- The Washington Times - Tuesday, November 18, 2008


Pyramid schemes lead to emergency

BOGOTA | Colombia declared a state of emergency Monday to crack down on illegal investment schemes that lured millions of people with promises of improbably high payouts, only to collapse amid rioting.

Government officials vowed to repay the poorest investors and sent police to shut down other purported pyramid scheme operations Monday, even though some loyal clients marched through the streets to defend companies that had offered interest rates as high as 150 percent a month.

Interior Minister Fabio Valencia announced the emergency measures, which include boosting prison terms for those who illegally collected money to 20 years from six, and giving mayors and governors police powers to shut down such businesses.

The emergency authority lasts 30 days, and could be extended for 30 more.

Millions of Colombians had invested cash with unlicensed companies, and panic set in last week when one company, Proyecciones DRFE, collapsed amid news that its owner had left the country - leaving about $270 million of investments in limbo.

Furious clients stormed and looted local branches in rioting that left 13 towns under police curfew and two men dead last week. Officials seized $42 million from 68 of the company’s offices and arrested 52 employees, police said.

Pyramid schemes can offer dramatically high returns by using later investors’ cash to pay off those who invest first. But they collapse when the flow of incoming money isn’t enough to pay the growing pool of investors.

On Monday, police occupied 59 offices of the largest such investment company, DMG, in 20 of Colombia’s 32 states, national police Gen. Orlando Paez said. Federal financial regulator Hernando Ruiz said his office had found irregularities in DMG’s balance sheets. But DMG investors took to the streets in downtown Bogota on Monday afternoon to defend the company and its owner David Murcia Guzman.


7 killed in plane crash

VANCOUVER | A small plane crashed on a remote island off British Columbia’s southern coast Sunday, killing seven of the eight people on board. One survivor walked away, rescue officials said.

The Grumman Goose amphibious airplane operated by Pacific Coastal Airlines went down on Thormanby Island, off the coast north of Vancouver.

“The great news is, some guy … walked out and is alive and the Canadian Coast Guard found him on the beach” of Thormanby Island, said Lt. Margeurite Dodds-Lepinski of the Joint Rescue Coordination Center in Victoria.

Pacific Coastal Airlines Vice President Spencer Smith said the survivor was a passenger. He said the pilot, who was among the dead, was quite experienced.


China’s Hu arrives for free trade talks

SAN JOSE | China and Costa Rica were to launch free trade talks here Monday in a historic visit by Chinese President Hu Jintao, at the start of a Latin America tour that includes Cuba and Peru.

China has increased diplomacy and investment in the region in recent years, with an eye on natural resources and developing markets for manufactured goods and even weapons.

The Costa Rican capital, normally heaving with traffic, was partially closed for the highest-level visit by a Chinese official to the country, just over a year after it gave up six decades of ties with Taiwan.

Mr. Hu, who came with scores of businessmen and Communist Party officials, met early Monday with Costa Rican President Oscar Arias. They were later due to announce the start of talks for a joint free trade deal.

They were also due to sign 11 cooperation deals, from building a joint oil refinery to setting up a Chinese language institute.

Costa Rica, a major exporter of computer components, has dismissed fears of an invasion of Chinese products into the country of some 4 million under the free trade deal, which could be signed in 2010, diplomats said.

Costa Rica would be the third Latin American country to negotiate a free trade deal with China, after Chile and Peru. Peru has not yet concluded its accord.


Indonesian president to discuss alliance

SAO PAULO | Brazil and Indonesia are to sign a strategic partnership at the start of a three-day visit by Indonesian President Susilo Bambang Yudhoyono on Tuesday, Brazil’s foreign ministry said.

The accord, to be inked in Brasilia, will open the way to joint actions in areas such as biogenetics, biofuels, the fight against hunger, and science and technology, the ministry said in a statement.

Mr. Yudhoyono was to be greeted by Brazilian President Luiz Inacio Lula da Silva on Tuesday ahead of the signing ceremony.

On Wednesday, he was to travel to Sao Paulo to see a factory run by Embraer, Brazil’s plane maker, and a biofuel plant.

On Thursday, he was to be in Rio de Janeiro for a meeting with business leaders.


Chavez spies on opposition

CARACAS | Government wire-tapping of opposition leaders may conjure up images of Soviet-bloc police states, but in the Venezuela of President Hugo Chavez it’s the stuff of state TV commercials.

The Chavez government has turned a barrage of tapped conversations into tongue-in-cheek advertisements slamming the leftist leader’s rivals before tough regional elections Sunday in which a handful of his allies are likely to lose governorships.

One set of state TV spots features recordings of opposition leader Manuel Rosales discussing campaign finance or the purchase of expensive jewelry along with slapstick sound effects and pictures of rings and a Cartier watch.

Another state TV ad replays a conversation of Mr. Rosales negotiating the purchase of cattle to a backdrop of mooing sounds and cartoon pictures of coins.

“They use shameful systems to get information, but that’s their problem - I’m relaxed,” Mr. Rosales said.

Mr. Chavez, who calls ex-Cuban leader Fidel Castro his mentor and has supporters controlling Venezuela’s courts, Congress and the ubiquitous state oil company, has said he is determined to have “mafia boss” Mr. Rosales imprisoned.


Blasts outside newspaper offices

CULIACAN | A Mexican newspaper’s offices have been damaged by two grenades in the violence-plagued city of Culiacan in northwestern Mexico.

The director of El Debate de Culiacan says his newspaper won’t be deterred from coverage of drug cartels because of the pre-dawn attack Monday. Jose Isabel Ramos says no one was injured in the explosion.

Culiacan is the capital of Sinaloa, a state that has seen the rise of several major drug trafficking groups.

Mexico has become one of the world’s most dangerous countries for journalists, and many newspapers have downplayed coverage of drug gangs.

From wire dispatches and staff reports



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