SECRETARY LEAVITT,S MEETING WITH HONDURAN

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000246

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SIPDIS

STATE PASS HHS FOR SECRETARY LEAVITT AND OFFICE OF GLOBAL
HEALTH AFFAIRS (STEIGER AND CORREA-DE-ARAUJO)
MCA FOR AMBASSADOR DANILOVICH
DEPT FOR WHA A/S SHANNON AND WHA/CEN
DHS FOR SECRETARY'S OFFICE (ADAM ISLES)

E.O. 12958: DECL: 01/29/2017
TAGS: PGOV PINR KDEM NU PREL
SUBJECT: SECRETARY LEAVITT,S MEETING WITH HONDURAN
PRESIDENT ZELAYA

REF: TEGUCIGALPA 00076

Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D).


1. (C) Summary: On January 9, 2007 the U.S. Presidential
Delegation (Presdel),led by Health and Human Services (HHS)
Secretary Michael Leavitt, discussed with Honduran President
Jose Manuel Zelaya a new regional health-care training
initiative; Honduras' petroleum dependency; resolving the
need for road-maintenance legislation for the Honduran
Government's (GOH) Millennium Challenge Account (MCA)
program; bilateral immigration concerns, including the GOH's
desire for continued Temporary Protected Status (TPS); and
the GOH's offer to serve as an intermediary between the U.S.
and Cuban Governments. President Zelaya expressed his
Government's interest in the new health initiative and
invited the Secretary to visit Honduras. End Summary.


2. (C) President Zelaya opened the meeting by noting that
Honduras' main problem is its reliance on petroleum, a
"volatile, speculative commodity" subject to unpredictable
price fluctuations. He called for USG assistance in
resolving Honduras' "difficulties" with U.S. oil companies
that provide petroleum and its derivatives to Honduras.
Citing Texaco and Shell (Foreign Minister Milton Jimenez
Puerto interjected to note that Shell is a Dutch-Anglo
consortium) as the primary petroleum refiners and retailers
in Honduras, President Zelaya explained these companies have
refused to consider the GOH's proposal to run a competitive
tender to purchase oil products on the market instead of
pegging them to exorbitant international rates (Reftel).


3. (C) President Zelaya alleged that Texaco and Shell,
companies he claimed maintain an "oleopolio" in Honduras,
have threatened to "cut their supplies" to Honduras if it
does not comply with their terms. He said this impasse could
force the GOH to consider an offer from Venezuelan President
Hugo Chavez to provide the indispensable resource under more
attractive terms -- an option that would not be convenient
for either the United States or Honduras, he warned.
Assistant Secretary Shannon confirmed President Zelaya has
raised these concerns twice with President Bush, as well as
with U.S. Embassy officials in Tegucigalpa, and stated the
USG is exploring ways to stabilize oil prices via the
Meso-America Initiative of the Inter-American Development
Bank.

TPS and Other Immigration Concerns
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4. (SBU) President Zelaya then touched on U.S. immigration
policy vis a vis Honduras, specifically the need for the
extension of what he termed the "almost legalized immigration
status" of some 80,000 Hondurans who participate in the U.S.
Temporary Protected Status (TPS) program. Assistant
Secretary Shannon clarified that Honduras' access to TPS is
set to expire in July 2007. He assured President Zelaya he
will convey these concerns to Washington decisionmakers.


GOH Welcomes Health Initiative
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5. (SBU) Secretary Leavitt next outlined his vision for the
new regional health initiative, whose centerpiece is a
regional training facility in Panama to train hundreds of
health workers, including nurses, medical technicians, and
community health workers from the region. Suggesting the
center could train 150-300 health workers per year to start,
the Secretary explained the program will focus on the
training of service providers from rural areas. President
Zelaya congratulated the Secretary for the initiative and
assured him he can "count on our cooperation." The Secretary
described the next steps in the program -- drafting a
Memorandum of Understanding, visiting the participating
countries, and possibly signing the agreement in a regional
venue. The Secretary clarified the health initiative arose
from a meeting of Central American Ministers of Health in
June 2006. President Zelaya promised to follow up on the
details with the Honduran Minister of Health and to work with
Panamanian President Torrijos to ensure progress.

Honduras Offers to Serve as Intermediary for U.S.-Cuba Talks
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6. (C) Remarking that Honduran Foreign Minister Jimenez
Puerto had traveled to Cuba in December, President Zelaya
suggested that Honduras, through its new Embassy in Havana,
could help facilitate talks between U.S. and Cuban Government
officials. President Zelaya urged the United States to
engage Raul Castro and other Cuban Government leaders before
Fidel Castro's death as a means to positively influence the
direction of Cuba's transition, and speculated the Cubans
might show more flexibility now than after Fidel is gone.
Assistant Secretary Shannon thanked President Zelaya for his
interest and promised to convey his kind offer to Secretary
Rice. A/S Shannon added that talks are difficult during this
uncertain period and that the USG seeks to help Cuba embark
on a process towards democratic change. Foreign Minister
Jimenez explained that, given Honduras' extensive maritime
borders with Cuba, the considerable presence of both pro and
anti-Castro naturalized Cubans who now work for the Honduran
Government, and long historical connections between the two
countries, Honduras maintains particular interest in Cuba and
will continue to engage Havana. The Foreign Minister made a
point of emphasizing these motives so that Washington would
not misinterpret future Honduran dealings with the Cuban
regime.

Zelaya Promises to Resolve MCC Road Maintenance Concerns
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7. (C) Congratulating President Zelaya for his leadership in
the MCA-Honduras program, Millennium Challenge Corporation
Chief Executive Officer (CEO) John Danilovich urged Zelaya to
use his leadership to resolve an outstanding matter involving
road maintenance. Ambassador Danilovich explained the MCC
program in Honduras (MCA-H) had been flexible with the GOH,
and it had not required the passage of a road-maintenance law
before initiating the program. (Note: Nicaragua established
road-maintenance funding in its national budget before its
Compact entered into force.) However, to date, the Honduran
Congress had still not passed the required legislation, and
has not budgeted approximately USD 5 million of the total USD
45 million required for road maintenance, said Ambassador
Danilovich. President Zelaya, who thanked Ambassador
Danilovich for his clarification, commented that, although he
knew of the GOH commitment to provide additional maintenance
funds, he was unaware legislation is also required.
President Zelaya assured Ambassador Danilovich that he will
take prompt action on the matter.


8. (U) Participants:

Honduras:
President Jose Manuel Zelaya
Foreign Minister Milton Jimenez Puerto
Minister of Poverty Reduction Fernando Garcia
President of the Liberal Party Executive Council Patricia
Rodas

U.S.:
Secretary Michael Leavitt

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MCC CEO John Danilovich
Assistant Secretary Tom Shannon
Ambassador Paul Trivelli
HHS Special Assistant to the Secretary for International
Affairs William SteigerUSAID Director Alex Dickie
MCA-N Country Director Matt Bohn
Political Counselor/notetaker Victoria Alvarado


9. (U) This cable was cleared by Secretary Leavitt, MCC CEO
Ambassador Danilovich, and Department of State A/S Shannon.
TRIVELLI