THE DEMISE OF HONDURAS' ANTI-CORRUPTION COUNCIL

C O N F I D E N T I A L SECTION 01 OF 03 TEGUCIGALPA 002123

SIPDIS

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

E.O. 12958: DECL: 09/20/2014
TAGS: PGOV KCOR KJUS KCRM ECON PHUM PINR ASEC EAID HO
SUBJECT: THE DEMISE OF HONDURAS' ANTI-CORRUPTION COUNCIL
YET ANOTHER SIGN OF THE GOH'S WEAK FIGHT AGAINST CORRUPTION

REF: A. 04 TEGUCIGALPA 1690


B. 03 TEGUCIGALPA 2844

Classified By: Political Counselor Francisco Palmieri;
reasons 1.4 (b) and (d).


1. (C) SUMMARY: Once heralded by President Ricardo Maduro as
a success story in the fight against corruption, Honduras'
National Anti-Corruption Council (Consejo Nacional Anti
Corrupcion - CNA) is about to fade from existence. The
Maduro Administration plans to coopt the CNA's operations by
placing it within the GOH bureaucracy. Roman Catholic
Cardinal Oscar Rodriguez will likely resign as head of the
CNA in October rather than remain as the figure-head leader
of an ineffective institution. With little real GOH support,
frustrated members, and funding problems, the CNA never
really lived up to its potential. However, already under
Transparency International's spotlight for its lackluster
achievements in combating corruption to date, the GOH's
proposed reorganization will hasten the CNA's demise and once
again demonstrate the nation's weakness in combating
corruption. Stay tuned for one last media firestorm over who
lost Honduras' war on corruption. END SUMMARY.

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The CNA's Demise
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2. (U) On September 16, Honduran press reported the
resignation of German Espinal, Executive Director of the CNA.
In public comments, Espinal lambasted the GOH for its
lackluster commitment to combating corruption, stating that
publicly the GOH talks about fighting corruption, but "the
reality is quite different." Espinal apparently privately
tendered his resignation to CNA Chairman, Roman Catholic
Cardinal Oscar Rodriguez, in late August. Espinal criticized
the GOH for not funding the CNA, claiming that, rather than
diminishing, corruption is increasing in Honduras. Casting
blame widely, Espinal criticized the GOH, both major
political parties, police, and well-connected businessmen for
allowing a culture of corruption to flourish in Honduras. He
added that the Attorney General's anti-corruption office in
the Public Ministry (PM) and the Supreme Court of Accounts
(Tribunal Superior De Cuentas - TSC) lacks the qualified
personnel, technical expertise, and funding to effectively
fight corruption in Honduras.


3. (SBU) The CNA was conceived under the previous government
of Liberal Party President Carlos Flores and its mandate was
renewed by current President Ricardo Maduro. The CNA's
charge was to develop a national anti-corruption strategy and
then help the GOH implement that strategy. The CNA is
composed of 14 prominent individuals representing Honduran
civil society (some apparently hand-picked by Maduro for
their fidelity to the Nationalist Party) and 14 senior GOH
officials, although in reality far fewer members actually
attended the CNA's monthly meetings or took an active
interest in the organization. While the CNA is officially
headed by Cardinal Rodriguez, Espinal was responsible for its
day-to-day activities.


4. (SBU) The CNA did develop a national strategy, but its
implementation fell short. Lassitude among the CNA's
members, insufficient funds, and lack of any concrete
follow-on action by responsible GOH prosecuting and judicial
officials all contribute to the CNA's poor performance. Its
most significant achievement has been to consistently call
public attention to the nation's most blatant corrupt
practices, such as government inaction against those
responsible for massive bank failures. Most of its
credibility emanates from the moral authority of Cardinal
Rodriguez.

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Cardinal Wants Out
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5. (SBU) In a September 9 meeting between the Cardinal and
the Ambassador, visiting WHA Deputy Assistant Secretary Dan
Fisk, and former Ambassador Cresencio Arcos, Director of
International Affairs for the Department of Homeland
Security, the Cardinal voiced his frustration with the GOH's
commitment to fighting corruption, indicating his desire to
resign as chairman of the CNA. The Ambassador asked Cardinal
Rodriguez to persevere another month until the CNA's future
could be better assured. The Cardinal's chief aide, Father
Juan Jose Pineda also told PolCouns on August 30 that
Cardinal Rodriguez will depart the CNA in October. Pineda
said the Cardinal was unhappy with the lack of concrete GOH
support for the CNA and would not remain as a figure-head
leader of an inactive and ineffective organization.


6. (SBU) The CNA's small staff and other resources have been
provided by international donors. USAID has contributed
roughly USD 25,000 to the CNA and the international donor
community close to another USD 600,000. The GOH's support
has been limited to providing office space in a government
building and one phone line. (Comment: Sadly, international
donors have little to show for this investment. End
Comment.) Maduro, and his Minister of the Presidency Luis
Cosenza talked last year during a Transparency International
country visit of increasing GOH funding for the CNA, but that
never came to fruition.


7. (SBU) International donor support for the CNA faltered due
to the organization's inability to effect change and lack of
a clear institutional mandate as the nation's leading
anti-corruption entity. Donors withheld future promises of
financial support pending a reorganization of the CNA into an
independent watch-dog organization managed by civil society.
The GOH thwarted all civil society attempts at reorganization
for over six months, preferring a plan to incorporate the CNA
into the GOH, thus putting the organization under government
control. This deadlock contributed to recent speculation
regarding the CNA's future. (Comment: In ref B, Post
highlighted the probable demise of the CNA if the donor
community withdrew its support. End Comment).

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CNA Not Alone In Being Ineffective
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8. (C) In recent related public comments regarding the GOH's
commitment to fighting corruption, Special Prosecutor for
Corruption Soraya Morales, (who herself has received
extensive training in the U.S. and whose office receives U.S.
technical support) stated the GOH should close her office
because of its ineffectiveness. While Morales appears to be
intent on bringing corruption cases to trial, she has
privately confided to PolOff that her office's meager
resources make it very difficult to effectively pursue cases.
She also indicated that her office does not receive
sufficient support from top Public Ministry (PM) management,
and in fact, at times is pressured by higher management to
not pursue cases. Apart from the challenges her office faces
at the PM, Morales noted that even when the PM does move
forward on corruption cases, they are inevitably thwarted by
judicial interference or indifference.


9. (SBU) To highlight the PM's ineffectiveness in prosecuting
corruption cases, the Honduran press reports that in ten
years of existence, the PM has only effectively prosecuted
fifteen cases. This statistic includes all corruption cases.
(Note: The GOH has not in recent memory convicted a single
prominent individual on corruption charges, although a
corrupt congressman was convicted on narcotrafficking
charges. End Note.) Currently, the Special Prosecutors'
office for corruption at the PM is staffed with 15 corruption
prosecutors, of which four are specifically dedicated to
financial crimes, plus 13 auditors. These individuals are
responsible for all corruption/fraud cases in Honduras, both
public and private.

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The Partisan Finger-Pointing Begins
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10. (U) Honduras' first Attorney General, Liberal Party
member Edmundo Orellana, who served under the Carlos Reina
administration, also recently joined the fray. In a
September 17 interview with Honduran daily El Tiempo,
Orellana castigated the GOH for its failure to combat
corruption and questioned the GOH's true commitment to
stemming corrupt practices. In the interview, he highlighted
Honduras' failure to be an original signator to the UN's
anti-corruption convention (among the very few Latin American
and Caribbean countries not to sign at the original signing
ceremony),the GOH's unwillingness to fund the CNA, and the
comments of other disgruntled GOH officials tasked with
fighting corruption. These indicators, Orellana claimed,
send a signal to the international community as to where the
GOH truly stands on combating corruption.


11. (U) In defense of Maduro's administration, Minister of
the Presidency Luis Cosenza noted to El Tiempo that the GOH
had no obligation to fund the CNA and that the Maduro
administration was working on a proposal to fund a
reorganized council. (Note: As highlighted in paragraph
seven, this GOH proposed reorganization would stymie the
independence and effectiveness of the CNA. There are also
rumors a reorganized CNA might fall under the Public
Ministry. End Note.) He stated it is the GOH's desire that
the international community continue to support a reorganized
CNA.

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Honduras' Commitment to Combat Corruption Doubtful
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12. (C) COMMENT: Post has commented extensively on the GOH's
weak performance in combating corruption in Honduras and
questioned the GOH's true commitment to doing so (refs A and
B). Recent troubles with the CNA and comments by
disillusioned individuals directly involved in the fight
against corruption illustrate how far Honduras still has to
go.

13 (C) COMMENT CONTINUED: The Cardinal's pending resignation
will certainly spark a media storm of public recrimination
over who is responsible for the lagging fight against
corruption in Honduras. Post notes, however, there continues
to exist broad-based support amongst the Honduran people for
effective and more aggressive anti-corruption efforts. As
noted in ref B, if the GOH were to get serious about
prosecuting a number of high-level, powerful, corrupt figures
it would go a long way toward generating greater public
support for government institutions and help break the
current cycle of cynicism and despair about the inevitability
of corruption in Honduras. END COMMENT.
Palmer