US embassy cable - 02TEGUCIGALPA1927

ANTICORRUPTION EFFORTS AND ACHIEVEMENTS IN HONDURAS

Identifier: 02TEGUCIGALPA1927
Wikileaks: View 02TEGUCIGALPA1927 at Wikileaks.org
Origin: Embassy Tegucigalpa
Created: 2002-07-02 15:01:00
Classification: UNCLASSIFIED
Tags: KJUS KCRM KSEP PGOV EAID HO
Redacted: This cable was not redacted by Wikileaks.
This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 06 TEGUCIGALPA 001927 
 
SIPDIS 
 
STATE FOR INL/C DAVID LUNA AND JOHN BRANDOLINO, FOR AID 
EXO/WHA JOHN SMITH AND FOR WHA/CEN 
 
E.O. 12958: N/A 
TAGS: KJUS, KCRM, KSEP, PGOV, EAID, HO 
SUBJECT: ANTICORRUPTION EFFORTS AND ACHIEVEMENTS IN 
HONDURAS 
 
REFS:  (A) 02 STATE 90733 
       (B) TEGUCIGALPA 01811 
 
1.  This cable responds to the action requested in 
Reftel. 
 
2.  SUMMARY:  Over the course of the last three years, 
there has been considerable activity in the battle 
against corruption in Honduras, in which the government 
of Honduras (GOH), civil society and the private sector 
have been involved.  Anticorruption efforts are a Mission 
Program Plan priority for Post, and they are an important 
cornerstone of U.S. diplomatic undertakings in Honduras. 
As a result of these efforts, public awareness has been 
heightened and the GOH has taken steps to both identify 
and address the problem of corruption.  While the fight 
against corruption rages on, there are concrete successes 
attributable to USG technical assistance and bilateral 
diplomatic efforts.  We provide here brief descriptions 
of the various anticorruption projects and activities, 
along with summary assessments of their achievements. 
 
3.  Many of the anticorruption efforts described herein 
are components of various Hurricane Mitch assistance 
programs funded by the May 1999 supplemental--the 
projects are drawing to a close.  Without the additional 
funds, Post will be hard-pressed to continue work in 
furtherance of its anticorruption goals.  END SUMMARY. 
 
--------------------------------------------- -- 
EFFORTS FUNDED BY INL HURRICANE MITCH FUNDS 
--------------------------------------------- -- 
 
-------------------------------------------- 
INL SECURITY MINISTRY ANTICORRUPTION PROJECT 
-------------------------------------------- 
 
4.  The Public Security Ministry (MoPS) project involved 
three (3) primary components--training, technical 
assistance and the provision of equipment and software. 
To accomplish the anticorruption initiative, the project 
focused on the investigation of financial crimes, as well 
as the development and implementation of a case-tracking 
system.  Courses were taught in investigative techniques, 
report writing and interviewing methods, financial crimes 
auditing and various computer skills.  Hands-on technical 
assistance was provided in the field.  Both computer 
hardware and software was donated so that investigators 
and prosecutors can participate in the National Automated 
Case Management and Information System (NACMIS). 
Additionally, technical assistance was given to the 
Financial Crimes Unit (FCU) to help them develop 
specialized modules to support financial crimes in the 
NACMIS. 
 
5.  As a result of the project, the FCU's ability to 
investigate, prosecute and track public corruption and 
financial crime cases is considerably greater.  Moreover, 
the GOH now has the capacity to link this computer system 
with the judicial sector system.  Project funding was 
$150,000 and was managed by ICITAP. 
 
--------------------------------------------- 
INL PROCURADOR GENERAL ANTICORRUPTION PROJECT 
--------------------------------------------- 
 
6.  The Honduran Procurador General performs functions 
similar to those performed in the U.S. by the Office of 
the Inspector General and the Office of the Solicitor 
General.  This three-pronged project included the 
provision of training, technical assistance and 
equipment/software.  The project focused on the 
investigation of tax-related financial cases, as well as 
the development and implementation of a case-tracking 
system.  The same types of courses as were taught in the 
MoPS project were also taught in this project.  As in the 
MoPS project, the donation of hardware and software made 
it possible for the Procurador General's Office to tap 
into the NACMIS system.  The benefits of the 
anticorruption initiative include a heightened ability to 
handle cases involving tax evasion and the capacity to 
tie into the future judicial computer system.  Project 
funding was $150,000 and was managed by ICITAP. 
 
-------------------------------- 
INL PUBLIC MINISTRY/IABF PROJECT 
-------------------------------- 
 
7.  The Inter-American Bar Foundation (IABF) has a 
$400,000 grant of INL funds (administered by out USAID 
mission)to provide technical assistance and training to 
the Public Ministry (MP--Attorney General's Office). The 
project focuses on strengthening the capability of the 
Public Ministry to detect, investigate and prosecute 
public corruption cases (in particular, to prosecute 
successfully under the recently implemented oral 
accusatory judicial system).  The project has three 
components--to increase the effectiveness of the MP in 
the fight against corruption, to form an inter- 
institutional alliance against corruption and to 
strengthen the Citizen Advisory Council (CAC) as an 
anticorruption tool. 
 
8.  First, the project involved the selection of six 
active corruption cases for which prosecutors in the MP's 
Anticorruption Unit received specialized training in 
investigative techniques.  Additionally, inter- 
institutional committees were formed to coordinate 
efforts and avoid duplication of services.  Along with 
the MP, the Comptroller General's Office, the Directorate 
of Administrative Probity and the Honduran IRS 
participated.  The goal of this training is to teach 
prosecutors how to develop a corruption case from the 
initial investigation through prosecution and trial.  A 
broad-based interagency case-study approach is used to 
encourage agency cooperation.  An inter-institutional 
alliance against corruption was formed, and a final 
report regarding its formation is forthcoming.  The CAC 
(intended to make recommendations for the repeal and 
modification of various immunities enjoyed by public 
officials) has been only marginally successful.  The 
CAC's progress is at a standstill, so alternative 
solutions are being pursued. 
 
--------------------------------------------- ---- 
INL DIRECTORATE OF ADMINISTRATIVE PROBITY PROJECT 
--------------------------------------------- ---- 
 
9.  The Public Affairs Section (PAS) carried out a two- 
year $150,000 anticorruption project in conjunction with 
the Directorate of Administrative Probity (DPA).  The DPA 
serves as the GOH's chief ethics watchdog and performs 
some functions that are similar to those performed by the 
Office of Government Ethics.  Approximately $86,000 was 
spent on technology, including a digital copier, 
computers, printers, Oracle database software, licenses 
and technical support and training for DPA staff. 
 
10.  The remainder of the funding was spent on training 
seminars and conferences, both in Honduras and the U.S. 
The training and conferences focused on financial 
government administration, anticorruption in government 
and the private sector, and government ethics.  PAS 
hosted five (5) workshops with presenters recruited by 
State's International Information Programs (IIP) Office 
of Speakers and Specialists.  The speakers' areas of 
expertise included government ethics, anticorruption and 
financial oversight. 
 
------------------------------ 
INL MIGRATION COMPUTER PROJECT 
------------------------------ 
 
11.  This $217,000 project, currently in the contracting 
phase, is designed to provide computers, modems and other 
hardware to the GOH Office of Migration.  The equipment 
will augment the GOH's ability to transmit migration 
information between offices efficiently, and generally 
enhance the record-keeping capabilities of the Migration 
Office.  Moreover, the project to issue Machine Readable 
Passports in Honduras (funded through the 2001 INL Letter 
of Agreement) will dovetail with the Migration Office's 
new hardware, making migration and border controls in 
Honduras better than ever.  Post anticipates that both 
projects will be in place before the end of FY 2002. 
 
--------------------------------- 
USAID COMPTROLLER GENERAL PROJECT 
--------------------------------- 
 
12.  One of the objectives of USAID's Transparency 
Program is to strengthen the capability of the 
Comptroller General of the Republic (CGR) and promote 
enhanced awareness of the importance of audits in 
general.  Several goals have been accomplished, 
including: 
 
-USAID's contractor conducted training (most notably to 
the Audit Unit for Projects of International 
Organizations), while overseeing systematic concurrent 
audits of Hurricane Mitch reconstruction projects. 
-The Regional Inspector General certified the CGR to 
perform audits for U.S.-funded programs. 
 
-A Web site for the CGR was designed 
(http://www.cgrh.net/) and assistance was given in the 
publication of final audit reports on the site. 
 
-A much-needed Audit Recommendation Follow-Up System was 
developed in order to promote early and impartial 
resolution of recommendations. 
 
--------------------------------------------- ---- 
ASSISTANCE TO THE NATIONAL ANTICORRUPTION COUNCIL 
--------------------------------------------- ---- 
 
13.  USAID's Transparency Program provides support to the 
National Anticorruption Council (NAC), which was created 
by former President Carlos Flores, reinforced by 
President Maduro and is chaired by Roman Catholic 
Cardinal Oscar Andres Rodriguez.  The objective of the 
NAC is to develop and implement a national anticorruption 
strategy and action plan.  USAID provided financial 
support for civil society events, and financed a public 
opinion survey about corruption, governmental integrity 
and accountability issues.  Results were publicly 
presented and used as a basis for the NAC's National 
Anticorruption Strategy.  USAID serves the NAC in an 
advisory role, with emphasis on diagnosing the 
anticorruption problem in Honduras. 
 
14.  U.S. funds for the project total $291,665 and are 
managed by the United Nations Development Program (UNDP). 
Recently, USAID delivered a letter to the Cardinal 
reaffirming its support for NAC's activities.  Other 
international donors also support the NAC, including 
Canada, the United Kingdom, Sweden, the Interamerican 
Development Bank (IDB), the UNDP and the World Bank. 
 
----------------------------------- 
USAID MUNICIPAL DEVELOPMENT PROGRAM 
----------------------------------- 
 
15.  USAID supports accountability and transparency at 
the local level through its Municipal Development Program 
(MDP).  The MDP installs formal internal controls on 
municipal accounting/management systems, trains the 
community to oversee the performance of local governments 
and their use of resources, involves citizens in decision 
making processes and in oversight functions, and 
strengthens management systems at the local level. 
 
16.  Using Hurricane Mitch reconstruction funds, Post 
signed a Cooperative Agreement (CA) with the Municipal 
Development Foundation (FUNDEMUN), under which FUNDEMUN 
designs and implements a strategy for social auditing to 
follow-up processes and activities for reconstruction 
projects. 
 
----------------------------------------- 
TRANSPARENCY AND GOVERNANCE WORKING GROUP 
----------------------------------------- 
 
17.  The GOH, civil society and, subsequently, the 
Consultative Group for the Reconstruction and 
Transformation of Honduras (whose members include the 
leading members of the G-15), established a Transparency 
and Good Governance Working Group to address issues of 
government accountability, transparency and corruption. 
Its priorities include immunities laws, social auditing 
and the NAC. 
 
-------------------------------------------- 
USAID/GOH/IDB PROCUREMENT INSPECTION PROJECT 
-------------------------------------------- 
 
18.  USAID joined with other donors to establish an $11.5 
million independent donor mechanism, which provides 
management oversight to the operations of the GOH's line 
ministries and independent GOH agencies in their 
implementation of Hurricane Mitch reconstruction 
programs.  This effort is part of a larger IDB program to 
strengthen the Honduran procurement system. 
Specifically, there will be selective inspections of the 
procurement and contracting processes, covering 
technical, administrative, financial and control aspects. 
 
-------------------- 
OTHER USAID PROJECTS 
-------------------- 
 
-------------------------------------------- 
INTER-AMERICAN CONVENTION AGAINST CORRUPTION 
-------------------------------------------- 
 
19.  Through its Transparency Program, USAID intends to 
promote monitoring of the standards set forth in the OAS 
Inter-American Convention against Corruption (IACAC).  In 
particular, USAID will encourage the assessment of the 
Honduran legal framework against the IACAC standards. 
 
--------------------------------------- 
CIVIL SOCIETY/PUBLIC AWARENESS CAMPAIGN 
--------------------------------------- 
 
20.  USAID's work with government control entities is 
enhanced by effective public information campaigns, which 
increase citizen awareness of the importance of vigilance 
over the GOH's administration of public resources, 
knowledge about what kinds of problems to look for, and 
clear instructions regarding what to do if corruption is 
identified.  Moreover, one of the objectives of USAID's 
Transparency Program is to develop a public awareness 
campaign strategy.  USAID published a booklet featuring 
the IACAC illustrated with cartoons that relate to the 
Honduran experience.  The booklet will soon be available 
for distribution. 
 
21.  USAID and the Center for the Investigation and 
Promotion of Human Rights (CIPRODEH) created a 
transparency Web site (www.e-demoKratia.org), printed 
bulletins called "Transluz," and presented workshops on 
transparency in the budget process.  In 2001, the 
Ministry of Defense published its budget for the first 
time.  In 2002, the GOH published the budget broken down 
by Ministry in a groundbreaking effort to achieve better 
transparency.  Taken together, USAID transparency efforts 
since May of 2000 have totaled $8,294,000. 
 
--------------------------------- 
MISCELLANEOUS EFFORTS AND STRIDES 
--------------------------------- 
 
-------------------------- 
A NEW MONEY LAUNDERING LAW 
-------------------------- 
 
22.  In February of 2002, the Congress passed new money 
laundering legislation, which took effect on June 4, 
2002.  The law expands the criminal definition of money 
laundering to encompass any non-economically justified 
sale or movement of assets, and strengthens the powers of 
prosecutors to investigate and prosecute suspected 
offenses.  Additionally, the new law makes the financing 
of terrorism a criminal offense and provides for the 
creation of a financial information unit to track 
suspicious transactions. 
 
23.  Officials at the Attorney General's Office and the 
National Banking Commission are drafting regulations 
applicable to the new financial information unit.  In 
April, the U.S. Department of Treasury sent a money 
laundering expert to Honduras to conduct a needs 
assessment for a USG-funded technical assistance package. 
According to the Treasury expert, funding for this 
project will cost about $250,000 over two (2) years. 
 
----------------------------- 
STOCKHOLM DECLARATION OF 1999 
----------------------------- 
 
24.  The Stockholm Declaration of 1999 as authored by the 
Mitch donors, includes as a goal: "Reconstruct and 
transform Central America on the basis of an approach 
integrated with Transparency and Governance."  The 
Honduran Follow-Up Group on the Stockholm Principles (G- 
15) was formed by the U.S., Germany, Canada, Spain, 
Japan, the Netherlands, the U.K., Sweden, Italy, the IDB, 
the IBRD, International Monetary Fund (IMF), UNDP, the 
Central American Bank for Economic Integration (CABEI) 
and the E.U.  G-15 members coordinate various efforts and 
programs, and the GOH encourages donor coordination. 
 
-------------------------------------- 
GOH POVERTY REDUCTION STRATEGY PROGRAM 
-------------------------------------- 
25.  Transparency and accountability are becoming much 
more high-profile issues in Honduras.  As a result, both 
transparency and accountability are included in the GOH's 
fifteen-year Poverty Reduction Strategy Program (PRSP), 
which contains guidelines to transform the country over 
the next fifteen (15) years.  Notably, since Hurricane 
Mitch, the GOH and civil society have taken important 
steps to develop the PRSP in a participatory manner. 
 
------------------------- 
A NEW GOH PROCUREMENT LAW 
------------------------- 
 
26.  In September 2001, a new government procurement law 
went into effect.  This new legislation in intended to 
increase transparency and reduce corruption. 
 
--------------------------------- 
A FORTHCOMING GOH CODE OF ETHICS? 
--------------------------------- 
 
27.  The GOH is in the process of developing a code of 
ethics for public employees.  Post hopes that, in fact, 
an effective code of ethics will be implemented-- 
including rules regarding conflicts of interest and 
feasible processes for the investigation and prosecution 
of such cases. 
 
---------------------------- 
OTHER PRIVATE SECTOR EFFORTS 
---------------------------- 
 
28.  There are several private sector efforts worth 
mentioning: 
 
-The Honduran Council for Private Enterprise (COHEP) 
sends a representative to the meetings of the NAC. 
 
-The private sector led the NAC's investigation on the 
causes of corruption and its prevention. 
 
-------------------------------------- 
MISCELLANEOUS PUBLIC DIPLOMACY EFFORTS 
-------------------------------------- 
 
29.  Septel (Tegucigalpa 01876) reported Ambassador Frank 
Almaguer's June 21 speech given to the International 
Development and Ethics Association (IDEA) in which he 
outlined the U.S. anticorruption policies.  The speech 
dominated the news in Honduras for days, and clearly has 
had a significant impact.  This is the most recent of a 
number of public diplomacy efforts that serve the 
anticorruption effort. 
 
30.  There was an interactive dialogue on WHANET that 
dealt with anticorruption and money laundering, in which 
representatives from the MP participated. 
 
31.  Post arranged for an individual from the DPA to 
participate in the International Visitor Program on 
anticorruption in the government and private sector. 
 
32.  With the support of PAS, the Ambassador has become a 
champion of Honduran anticorruption efforts.  This is the 
result of a multitude of public diplomacy efforts, 
including: 
 
-Post regularly distributes USG policy statements on 
anticorruption to the Honduran press--for example, A/S 
Reich's speech on Latin American policy and 
anticorruption efforts. 
 
-The Ambassador frequently publicly addresses various 
anticorruption issues (e.g. money laundering, judicial 
reform, transparency in governance) by way of speeches at 
various events, press releases, radio and television 
interviews and other media.  As a result, anticorruption 
has become a popular topic for public debate and public 
awareness has been significantly heightened. 
 
-Post has worked hard to convey the message that 
anticorruption efforts are an important component of the 
war on terrorism--that money laundering, arms and 
narcotics trafficking and government corruption all 
create an environment in which terrorism can thrive. 
 
ALMAGUER 

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