NATIONAL IMPLICATIONS OF VESCO CASE CITED

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP09-00956R000105640024-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: December 23, 2016
• Document Release Date: August 1, 2013
• Sequence Number: 24
• Publication Date: May 14, 1973
• Content Type: MISC

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COSTA RICA
NATIONAL IMPLICATIONS OF VESCO CASE CITED
Article; San Jose, La Nacion, Spanish, 14 May 1973, p 14 7
The news that financier Robert L. Vesco has been summoned to appear
before criminal courts in the United States on charges of alleged crimes
involving violation of the election laws and obstruction of justice is
relevant in our country, because Vesco has many investments here, and be-
cause the Head of State and other high-ranking public officials have for-
mally assumed responsibility for defending and protecting him.
The fact that he has been charged with attempting to obstruct jus-
tice and is, moreover, an individual accused of having diverted the astro-
nomical sum of millions of dollars (224, to be exact) for his own personal
gain cannot be overlooked; even though efforts have been made to blame all
this on a plot by certain Wall Street capitalists to take revenge on the
man who dared to challenge the mutual funds "system." As a matter of fact,
both the defense that has been diligently put forth for him by his repre-
sentative in Costa Rica, as well as the government's defense of Vesco's
investments in our country, have created such a network of interests that
one cannot refrain from commenting on the circumstances surrounding this
suit.
The nation's moral fiber, and its most valuable ethical and spiri-
tual tendons, may be damaged if these things are not brought out into the
open, so that they can be aired and properly judged, so that the citizen-
ry can form its own opinions. Otherwise, we may observe that the erosion
of principles has led to a total breakdown of our national morale, with
consequences that cannot be predicted but can, indeed, be guessed.
Vesco came to Costa Rica, not to do us the favor of returning funds
that had been taken out of the country by devious means, but to find re-
fuge, because he knew that he was being investigated. Inhen he arrived at
the Juan Santamaria airport, he was already informed that the Federal
Securities Exchange Commission (SEC) was investigating his business deal-
ings. The explanation that Vesco was "persecuted" because he did not
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invest IOS (Investors Overseas Service) funds in big international financ-
ing capital, but rather in underdeveloped countries, could only occur to
someone with a very low opinion of the mental capacities of Costa Ricans.
The fact is that, prior to coming to Costa Rica, he tried to make a for-
tune with his interesting systems in the Bahamas. There, too, Vesco tried
to do the same thing he had attempted in Washington, something that he has
at least partially accomplished in Costa Rica: namely, to establish ties
with public officials, assisting them in their political aspirations, and
in investments and business, and thus creating sufficient spheres of in-
fluence with which to secure protection and, eventually, even security
under the law.
The investment which Vesco made in a company owned by the Presi-
dent's family has been described by the SEC as "without guarantees." We
are not concerned about the terms under which the operation took place.
The obvious fact is the manner in which the Chief Executive subsequently
came out in favor of the creation of an "international financingdistrict,"
something', which had been denounced and fought at the time by many sectors
of public opinion, including some in the National Liberation Party itself.
Later, through some strange interpretations of the law, Vesco and his
aides were granted Costa Rican passports. Finally, a few weeks ago, the
financier visited the Presidential House and "officially" notified the
President of his Intention to renounce his American citizenship, presum-
ibly intending to take Costa Rican citizenship whenever it became legally
advisable or necessary for him to do so.
And so, while Vesco obtained the advantages of governmental influ-
ence that was no doubt prompted by gratitude, our nation has become, not
only another geographical location that is astir, but an object for curi-
osity on the part of the international press. The latter refers to Costa
Rica as "another Tangiers," a "banana republic," or, in the humiliating
words of the prestigious London magazine, The Economist, as "Costa Rober-
to;" in other words, a nation that has partially been turned over to Ves-
co.
Hence, it is pertinent that we examine the way in which Vesco has
reacted to the charges: namely, the SEC's civil suit for alleged defraud-
ing of DS funds and those of other firms; and the penal suit based upon
a 200,000-dollar contribution which he made to the campaign to reelect
Nixon. According to the charges in the penal suit, Vesco contributed that
money in an attempt to promote governmental influence in Washington to
his advantage. Based upon the charges, it was his intention to halt or
neutralize the investigation which the SEC was making of his activities.
The Attorney General of the United States himself took charge of the
negotiations with the SEC, apparently without success. On 27 November,
that institution, which is autonomous, decided to make the complaint and
accuse Vesco of what it alleged to be "theft" of IOS funds. When the
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rumors and news broke out, the committee to reelect Nixon decided to re-
turn the 200,000 dollars to Vesco. The Wall Street Journal claims that
this happened because the purpose of the contribution had not been achiev-
ed, and also because an investigation was underway of the origin of the
funds (one of Vesco's companies which was not owned by him). There was
also the fact that the contribution had been made secretly, hence possibly
violating a law requiring that political contributions be made public.
Let it be said, in passing, and without any apparent implication of Vesco
in the matter, that a portion of that money, and another sum which also
reached the safe of a high-ranking campaign official, were taken to finance
the Watergate espionage plan, regarding which great trepidation has seized
the White House, reaching the very heels of that modern-day Achilles known
as Richard Nixon.
As we can observe, Vesco has been accused of attempting to use
the money of others to more readily engage in activities which bring him
dividends. The charges brought against him by a grand jury in the United
States indicate that this was the purpose of his "gift" of the 200,000
dollars. Reports from the Bahamas claim that he is also associated with
the ruling family in those islands. And, in Costa Rica, his swift passage
through customs and in migrating, his protective umbrella, and almost a
privilege affording him extraterritoriality and immunity, have been guaran-
teed with the collaboration of those who have profited from his investments.
And now we are told, through wired reports and verbally, by one of
Vesco's attorneys, that the SEC ordered President Figueres' personal bank
accounts to be submitted, without informing either him or his family. Of
course, with the typical cleverness of the Presidential House press offi-
cials, when the SEC order became known there, but allegedly not here, it
was announced that the President's older son would testify at the civil
suit against Vesco in New York concerning investments in SAI San Cristo-
bal, and regarding the "erroneous" transfer of funds made to that firm
using the Presideht's personal account.
Wb ask, isn't it sad that even matters involving the private finan-
ces of the President of Costa Rica have to be aired at a trial, just be-
cause someone failed to take the precaution of depositing funds in a com-
pany's account instead of in the personal account of a Head of State?
Vesco has become so deeply involved in national affairs that, now,
every business transaction or sale is attributed to him. How much legend
or myth lies in his economic omnipresence remains to be seen. However,
he himself cannot prevent people from associating him with the purchase
of radio broadcasting stations, coffee plantations, gasoline distributor-
ships, newly founded newspapers and, why not include it, the financing of
political campaigns. After all, folklore only needs a few facts with
which to invent a whole world of fiction that seems real. But, as The
Economist so aptly puts it, in that article which we read with bitterness
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wherein we were referred to as "Costa Roberto," whatever the facts are,
there is too much money at stake for both courses of action to be consider-
ed regrettable: whether he remains, because his penetration could inter-
fere with the maintenance of an overt, democratic political system; or if
he leaves, because the deposits he has made in certificates at sight, and
in unguaranteed investments, might mean a blow to the economy.
The country's only recourse for making an appropriate defense is
the moral shield of its principal institutions. One of these is the Le-
gislative Assembly, wherein the investigation might pursue an erratic
course, but would necessarily culminate in a warning about the signifi-
cance of Vesco's dealings with officials, and his possible asylum from
what he terms "persecution by the SEC." The other is the press, at least
the completely independent and invulnerable one that we now have, in
spite of the way in which public officials, imported "public relations
men" and paid groups have mobilized in favor of Vasco. The press in Cos-
ta Rica must carry out a mission such as that of the United States news-
papers in the case of the Pentagon papers, the Watergate incident and
other situations disturbing that country. The conduits of a system with
free and plural opinion make it possible to purge the harshest of material
and to brighten the murkiest of crossroads. Finally, there is our legal
system, on which the policy of coexistence rests. The functioning of a
legal system allied with the press and the Legislative Branch is essential
to the maintenance of unsullied institutions and to the protection of the
nature of our values. The fact that Vesco has been called to trial does
not necessarily mean that he will be found guilty. Charges of conspiracy
are always difficult to prove, because they relate to the intent underly-
ing actions. Nevertheless, if the time should come when Vesco must be
extradited, it will be a test of the extent to which these provisions
for security are operating properly and to the utmost, to prevent our hav-
ing to fear a temporary lack of international prestige, or a transitory
interdict that might affect public office in our country.
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CUBA
FOREIGN TRADE MINISTER DISCUSSES SUGAR AT GENEVA
5rticle by Prensa Latina special correspondent Leonel Nodal; Havana,
Granma, Spanish, 11 May 1973, p 77
Here in Geneva today (10 May), the Minister of Foreign Trade, Mar-
celo Fernandez Font, in establishing his country's position with regard to
the negotiation of a new international sugar agreement, declared that Cuba
has been, is now and will continue to be a great producer and exporter of
sugar, and aspires to increase its participation in the free market.
The minister admitted that the 1968 agreement reflects the degree
of cooperation that has been achieved between exporters and importers, and
has offered economic advantages to both, but said that some of its funda-
mental terms have become obsolete.
He added that, this year, a new sugar agreement must be approved
which will provide for the interval between 1974 and 1978; inasmuch as any
attempt to extend the current instrument for another year or more would be
inadmissible.
He observed that the inflationary spiral and monetary crisis affect-
ing the developed, capitalist nations have made the present price scale ob-
solete, as well as the prevailing price incumbent upon the supplier.
The head of the Cuban delegation stated that the gradual increase
in sugar consumption the world over, especially in the importing nations
on the free market, has made it impossible to postpone a new distribution
of quotas based upon this new situation.
He stressed the fact that very special heed must be taken of the
need on the part of developing, exporting nations to increase their exports
to the free market.
Fernandez Font remarked that one basic aspect of this conference is
to make a suitable estimate of the demand over the next 5 years.
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In this respect, he noted that 1972 and 1973 have been exceptional
years, wherein the demand for sugar on the free market rose both unaccount-
tably and disproportionately, from 9 million tons in 1971 to 11.2 million
in 1973, according to estimates from the International Sugar Organivation.
He added that the satisfactory implementation of a new agreement
demands that the total number of quotas and other export authorizations
bear a proper relationship to the anticipated demand.
He said that inflation and monetary crises in the developed, capi-
talist nations have caused a decline in the real value of sugar in terms
of its power to purchase manufactured goods from the capitalist countries.
The minister observed that, according to statistics provided by the
International Sugar Organization and based upon the price index published
by the U.N., in 1971, the nominal sugar price that prevailed (4.50 centa-
vos per pound) was equivalent to 3.26 centavos in terms of its purchasing
power in 1954.
He said that, if we bring this information up to date, we find that,
whereas the nominal price of sugar in 1972 was 7.27 centavos per pound, its
purchasing power in relation to 1954 was only 4.85 centavos.
He emphasized that the new agreement must perforce guarantee the
exporting nations prices that will maintain a parity of purchasing power
equivalent to what its nominal status would have been in 1954.
On the basis of this criterion, the delegation set as target prices
in these transactions a minimum of 5 centavos per pound, and a maximum of
9; and, in instances of obligation to supply, when the price exceeds the
maximum level, a price of 11 centavos per pound of raw sugar.
The Cuban minister said: "Our country regards it as fair for the
new agreement to include the concept of obligation to purchase incumbent
upon importing nations, as an amendment to the obligation to supply which
we exporting countries accepted in the 1968 agreement.
In this connection, the minister proposed an obligatory purchase
price of 5 centavos per pound for a certain number of tons, to be calculat-
ed just as the obligation to supply was.
In concluding his comment on prices, the head of the Cuban delega-
tion reminded his hearers that Cuba has recently signed trade agreements
with the U.S.S.R. and Bulgaria in which a fixed price of 200 rubles per
metric ton, or 12 centavos per pound, was established.
The head of Cuba's delegation remarked that, despite adverse weather
conditions, Cuba has met its export quotas in recent years, retaining its
status as a reliable supplier to meet the requirements for sugar on the
free market.
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,
He said: "The adverse weather conditions have been surmounted, and
we can announce here today that production in our country's current harvest
has exceeded 5 million metric tons, which, compared with that of the same
date last year, means an increase of 1.2 million tons."
He added: "Our policy of increasing exports to the free market, bas-
ed upon the historic share we have had in that market, has been indorsed by
the serious effort which our country is making to guarantee increased su-
gar production."
He then cited the fact that Cuba proposes to plant 430,000 hectares
of cane for the 1973-74 harvest, a 40 percent increase over the previous
year.
The Cuban minister added: "A total of 512,000 tons of fertilizer
will be used, which is 30 percent more than last year; and, for this pur-
pose, we have opened a nitrogenized fertilizer plant which will produce
465,000 tons."
Large investments are likewise planned for the purification, irri-
gation and mechanized processes, as well as for transportation; or other
facilities made available in previous years will be used. He cited the
example of 420 cane combines currently in operation, a number that will
increase at the rate of 300 or 400 per year, until 80 percent of the cut-
ting is mechanized in 1980.
The head of the Cuban delegation indicated that, when one has this
background information, one can appreciate how ridiculous the estimate of
7 million tons for 1980 is, a figure attributed to Cuban production in a
study prepared by an international organization.
The Cuban minister likewise mentioned the problem that has been
created by Great Britain's entry into the European Common Market, and the
uncertainty that exists regarding the fate of its future imports from the
developing nations, which amount to 400,000 tons.
Thus far, the United Kingdom has purchased this sugar by virtue of
an agreement that was negotiated with the countries of the British Common-
wealth. The Cuban delegate said that it is his firm conviction that struc-
tural changes such as this Should be resolved within the context of the
present special agreements; and that, therefore, he supports the exporting
nations in their effort to retain access to the traditional markets.
The Cuban minister emphasized that an attempt to replace the 1.4
million tons of cane sugar which the United Kingdom receives from develop-
ing nations with beet sugar from countries on the continent which belong
to the European Economic Community, thus dumping that tonnage on the free
market, is unacceptable.
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The Cuban delegation expressed confidence that the spirit of inter-
national cooperation between exporting and importing countries would be
maintained, and that the conference, in its second phase, will find it
possible to approve a new international agreement on sugar, with partici-
pation by all the nations represented at this conference.
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