A Synopisis of the Cementazo Scandal

The "Cementazo" is the political scandal that questions the loan of US$31.5 million by the state bank to a businessman to buy and import to Costa Rica cement from China


Rico’s TICO BULL – So far I have stayed away from reporting the Cementazo (cement scandal). In the words of a dear friend, it’s just gotten boring. In fact, the first few stories in La Nacion daily are about the Cementazo. At the risk of boring you here, here is a brief summary of the scandal.

The “Cementazo” or the case of Chinese cement (political) scandal questions the loan of US$31.5 million by the Bank of Costa Rica (BCR), the state bank, to the businessman Juan Carlos Bolaños and his company Sinocem Costa Rica in irregular conditions.

The case became relevant after the disclosure of an audio by the CRHoy.com of a conversation that allegedly involved the businessman Bolaños and the then deputy manager of the BCR, Guillermo Quesada.


Uncovered is an alleged case of influence peddling and questioned the relationship of the businessman with members of the three Supreme Powers: The Supreme Court (Corte Suprema),  Government House (Casa Presidencial), legislators, as well as members of different political parties such as the PAC (Partido Acción Ciudadana), PLN (Partido Liberacion Nacional), ML (Movimiento Libertario) and the PUSC (Partido Unidad Social Cristiana).

The story begins with the November 2015 loan by the BCR to Bolaños for the import Chinese cement to Costa Rica. Prior to the loan, regulations were changed in the BCR and at the Ministry of Economy, which at the time that favored Bolaños.  According to the banking regulator – the Superintendencia de Entidades Financieras, it is unknown what the entrepreneur has done with US$12.3 million that he did not use while maintaining another US$12.3 million in his accounts for six months before returning them to the BCR.

In total, Costa Rica’s state-owned bank has loaned Bolaños US$45.5 million.

The Consequences
On October 18, 2017, the Supreme Court suspended magistrate Celso Gamboa for three months to investigate his relations with Bolaños. The alleged ties include a trip to and from Panama and the airfares purchased with the same credit card.

A few days earlier, on October 13, the Supreme Court suspended the country’s Attorney General, Jorge Chavarría, for three months to investigate the apparent concealment of evidence in the process. That position is currently occupied on an interim basis by Emilia Navas.

On October 3, for its part, the Governing Council (Cabinet), led by President Luis Guillermo Solis, suspended the Board of Directors of the BCR, who in turn refused to resign as it had been requested by the government.

The bank’s general manager and advocate of the credit, Mario Barrenechea, was suspended by the BCR Board in July to October 26 to investigate the case internally. In addition, Legislator Víctor Morales Zapata resigned from the PAC on September 5, 2017, for his connection with Bolaños. The resignation followed the request of President Solís and the PAC party.

A special Legislative commission called on Bolaños, to directors of the BCR and even President Solís to appear.

The businessman has defended himself by saying that his intention from the beginning was to break the cement duopoly held by Holcim (a Swiss company) and Cemex (a Mexican company), by importing cement from China at a better price and higher quality. Bolaños accused CRHoy.com of being linked to Holcim and Cemex, to sabotage him.

Where does the case stand today?
In real terms no closer to the truth from when it all started. The suspension of the judicial officials shows an inherent fragility in the country’s judicial system. The BCR has a new board. Politicians are scurrying to distance themselves from Bolaños and with their version of their connection with the businessman, but clearly deny any involvement in the cement deal or the loan.

Bolaños’ wife, who is alleged to have key role in husband’s business, at least with the cement loan, made a forced appeared before the legislative commission, but refused to answer questions.

On Friday, PAC legislator Otton Solis made a bold statement with respect to allegations of President Solis involvement, saying, “the only way that President Solis is not incriminated (for influence peddling) is that Morales Zapata has lied.”

With notes from Wikipedia; Crhoy.com; La Nacion; Casa Presidencial