COLOMBIA SAYS U.S. FUNDS DIDN'T PAY FOR REBEL EXTORTION

A senior Colombian official said that the government has no evidence
to suggest that any U.S. funds have gone to pay extortion demands by
Colombian rebels groups.

The Dallas Morning News, citing government sources, reported Wednesday
that Colombia's largest rebel group had received payments from
contractors carrying out large-scale social projects in southern
Colombia as part of Plan Colombia. The $7.5 billion counternarcotics
program is co-sponsored by the United States and other foreign
governments, although the vast majority of funding is provided by Colombia.

A headline accompanying Wednesday's story stated that U.S. funds might
have been paid to the rebels under Plan Colombia. Neither U.S. nor
Colombian officials have suggested that any U.S. aid, which totals
$1.3 billion, has been paid to the rebels.

Gonzalo de Francisco, chief adviser to President Andres Pastrana for
social projects under Plan Colombia, said in an interview that the
government has not received any formal complaints from contractors
about extortion demands from the rebels. He said he could not deny
that the nation's largest rebel group, the Revolutionary Armed Forces
of Colombia, had made such demands.

"We do not have any concrete denunciations about this," he said. "I
cannot deny that this has happened. It has happened throughout
Colombian history, in all parts of the country. Until the people of
this country begin standing up to it, the practice is not going to
stop."

A primary goal of Plan Colombia is to use a mix of military firepower
and social spending to help rid Colombia of drug-crop cultivation, a
primary source of profits for Colombian guerrilla groups.

Government sources said that members of the Revolutionary Armed Forces
of Colombia, or FARC, had approached contractors with demands for
payments in order to avoid being attacked while carrying out Plan
Colombia projects.

The extortion demands ranged from 10 to 30 percent of the contract,
the sources said. Mr. de Francisco said the contractors who are most
vulnerable to extortion demands are those carrying out rural projects,
most of which do not involve U.S. or other foreign government funding.

"These projects are paid by us, from our own funds. The ones who
undertake these projects are the ones most exposed to those who want
to carry out illegal actions," such as extortion, he said.

He also insisted that strict accounting procedures are being enforced
to ensure that neither Colombian nor international funds are masked or
otherwise disguised to cover protection payments to the rebels.

"The contracts are being negotiated at commercial prices and are open
to public [scrutiny]. There is very little possibility for these
accounts to be inflated to cover the costs of payments to the
guerrillas," Mr. de Francisco said.

In a separate communique, the Colombian government said that it
"rejects the demand or the payment of extortion money in carrying out
any official or private activity or contract, as it is openly against
the laws of the country.''

Mr. de Francisco added that obstacles posed by rebel groups served
only to delay projects that are widely popular and beneficial to the
rural farmers whom the rebels claim to be supporting.

"All of these works are the result of years and years of government
absence in the zone. These are projects that the people want," he
said. "It worries us that, with all of these projects we are doing for
the people, the impression is being given that more is going to the
rebels than to the people themselves. It is not true, and what we
don't want is that such reports generate criticism from outside. ...
That's not what we want."