroyo Cordero said that he had been informed that
"Vesco's team of lawyers includes a nephew of President Nixon who
resides in the Bahamas and is in charge of all of Robert Vesco's
dealings on the islands. The Bahamas will be independent in June,
and new legislation could change the status of the companies in-
volved.
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In another portion of his statement, Deputy Soto Pacheco
said that in addition to the voluminous documentation that they were
going to turn over to the investigating commission, the U.S. Embassy
was going to receive more documents shortly, which in turn would go
to the commission. "There is a large room containing only documents
on Vesco and the mutual fund firms. For years, many men have been
involved in the investigation. There is nothing they do not know,
nothing has been left out, and the was broad cooperation. There has
only been a little pressure exerted by the SEC so that Vesco would
no longer be allowed to invest here," said Soto Pacheco.
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COSTA RICA
SPECIAL COMMISSION CONTINUES INVESTIGATION OF MUTUAL FUND FIRMS
/Article; San Jose, La Nacion, Spanish, 13 February 1973, p 27
Yesterday, the special legislative commission in charge of
investigating the activities of the American investor Robert Vesco
and the mutual fund companies operating in the country approved a
motion authorizing deputies Longino Soto Pacheco and Edgar Arroyo
Cordero to go to New York and the Bahamas for the purpose of attend-
ing the beginning of Vesco's trial scheduled for 20 March in the
city of the skyscrapers and in order to compile pertinent documents.
At the first session of the special commission, presided over
by legislator Rafael A. Valladares Mora, a motion was approved to
invite former President Otilio Ulate Blanco to appear, along with
the legal partners Fournier, Facio, and Canas, a representative of
the Costa Rican Anglo Bank, and deputies Daniel Oduber Quiros,
Jenaro Valverde Marin, and Oscar Saborio Alvarado.
The deputy who is chairman of the legislative body was asked
because he was the author of the motion to investigate Robert Vesco
and the mutual fund companies. The other two deputies were asked
because they had said during a session of the legislature that they
are in possession of documents having to do with the activities in
question. The investigation of Vesco will be thorough.
At its opening session, the commission decided to provide
a 30-day period, until 12 March, for the reception of documents hav-
ing to do with the case under investigation. During its first work-
ing session, it will compile as much evidence as possible and,if
possible, will have the help of a German lawyer now in Costa Rica
representing numerous small savers who have allegedly been cheated.
The commission will have the necessary translation services in order
to carry out its duties, since numerous vitally important documents
in what has been termed the Velasco case are written in English
and German.
Deputy Longino Soto Pacheco said that the study to be under-
taken by the commission will be so broad that from its conclusions
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there will emerge a thesis that will be useful for any legislative
bill concerning foreign investment in the country. For his part,
Deputy Valladares Mora suggested that at a later date, the commis-
sion could invite representatives of the Federation of University
Students, if the Federation should have documents relating to activ-
ities of the mutual fund firms.
During their discussion of their impressions and plans of
work, the members of the commission expressed the view that the
trip of the two commission representatives to New York ?and the Bahamas
was absolutely essential, because "New York is the place where Vesco's
trial will take place and is the document receiving center and be-
cause for a time the Bahamas were the epicenter of the activities
of Vesco and his mutual fund subsidiary firms," said Deputy Rafael
Valladares Mora.
The commission will hold intensive meetings during the recess
of the legislative assembly on the first 4 days of each week for the
purpose of gaining as much time as possible before the next period
of special sessions.
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COSTA RICA
LAWYER TESTIFIES IN VESCO HEARING
Vesco Investments Explained to Commission
[Article; San Jose, La Nacion, Spanish, 16 February 1973,, p 41
Acting as an individual and not as a representative of the law firm
of Facio-Fournier-Canas, attorney Fernando Fournier Acuna appeared yesterday
before the legislative commission investigating activities by Robert Vesco
and Mutual Funds firms in this country. He said that Vesco "had only trans-
ferred 6 million dollars in additional capital to the Inter-American Capital
firm which he has set up. here. When this transfer was made, I no longer had
any connections with Vesco and his associates; this was in August, and I did
not take part."
Attorney Fournier made this statement after Dr Longino Soto Pacheco,
a member of the investigating commission, said that according to the U.S.
Securities and Exchange Commission's brief against Vesco and his associates,
Vesco had attempted to transfer 60 million dollars to Costa Rica. These
funds were originally in the custody of a New York bank, but were then trans-
ferred to the Bahamas.
When the same legislator asked him what procedure had been followed
for transferring the 6 million dollars to Inter-American Capital in Costa
Rica, attorney Fournier said he did not know. He said, "I did not take part
in that operation."
Matters Covered by Professional Secrecy
In his preliminary remarks before the investigating commission, at-
torney Fernando Fournier Acuna said that he would be as helpful as possible
when it came time to answer questions. "But as we all know," he said, "there
are things which are covered by ethics or professional secrecy. I want to
ask your indulgence in advance, because I may have to disappoint you. I have
come here as Fernando Fournier, not as a representative of the law firm per se,
and I feel that some of the partners are in a better position than I am to
give you information concerning Mutual Funds."
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He added, "There has never been a complete integration of the law firm
because it has been impossible to find a formula for a fair distribution of
income. Therefore each of us works for his awn account, although for public
purposes we use a joint name."
Held 42 Million Colones in His Account
Attorney Fournier Acuna recounted his early connections with Vesco's
associates, leading to the establishment of the Inter-American Capital firm,
"at a time when the name of Vesco didn't mean a thing. I was told that the
sum was to be used for acquiring bonds of public institutions with repurchase
rights, and they were asking my advice on this legal provision; in other
words, for a legal opinion. It is common practice that a lawyer inspires
confidence, and he is frequently entrusted with money by his clients, although
in this case it was an unusual sum. At the moment I have deposited in my
account the sum of 50,0004eolones belonging to Francisco Curling, who lives
in New York... but I repeat to you that that was the extent of my partici-
pation in the matter."
Law Firm Broke Relations With Vesco and Associates
At another point in his testimony, attorney Fournier Acuna said that
"in his opinion, nothing in Vesco's activities in the country had been found
to be immoral and illegal. Furthermore, a lawyer has the obligation to be
anyone's lawyer, even a criminal's.
"After specific accusations by the SEC against Vesco began to leak out
through the press, our name was in and out of the newspapers, and at a certain
point we came to the conclusion that it would be best to break off all rela-
tions." In response to a question, attorney Fournier said, "The only thing
attorney Rodrigo Oreamuno did was to clear up some unfinished business in
connection with obtaining a passport for Vesco. This involved transactions
with the Civil Registry, I think. That was the last thing the law firm was
involved in."
No Connection With Latest Transactions
In response to-a question from congressman Angel E. Solano Calderon,
attorney Fournier Acuna said that no one in the law firm has'had anything
to do with the latest dealings Vesco is alleged to have had in the country.
Answering another question, he said that the only lawyer he understood to be
working for Vesco was attorney Rolando Soto. He then added, "I do not know
for certain whether Vesco has made any investment in the San Cristobal firm.
I understand that it was McAlpin, and I think that Capital Grows funds were
used for the purpose."
Voluminous Documentation
At the conclusion of the session, the investigating commission approved
a motion to invite attorney Rolando Soto, attorney Rodrigo Oreamuno B., and a
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representative of the National Insurance Institute to appear. It also gave
its approval for congressmen Dr Longino Soto Pacheco and attorney Edgar
Arroyo Cordero to make a trip this Tuesday to New York and the Bahamas.
Congressman attorney Jenaro Valverde Marin handed over 225 pages of
documents concerning the Vesco case to the commission. Valverde Marin said,
"In our society, the laws do not protect us against these people, since legal
red tape enables them to conceal everything. We do not know who the real
owners of the companies they set up are, because in most cases the shares
are made out to the bearer."
Fournier Explains Further Concerning Vesco
[Memorandum from attorney Fernando Fournier Acuna; San Jose, La Nacion,
Spanish, 17 February 1973, p 2]
\I
Attorney Fernando Fournier sent this memorandum yesterday:
, Solely for the purpose of preventing incOrrect interpretations from
occurring in the future, I would like to clarify certain ideas in the rele-
vant account published today in your newspaper concerning my'appeatance before
the congressional commission investigating the Vesco case.
1. Congressman Dr Longino Soto asked me whether I knew how the Vesco
group had gone about taking 60 million U.S. dollars from the Bahamas and
bringing them to Costa Rica. I replied that I understood that the amount
had been changed to 6 million U.S. dollars, but that I knew nothing about
the procedure used for transferring the funds, since I had not taken part in
the bank procedure followed for this purpose. At that time I had already
given up my position as president of Inter-American Capital and had transferred
the shares in the company originally subscribed by me when it was founded. How-
ever, the change in the board of directors had still not been recorded in the
books, and as a result, during that period and for that reason, I still had to
sign a few papers and documents. Consequently, out of respect for the truth,
I would not be able to say that I had already at that time terminated all con-
nections with Vesco's companies.
2. During the discussion of investments in bonds, I said that the sum
of 42 million dollars deposited in the law fines account was undoubtedly
unusual. But that the practice of depositing money belonging to clients in
lawyers' bank accounts was a quite common occurrence. In this connection I
cited some examples which have no connection with the Vesco case, and among
them was the case of my friend and client Francisco Curling, who several
months ago sent me a deposit of 50,000 colones with which I was to buy some
property in this city in his name.
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COSTA RICA
NEWS BRIEFS
MORE INVESTMENT PLANS -- San Jose, La Nacion, Spanish, 14 Feb 73,
p6
La Nacion has learned that the controversial American busi-
nessman Robert L. Vesco is now planning to set up in Costa Rica a
railroad freight station for cars of Central American dimensions.
Talks were begun more than a week ago between one of Vesco's closest
advisers and the Central American Transporters Union which has an
office in the country. At first, the Central American transporters
reacted vehemently against the project, due to the fact that it was
detrimental to their interests and to their project to set up a
railroad freight terminal, which has already been designed and for
which financial negotiations are already in process. With respect
to the installation of a station, the transporters are demanding
51 percent of the shares; otherwise, they are ready to fight any
other alternative that would be disadvantageous to them. Neverthe-
less, the talks continue, and we have been informed that this week
a spokesman for Vesco will probably propose a concrete offer on the
project to be discussed.
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