VESCO CASE: ACTIVITIES OF VESCO'S PR MAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP09-00956R000105640008-1
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: December 23, 2016
• Document Release Date: August 1, 2013
• Sequence Number: 8
• Publication Date: April 1, 1973
• Content Type: CABLE

Declassified and Approved For Release 2013/08/13: CIA-RDP09-00956R000105640008-1
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NC 35728
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ESA077JOA037
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DE RUESJO #1269/1CS 1022000
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R 121930Z APR 73
FM AMEmBASsY SAN JOSE
TO SECSTATE WASHDC 3735
8T
CUNFIDENTIAL
LIMITED OFFICIAL USE SECTOM SAN JOSE 129
Y
E.O. 11652: GDS /
/
TAGS: PGOV, EFIN, BE. CS
SUBJECT: VESCO CASE: ACTIVITIES DF---4.6408-rt---PR MAN
BEGIN SUMMARY. THE EMBASSY RELEASED TO THE PRESS APRIL 9
A DETAILED STATEMENT THAT TOOK ISSUE WITH A HARSH COMMUNI-
QUE ISSUED BY RAUL ESPINOSA, VESCO'S PUBLICITY AGENT,
WHICH CRITICIZED THE EMBASSY AND THE SEC FOR "DARK MANEUV-
ERS" AGAINST THE INTEREST OF COSTA RICA. THE AMBASSADOR
ALSO CALLED THE MATTER TO PRESIDENT FIGUERES' ATTENTION.
THE PRESIDENT SAID THAT HE WOULD TAKE STEPS THROUGH HIS
PRESS OFFICER TO INSURE THAT ESPINOSA DID NOT REPEAT
ATTACKS ON THE EMBASSY. THE PRESIDENT HIMSELF ISSUED A
PUBLIC STATEMENT APRIL 11 SAYING He FOUND NOTHING IMPROPER
IN THE EMBASSY'S CONDUCT AND DEPLORING SPECULATIVE PIECES
THAT THREATENED TO DAMAGE US-COSTA RICAN RELATIONS.
ESPINOSA (PRESUMABLY AFTER GETTING HIS WRISTS
SLAPPED BY THE PRESIDENT) THEN TELEPHONED THE AMBASSADOR TO
APOLOTIZE, ACTION REQUEST: INFORMATION WOULD BE APPRE-
CIATED ON APRIL 3 SEC REQUEST FOR NEW LEGISLATION RE OFF-
SHORE FUNDS (SEE PARA 1 BELOW). END SUMMARY
1. IN A,COMMUNIQUE, WHICH WAS PUBLISHED ONLY IN THE LOW-
CIRCULATION AFTERNOON NEWSPAPER LA TARDE ON APRIL 7, AND
ON APRIL 9 IN ITS MORE WIDELY READ SISTER PAPER EL DIARIO
DE COSTA RICA,LAS A PAID AD, RAUL ESPINOSA CHARGED THAT THE
CONFIDENTIAL
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EMBASSY HAD ENGAGED IN "DARK MANEUVERS", MOSTLY RELATED TO
THE DELIVERY OF SEC DOCUMENTS TO THE NATIONAL ASSEMBLY'S
MUTUAL FUNDS INVESTIGATING COMMITTEE. ESPINOSA ALLEGED
THAT THE EMBASSY HAD TRIED TO COVER UP THE FACT THAT IT
POSSESSED SEC DOCUMENTS, AND THEN DELIVERED THEM. HE ,
ALSO REPEATED THE CHARGE THAT EMPLOYEES OF THE SEC, WHICH
HE CALLED A "FINANCIAL CIA", HAD BEEN IN COSTA RICA TRYING
TO BRIBE JOURNALISTS. FINALLY, HE CHARGED THAT THE SEC
ACTED CONTRARY TO THE INTERESTS OF DEVELOPING COUNTRIES,
CITING WHAT HE ALLEGED TO BE A SEC REQUEST OF THE US CON
GRESS,(1) FOR "EXTRATERRRITORIAL JURISDICTION" IN
ORDER TO REGULATE US INVESTMENT ABORAD AND (2) TO ORGANIZE
AN ENTITY TO MONOPOLIZE THE SALE OF STOCKS TO FOREIGNERS
(ESPINOSA QUOTES AS AUTHORITY ON THIS POINT A DOW JONES NEWS
WIRE DATED MARCH 3, ALTHOUGH HE PRESUMABLY MEANT APRIL 3
AS ANOTHER DATE IN HIS ARTICLE IS ERONEOUSLY SHOWN AS
MARCH).
2. NONE OF THE OTHER PAPERS PRINTED THE ESPINOSA PIECE,
ALTHOUGH ALL RECEIVED IT, AND SOME EDITORS PRIVATELY
CALLED THE PIECE IRRESPONSIBLE, JULIO SUNOL, EDITOR OF
BOTH LA TARDE AND EL DIARIO, CALLED AN EMBASSY OFFICER OVER
THE WEEKEND AS LA TARDE WAS HITTING THE STREETS TO APOLO?
GIEE FOR THE PUBLICATION, STATING IT WAS INSERTED WITHOUT
HIS PERMISSION, HE SAID HE HAD FIRED THE MAN RESPONSIBLE
WHO, HE SAID; WAS A FRIEND OF ESPINOSA'S. SUNOL, WHO HAS
BEEN THE MOST PERSISTENT AND FOCAL PRESS VOICE AGAINST VESCO,
THEN RAN A SHARP EDITORIAL IN BOTH OF HIS PAPERS
APRIL 8 AND 9 SHARPLY CRITICIZING WHAT HE CALLED VESCO'S
ATTEMPT TO ACHIEVE POLITICAL POWER IN COSTA RICA
THROUGH, USE OF "COMPROMISED MONEY",
3. THE EMBASSY, WHICH HAS REMAINED STUDIOUSLY LOW-KEY ON
ALL ASPECTS OF THE VESCO CASE DESPITE AN AGGRESSIVE
ONGOING PUBLIC RELATIONS CAMPAIGN BY VESCO'S MAN DESIGNED
TO DISCREDIT THE SEC (SAN JOSE 1200), DECIDED THAT IT HAD
TO ANSWER THIS CHARGE DESPITE ITS LIMITED PUBLICATION SINCE
IT WAS SO BLATANT AND SO DISTORTED. AN EMBASSY PRESS
RELEASE RELATED THE FACTS AND REASONS FOR THE INFORMATIONAL
EXCHANGES BETWEEN THE SEC, THE EMBASSY AND THE ASSEMBLY'S
CONFIDENTIAL
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INVESTIGATING COMMISSION, DENIED THAT SEC OFFICIALS HAD BEEN
IN COSTA RICA; EXPLAINED THE EMBASSY'S ROLE AS THE LEGITIMATE
REPRESENTATIVE OF ALL US GOVERNMENT AGENCIES, INCLUDING
THE SEC; AND DEPLORED ESPINOSA'S USE OF INNUENDO WHICH COULD
ONLY HURT US-CR RELATIONS, THE RELEASE APPENDED A SEPARATE
DESCRIPTIVE STATEMENT ON WHAT THE SEC WAS$ INTENDED TO
CLARIFY ESPINOSA'S DISTORTIONS OF THAT AGENCY'S FUNCTION
AND PURPOSE. THE EMBASSY'S RELEASE WAS PRINTED IN LA
TARDE AND EL DIARIO, BUT NOT BY THE OTHER PAPERS, WHO TOLD
US THAT SINCE THEY HAD NOT PRINTED THE ORIGINAL COMMUNIQUE
THEY DID NOT WANT TO FOLLOW THIS UP, LA NACION DID HOW-
EVER SUMMARIZE some OF THE RELEASE IN AN EDITORIAL PAGE
COLUMN, APPLAUDING THE SEC'SWATCHDpG ROLE.
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SAN JOSE 1269
4, IN A MEETING ON APRIL 9, THE AMBASSADOR BROUGHT THE
MATTER TO PRESIDENT FIGUERES1 ATTENTION, STATING THAT HE
FELT THE ESPINOSA PIECE IMPUGNED THE INTEGRITY OF THE:
EMBASSY
EMBASSY AND THE USG AND DAMAGED RELATIONS BETWEEN THE COUN-
TRIES AND THAT HE WAS OBLIGED TO RESPOND PUBLICLY, WANT.-
ING TO BE SURE THERE WAS NO DOUBT IN THE PRESIDENT'S MIND
THAT THE EMBASSY HAD ACTED IN ANY WAY BUT PROPERLY, HE
EXPLAINED THE TRANSMITTAL OF DOCUMENTS AND DENIED THAT SEC
OFFICIALS HAD BEEN IN THE COUNTRY, HE ASKED THE PRESIDENT
TO TRY TO REIN-IN ESPINOSA, THE PRESIDENT RESPONDED POSI-
TIVELY, AND STATED THAT THE GOCR SHOULD ASSIST THE EMBASSY
IN REFUTING ANY ImpLicrolaN OF "DARK MANEUVERS", IN THE
AMBASSADOR'S PYESENCE, 5#3 043853,5 :...))3$ #8 :7?-0-BORN
PRESS SECRETARY, WHO IS APPARENTLY CLOSE TO ESPINOSA, TO
TELL HIM TO CAUTION ESPINOSA ON FUTURE STATEMENTS. THE
PRESIDENT ALSO ISSUED A PRESS STATEMENT SAYING THAT HE
FOUND NO FAULT WITH THE EMBASSY'S CONDUCT IN DELIVERING
DOCUMENTS TO THE ASSEMBLY, AND DEPLORING "SPECULATIVE
PIECES" WHICH COULD DAMAGE US-COSTA RICAN RELATIONS,
THIS WAS PRINTED IN EL DIAPIO, AND LA TARDE AND WAS ALSO
FRONTPAGED BY LA REPUBLICA.
5, IN RESPONSE TO THE EMBASSY RELEASE, ESPINOSA SENT A
LETTER TO THE AMBASSADOR DENYING THAT HE MEANT TO ATTACK
THE EMBASSY, AND IN SQUIRMING AND GRACELESS FASHION CLAIMED
THAT LOCAL PRESS STORIES WERE THE AUTHORITIES FOR HIS
CONFIDENTIAL
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CHARGES ON DELIVERY OF DOCUMENTS AND PRESENCE or SEC OFF I-
CI ALS. HE ALSO REPEATED THE CHARGE THAT THE SEC SOUGHT
"EXTRATERRITORIAL JURISDICTION". THIS WAS PRINTED IN EL
DI AR IO APR IL 11, HOWEVER, ON APR IL 11 ESPINOSA TELEPHONED
THE AMBASSADOR AND APOLOGIZED SAYING IT WAS NOT HIS INTEN-
TION TO ATTACK US, SINCE HE HIMSELF WAS AN AMERICAN CI TIZENg
HE SAID THAT HE HAD ASSURED FIGUERES THAT HE DID NOT WISH
TO CREATE ANY TROUBLE (PRESUMABLY THE PRESIDENT TALKED TO
HIM AND SLAPPED HIS WRISTS)
6. TEXTS OF ALL RELEASED ARE BEING AIR-POUCHED TO ARA/CEN,
7. ACTION REQUESTED: DEPARTMENT AND SEC ARE REQUESTED TO
SUPPLY EMBASSY WITH COMMENT AND ANALYSIS OF REPORTED APRIL
SEC REQUEST FOR NEW LEGISLATION ON OFF-SHORE FUNDS
(PARA 1 ABOVE), INCLUDING IF POSSIBLE THE TEXT OF SEC
MESSAGE OR BILL SENT TO CONGRESS. VAKY
CONF IDENT.IAL
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