HONDURAN AG NAVARRO SEEKS SOLUTION TO PARALYSIS AT

C O N F I D E N T I A L SECTION 01 OF 03 TEGUCIGALPA 002496

SIPDIS

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

E.O. 12958: DECL: 11/02/2014
TAGS: PGOV KCOR KJUS KCRM ECON PHUM PINR EAID HO
SUBJECT: HONDURAN AG NAVARRO SEEKS SOLUTION TO PARALYSIS AT
THE PUBLIC MINISTRY OVER CORRUPTION CASES CRISIS

REF: A. TEGUCIGALPA 2434

B. TEGUCIGALPA 2356

C. TEGUCIGALPA 2123

D. TEGUCIGALPA 1690

E. TEGUCIGALPA 729

F. TEGUCIGALPA 400

Classified By: Ambassador Larry L. Palmer;
reasons 1.4 (b) and (d).


1. (SBU) SUMMARY: Negotiations continue at the Public
Ministry (PM) between Attorney General Ovidio Navarro and
federal prosecutors (fiscales) after many fiscales walked off
the job October 19 following Navarro's termination of ten and
transfer of six others for their public criticism over the
PM's decision to drop all pending corruption charges against
ex-president (and National Party leader) Raphael Leonardo
Callejas and a number of Callejas associates (ref B). The PM
has remained paralyzed since then as both sides continue to
exchange charges of political cronyism and incompetence.
Representatives of both sides are seeking a workable
compromise as the unrest moves into its third week. Since
its inception ten years ago, the PM has demonstrated little
ability to tackle high-profile criminal cases in Honduras.
END SUMMARY

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Navarro Butts Heads With Career Prosecutors
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2. (U) Negotiations continue at the Public Ministry (PM)
between Attorney General Ovidio Navarro and prosecutors
(fiscales) after many fiscales walked off the job October 19
due to Navarro's decision to terminate ten and transfer six
others for their public criticism over the PM's decision to
drop all pending corruption charges against ex-president (and
National Party leader) Raphael Leonardo Callejas and a number
of Callejas associates (ref B). Navarro justified the
decision based on his view that the terminated fiscales were
politically motivated and/or incompetent. The PM has
remained partially paralyzed since then as both sides
continue to exchange charges of political cronyism and
incompetence. Fiscales originally called for Navarro, also a
National Party member, to resign, something he has stated
both publicly and privately he will not do. Navarro claimed
he would not reverse his earlier decision to follow-through
on removing insubordinate fiscales although both sides appear
to be moving toward a compromise, especially after an October
27 ruling by the Constitutional Chamber of the Honduran
Supreme Court that the PM did not have the authority to drop
the cases against Callejas and his associates.


3. (C) Eight of the ten fiscales who were fired agreed to
receive severance packages rather than return to the PM and
Navarro agreed to halt the transfer of the six others. The
final sticking points revolve around fiscales' demands that
Navarro sack Jaime Banegas, Director of Fiscales and
reinstate the two other fiscales who were dismissed.
Fiscales claim that, since assuming the position of Director
in February, Banegas has acted inappropriately by putting
pressure on fiscales to drop corruption cases against
politically-connected individuals and obstructing business at
the PM by transferring fiscales to other positions due to
their desire to push corruption cases forward. According to
news reports, Banegas officially made the decision to drop
all corruption cases against Callejas since Navarro had
recused himself due to his past legal representation of
Callejas. Post believes, however, that Navarro ordered the
cases be dropped.


4. (SBU) Navarro agreed to form a commission, which includes
representatives of both the PM and the fiscales, to
investigate charges that Banegas has acted inappropriately.
Navarro subsequently disbanded the Commission when he
received word that a few members intended to publicize the
charges against Banegas in the name of transparency. Navarro
saw the Commission's role as gathering facts and providing a
recommendation to him. He reserved the right to make the
final decision on keeping or dismissing Banegas. Navarro has
said that he will discuss the Banegas matter directly with
the Association of Fiscales. For their part, the fiscales
have said that they will maintain pressure on Navarro through
a variety of measures. (COMMENT: Prior to the crisis, Post
had fielded complaints from fiscales concerning Banegas'
heavy-handed approach and questionable behavior. END
COMMENT.)

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Navarro Meets With DCM
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5. (C) On October 29, DCM met with Navarro regarding the
situation at the PM. Navarro insisted that his decision to
discipline certain fiscales was based on his view that they
were not competent and had acted in an insubordinate manner.
He particularly mentioned Soraya Morales, head of the PM's
anti-corruption office, as an individual who was not doing a
good job and had a political agenda. (COMMENT Morales was
not among the fiscales affected by the PM's recent decision,
as she was in Japan at the time of the firings, although a
few who worked for her were dismissed. Morales called
publicly in August for the PM to close its anti-corruption
office due to the PM's inability to prosecute meaningful
corruption cases. She also frequently confided to Post her
frustration in not being able to move cases forward;
something she blames on the PM's leadership. In point of
fact, many of these dismissed cases had not moved forward
during the leadership of the two prior Liberal Party Attorney
Generals. END COMMENT) Navarro also noted the partisan
manner in which the anti-corruption office conducted its
business, noting that they were preparing cases only against
Nationalists, including presidential pre-candidates Pepe Lobo
(President of the Congress) and Miguel Pastor (Mayor of
Tegucigalpa). Charges were also being developed against Oscar
Kilgore (Mayor of San Pedro Sula, the commercial center of
Honduras).


6. (C) Navarro assured DCM that he wants to make progress in
fighting corruption and that over the next few months he
expected several high-level cases would be brought forward.
Navarro continued to insist, however, that the Congress must
act on pending legislation outlining implementing procedures
for how individuals who previously enjoyed immunity would be
prosecuted. The current draft legislation before Congress
outlining procedures for how to prosecute some 400 high-level
government officials previously immune from prosecution calls
for these cases to be brought before a magistrate of the
Supreme Court for a preliminary determination of the merits
of the case. If, and only if, a Supreme Court justice
determines a case should be brought forward can an individual
be prosecuted. If this process is implemented in a
transparent and impartial manner, this could be a positive
development. However, if past history prevails, this
legislation offers corrupt individuals with contacts in the
Supreme Court (another politicized institution not known for
its zeal in fighting corruption) an opportunity to quash
prosecutions altogether.

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PM In The Spotlight
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7. (C) On October 27, Ambassador and DCM raised U.S. concerns
with President Maduro about perceptions that Honduras is
backsliding on anti-corruption efforts and the recent
decision by the PM to dismiss corruption cases against
leading political figures (ref A). Also, representatives of
the G-17 donor countries and cooperating institutions
(including the Ambassador) met with a Honduran Congressional
delegation headed by President of the Congress Porfirio
"Pepe" Lobo. In this meeting, G-17 representatives expressed
their concern over the situation at the PM and their desire
to see Honduras make meaningful progress in the fight against
corruption.


8. (U) A number of civil society organizations and the
Popular Block (a configuration of leftist groups) staged
peaceful protests outside the PM demanding action against
corruption in Honduras. These groups have also been joined
by sympathetic fiscales. To make a point that speaking out
against corruption was taboo at the PM, striking and
dismissed fiscales lined up outside the PM's headquarters on
November 2 dressed in black with tape across their mouths.

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PM Needs to Make Impact on Fighting White-Collar Crime
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9. (SBU) COMMENT: In its ten-year history, the PM has never
been effective at prosecuting high-profile white-collar crime
in Honduras. Whether through lack of resources, political
will, incompetence of poorly-trained front-line prosecutors,
or negligence, the institution seems unable to make concrete
progress on this front. This inaction has led many in
Honduras to view the institution with justified skepticism
regarding the PM's ability to make a dent in the fight
against corruption. If the PM were to move a few high-level
cases successfully through the system, it would go a long way
toward assuring the people of Honduras and the international
community that the government is able to fight corruption.
END COMMENT.
Palmer