ANTI-CORRUPTION IN HONDURAS--IS RICARDO MADURO

1. (C) SUMMARY: As President Ricardo Maduro enters the
second year of his single four-year term in office, the
looming question in his professed effort to transform
Honduras, economy, judicial system and political environment
is whether or not he is prepared to seek concrete results in
his battle against the country's endemic corruption. While
the President's will appears strong and the Supreme Court has
taken some important initial steps to clean up corruption in
the courts, it remains to be seen if Maduro and his
government, including the Court and the Congress, are
prepared to press for action against major economic and
political figures involved in corrupt practices. Cardinal
Oscar Rodriguez, the Chairman of the National Anti-Corruption
Commission, gave a strong, but qualified, endorsement of
President Maduro's efforts thus far. But the newly formed
anti-corruption entity, the Tribunal Superior de Cuentas
(TSC), is off to a slow start and lacks the necessary
prosecutorial zeal needed in an effective anti-corruption
entity. WHA DAS Dan Fisk directly explored this question
during his February 5-8 visit in meetings with President
Maduro, the President of the Supreme Court, the Ministers of
Foreign Relations and Public Security, Cardinal Rodriguez,
and the TSC. END SUMMARY.



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President Maduro Renews His Pledge to Fight Corruption


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2. (C) In a meeting with Western Hemisphere Affairs (WHA)
Deputy Assistant Secretary (DAS) Dan Fisk originally
scheduled for one hour but extended to two hours, President
Maduro spent much of the first hour outlining his
government's efforts to combat corruption. He highlighted
the following achievements in his anti-corruption campaign:
the selection of an independent Supreme Court; creation of a
transparency commission for the energy contract solicitation;
establishment of a task force to capture white collar
criminals, such as the fugitive bankers involved in
fraudulent banking practices; the first ever removal of
congressional immunity from a deputy (in a rape case); and
adoption of the national budget by Congress in an open and
transparent process. DAS Fisk told Maduro that the U.S. sees
forward progress being made and that the President had a good
agenda. However, he reiterated the importance of holding
people and institutions accountable. Fisk said that for all
he has seen and hears from other sectors of Honduran civil
society, many average Hondurans still did not feel that there
was real change taking place and that Maduro needed more
concrete results against individuals involved in corrupt
activities.



3. (C) Maduro responded that his government is taking a clear
direction against corruption that should be clear to all. He
said that he was acting against vested interests, even though
they wanted to be able to manipulate the system. He also
offered that he was pushing for the review of pending
corruption cases and for establishing a higher level of
transparency in these prosecutions. He cited as another
example his effort to decentralize authority for government
programs to the municipalities and the people who are most
responsible for delivering services so that the public can
hold them more directly accountable for their actions. He
called attention to the poor performance of the Attorney
General (AG) in prosecuting corruption cases. He explained
that the AG is an independent appointee from the Liberal
Party with a seven-year term of office, which does not expire
until next year. Maduro said that the AG was not in sync
with the rest of his government team.



4. (C) DAS Fisk also raised with the President his discussion
with the President of the Supreme Court about Congress'
effort to pass an amendment on constitutional interpretation.
Maduro said he was well aware of the effort in Congress and
flagged another effort there to adopt a new constitutional
method for the removal of constitutionally-designated
officers, such as members of the Supreme Court, the AG, the
TSC, and the Human Rights Commissioner. Maduro expressed

SIPDIS
concern that such power would allow Congress to remove
independent justices who did not follow the political
parties' interests. He added that this proposed change would
also undermine the court's effort on corruption and judicial
reform.



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Supreme Court Is Bright Spot on Anti-Corruption Horizon


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5. (SBU) Supreme Court President Vilma Morales underscored to
WHA DAS Fisk her firm commitment to improving the
administration of justice in Honduras and her willingness to
establish the Supreme Court as a co-equal branch of power
with the Executive and Congress during her term. She said
that the new nominating process put in place to select the
current court and the seven-year term had been the most
important judicial reform measure enacted and had set the
stage for her efforts to further judicial reform by granting
this court far more political independence than any court
that had proceeded it. She acknowledged that judicial reform
was a process and that these changes would take time to
consolidate. However, Morales said it would only be through
a strengthened and independent judiciary that Honduras would
be able to begin attacking corruption. She told Fisk that
she was removing corrupt judges and improving the selection
process for new judges.



6. (SBU) However, Morales warned Fisk that powerful political
interests remained opposed to the Court's efforts. She
explained that the Congress was attempting to amend the
Honduran constitution to give itself the power to interpret
the constitutionality of its laws. She said the Court was
preparing a legal decision in a test case over the
constitutionality of the proposed amendment. Interestingly,
the Attorney General had filed a brief supporting the
Congress' position. Morales told Fisk she thought the Court
would prevail but that it would be difficult and complicate
the Court's relationship with the Congress.



7. (SBU) DAS Fisk encouraged her to continue her efforts to
attack judicial corruption. Morales said she is working to
strengthen the courts and thanked Fisk for U.S. and other
international assistance. She highlighted assistance for
judicial training for judges and the effort to improve the
performance of public defenders, a critical need in Honduras
where the cost of an effective legal defense far exceeds what
the great majority of the population can afford.



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Cardinal Endorses Maduro Efforts but Notes Shortcomings


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8. (C) DAS Fisk thanked Cardinal Oscar Rodriguez for his
leadership of anti-corruption efforts in Honduras and asked
him for his assessment of the problem. The Cardinal said
that Maduro's statements in early January against the
fugitive bankers were a significant step. He added that it
was a good sign that Maduro is committed to fighting back
against the corruption that had created the bank failures.
The Cardinal noted that Honduras was still struggling to
improve its democracy and that corruption was a critical
area. Ambassador asked how the U.S. could help ensure
follow up on the bankers' cases. The Cardinal recognized
that there were leading Nationalist Party figures in the bank
failures who were not being pursued, and added that the legal
system needed to go after them. He too laid blame on the
Attorney General, stating that the AG has not done much in
any of these cases.



9. (C) DAS Fisk replied that the Supreme Court was an
optimistic point but that it appeared that the political and
economic structures in the country were still resisting its
independence. He told the Cardinal that a broader societal
effort against corruption was needed. The Cardinal agreed
that the Supreme Court was an important start. However, he
claimed that his main concern now was the Congress. He said
there needed to be an effort to reform the Congress: there
was a "dark side" there that defends only its own interests.
He relayed an anecdote of the direct involvement of a
prominent Liberal Party deputy in extorting a USD 3 million
commission for his son's law firm from a major health care
development project.



10. (C) In response to a question about the goals of the
National Anti-Corruption Commission he chairs, the Cardinal
explained that he wants to get the Commission more involved
in social auditing. He also shared that his life had been
threatened for his work on corruption. Ambassador offered
the full support of the U.S. for the Cardinal's efforts. The
Cardinal said that U.S. visa revocations were an important
tool and had an important impact on people. The Ambassador
responded that the Embassy would continue canceling visas.
He also said the Embassy was prepared to pursue people who
were involved in intimidation as well.



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Stressing Anti-Corruption to Foreign/Security Ministers


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11. (C) DAS Fisk also stressed the importance of
anti-corruption activities to Minister of Foreign Relations
Guillermo Perez-Cadalso Arias and Minister of Public Security
Oscar Alvarez. He told them it was essential that the GOH
step up its campaign against corruption and produce some
tangible results. FM Perez-Cadalso, a justice on the
previous Supreme Court, noted that the current court was not
tainted by a politicized selection process as previous courts
had been and assured Fisk the Maduro government would push
the Court for success in this area. Ambassador added that
the support of the Maduro administration was critical. He
said that it takes courage to move the judicial system
forward. DAS Fisk and Ambassador gave assurances of complete
U.S. support for these efforts. FM Perez-Cadalso also
focused on the need to view the judicial system as a whole.
He said that judges cannot do it alone; prosecutors, police
and the penal system were also critical parts. He admitted
that coordination among these entities did not work as well
as it should. DAS Fisk urged the GOH to work with the U.S.
on anti-corruption and called attention to Millennium
Challenge Account (MCA) criteria, which would weigh
government's performance in this area. He said fighting
corruption was fundamental to U.S. policy objectives in
Honduras.



12. (C) In his meeting with Minister of Public Security Oscar
Alvarez, Fisk urged Alvarez to take action against corrupt
police, to send a strong signal about impunity by arresting
fugitive policeman Juan Carlos "Tiger" Bonilla, and to act
carefully against whistle-blowers, such as ex-Chief of Police
Internal Affairs Maria Luisa Borjas. He also encouraged
Alvarez to address the problem of extra-judicial killings of
youth and trafficking in persons. Alvarez pledged his full
cooperation in the war on corruption and to improve the
capabilities of the internal affairs unit. He acknowledged
that the police force was a weak institution and that current
law severely hamstrung his efforts to remove corrupt and
under-performing officers. He assured Fisk that the GOH was
investigating extra-judicial killings and that the police
were becoming more involved in law enforcement operations
against alien smugglers and traffickers of people.



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New Anti-corruption Entity Off to a Slow Start


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13. (SBU) The meeting with the new three-member Tribunal
Superior de Cuentas (TSC - Superior Accounting Tribunal)
proved disappointing. DAS Fisk probed the TSC members for
their views on how the TSC can operate more effectively
against corruption, after acknowledging the difficult job
they face starting up a newly created institution. He
pointed out that the TSC would be on the front line of the
effort against corruption and urged them to more effectively
align resources to anti-corruption priorities.
Unfortunately, he found the panel had neither a broad
anti-corruption vision nor a strong desire to lead a head-on
charge against government corruption. TSC President Renan
Sagustume explained that the group has been in office less
than a month and is in the process of consolidating the
operations of three previously independent government
institutions. His technical presentation focused almost
entirely on the bureaucratic challenges facing the TSC --
hiring new staff, deciding on who to keep from the old staff,
locating the existing files (many of which are lost) and
defining the necessary ethics standards that they will apply
in their work. He asked for U.S. assistance in developing
mechanisms for sharing information about bank accounts in the
U.S., for technical training for the staff in investigating
corrupt practices, and for help in developing a better
auditing function in the organization.



14. (SBU) Fellow TSC commissioner, Fernando Montes, was
uninspiring in his explanation of the process needed to
review government officials' financial disclosure forms,
unconsciously revealing more of a preoccupation with the
electronic storage of the forms rather than any interest in
actually reviewing the forms for accuracy or making them
publicly available. He stated without any hesitation that he
was more interested in securing the forms' information from
potential kidnappers or other criminal elements than in using
them as a transparency tool to hold public officials
accountable for their actions in office. Montes did point
out that the TSC will establish a "follow through" unit to
follow cases referred to the Attorney General's office and
Solicitor General's office for prosecution. He noted that
they had already referred 25 pre-existing cases but that the
AG had only taken action on one case thus far.



15. (SBU) Only former Liberal Party Congressman Ricardo Galo
Marenco, who resigned from Congress to take this post, made
any mention of leading the fight against corruption in the
country, assuring DAS Fisk that the TSC would fully apply
Honduran law and act firmly against corruption so that
Honduras has credibility in its effort against this problem.
Notwithstanding this professed commitment, his tone and
language echoed the hollow promises to stop corruption which
one hears all too often in the National Congress.



16. (C) COMMENT: Media coverage of DAS Fisk's visit squarely
placed the corruption issue back on the public agenda and
made it obvious to all that this issue remains a top policy
priority for the U.S. President Maduro was taken aback by
Fisk's comments that the Honduran people want to see more
concrete results. Obviously he feels that he has made more
progress on this issue than any previous government and was
surprised that many are questioning his results. Maduro did
present a persuasive case that anti-corruption remains a top
priority for his administration; but privately we have heard
that he is already backing away from aggressively pursuing
bankers involved in the bank failures. He has couched his
reticence in terms of not wanting to undermine the stability
of and public confidence in the financial sector. The lack
of any prosecutorial zeal at the TSC was also disappointing.
However, the unmistakable message delivered by DAS Fisk's
visit is that the U.S. wants to see some big fish caught in
the GOH's anti-corruption net, even if it does have major
holes in it.
Palmer