US embassy cable - 03TEGUCIGALPA2844

S E C R E T SECTION 01 OF 05 TEGUCIGALPA 002844 
 
SIPDIS 
 
STATE FOR WHA, WHA/CEN, AND WHA/PPC 
STATE FOR INL, INL/LP, INR/B, AND INR/AN/IAA, 
STATE PASS AID FOR LAC/CEN AND DCHA/DG/ROL 
 
E.O. 12958: DECL: 12/04/2013 
TAGS: PGOV, KJUS, KCRM, ECON, EFIN, PHUM, PINR, HO 
SUBJECT: GOOD TALKERS, BUT MADURO ADMINISTRATION NOT 
SERIOUSLY COMMITTED TO FIGHTING CORRUPTION 
 
REF: A. USDAO TEGUCIGALPA IIR 68410026 03 
 
     B. TEGUCIGALPA 1615 
     C. TEGUCIGALPA 2514 
     D. STATE 312936 
     E. STATE 319281 (ALL NOTAL) 
 
Classified By: Ambassador Larry L. Palmer; 
reasons 1.5(B) and (D). 
 
1. (S) SUMMARY: In office for almost two years, President 
Ricardo Maduro's administration talks a lot about fighting 
corruption, particularly when addressing interested U.S. 
audiences.  Upon close examination, however, one sees little 
demonstrable progress in breaking corruption's pervasive grip 
on almost all aspects of daily life in Honduras.  Moreover, 
there appears to be very little genuine interest in 
addressing corruption's root causes or the venality of many 
Government of Honduras (GOH) officials.  Honduras ranked 106 
out of 133 countries in a recent survey by Transparency 
International, an NGO that tracks international corruption 
issues.  Only Ecuador, Haiti, and Paraguay scored lower in 
the Western Hemisphere.  Maduro's inability to effectively 
attack corruption has fueled anti-government sentiment among 
a general population disillusioned with the president's 
lackluster leadership and undelivered reform program. 
Discontent with Maduro and his administration continues to 
grow, providing fodder for protesters and many others 
yearning for a leader with the ability to effect real change 
in the fight against corruption. END SUMMARY 
 
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President Committed Rhetorically, But Not Pushing the Issue 
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2. (S) Candidate Maduro promised the people of Honduras that 
fighting corruption would be a top priority of his 
administration, but since taking office almost two years ago, 
he has done little to reduce corruption's pervasive hold on 
Honduran society.  Maduro speaks eloquently about 
corruption's grip on daily life in Honduras and its 
detrimental effects on the Honduran economy, particularly to 
U.S. and European audiences (ref D).  Rhetoric aside, 
however, the President seems unwilling or unable to make the 
politically tough decisions necessary to effect a paradigm 
shift in Honduras. 
 
3. (S) When pressed on the issue, Maduro squarely places the 
blame for his administration's inability to effectively 
confront corruption on the shoulders of Attorney General (AG) 
Roy Medina, who (according to Maduro) is politically 
motivated and simply refuses to prosecute high level 
corruption cases.  Maduro cites limited resources as another 
major impediment to combating corruption, but the GOH's 
parsimonious funding of anti-corruption efforts clearly 
reflects the priority his administration is itself willing to 
put forth. 
 
4. (C) Other aspects of Maduro's anti-corruption strategy 
which require congressional action, particularly electoral 
reform, have either run out of steam or have been hijacked by 
others for their particular political purposes.  Although 
Maduro's Nationalist Party (NP) does not control a majority 
in Congress, the president's inability to muster support for 
needed reforms (even within his own party) has begun to 
reflect poorly on his leadership ability and bodes ill for 
any significant improvements in the near future. 
 
5. (C) Maduro and his Minister of the Presidency Luis Cosenza 
recently highlighted to visiting Secretary Powell Congress's 
recent passage of a constitutional amendment to eliminate 
immunity for all legislative, judicial, and government 
officials (still pending ratification) and the selection of 
an independent Supreme Court as the most significant advances 
in ending a culture of impunity that permits corruption in 
Honduras.  Cosenza noted how the new Criminal Procedures Code 
is streamlining the administration of justice.  However, they 
both acknowledge that a major figure needs to be jailed to 
make a statement, and change the perception of corruption and 
impunity in the country (ref D). 
 
6. (C) Cosenza has noted that the GOH has also instituted a 
number of other measures to combat corruption including: the 
selection of an independent auditing firm to audit executive 
branch procurements; the closure of certain businesses for 
tax evasion; and an effort to get Congress to enact a law 
that requires transparency in the budget process. The GOH 
also highlights the transfer of public procurement projects 
to the United Nations Development Program (UNDP), although 
Post notes that the UNDP in Honduras has itself been accused 
of questionable practices, particularly in the awarding of 
Hondutel procurement contracts to select European firms. 
 
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Attorney General Irrelevant, Maladroit, or Worse 
--------------------------------------------- --- 
 
7. (S) A hold-over from the previous Flores administration, 
in March, 2004, Roy Medina will complete his congressionally 
appointed five-year term as AG.  While eligible to be 
nominated to serve a second term, he is not considered a 
possible candidate.  Medina entered the Public Ministry (PM) 
amid high-hopes that the GOH would be able to begin an 
effective campaign to combat corruption by prosecuting 
high-profile corrupt individuals.  This has not happened. 
Rather, Medina's tenure with the PM has been a major 
disappointment, characterized by obfuscation, excuses, and 
allegations of corruption within the PM itself.  Worse, since 
Maduro's election, Medina has used his prosecutorial 
discretion to foil efforts by Maduro to pursue cases against 
bankers who looted their own banks and the national treasury. 
 
 
8. (S) Clearly, Medina does not have the fortitude or 
prosecutorial zeal to pursue high-level corruption cases. 
Whether through intimidation, ineptness, lack of resources, 
lagging political will, or worse, Medina appears to have no 
intention of pursuing allegations of corruption against 
prominent individuals, regardless of the evidence presented. 
Maduro, at one time, entertained ideas of seeking Medina's 
ouster, but decided against directly confronting a Liberal 
Party appointee, particularly as it would lead to a 
confrontation with Congress.  Maduro's strategy now appears 
to let Medina's time run out, then seek an individual who 
will purportedly more aggressively seek to combat crime in 
Honduras. 
 
9. (C) Embassy confronted Medina in June (ref B) concerning 
the disappointing results and allegations of corruption 
within the PM.  At that time, Medina promised Ambassador that 
the PM would begin to move forward on the more than 160 money 
laundering cases languishing in its files.  Medina also 
promised action on other high level cases, although he noted 
that faulty police work and ineffective judges were hampering 
his efforts to bring cases to trial.  While there was some 
improvement in the short term, paralysis has once again 
gripped the PM.  The one exception was PM action against 
congressman Avila Panchame on narco-corruption charges, 
although this appears to have been in direct response to 
Embassy pressure. 
 
10. (S) In an orchestrated effort to deflect continued 
criticism and avoid a cut-off in USG assistance, Medina did 
shuffle a number of high level officials within the PM, 
moving Special Prosecutor for Organized Crime Mario 
Chinchilla and prosecutor Rafael Soto to the Environmental 
Crimes Unit.  (Chinchilla was replaced by Doris Aguilar.) 
Both Chinchilla and Soto were tainted by accusations of 
corruption and possible ties to narcotraffickers, although 
the PM has shown no interest in pursuing these allegations. 
Also, Soto continues to interfere in drug cases, even though 
he has been reassigned.  While Aguilar appears to be well 
intentioned, these moves have not resulted in any greater 
exuberance at the PM to prosecute meaningful cases.  There 
have been, however, several prosecutions against low-level 
police officers. 
 
11. (S) While inaction at the PM is itself a serious concern, 
corruption within the judiciary and police also hamper 
efforts to improve the administration of justice and rule of 
law within Honduras.  Although both Supreme Court President 
Vilma Morales and Public Security Minister Oscar Alvarez 
remain committed anti-corruption watch-dogs, the influence of 
drug money, threats from narcotrafficking organizations, and 
a general climate of impunity continues to vitiate any 
significant improvements. 
 
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Judiciary Improving, But Still A Long Way To Go 
--------------------------------------------- -- 
 
12. (C) Vilma Morales has been very outspoken on corruption 
issues and is working to increase judicial independence in an 
effort to, among other things, bolster anti-corruption 
efforts.  Morales has gone as far as to challenge the public 
to come forward with the names of corrupt judges, whom she 
has promised to investigate.  While many newly appointed 
trial judges are performing admirably, the vast majority of 
magistrates continue to exhibit old tendencies, namely 
dismissing cases for arbitrary reasons, or simply refusing to 
bring them to trial.  Morales has dismissed some judges, but 
Liberals charge that some of these dismissals were 
politically motivated.  Inexplicably, she also chose to 
publicly criticize the Embassy for failing to coordinate with 
her regarding a corrupt judge who was recently excluded from 
a U.S.-sponsored money laundering training class.   She 
claimed to be unaware of U.S. concerns, despite the fact that 
the Embassy had notified her in advance and that she herself 
had expressed concern about this judge's actions and had also 
hinted about an investigation of her own.  To date, there has 
been no Supreme Court follow-though on this. 
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GOH Anti-Corruption Efforts Underfunded and Inadequate 
--------------------------------------------- --------- 
 
13. (U) In an effort to provide greater transparency and more 
effectively combat corruption, with the help of international 
donors, the GOH created the National Anti-Corruption Council 
(NAC) and the Supreme Court of Accounts (Tribunal Superior De 
Cuentas - TSC). To date, neither institution has lived up to 
its potential. 
 
14. (SBU) The NAC was conceived under the Flores 
administration and continued by Maduro.  The NAC's charge was 
to develop a national anti-corruption strategy and then help 
the GOH implement that strategy.  The NAC is composed of 14 
prominent individuals representing Honduran civil society, 
and 14 senior GOH officials; heading the NAC is Roman 
Catholic Cardinal Oscar Rodriguez.  While the NAC was able to 
develop a national strategy, its implementation has fallen 
short.  Lassitude among the NAC's members, insufficient 
funds, and lack of attention from the GOH have all 
contributed to the NAC's poor showing.  Its most significant 
contribution has been to call public attention to corrupt 
practices.  Most of its credibility emanates from the moral 
authority of Cardinal Rodriguez. 
 
15. (C) In an October 21 meeting with PolCouns, NAC Executive 
Director German Espinal confided that the GOH was not 
committed to the NAC's mission.  Espinal outlined the limited 
extent of GOH financial support for the NAC: one phone line. 
The NAC's small staff, and all other resources, are provided 
by international donors.  If the international community 
withdrew funding from the NAC, it would probably disappear. 
 
16. (SBU) The TSC was intended to function as a national 
hybrid general accounting and public ethics office.  It was 
created in January, 2002, and its organic law was approved by 
Congress on January 20, 2003.  The TSC placed the Comptroller 
General of the Republic, the Directorate of Administrative 
Probity (Ethics office), and the Office of State Assets under 
one roof.  However, since its inception (to Post's 
knowledge), the TSC has yet to report a single accounting 
discrepancy or to recommend corruption charges against any 
individual.  In essence, the TSC has had no visible impact on 
the fight against corruption in Honduras. 
 
17. (C) Espinal alluded to dysfunctionality at the TSC during 
the October 21 meeting with PolCouns.  According to Espinal, 
the TSC employs close to 600 people (most of them lawyers) 
who really contribute nothing to the TSC's ability to 
effectively function as a public auditor.  Rather, the TSC 
seems to have become a jobs program for contacts of senior 
GOH officials in need of employment.  Still, the Maduro team 
trumpets the creation of the TSC as one of its major 
accomplishments in its fight against corruption. 
 
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One Bright Spot - Reduced Corruption in the Armed Forces 
--------------------------------------------- ----------- 
 
18. (C) The reduction of corruption within the Honduran Armed 
Forces (HOAF) is one of the few success stories in an 
otherwise cloudy horizon.  Once a bastion of corruption, the 
HOAF is now no more corrupt than other GOH entities.  Firmly 
under civilian control, and with the introduction of 
transparency in the budgetary process, the Generals and those 
that serve them, have been reduced to low-level graft.  The 
HOAF, particularly the Navy and Air Force, are also now much 
more inclined to effectively participate in drug interdiction 
efforts.  The HOAF leadership is more inclined to discipline 
corrupt officers, even at the highest levels.  In fact, 
recent rumors suggest that Col. Caceres, commander of the 
Honduran Air Force, and his deputy, Col. Cervantes, will soon 
be removed for the alleged misuse of funds.  Also, at least 
two naval officers suspected of involvement in narcotics 
trafficking have been removed from their positions. 
 
19. (C) Problems continue with the undercapitalized military 
pension fund "Instituto Prevision Militaria" (IPM), as a 
result of an extraordinary theft by former Commander in Chief 
General Hung Pacheco before his retirement (ref A).  It 
remains unclear if General Pacheco will ever face criminal 
charges for the heist.  Grumbling can also be heard from some 
senior and mid-level officers upset with rumors that Chief of 
the Joint Staff General Isaias Barahona intends to raise the 
mandatory retirement age from 30 to 35 years of active 
military service.  The disgruntled officers claim Barahona is 
really raising the retirement age so that he can continue in 
his present position.  Barahona has stated that the IPM needs 
this five-year retirement hiatus to recover and recapitalize 
to be able to support the next round of senior retirements. 
 
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Don't Look to Congress for Any Help 
----------------------------------- 
 
20. (S) Congress continues to resist any meaningful reform 
that would lead to the reduction of corruption within 
Honduras.  The institution itself is riddled with tainted 
politicians who view their positions heavily through the lens 
of personal wealth creation.  This year alone, three members 
of Congress have been arrested on drug trafficking charges, 
and many others continue to be involved in a wide range of 
other illicit activities. 
 
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Designada Genuine, But Lacks Support 
------------------------------------ 
 
21. (S)  Honduran Vice President Armida de Lopez Contreras 
(one of three presidential designates in the current Honduran 
constitutional leadership structure) appears genuinely 
committed to anti-corruption efforts but lacks any type of 
following within the GOH.  She has publicly clashed with 
other senior GOH officials over inaction on fighting 
corruption (ref C) which has contributed to her political 
isolation.  While wanting to do the right thing, Contreras' 
lack of a political following renders her unable to force 
movement on anti-corruption efforts. 
 
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Lack of Resources Serious Impediment 
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22. (SBU) While the GOH, without doubt, could do a better job 
of fighting corruption, a lack of resources continues to 
seriously impede effective measures to address the issue. 
Post notes the technical assistance provided to Honduras by 
USAID (ref E) and its positive case-by-case results. 
However, the lack of U.S. assistance to fund more effective 
work by national legal institutions is a short-coming. Other 
international donors are providing some limited 
anti-corruption assistance; but more international aid, with 
U.S. leadership, is essential to realize the necessary 
enforcement effort in this crucial area.  Still, these types 
of programs (and others funded by the international 
community) need to be matched by a similar commitment on the 
part of the GOH for them to be effective and have a lasting 
impact. 
 
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Population Losing Confidence In Maduro to Fight Corruption 
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23. (S) Comment:  Public support for the Maduro 
administration has decreased in recent months.  Apart from 
serious economic concerns, the general population has doubts 
that Maduro is serious about tackling corruption in Honduras. 
 This lack of confidence is turning into a general 
disillusionment with the Maduro administration.  There is a 
growing sense that the President will not deliver his reform 
agenda, with anti-corruption being a major short-coming.  It 
is not lost on Honduran political observers, and protest 
leaders, that known corrupt individuals continue to ply their 
trade with complete impunity.  On a positive note, no 
evidence exists linking Maduro, or most of his ministers, to 
personal involvement in corrupt activity.  However, Maduro 
and his cabinet, while aware of the corruption problem and 
the need to address it more effectively, are dangerously out 
of touch on this issue, appearing to believe that 
anti-corruption rhetoric alone is enough to win the people's 
trust.  Maduro's inaction on fighting corruption could 
contribute to increasingly fertile ground for a strong, 
left-leaning populist leader, inclined to seriously challenge 
the status quo in Honduras.  End Comment. 
Palmer