Best Investigative Journalism Report on Corruption in Latin America and Caribbean award goes to Costa Rican journalist

A series of exceptional reports on illegal payments, made by two European companies to former Central American presidents, has won the Best Investigative Journalism Report on Corruption in Latin America and the Caribbean which is awarded annually by Transparency International in Latin America and the Caribbean (TILAC) and the Press and Society Institute (IPYS). The prize, an award of $25,000 was presented yesterday in Mexico. TILAC is a regional network of TI, the leading non-governmental organisation devoted to the fight against corruption worldwide. IPYS is a Latin American society of independent journalists.

The winners are Giannina Segnini, Ernesto Rivera, and Mauricio Herrera, from the Costa Rican daily La Nación. The winners were chosen by a jury composed of Marcelo Beraba, Ombudsman of Folha de S. Paulo (Brazil); Gustavo Gorriti, co-director of the daily La República (Peru); Michael Reid, Latin American editor of The Economist (Great Britain); Gerardo Reyes, journalist at El Nuevo Herald (United States); and Tina Rosenberg, editorial page editor for The New York Times (United States).

The La Nación journalists unveiled how the Finnish company Instrumentarium Medko Medical and the French corporation Alcatel-CIT, made illegal payments to three former presidents: the former OAS Secretary-General Miguel Ángel Rodríguez, the former President Rafael Ángel Calderón, and the former Executive Director of the Switzerland-based World Economic Forum José María Figueres.

“The majority of this year’s contributions, and particularly the outstanding investigations conducted by the La Nación team, show that corruption in Latin America is a phenomenon that transcends borders and often involves companies from industrialised countries which violate the international anti-bribery framework when they offer bribes to foreign officials and, in doing so, undermine the fight against corruption in Latin America,” said Silke Pfeiffer, Transparency International Regional Director of the Americas.

Two Brazilian investigative reports received special recognition on behalf of the jury, in the form of a $5,000-prize. “Os homens de bens da Alerj”, the first report, researched the unjustified increase in assets among 27 congressmen in Rio de Janeiro, was investigated by Angelina Nunes, Alan Gripp, Carla Rocha, Dimmi Amora, Flavio Pessoa, Luiz Ernesto Magalhães, and Maiá Menezes, from the daily O Globo. “Bolsa Família”, the second investigation, by Eduardo Faustini of TV Globo, revealed irregularities in the handling of funds allocated for the Brazilian Government’s main social program.

“We have experienced a rebirth in investigative journalism in Latin America,” said Gustavo Gorriti, president of IPYS. “This year’s contributions stand out due to their high caliber and the ever-increasing ability of investigative reporters to cover very complex corrupt activities.” He added that the prize is an excellent way to provide a platform for investigative journalism in Latin America, which makes impunity all the more difficult.”

The jury also gave special recognition to the investigative merits of ten other pieces, among which figure:

Argentina
“Jefes y Jefas de Exportación,” by the production team of Telenoche Investiga, Canal 13, which showed the use of social programs as a means of extortion and buying votes in Argentine provinces.

Brazil
“Caso Waldomiro,” by Andrei Meireles, Gustavo Krieger, and Diego Escosteguy of the magazine Época, which unveiled illegal payments made by businessman Carlos Cachoeira to Waldomiro Diniz, president of the state-owned company in charge of the Rio de Janeiro lottery and political operator for the governing Worker’s Party.

Colombia
“Los señores de las tierras,” by Maria Teresa Ronderos, Carlos Eduardo Huertas, and César Molinares of the magazine Semana, which revealed the appropriation of estates and other properties by paramilitaries.

Costa Rica
“Corrupción alcanza a tres expresidentes,” investigated by Liliana Carranza, Pilar Cisneros Gallo, and Ignacio Santos Pasamontes of Telenoticias, Canal 7, which addressed the illegal payments made by European companies Alcatel and Instrumentarium to former Costa Rican presidents.

El Salvador
“Anomalías en licitaciones de COSSAL,” Rafael García of the daily La Prensa Gráfica, which revealed irregular contracts tied to the organizers of the XIX Central American and Caribbean Games.

Guatemala
“Millones de quetzales de impuestos desviados a campañas electorales,” presented by Jennyffer Paredes of the daily Prensa Libre, which demonstrated that the electoral campaigns of two political parties were financed with state funds.

“Así lavó millones la banda de Portillo,” written by Coralia Orantes and Carlos Menocal of the daily Siglo XXI, which uncovered the money-laundering practices of high-level officials linked to former president Alfonso Portillo via operations with Banco Crédito Hipotecario Nacional.

Mexico
“Caso Sasayama,” presented by Omar Millán of the daily Frontera, which showed how the Baja California State Attorney General’s Office, in an attempt to produce immediate results, falsely convicted a citizen of murder.

Peru
“El caso Zevallos o la tentación del narcoestado,” by Fernando Ampuero and Miguel Ramírez of the daily El Comercio, which proved airline businessman Fernando Zevallos’ ties to drug trafficking.

“Caso Bavaria,” by Fernando Ampuero and Pablo O´Brien of the daily El Comercio, which revealed the payment of bribes on the part of Colombian beer company Bavaria to President Alejandro Toledo’s top aide.

Mexico Jury Meeting 2005:

• Declaration of the Jury (PDF)
  declaration_jury_2005.pdf 102.46 kB
• Members of the Jury
• Award criteria
• Press release 2005

Picture of the Award Ceremony

Interview with one of the awarded journalists, Ernesto Rivera member of the investigative unit of La Nación

“The prize motivates us to continue telling the stories that others don’t want revealed”

The journalists Giannina Segnini, Ernesto Rivera y Mauricio Herrera from the daily La Nación (Costa Rica) won the first prize of the annual award for the best investigative report on corruption in Latin America and the Caribbean that TILAC and IPYS have been distinguishing since 2003.
Berlin 10 May 2005.- They carried out investigations in their country, Costa Rica. They inconvenienced many, including ex-Presidents. They put forward their candidacy for the Best Investigative Report on Corruption in Latin America and the Caribbean Award and sent along their articles, published in 2004 in the newspaper La Nación in Costa Rica. They were invited to participate in an international seminar about investigative journalism in order to share how they had revealed the scandals involving the ex-presidents. In this same seminar the winners of the above-mentioned prize were to be announced. And they were awarded first prize: three journalists from the investigative journalism team of La Nación.

Ernesto Rivera, one of the members of the team went to Mexico to participate in the Seminar and learned last night that he and his partners in investigation won the $25,000 first prize. “It seemed like the Oscar Awards ceremony” commented an assistant. “We are so happy” is what Rivera repeated over and over again.

When you arrived to Mexico for the International Seminar did you imagine this ending?
We came with hope, faith and good will, but we had no idea what would happen since this prize is open to all countries in the Americas and there was a range of impressive pieces. We saw evidence of excellent journalism in the last few days. There were great pieces from Argentina, Brazil, Ecuador, Guatemala. The truth is we are very happy. Today we are traveling to Spain to receive the Ortega y Gasset prize, and then we are complete!

Tell me a little about the investigation?
Well, it took almost one year of work, but I will try to summarize the most important points. We discovered that the Executive President of the Costa Rican Social Security Agency, Eliseo Vargas, was living in a luxurious home that had been purchased for him by the company Fischel, the largest chain of pharmacies and medical supplies in Costa Rica, and the largest supplier to the state in this area. We published the first article in April 2004 and from that story of Vargas’ home - a $735,000 mansion- we followed the route that money took. We learned that they had not given Vargas the house for his “services” in the Social Security Agency, but rather for other services he provides when he was a Congressman. In the previous legislative period Vargas was Congressman and leader of the faction of his party, and he pushed for passage of a law, that was passed in three days, and that allowed the purchase of medical equipment for $39.5 million dollars from a Finish company.
Once the law was passed the Finish company was represented in Costa Rica by Fischel. With this discovery we realized that the home had been a bribe for Vargas’ “services” as Congressman to assure that the procurement contract could go ahead. What we did was prove the bribe and the motivation behind it, but what was missing was how this had transpired. Then we discovered the existence of an off shore bank account in Panama that was controlled by the executive President of Fischel in which there were 8 million dollars from and from which funds were transferred not only to Vargas but to other employees of the Social Security Agency as well. We analyzed the money transfers and realized that one of the payments of 1.2 million dollars was made to the ex-president of Costa Rica, Rafael Ángel Calderón. Ironically, he was the son of the founder of the Social Security Agency. When we interviewed Calderón he told us that the payment had been for “political consultancy services” to Fischel. In summary this is the Finish case.

But there was also a relationship with a French company?
Yes, now the connection to France. When we continued investigating the bank account in Panama we realized that there were funds that had not followed the same route as the others, that is: Finland, Panama, Costa Rica, but rather had moved from the Bahamas to Panama. There were 400,000 dollars for the account of Servicios Notariales QC. We investigated this money and learned that the French telephone company Alcatel had paid out 9 million dollars from the account in the Bahamas as “bonuses” to Costa Rican politicians and civil servants for awarding a series of contracts for up to 300 million dollars. Here you have to keep in mind that in Costa Rica the telecommunications industry is state owned and that Costa Rica is one of the countries in the Americas with the highest quantity of telephone lines per inhabitant. The State had put together a questionable bidding process and because of these “bonuses”, Alcatel, a company with a Costa Rican subsidiary, had won the contracts.

As we continued to investigate the 9 million dollars that arrived from the Bahamas, we learned and published the fact that 2.4 and 1.4 million of the 9 million were deposited with 2 ex-Directors of the Costa Rican Electricity Institute (Instituto Costarricense de Electricidad) that manages the country’s telecommunications. However, in reality the 2.4 million went to the bank account of the wife of one of the directors. When we finally were able to locate this individual on the phone, and we told her that the next day we were planning to publish this information, she became scared, hung up the telephone, and didn’t return our call. The next day she left for New York because she is American. Her fleeing prompted the Attorney General to detain her husband who confessed to receiving the money, but who also said the ex-president of Costa Rica, Miguel Ángel Rodríguez, knew about the transaction and “asked me for 60%.” Here you have the connections to the two ex-Presidents.

What is the current situation with the ex-Presidents and the others involved?
When this was discovered Rodríguez quit his post as Secretary General at the Organization of American States, returned to Costa Rica, and was put in jail. Now he and Calderón are under house arrest. But there is a group of between 14 and 17 people that are also involved and currently are under precautionary measures pending judgment. They took away Vargas’ home and he was jailed for a time, but now he is free on bail.

But yet there is still another President…
Yes. While we investigated the 9 millioin dollars from Alcaltel we had doubts about the payments and commissions that we saw coming out of the account. At the same time we discovered hat the ex-Chief of Intelligence of the ex-President José María Figueres (he was the Director General of the World Economic Forum in Davos) had served as a criminal lawyer for Figueres. This caught our attention and we managed to speak with the General Manager of Alcatel Costa Rica who was being held prisoner, and from statements that he gave me, we saw that 2.7 million dollars of the total 9 were sent to charity and finally distributed between Carmen Valverde (sister of the general manager of Alcatel Costa Rica), the ex-President Figueres, and an assistant. When Figueres was asked about this money he said it was for consulting services.

How did the government react when all of this came to light?
Abel Pacheco, the current President, belongs to the same political party as Calderón y Rodríguez – although a different faction- but he didn’t interfere with our investigation at all. He did not get involved and we did not feel any type of pressure.

And how did your editors and the newspaper react?
We had full support from the newspaper and this is very important. Actually, the entire investigative journalism team – three reporters- became involved in this case. We had the resources we needed to carry out the research, from making unlimited international phone calls to fact-checking trips we made. Furthermore, the newspaper held out against all pressure once the facts became uncovered.

Were there repercussions in Finland and France?
There were strong repercussions in Finland to the point that the Finish government is modifying the way it handles development funds. In France, however, they said this was a problem of the local subsidiary and they accused the President of Alcatel Costa Rica and the representative in Latin America -a French citizen-, of fraud.

What is your impression of investigative journalism in Latin America in relation to the corruption cases that are uncovered?
From what we saw in the Seminar, there are similar problems and similar situation that have to do with the area of work between state contracts and private firms. It is a volatile area where there are not strong control systems in place. In relation to investigative journalism, I think there is good work being done. There are risks for doing this work in the North of Mexico, for example, and also in Colombia. In these places the conditions are extreme but there are still many journalists trying to do the best job possible so that the public can learn about the stories that no one wants them to know.

What do you plan to do with the money? (This one you don’t have to answer!)
(Laughter) It is truly a motivation. We will split the money up within the team. But I just want to say, once more, how happy we are.

Interviewed by Inés Selvood

Translated by Jessica Berns

Other Documents related to the awarded investigation

• Recent high-level bribery allegations highlight disregard for international anti-corruption laws
• OECD Convention against transactional bribery
• TI’s Business Principles

Past editions

2004
Press release on the second edition’s winners
Exposé of corrupt judges wins award

2003
Press release on the first edition’s winner
Best Investigative Journalism Report on Corruption in Latin America and Caribbean award goes to Nicaraguan journalist

Declaration of the Jury (PDF)