US embassy cable - 05TEGUCIGALPA2380

S E C R E T SECTION 01 OF 03 TEGUCIGALPA 002380 
 
SIPDIS 
 
STATE FOR WHA, WHA/PPC, WHA/USOAS, AND WHA/CEN 
STATE FOR INL/LP, S/CT, AND EB 
NSC FOR DAN FISK 
 
E.O. 12958: DECL: 11/23/2035 
TAGS: PGOV, EFIN, PREL, KDEM, ETTC, KCRM, SNAR, PINR, HO 
SUBJECT: HONDURAN CAMPAIGN FINANCE 2: ALLEGATIONS OF NARCOS 
AND LEFTISTS FUNDING CAMPAIGNS BUT NO PROOF PRESENTED 
 
REF: TEGUCIGALPA 2252 
 
Classified By: Deputy Chief of Mission James Williard; 
Reasons 1.4 (b) and (d). 
 
1.  (C) Summary  In one of Latin America's poorest countries, 
a country where the ideals and mechanics of democracy are 
still being realized, financing a general election campaign 
is a difficult undertaking for both individual candidates and 
political parties as a whole.  This reality, coupled with 
anemic regulatory oversight and a long-standing tradition of 
corruption, has created an environment where charges of 
improprieties and indeed outright illegal campaign financing 
have been common.  Specific allegations this election cycle 
have included campaign financing from narcotraffickers, 
leftists groups, and other foreign sources.  Post queried 
internal sources and external contacts to determine whether 
campaign finance irregularities were materially affecting the 
electoral process.  Though this research was necessarily 
limited by time and resources, Post has concluded that to the 
extent there is illegal money in the campaign, it has not 
significantly distorted the process.  Instead, at least with 
the two largest political parties, the Liberal Party and the 
National Party, illegal campaign funding is a more of a tide 
that lifts both boats and therefore should not change the 
outcome to the election in a meaningful way.  End Summary. 
 
Lies, Charges, and Allegations 
------------------------------ 
 
2. (U) Mudslinging is a common feature to most democratic 
political campaigns.  However, the particularities of 
Honduras shed an interesting light on where the country is 
today in terms of which allegations take root in the popular 
imagination or are deemed, by the originators, to have some 
creditability with the general public.  Accordingly, here are 
some to the more interesting charges/rumors circulating 
during this electoral season about campaign finance: 
 
Money from Sandinistas, Chavez, or Taiwan? 
------------------------------------------ 
 
3. (C) The Liberal Party has been accused of taking money 
from a variety of leftist groups.  For example, Liberal Party 
presidential candidate Jose Manuel "Mel" Zelaya reportedly 
allegedly received USD 80,000 from El Salvador's main 
left-wing opposition party, the FMLN (Farabundo Marti 
National Liberation Front).  Further, National Party campaign 
leaders, during a meeting with PolOffs, stated that they 
believed the Zelaya campaign was receiving monetary support 
from Nicaragua's Sandinistas (FSLN - Sandinista National 
Liberation Front).  Members of the UD (Democratic 
Unification) Party, have traveled to Venezuela to attend 
conferences organized and sponsored by President Hugo Chavez. 
 Others have speculated about the possible political 
activities of Cuban doctors; here through the aegis of Fidel 
Castro.  The alleged involvement of Castro and Chavez in the 
election, in support of the Liberal Party, is something that 
National Party leaders like to regularly claim in 
conversations with USG officials. 
 
4. (C) Another rumor circulating is that the Government of 
Taiwan, either directly or through intermediaries, has 
provided monetary assistance to the Liberal Party.  The GOH 
has diplomatic relations with Taiwan, but neither the Liberal 
Party nor the National Party seems inclined to change the 
policy.  Likewise, it has been alleged that National Party 
congressional candidates in San Pedro Sula have accepted 
campaign contributions from Taiwanese businessmen.  When 
queried about this during a meeting with PolOffs, National 
Party leaders commented that each congressional candidate is 
responsible for raising the bulk of their campaign funds, 
which makes it difficult for the Party to monitor.  But they 
were careful to state that there was no proof of illegal 
activities. 
Drugs and Thugs? 
---------------- 
5. (C) It is frequently alleged that both of the main 
political parties purportedly fund their campaigns with money 
originating, directly or otherwise, from organized crime, 
especially from narcotraffickers.  The governing National 
Party, especially the presidential candidate, Porfirio "Pepe" 
Lobo, has been subject of numerous charges in this regard. 
This connection with "drug money" has been a frequent 
allegation in the political life of Lobo, who currently is 
the President of the National Congress.  However, his Liberal 
Party opponent, Zelaya, is also rumored to have used drug 
money to finance his campaign.  One interesting rumor is that 
he emptied the passenger seats from his private helicopter 
and made a trip to Guatemala to pickup drugs or other 
contraband.  Lobo has also blasted Zelaya in campaign ads for 
allegedly accepting money from figures involved in several 
prominent bank failures. 
 
6. (S) One unauthorized campaign funding source that Post has 
been able to confirm stems from illegal activities within 
Honduran Immigration.  During the primary election campaign, 
the Chief of the Passport Section in San Pedro Sula, Sergio 
Diaz, accepted bribes to facilitate the issuance of Honduran 
passports, visas, and visa extensions.  Diaz was known to 
have charged up to 6,000 lempiras, (USD 320), for each 
passport.  The week prior to the February primary election, 
it was reported that Diaz processed an unusually high number 
of Honduran passports.  Additionally, sources stated that 
other Immigration officers in San Pedro Sula charged illegal 
fees to expedite passport processing.  According to reliable 
sources, every weekend an Immigration officer would travel to 
Tegucigalpa and give former Immigration Director Ramon Alexis 
Romero an envelope containing at least 40,000 lempiras (USD 
2,133) in illegally collected fees.  The source stated that 
Romero used this money to fund various National Party 
campaign activities. 
 
7. (C) There have not been any rumors of funding from 
terrorist organizations. 
 
Other Sources 
------------- 
 
8. (SBU) Finally, National Party campaign leaders admitted to 
PolOffs that all party members employed by the government 
were expected to contribute three percent of their salary to 
the party for election purposes.  (The Liberal Party likely 
does the same.)  This funding source is one of the three legs 
of the Party's campaign finance stool:  the other two are 
loans and contributions from businessmen.  The Liberal Party 
also uses these two sources, as well as a lottery to raise 
money among party supporters.  In the Honduran context, it is 
not strictly illegal to pressure civil servants for political 
contributions. 
 
Oversight? 
---------- 
 
9. (SBU) Though each of the five political parties has 
submitted financial statements to the Supreme Electoral 
Tribunal (TSE), as required by electoral law, none of the 
parties has completely complied with the law.  A NGO also 
conducted a monitoring effort to estimate a month of campaign 
expenditures of the presidential and Tegucigalpa mayoral 
candidates (see refel).  No party has been forthcoming with 
regards to the sources and identities of contributors, though 
the Liberal Party did provide PolChief a partial listing of 
supposed party donors.  It is alleged that the National Party 
has established a "foundation" to support the party that 
would act as a clearinghouse for those who did not wish, for 
what ever reason, to give to the party directly.  While Post 
has not been able to confirm the existence of the foundation, 
should it exist it is unclear if it would violate the 
electoral law. 
10. (C) Comment: The TSE lacks the organizational resources, 
institutional experience, and authority to fully monitor and 
enforce the existing law.  The provision of technical 
assistance and international observers provides critical 
support to the TSE and furthers democratic maturation in the 
country.  While the electoral law changes of 2004 clearly 
represents an improvement in the regulatory and legal 
underpinnings of democracy in the country, further 
development, especially with regards to campaign financing is 
necessary.  The leadership of both main parties, though aware 
of the need for further reform and increased transparency, 
feel the transition is a process, and a gradual one.  With 
regards to the abuses and charges outlined above, there is a 
tendency in Honduras to exaggerate.  Since the general public 
is already solidly convinced of the corruptness of both main 
parties, the allegations necessarily need to be sensational 
or to touch on sensitive issues (e.g., possible role of 
leftist groups and organized crime).  With civil society 
beginning to discuss campaign financing in a meaningful way, 
it bodes well for gradual progress in this area.  End Comment. 
Ford