Identifier
Created
Classification
Origin
06TEGUCIGALPA1345
2006-07-28 19:35:00
CONFIDENTIAL//NOFORN
Embassy Tegucigalpa
Cable title:  

HONDURAN PRESIDENT ZELAYA: JULY BETTER THAN JUNE,

Tags:  PREL PGOV ECON ETRD KCRM SMIG SNAR PINR VZ HO 
pdf how-to read a cable
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C O N F I D E N T I A L SECTION 01 OF 02 TEGUCIGALPA 001345 

SIPDIS

NOFORN
SIPDIS

STATE FOR D, P, AND E
STATE FOR WHA, WHA/PPC, WHA/EPSC, WHA/AND, AND WHA/CEN
STATE FOR EB, INL/LP, AND INR/B
STATE PASS AID FOR LAC/CAM
NSC FOR DAN FISK
TREASURY FOR JHOEL

E.O. 12958: DECL: 07/28/2036
TAGS: PREL PGOV ECON ETRD KCRM SMIG SNAR PINR VZ HO
SUBJECT: HONDURAN PRESIDENT ZELAYA: JULY BETTER THAN JUNE,
BUT WHAT LIES AHEAD FOR DISJOINTED ADMINISTRATION?

REF: A. TEGUCIGALPA 1331 AND PREVIOUS

B. TEGUCIGALPA 1329

C. TEGUCIGALPA 1179

TEGUCIGALP 00001345 001.4 OF 002


Classified By: Ambassador Charles A. Ford;
Reasons 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 02 TEGUCIGALPA 001345

SIPDIS

NOFORN
SIPDIS

STATE FOR D, P, AND E
STATE FOR WHA, WHA/PPC, WHA/EPSC, WHA/AND, AND WHA/CEN
STATE FOR EB, INL/LP, AND INR/B
STATE PASS AID FOR LAC/CAM
NSC FOR DAN FISK
TREASURY FOR JHOEL

E.O. 12958: DECL: 07/28/2036
TAGS: PREL PGOV ECON ETRD KCRM SMIG SNAR PINR VZ HO
SUBJECT: HONDURAN PRESIDENT ZELAYA: JULY BETTER THAN JUNE,
BUT WHAT LIES AHEAD FOR DISJOINTED ADMINISTRATION?

REF: A. TEGUCIGALPA 1331 AND PREVIOUS

B. TEGUCIGALPA 1329

C. TEGUCIGALPA 1179

TEGUCIGALP 00001345 001.4 OF 002


Classified By: Ambassador Charles A. Ford;
Reasons 1.4 (b) and (d).


1. (C) Summary: Honduran President Jose Manuel "Mel" Zelaya
and his Administration have now been in office six months.
Zelaya continues to act like a populist, although he makes
fewer obvious errors, fired his most incompetent minister
(the Minister of Health),and has, since the Embassy's U.S.
Independence Day reception, sought to improve the tone of the
bilateral U.S. - Honduran relationship. The energy issue
writ large (including the petroleum bid whose terms of
reference were finally announced for public comment on July
25, the alleged sale of the Honduran gasoline distributor
DIPPSA to a possible Venezuelan front company, and continuing
grave problems at the parastatal electricity company, ENEE)
has continued to dominate GOH and Embassy concerns. The
Embassy strategy has been to conduct an intense dialogue with
senior GOH officials, while at the same time engaging with
other power players. We hope they can provide more moderate
advice to Zelaya, and apply countervailing pressure on the
more radical elements of the Administration, to encourage
responsible behavior. A private poll has shown that the
Embassy is viewed more positively than the Zelaya
Administration. Miscellaneous protests this week have
encouraged the belief that, as with the Maduro Administration
that preceded it, if a group can mobilize enough protesters

to block a major road, the GOH will grant it concessions with
no attempt at dislodging them. This does not bode well for
continued Honduran compliance with IMF targets, given the
likelihood that the GOH concessions to teachers will continue
to stave off more protests from the powerful teachers unions.
End Summary.


2. (C) Honduran President Jose Manuel "Mel" Zelaya and his
Administration have now been in office six months. Zelaya
continues to act like a populist, but he has seemed to put
his June stumbles behind him. He fired his most obviously
incompetent minister (the Minister of Health),in what
appeared to virtually everyone except the minister's
loyalists at the ministry as a long overdue step. Zelaya
forged a more positive relationship with the Embassy at the
U.S. Independence Day reception when he broke with protocol
and tradition and gave the GOH's remarks alongside the
Ambassador, instead of the Foreign Minister as in years past.
His positive statement evoked the U.S. Founding Fathers and
President Abraham Lincoln, and went a long way toward
smoothing over the public disputes that had bedeviled the
bilateral relationship since Zelaya's public
misrepresentations of the results of his June 5 meeting with
POTUS.


3. (C) The energy issue writ large (including the petroleum
bid whose terms of reference were finally announced for
public comment on July 25, the alleged sale of the Honduran
gasoline distributor DIPPSA to a possible Venezuelan front
company, and continuing grave problems at the parastatal
electricity company, ENEE) has continued to dominate GOH and
Embassy concerns (see ref A and previous for extensive
reporting on these issues). In a reliable July 6 private
poll, a small plurality said the GOH is responsible for fuel
prices (not international forces or transnational oil
companies). A similar plurality approves of Zelaya's
handling of the fuel issue, and a larger plurality believes
the fuel bid will lead to lower pump prices. Thus, Zelaya's
public relations strategy of controlling pump prices through
subsidies and tax breaks has succeeded in winning him
popularity, but at a very high price: the public is now more
likely than ever to blame him personally if the fuel bid

TEGUCIGALP 00001345 002.4 OF 002


fails to lower gas prices.


4. (C) As discussed in ref C, the Embassy strategy has been
to engage senior GOH officials and a wide range of key
opposition politicians and civil society leaders to encourage
responsible behavior that can positively affect the more
radical elements of the Zelaya Administration. Liberal Party
President Patricia Rodas, Foreign Minister Milton Jimenez,
and Zelaya legal advisor Enrique Flores Lanza, as well as
Minister of Defense Aristedes Mejia, continue to be key
players and the Embassy has established a regular dialogue
with Jimenez/Mejia/Flores Lanza. The Ambassador and DCM will
continue to seek fairly regular meetings with Zelaya and FM
Jimenez, to ensure that Zelaya is talking directly and openly
to the Ambassador (see ref B for the latest meeting). The
Embassy has also engaged with Minister of the Presidency Yani
Rosenthal, and Vice President Elvin Santos, who continues to
assert his independence from the Melistas, much to their
frustration. Non-GOH meetings have included business, labor,
the Cardinal, National Party, and Christian Democrat leaders,
as well as Liberal Party leaders outside the executive
branch. The Embassy also continues to provide encouragement
and expert advice to nascent think tanks seeking to grapple
with major national issues.


5. (C) Several disparate protests in recent days have
encouraged the belief that, as with the Maduro Administration
that preceded it, if a group can mobilize enough protesters
to block a major road, the GOH will grant it concessions with
no attempt at dislodging them. This does not bode well for
continued Honduran compliance with IMF targets, given the
likelihood that the GOH will continue to resort to fiscally
unsustainable concessions to stave off more protests from the
powerful teachers unions. The GOH does have limited
capabilities to peacefully break up protests. While they do
have riot police and tear gas, administrations have rarely
used this capability. Post sees no reason to believe that
Zelaya will choose to confront groups that his Administration
may (a) sympathize with or (b) prefer to pander to than
confront.


6. (C) Comment: The Embassy is cautiously optimistic that
Post's strategy to engage both the GOH and a wide array of
countervailing powers could help keep the less responsible
elements of the Zelaya Administration in check. However,
Post questions whether Zelaya can ever get his Administration
on track as long as it is buffeted by ideological clashes
from within, coupled with the probably unrealizable
expectations created by his campaign promises. While Zelaya
maintains fairly positive ratings in a reliable July 6
private poll, the Embassy was rated higher, two thirds of
Hondurans want to strengthen bilateral relations, and
Hondurans rated extremely high the importance of U.S.
assistance to the country. Zelaya appears to have realized
that actions that threaten a good bilateral relationship
create the public perception that his actions imperil renewed
Temporary Protected Status (TPS) or even the massive
remittances sent from Hondurans living in the U.S. Either
would hurt him much more than the U.S. in any public
relations battle, as his vanquished opponent Pepe Lobo
predicted to the Ambassador. End Comment.
FORD