(S) UNDER ATTACK, HONDURAN VICE PRESIDENT TROUBLED

S E C R E T SECTION 01 OF 03 TEGUCIGALPA 001000

SIPDIS

SIPDIS

STATE FOR EB/ESC, WHA/EPSC, WHA/PPC, AND WHA/CEN
STATE FOR D, E, P, AND WHA
TREASURY FOR JHOEK
NSC FOR DAN FISK

E.O. 12958: DECL: 06/01/2036
TAGS: PREL EPET ENRG PGOV PINR VZ HO
SUBJECT: (S) UNDER ATTACK, HONDURAN VICE PRESIDENT TROUBLED
BY INFLUENCE OF CERTAIN LEFTIST PRESIDENTIAL ADVISORS

REF: TEGUCIGALPA 985 AND PREVIOUS

Classified By: Ambassador Charles A. Ford for reasons 1.4 (b) and (d)


1. (S) Summary: Honduran Vice President Elvin Santos
respects President Jose Manuel "Mel" Zelaya, but fears the
influence that certain leftist advisors surrounding him are
exercising over Honduran policy. Zelaya is trying, in his
view, to "play both sides" but will be unlikely to abandon
his current populist trajectory unless presented with a major
failure. Santos has objected privately to current policies,
which has resulted in his being cut out of the policy-making
process and, in his view, targeted by a conspiracy of his
rivals. Santos very much seeks assistance from any quarter
in convincing Zelaya to abandon what Santos sees as his
improvised and often misguided approach before he squanders
Honduras' best chance for economic growth. That said, he is
concerned that there is little that will prove effective in
moving Zelaya. Post does not see such a dire situation as
does Santos, who feels he is fighting for his political life.
Post notes that despite his rhetoric, Zelaya has supported
nearly all significant U.S. national interests, and is
clearly pro-U.S. in orientation. That said, a number of
Zelaya's advisors have succeeded in engaging him in populist
and leftist-inspired policies that bear close scrutiny and
vigilance. The USG could assist Santos and other GOH
moderates by sending a clear signal about our views on the
GOH's flirtation with Chavez. End Summary.


2. (S) In a surprisingly frank dinner discussion with
Ambassador and EconChief on May 22, Honduran Vice President
Elvin Santos confided his frustrations and concerns over
President Jose Manuel "Mel" Zelaya Rosales' continued policy
improvisations, and his susceptibility to the "hard leftist"
influence of his closest advisors (Liberal Party President
Patricia Rodas, Foreign Minister Milton Jimenez, and others).
Referring to the historic conjunction of debt relief, the
CAFTA free trade agreement, and solid macroeconomic
foundations, Santos at one point castigated the Zelaya
Administration, saying "they are throwing away the best
chance Honduras has ever had."

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Zelaya: "A Great Man"
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3. (S) By turns loyal to his boss and deeply critical of
him, Santos nevertheless was clear that he has a great
respect for Zelaya. Zelaya is "a great man," Santos said,
and one with whom he has a strong personal friendship and
respect. The problem, as he sees it, is that Zelaya has
surrounded himself with leftist advisors, who "know where
they want to go." While Zelaya himself is widely seen as
improvising his policy, Santos said, those who advise him
have clearer goals in mind. This leaves Zelaya -- a decisive
decisionmaker, but one not given to deep policy analysis, in
Post's view -- vulnerable to the attractions of short-term
political expediency. Citing examples, Santos called
Zelaya's handling of the teachers' protests "a disaster" and
lamented the poor GOH handling of energy issues as well
(reported extensively reftels). The one bright spot to date
has been Zelaya's decision to protect the forests, which
Santos considers an unqualified policy success. (Comment:
Interestingly, this is one of the few policy areas in which
Zelaya has taken a leadership role, setting the course of
that policy personally. This suggests that his instincts are
sound, and that he would be better served by seeking his own
counsel than that of some of his current advisors. End
Comment.)


4. (S) It has been clear for some time, Santos told
Ambassador, that Zelaya is seeking a closer relationship with
Venezuelan President Hugo Chavez. Hoping to prevent any
precipitous agreements with Chavez on the margins of the
Vienna Summit, Santos tried to convince Zelaya to send him
instead. Santos had been puzzled and frustrated by Zelaya's
unwillingness to decide on who should go until his return
from the inauguration of Costa Rican President Oscar Arias on

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May 8. Zelaya intended to meet with Chavez in Costa Rica,
and, had he succeeded in doing so, would likely have sent
Santos to represent him in Vienna. Only when Chavez did not
attend the Costa Rica event did Zelaya finally decide to go
personally to Vienna on May 10. When Santos realized this,
he said, "All the pieces fell into place." Santos was
therefore unsurprised by the Zelaya/Chavez press remarks on
oil cooperation following the summit, or by Zelaya's failure
to focus on the biggest story to come out of that event: the
start of European Union - Central American trade talks.


5. (S) Comment: Post concurs with Santos that Zelaya has
sought warmer relations with Chavez for some time. In our
view, however, this is not indicative of ideological kinship.
Zelaya seems drawn to the charismatic Chavez, but has shown
none of his anti-democratic tendencies. Though he too
frequently resorts to the populist political quick-fix
(reftel),Zelaya is not himself a leftist. Zelaya strongly
supported CAFTA entry into force, and expressed disdain for
transitional measures included in the agreement to protect
vested Honduran interests. Zelaya has fully supported USG
efforts to improve immigration and counter-drug enforcement,
and is entertaining a USG request to expand both the Soto
Cano airbase and the U.S. military footprint there. Zelaya
has personally met with nearly every senior USG visitor to
Honduras, and on his inauguration day left Princes and
Presidents waiting in the wings while he met first with the
USG delegation, headed by Attorney General Gonzalez. Zelaya
has visited both the Embassy and the Ambassador's residence
on numerous occasions, for both private chats and formal
policy discussions. Bucking his own political advisors,
Zelaya recently made a public visit to the USS Underwood, the
first U.S. warship to visit the Honduran mainland in two
decades, and he has concluded settlement of a long-standing
land border dispute with El Salvador. Though he has not yet
taken any tough action on the endemic corruption that plagues
Honduras, he fully supports MCC, USAID, and Treasury efforts
at reform and increased transparency. He maintains close and
friendly ties with the Catholic Church's Cardinal Oscar
Rodriguez, and clearly seeks to maintain those same close and
supportive ties with the USG. End Comment.

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"A Conspiracy Against Me Every Day"
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5. (S) Santos said that once he had made it clear to the
inner circle surrounding Zelaya that he did not support their
leftist political agenda, he was effectively shut out.
Santos was forced to hire his own staff, locate his own
office space outside the Presidency, and "even set up (his)
own computer system." Since then, he argues, that inner
circle has been striving to discredit him, organizing marches
and even paying protesters to make allegations against him.
Having received word in early May, for example, that he would
be denounced for "selling out Honduran interests to El
Salvador" by supporting a hydroelectric project on the shared
border, Santos quickly got out in front of the issue by
calling for addressing domestic energy needs first. He said
his quick action stole a march on the protesters -- whom he
claimed had been primed with an anti-Santos message by his
political opponents within the Presidency itself -- and let
him "score a goal." For similar reasons Santos positioned
himself in late May as a hawk on the issue of Honduran F-5
fighters. While his comments at the time were not helpful in
reducing regional rivalries, they were successful in both
appearing to distance him from the USG and presenting him to
the public as "a patriot above all else."

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"There's Nothing You Can Offer Him"
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6. (S) Asked point-blank if Zelaya could be turned from his
current course, Santos said, "Yes, definitely." (Comment:
Post concurs, and suggests POTUS send such a signal during
his June 5 meeting with Zelaya -- see reftel. End Comment.)
Pressed on how that could be accomplished, though, Santos

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struggled for a strategy. Zelaya, he is convinced, is
"playing both sides," waiting to see what strategy works.
Should Zelaya's current leftist-inspired approach fail,
Santos is convinced he would abandon it in favor of a more
orthodox approach. In the meantime, Zelaya will continue to
court Chavez, and will await the results of upcoming
elections in Mexico and Nicaragua. Santos predicts that,
depending on how domestic policy evolves and how these
international elections play out, Zelaya could shake up his
cabinet after December.


7. (S) Santos shared others' concern, however, that Honduras
cannot afford to wait until the end of the year to set its
course, and certainly cannot afford to wait for its social
and economic policies to fail before reforming them. Asked
what the USG could say to Zelaya that might encourage him to
alter his policies sooner, Santos said, "There's nothing you
can offer him that will make him change his mind. You need
to threaten him." That said, Santos conceded, Zelaya is a
proud man who would not react well to overt threats, but he
is inexperienced in international affairs and could miss the
key message in a more subtly made approach. Asked how in
that case to best influence Zelaya, Santos thought carefully,
and sighed, saying, "I don't know. I just don't know." The
anguish in his voice appeared both evident and genuine.

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Comment
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8. (S) Comment: Santos, an upper-class businessman, is not
a politician by background, and is clearly struggling with
the bitter internecine battles being waged inside this
newly-elected administration. He has never had his own
political standing in the party or with the general public,
and was chosen as Zelaya,s running mate as a marriage of
convenience. He has clashed from the beginning with close
presidential advisor and Liberal Party president Patty Rodas.
He faces the dual challenge of defining the Vice Presidency
-- a position which has not previously existed in its current
form -- and also staking out a socio-economic position that
is in conflict with many of those that surround him. Santos
fears that current policies could lead Honduras to disaster,
yet he recognizes that he has little influence over those
policies. He maintains a respect for Zelaya and believes
that he will come around, but only if forced to do so by
events. Unfortunately, every day that passes in which good
policies are not put into place, and every move Zelaya makes
towards a more populist stance, only risks further
squandering Honduras' once-in-a-lifetime opportunity to
succeed. Santos continues to look for allies in his effort
to shift Zelaya's thinking, but after only 100 days in office
the strain is already starting to show.


9. (S) Santos' analysis that Zelaya is being pulled to the
left by Patty Rodas and her allies is shared by many other
observers. With no clear counterweight within the
Administration, some think that former President Carlos
Flores is the only Liberal Party heavyweight who could point
Zelaya in a more centrist direction. The question is whether
Flores' relationship with Zelaya and his close advisors is
close enough to be truly effective in that role. Per reftel,
Post believes that a strong signal from the highest levels of
the USG to Zelaya will help counter the influence of his more
leftist advisors, and strengthen his confidence in his own,
largely pro-U.S., convictions. End Comment.

Ford

Ford