Identifier
Created
Classification
Origin
03TEGUCIGALPA2844
2003-12-04 21:40:00
SECRET
Embassy Tegucigalpa
Cable title:  

GOOD TALKERS, BUT MADURO ADMINISTRATION NOT

Tags:  PGOV KJUS KCRM ECON EFIN PHUM PINR HO 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
S E C R E T SECTION 01 OF 05 TEGUCIGALPA 002844 

SIPDIS

STATE FOR WHA, WHA/CEN, AND WHA/PPC
STATE FOR INL, INL/LP, INR/B, AND INR/AN/IAA,
STATE PASS AID FOR LAC/CEN AND DCHA/DG/ROL

E.O. 12958: DECL: 12/04/2013
TAGS: PGOV KJUS KCRM ECON EFIN PHUM PINR HO
SUBJECT: GOOD TALKERS, BUT MADURO ADMINISTRATION NOT
SERIOUSLY COMMITTED TO FIGHTING CORRUPTION

REF: A. USDAO TEGUCIGALPA IIR 68410026 03


B. TEGUCIGALPA 1615

C. TEGUCIGALPA 2514

D. STATE 312936

E. STATE 319281 (ALL NOTAL)

Classified By: Ambassador Larry L. Palmer;
reasons 1.5(B) and (D).

S E C R E T SECTION 01 OF 05 TEGUCIGALPA 002844

SIPDIS

STATE FOR WHA, WHA/CEN, AND WHA/PPC
STATE FOR INL, INL/LP, INR/B, AND INR/AN/IAA,
STATE PASS AID FOR LAC/CEN AND DCHA/DG/ROL

E.O. 12958: DECL: 12/04/2013
TAGS: PGOV KJUS KCRM ECON EFIN PHUM PINR HO
SUBJECT: GOOD TALKERS, BUT MADURO ADMINISTRATION NOT
SERIOUSLY COMMITTED TO FIGHTING CORRUPTION

REF: A. USDAO TEGUCIGALPA IIR 68410026 03


B. TEGUCIGALPA 1615

C. TEGUCIGALPA 2514

D. STATE 312936

E. STATE 319281 (ALL NOTAL)

Classified By: Ambassador Larry L. Palmer;
reasons 1.5(B) and (D).


1. (S) SUMMARY: In office for almost two years, President
Ricardo Maduro's administration talks a lot about fighting
corruption, particularly when addressing interested U.S.
audiences. Upon close examination, however, one sees little
demonstrable progress in breaking corruption's pervasive grip
on almost all aspects of daily life in Honduras. Moreover,
there appears to be very little genuine interest in
addressing corruption's root causes or the venality of many
Government of Honduras (GOH) officials. Honduras ranked 106
out of 133 countries in a recent survey by Transparency
International, an NGO that tracks international corruption
issues. Only Ecuador, Haiti, and Paraguay scored lower in
the Western Hemisphere. Maduro's inability to effectively
attack corruption has fueled anti-government sentiment among
a general population disillusioned with the president's
lackluster leadership and undelivered reform program.
Discontent with Maduro and his administration continues to
grow, providing fodder for protesters and many others
yearning for a leader with the ability to effect real change
in the fight against corruption. END SUMMARY

-------------- --------------
President Committed Rhetorically, But Not Pushing the Issue
-------------- --------------


2. (S) Candidate Maduro promised the people of Honduras that
fighting corruption would be a top priority of his
administration, but since taking office almost two years ago,
he has done little to reduce corruption's pervasive hold on
Honduran society. Maduro speaks eloquently about

corruption's grip on daily life in Honduras and its
detrimental effects on the Honduran economy, particularly to
U.S. and European audiences (ref D). Rhetoric aside,
however, the President seems unwilling or unable to make the
politically tough decisions necessary to effect a paradigm
shift in Honduras.


3. (S) When pressed on the issue, Maduro squarely places the
blame for his administration's inability to effectively
confront corruption on the shoulders of Attorney General (AG)
Roy Medina, who (according to Maduro) is politically
motivated and simply refuses to prosecute high level
corruption cases. Maduro cites limited resources as another
major impediment to combating corruption, but the GOH's
parsimonious funding of anti-corruption efforts clearly
reflects the priority his administration is itself willing to
put forth.


4. (C) Other aspects of Maduro's anti-corruption strategy
which require congressional action, particularly electoral
reform, have either run out of steam or have been hijacked by
others for their particular political purposes. Although
Maduro's Nationalist Party (NP) does not control a majority
in Congress, the president's inability to muster support for
needed reforms (even within his own party) has begun to
reflect poorly on his leadership ability and bodes ill for
any significant improvements in the near future.


5. (C) Maduro and his Minister of the Presidency Luis Cosenza
recently highlighted to visiting Secretary Powell Congress's
recent passage of a constitutional amendment to eliminate
immunity for all legislative, judicial, and government
officials (still pending ratification) and the selection of
an independent Supreme Court as the most significant advances
in ending a culture of impunity that permits corruption in
Honduras. Cosenza noted how the new Criminal Procedures Code
is streamlining the administration of justice. However, they
both acknowledge that a major figure needs to be jailed to
make a statement, and change the perception of corruption and
impunity in the country (ref D).


6. (C) Cosenza has noted that the GOH has also instituted a
number of other measures to combat corruption including: the
selection of an independent auditing firm to audit executive
branch procurements; the closure of certain businesses for
tax evasion; and an effort to get Congress to enact a law
that requires transparency in the budget process. The GOH
also highlights the transfer of public procurement projects
to the United Nations Development Program (UNDP),although
Post notes that the UNDP in Honduras has itself been accused
of questionable practices, particularly in the awarding of
Hondutel procurement contracts to select European firms.

-------------- ---
Attorney General Irrelevant, Maladroit, or Worse
-------------- ---


7. (S) A hold-over from the previous Flores administration,
in March, 2004, Roy Medina will complete his congressionally
appointed five-year term as AG. While eligible to be
nominated to serve a second term, he is not considered a
possible candidate. Medina entered the Public Ministry (PM)
amid high-hopes that the GOH would be able to begin an
effective campaign to combat corruption by prosecuting
high-profile corrupt individuals. This has not happened.
Rather, Medina's tenure with the PM has been a major
disappointment, characterized by obfuscation, excuses, and
allegations of corruption within the PM itself. Worse, since
Maduro's election, Medina has used his prosecutorial
discretion to foil efforts by Maduro to pursue cases against
bankers who looted their own banks and the national treasury.



8. (S) Clearly, Medina does not have the fortitude or
prosecutorial zeal to pursue high-level corruption cases.
Whether through intimidation, ineptness, lack of resources,
lagging political will, or worse, Medina appears to have no
intention of pursuing allegations of corruption against
prominent individuals, regardless of the evidence presented.
Maduro, at one time, entertained ideas of seeking Medina's
ouster, but decided against directly confronting a Liberal
Party appointee, particularly as it would lead to a
confrontation with Congress. Maduro's strategy now appears
to let Medina's time run out, then seek an individual who
will purportedly more aggressively seek to combat crime in
Honduras.


9. (C) Embassy confronted Medina in June (ref B) concerning
the disappointing results and allegations of corruption
within the PM. At that time, Medina promised Ambassador that
the PM would begin to move forward on the more than 160 money
laundering cases languishing in its files. Medina also
promised action on other high level cases, although he noted
that faulty police work and ineffective judges were hampering
his efforts to bring cases to trial. While there was some
improvement in the short term, paralysis has once again
gripped the PM. The one exception was PM action against
congressman Avila Panchame on narco-corruption charges,
although this appears to have been in direct response to
Embassy pressure.


10. (S) In an orchestrated effort to deflect continued
criticism and avoid a cut-off in USG assistance, Medina did
shuffle a number of high level officials within the PM,
moving Special Prosecutor for Organized Crime Mario
Chinchilla and prosecutor Rafael Soto to the Environmental
Crimes Unit. (Chinchilla was replaced by Doris Aguilar.)
Both Chinchilla and Soto were tainted by accusations of
corruption and possible ties to narcotraffickers, although
the PM has shown no interest in pursuing these allegations.
Also, Soto continues to interfere in drug cases, even though
he has been reassigned. While Aguilar appears to be well
intentioned, these moves have not resulted in any greater
exuberance at the PM to prosecute meaningful cases. There
have been, however, several prosecutions against low-level
police officers.


11. (S) While inaction at the PM is itself a serious concern,
corruption within the judiciary and police also hamper
efforts to improve the administration of justice and rule of
law within Honduras. Although both Supreme Court President
Vilma Morales and Public Security Minister Oscar Alvarez
remain committed anti-corruption watch-dogs, the influence of
drug money, threats from narcotrafficking organizations, and
a general climate of impunity continues to vitiate any
significant improvements.

-------------- --
Judiciary Improving, But Still A Long Way To Go
-------------- --


12. (C) Vilma Morales has been very outspoken on corruption
issues and is working to increase judicial independence in an
effort to, among other things, bolster anti-corruption
efforts. Morales has gone as far as to challenge the public
to come forward with the names of corrupt judges, whom she
has promised to investigate. While many newly appointed
trial judges are performing admirably, the vast majority of
magistrates continue to exhibit old tendencies, namely
dismissing cases for arbitrary reasons, or simply refusing to
bring them to trial. Morales has dismissed some judges, but
Liberals charge that some of these dismissals were
politically motivated. Inexplicably, she also chose to
publicly criticize the Embassy for failing to coordinate with
her regarding a corrupt judge who was recently excluded from
a U.S.-sponsored money laundering training class. She
claimed to be unaware of U.S. concerns, despite the fact that
the Embassy had notified her in advance and that she herself
had expressed concern about this judge's actions and had also
hinted about an investigation of her own. To date, there has
been no Supreme Court follow-though on this.
-------------- --------------
GOH Anti-Corruption Efforts Underfunded and Inadequate
-------------- --------------


13. (U) In an effort to provide greater transparency and more
effectively combat corruption, with the help of international
donors, the GOH created the National Anti-Corruption Council
(NAC) and the Supreme Court of Accounts (Tribunal Superior De
Cuentas - TSC). To date, neither institution has lived up to
its potential.


14. (SBU) The NAC was conceived under the Flores
administration and continued by Maduro. The NAC's charge was
to develop a national anti-corruption strategy and then help
the GOH implement that strategy. The NAC is composed of 14
prominent individuals representing Honduran civil society,
and 14 senior GOH officials; heading the NAC is Roman
Catholic Cardinal Oscar Rodriguez. While the NAC was able to
develop a national strategy, its implementation has fallen
short. Lassitude among the NAC's members, insufficient
funds, and lack of attention from the GOH have all
contributed to the NAC's poor showing. Its most significant
contribution has been to call public attention to corrupt
practices. Most of its credibility emanates from the moral
authority of Cardinal Rodriguez.


15. (C) In an October 21 meeting with PolCouns, NAC Executive
Director German Espinal confided that the GOH was not
committed to the NAC's mission. Espinal outlined the limited
extent of GOH financial support for the NAC: one phone line.
The NAC's small staff, and all other resources, are provided
by international donors. If the international community
withdrew funding from the NAC, it would probably disappear.


16. (SBU) The TSC was intended to function as a national
hybrid general accounting and public ethics office. It was
created in January, 2002, and its organic law was approved by
Congress on January 20, 2003. The TSC placed the Comptroller
General of the Republic, the Directorate of Administrative
Probity (Ethics office),and the Office of State Assets under
one roof. However, since its inception (to Post's
knowledge),the TSC has yet to report a single accounting
discrepancy or to recommend corruption charges against any
individual. In essence, the TSC has had no visible impact on
the fight against corruption in Honduras.


17. (C) Espinal alluded to dysfunctionality at the TSC during
the October 21 meeting with PolCouns. According to Espinal,
the TSC employs close to 600 people (most of them lawyers)
who really contribute nothing to the TSC's ability to
effectively function as a public auditor. Rather, the TSC
seems to have become a jobs program for contacts of senior
GOH officials in need of employment. Still, the Maduro team
trumpets the creation of the TSC as one of its major
accomplishments in its fight against corruption.

-------------- --------------
One Bright Spot - Reduced Corruption in the Armed Forces
-------------- --------------


18. (C) The reduction of corruption within the Honduran Armed
Forces (HOAF) is one of the few success stories in an
otherwise cloudy horizon. Once a bastion of corruption, the
HOAF is now no more corrupt than other GOH entities. Firmly
under civilian control, and with the introduction of
transparency in the budgetary process, the Generals and those
that serve them, have been reduced to low-level graft. The
HOAF, particularly the Navy and Air Force, are also now much
more inclined to effectively participate in drug interdiction
efforts. The HOAF leadership is more inclined to discipline
corrupt officers, even at the highest levels. In fact,
recent rumors suggest that Col. Caceres, commander of the
Honduran Air Force, and his deputy, Col. Cervantes, will soon
be removed for the alleged misuse of funds. Also, at least
two naval officers suspected of involvement in narcotics
trafficking have been removed from their positions.


19. (C) Problems continue with the undercapitalized military
pension fund "Instituto Prevision Militaria" (IPM),as a
result of an extraordinary theft by former Commander in Chief
General Hung Pacheco before his retirement (ref A). It
remains unclear if General Pacheco will ever face criminal
charges for the heist. Grumbling can also be heard from some
senior and mid-level officers upset with rumors that Chief of
the Joint Staff General Isaias Barahona intends to raise the
mandatory retirement age from 30 to 35 years of active
military service. The disgruntled officers claim Barahona is
really raising the retirement age so that he can continue in
his present position. Barahona has stated that the IPM needs
this five-year retirement hiatus to recover and recapitalize
to be able to support the next round of senior retirements.

--------------
Don't Look to Congress for Any Help
--------------


20. (S) Congress continues to resist any meaningful reform
that would lead to the reduction of corruption within
Honduras. The institution itself is riddled with tainted
politicians who view their positions heavily through the lens
of personal wealth creation. This year alone, three members
of Congress have been arrested on drug trafficking charges,
and many others continue to be involved in a wide range of
other illicit activities.

--------------
Designada Genuine, But Lacks Support
--------------


21. (S) Honduran Vice President Armida de Lopez Contreras
(one of three presidential designates in the current Honduran
constitutional leadership structure) appears genuinely
committed to anti-corruption efforts but lacks any type of
following within the GOH. She has publicly clashed with
other senior GOH officials over inaction on fighting
corruption (ref C) which has contributed to her political
isolation. While wanting to do the right thing, Contreras'
lack of a political following renders her unable to force
movement on anti-corruption efforts.

--------------
Lack of Resources Serious Impediment
--------------

22. (SBU) While the GOH, without doubt, could do a better job
of fighting corruption, a lack of resources continues to
seriously impede effective measures to address the issue.
Post notes the technical assistance provided to Honduras by
USAID (ref E) and its positive case-by-case results.
However, the lack of U.S. assistance to fund more effective
work by national legal institutions is a short-coming. Other
international donors are providing some limited
anti-corruption assistance; but more international aid, with
U.S. leadership, is essential to realize the necessary
enforcement effort in this crucial area. Still, these types
of programs (and others funded by the international
community) need to be matched by a similar commitment on the
part of the GOH for them to be effective and have a lasting
impact.

-------------- --------------
Population Losing Confidence In Maduro to Fight Corruption
-------------- --------------


23. (S) Comment: Public support for the Maduro
administration has decreased in recent months. Apart from
serious economic concerns, the general population has doubts
that Maduro is serious about tackling corruption in Honduras.
This lack of confidence is turning into a general
disillusionment with the Maduro administration. There is a
growing sense that the President will not deliver his reform
agenda, with anti-corruption being a major short-coming. It
is not lost on Honduran political observers, and protest
leaders, that known corrupt individuals continue to ply their
trade with complete impunity. On a positive note, no
evidence exists linking Maduro, or most of his ministers, to
personal involvement in corrupt activity. However, Maduro
and his cabinet, while aware of the corruption problem and
the need to address it more effectively, are dangerously out
of touch on this issue, appearing to believe that
anti-corruption rhetoric alone is enough to win the people's
trust. Maduro's inaction on fighting corruption could
contribute to increasingly fertile ground for a strong,
left-leaning populist leader, inclined to seriously challenge
the status quo in Honduras. End Comment.
Palmer