BY STEVEN DUDLEY

SAN JOSE, Costa Rica - It is somehow fitting that Abel Pacheco, president of this long peaceful nation, is also a psychiatrist. Facing a string of corruption allegations against two former presidents -- one of whom went on to head the Organization of American States -- Costa Rica is collectively settling into the couch to reflect on the scandals that soil its image as the Switzerland of Central America.

''To think that nothing is wrong is a defense mechanism that's called denial and is used by some people who want to continue with their daily lives and don't want to face the facts,'' Pacheco told the media last week. He was talking about his predecessor and now former OAS Secretary General Miguel Angel Rodríguez, who resigned Friday, a week after allegations emerged that he took $140,000 from a French company as a ''prize'' for a government contract.

But when he spoke, Pacheco might as well have been talking about the whole country. ''It's not very effective,'' the president continued, as if he were speaking of a patient, ``because the reality always catches up to the person in spite of his denial.''

Costa Rica has long painted itself as the cleanest, safest and least corrupt of the Latin American family. And why not? Transparency International, the independent organization that tracks graft around the world, consistently ranks it above its neighbors. Guidebooks and foreign governments alike tout the country's hospitality, development and high literacy rate.

Peace and civility are a matter of pride here. It's one of the few countries in the world without a standing army and has regularly hosted peace talks throughout the war-stricken region. Former President Oscar Arias won the Nobel Peace Prize for his efforts to forge peace in Central America.

''Costa Rica is a Central American success story.'' The Central Intelligence Agency's World Fact book beams. ``Only two brief periods of violence have marred its democratic development. . . . The standard of living is relatively high. Land ownership is widespread.''

TWO TRUTHS

But those who know it well understand that there are two truths about this small nation of four million people.

''There's a level of bifurcated thinking,'' said Carlos Denton, regional head of CID Gallup polls. ''Costa Ricans, when they go abroad, they present themselves as clean-living, the Switzerland of Latin America. But while they're here, they're all well aware that corruption is going on.'' Denton, who also heads the Costa Rican-American Chamber of Commerce, says he has not done business with the government for 10 years because he believes kickbacks and bribes are part of the costs.

''It's a Switzerland,'' said Larry Birns, the director of the Washington, D.C.-based Council on Hemispheric Affairs, a policy institute. ``It's a Switzerland that thrives under the table.''

While Costa Ricans are not completely unaware that corruption is occurring, they still seemed surprised that it may have reached the upper echelons of public administration.

''They were the people who had the country's future in their hands, and look what they've done,'' said a 30-year saleswoman, Pilar Fallas. ``I feel defrauded.''

Rodríguez has denied any wrongdoing but has not said when he would return to Costa Rica to face the allegations. In the meantime, more allegations that Rodríguez took money from foreign companies have emerged.

In addition to the charges against Rodríguez, former President Rafael Angel Calderón is facing accusations that he received up to $500,000 from a loan the Finnish government gave to the Costa Rican government to buy medical equipment from a local company with Finnish connections.

Calderón has been barred from leaving the country, and there are already several public officials in jail. One of them, a former cabinet minister for Rodríguez, provided the key testimony against his old boss that was leaked to the media and jump-started his scandal.

Even Pacheco is facing questions about contributions to his electoral campaign in 2002 -- $500,000 from Taiwan and $100,000 from Alcatel, the same French firm linked to the Rodríguez allegations.

''I feel like I was deceived,'' said Miriam Aroyo, a 49-year-old hairdresser. ``When I was little, we didn't see what we're seeing now. Now they're catching the big guys, and the ones who pay for it are the poor people.''

The scandals are already affecting the public's perception of government officials.

A CID Gallup poll published by the newspaper La Republica this week showed that 90 percent of those polled said they did not trust any politicians. In another poll commissioned by Demoscopia and the daily Al Día, 64 percent of the respondents said they would not vote for any member of the current political parties.

As they have done in other Latin American nations, university students are planning marches to protest the recent eruption of graft. Corrupt politicians are also beginning to take the fall for everything from failing public institutions to a rise in crime and poverty rates.

LOSS OF FAITH

''They say the social security agency is broke,'' said Gustavo Cardión, a 74-year-old gardener. ``It's broke because they've stolen all the money.''

Pacheco's government has moved quickly to stop the bleeding. It was his letter to Rodríguez last week, in which Pacheco urged him to answer the allegations or resign, that started the flood of pressure against the OAS official. Pacheco also announced a new anticorruption law last week.

But the scandals seemed to have left an indelible print on the psyche of this country.

''You give your vote to a politician and then realize he's stealing your money,'' said 18-year-old high school student Leroy Sánchez. 'I talk to my friends now and we say, `How are we going to trust the politicians?' ''

It's a question that Costa Ricans are not used to asking.