U.S. denies Costa Rica aid in dispute over land

SAN JOSE, COSTA RICA — SAN JOSE, Costa Rica -- In an unusual and controversial move, the United States has been using its economic muscle to pressure this tiny Central American democracy into settling several land disputes. The likely beneficiaries include some U.S. businessmen whose property here figured in the Iran-contra affair.

State Department officials denied that the U.S. government's primary motive was to reward the owners of land that was used for a secret military airstrip. Some of the condemnation disputes go back to the 1970s, and U.S. officials contend they would never be settled without some pressure on the Costa Ricans.


The businessmen own about 39,000 acres on a remote Pacific Coast peninsula where U.S. operatives, led by then-Lt. Col. Oliver L. North, established a military airstrip during the mid-1980s as part of the covert war against Nicaragua.

Costa Rican officials say the land on the Santa Elena peninsula is an environmentally significant "endangered ecosystem" and xTC want to condemn the land for a national park.


The owners are fighting Costa Rica's efforts. The U.S. government has backed the owners by withholding $10 million in foreign aid and threatening to block hundreds of millions of dollars in loans to Costa Rica from international lending institutions.

U.S. officials say the financial pressure undertaken during the Bush administration also is meant to compel Costa Rica to reach settlements with the U.S. owners of six other properties involved in lengthy condemnation proceedings.

President Rafael Angel Calderon has called the financial squeeze an offense against Costa Rican sovereignty, and other critics accuse the United States of money-talks diplomacy, probably to reward the owners for making their land available for the contra-supply airport.

Roberto Cruz, a journalist and political activist, said the action violated the charter of the Organization of American States, which prohibits "the use of coercive measures of an economic or political character."

Sen. Jesse Helms, R-N.C., who championed the contra cause, has taken a leading role in pressuring Costa Rican officials.

Major partners in the land are Joseph Hamilton, a North Carolina textile manufacturer who is friendly with Mr. Helms; oilman Edward Carey, brother of former New York Gov. Hugh Carey; and George Livanos, a Swiss businessman. They want to build a resort on the land.