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OIJ investigation into road works corruption leads to inquiries in Panama

President of the company was listed by Forbes as one of the three richest men in Costa Rica

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30 September 2023 - At The Banks - Source: BCCR

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QCOSTARICA – The prestige of the company of some of the richest men in Costa Rica hangs by a thread. For many, the MECO Construction Company logo is very easy to recognize on Costa Rican highways, as it has to its credit a large number of State road construction and maintenance contracts.

MECO was among the simultaneous raids on Monday by the OIJ investigating corruption in Costa Rica’s public works

However, the June 14 raids and arrest of representatives of companies and state officials for alleged bribery payments, including Carlos Enrique Cerdas, president of MECO, brought to mind a series of scandals in which their company has been involved.

In 2019, Forbes Central America magazine included Carlos Enrique Cerdas on its list of the 100 richest entrepreneurs in the region, who stood out as one of the three millionaires in the country thanks to his construction company MECO, which according to the publication has income annual of about US$689.6 million per year.

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The report published in 2020, which shows that Forbes classified the company as “the largest construction company in Central America, occupying the 10th position in the Latin American ranking, according to the CLA50 ranking (of Latin American construction), and in addition to Costa Rica, it has operations in Nicaragua, Panama, Colombia and El Salvador”.

In recent years it has been one of the most powerful contractors of public construction works, which include government works, public institutions, and local governments, but today that work is clouded by doubts, the arrest of its president, and an investigation in in progress.

But doubts and questions are not something new. The company appeared in 2016 in the Panama Papers with a structure of shares of companies founded in tax havens.

At the time it was announced that they were clients of Mossack Fonseca, a law firm through which they carried out movements of money related to the payment of insurance and reinsurance.

In the investigation carried out on the Panama Papers, a company structure was discovered in the name of MECO. (Photo: File)

In the best style of the Russian Matryoshka dolls, which each time one is opened another comes out, the investigation of the Panama Papers showed how MECO was consolidated with a series of public limited companies, both in Costa Rica and abroad, in which its owner, Carlos Enrique Cerdas was the final holder of the shares.

In 2018, Cerdas reached an agreement with the Panama Prosecutor’s Office and was excluded from the accusation due to the high-profile Blue Apple case, related to the payment of bribes in exchange for the speeding up of Procedures and disbursements of the Panamanian State for construction companies.

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The investigation currently led by Costa Rican justice against MECO could also be related to Panama, whose authorities look into alleged company´s financial crimes and in the Panamanian investigation for alleged corruption and payment of bribes, Blue Apple (Manzana Azul), named in the Panama Papers for establishing a partnership structure in the Virgin Islands through the questioned Mossack Fonseca.

Panama´s Financial Affairs Unit (FAU) belonging to the President´s Ministry, is looking for possible funds being transferred from San José, Costa Rica, to Panama City and vice versa, as well as dates, recipients and the banks used in the transactions, the Estrella de Panama newspaper published.

MECO is headquartered in Costa Rica and present in many Central American countries, carried out projects in Costa Rica during the last decade and was involved in different lawsuits resulting in scandals.

Misappropriation of funds can qualify as an international crime, if Cerda´s and his associates´ unjustified wealth growth is confirmed, in coincidence to contracts for overrated works in Panama.

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After the scandal of Brazilian transnational Odebrecht, the Costa Rican company became the most important contractor of infrastructure works in Panama, after participating in the consortium that carried out the widening of the inter-oceanic canal.

Carlos Cerdas is the president of the MECO construction company, who is today being investigated by the Costa Rican Prosecutor’s Office. Photo

MECO was founded in 1977 at the hands of Ángel Américo Cerdas and his son Carlos Cerdas, who assumed the corporate presidency in 1987.

In the 1990s, the company entered the Nicaraguan and Panamanian markets and soon spread to the rest of the Central American region and Colombia, maintaining their operational headquarters in Costa Rica.

Some of its most outstanding projects have been works in the Panama Canal, the PAC3, PAC4 and the Borinquen Dams. In Colombia, it was awarded more than US$2 billion in works for the development of the Cartagena –Barranquilla and Circunvalar de la Prosperidad concessions in Colombia, Autopista Conexion Pacífico 3 and Proyecto Honda– Puerto Salgar, and Girardo.

According to MECO’s official website, the company currently has 44 projects in Costa Rica, 27 in Panama, 7 in Nicaragua, 2 in El Salvador and 10 in Colombia.

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