This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 TEGUCIGALPA 002434 
 
SIPDIS 
 
STATE FOR WHA, WHA/CEN, AND WHA/PPC, AND DS 
STATE FOR INL, INL/LP, INR/C, INR/AN/IAA, AND EB 
STATE PASS AID FOR LAC/CEN AND DCHA/DG/ROL 
 
E.O. 12958: DECL: 10/29/2014 
TAGS: PGOV KCOR KJUS KCRM ECON PHUM PINR EAID HO
SUBJECT: AMBASSADOR URGES GREATER ANTI-CORRUPTION EFFORTS; 
MADURO ASSERTS PROGRESS EXCEPT ON "POLITICAL CORRUPTION" 
 
REF: A. LINDWALL-PALMER E-MAIL 10/25/04 
 
     ¶B. TEGUCIGALPA 2356 
     ¶C. TEGUCIGALPA 2123 
     ¶D. TEGUCIGALPA 1690 
     ¶E. TEGUCIGALPA 729 
     ¶F. TEGUCIGALPA 400 
 
Classified By: Ambassador Larry L. Palmer; 
reasons 1.4 (b) and (d). 
 
¶1. (C) SUMMARY: On October 27, Ambassador and DCM raised U.S. 
concerns with President Maduro about perceptions that 
Honduras is backsliding on anti-corruption efforts, its 
potential impact on MCC eligibility, and the recent decision 
by the Public Ministry (PM) to dismiss corruption cases 
against leading political figures.  Maduro, visibly agitated, 
stated Honduras had made many significant strides in the 
fight against corruption but was not getting the credit it 
deserves.  Maduro claimed his administration was committed to 
fighting corruption and reiterated comments he made to the 
Secretary during their October 21 meeting stating he fears a 
 
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regional conspiracy to destabilize governments by prosecuting 
ex-presidents and attacking/destroying the political class. 
Maduro did concede, however, that Honduras needed to do a 
better job in addressing what he termed "political 
corruption."  Post believes that President Maduro and his 
inner circle, for a myriad of reasons, lack both the 
political will and leadership skills necessary to tackle 
high-level corruption in Honduras.  Maduro should confront 
the issue head-on by calling for a high-level review of the 
PM's recent decisions and of alleged corrupt sitting judges. 
END SUMMARY. 
 
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President Claims Honduras Making Strides Against Corruption 
--------------------------------------------- -------------- 
 
¶2. (C) On October 27, Ambassador and DCM met with President 
Maduro, Minister of the Presidency Luis Cosenza, and Minister 
of Government and Justice Jorge Ramon Hernandez Alcerro 
regarding perceptions that Honduras is backsliding on 
anti-corruption efforts and the recent crises at the Public 
Ministry (PM) (ref B).  Maduro, visibly agitated, stated that 
Honduras had made many significant strides in the fight 
against corruption but was not getting the credit it 
deserves.  He listed as examples the recent passage of 
legislation stripping immunity from senior government 
officials, allowing the UNDP to oversee public procurement 
projects, and increased success on clamping down on tax 
fraud.  (COMMENT:  It is ironic that Maduro cites the UNDP 
procurement process as an anti-corruption success.  The 
Government of Honduras' (GOH) recourse to UNDP management for 
its bid solicitations is fundamentally an admission that the 
GOH cannot control corruption in its own ranks.  While the 
GOH does deserve credit for removing immunities, the 
implementing legislation allowing the GOH to prosecute 
formerly immune officials has not yet been drafted.  Also, 
while the GOH has done a better job of collecting taxes from 
small businesses and ordinary private citizens, there have 
been no large-scale convictions although recent reports 
suggest that tax fraud - involving large businesses and 
benefiting both major political parties - continues on a 
massive scale.  END COMMENT.) 
 
¶3. (C) Maduro did admit to Ambassador that Honduras still 
needed to do a better job of fighting what he termed 
"political corruption", acknowledging Honduras' poor record 
in successfully prosecuting high-level individuals on 
corruption charges.  Maduro claimed his administration was 
doing all it could, but that other "independent" GOH 
entities, such as the judiciary, the PM, and the Supreme 
Court of Accounts (Tribunal Superior de Cuentas - TSC) could 
do a better job, although he believed the incumbent Attorney 
General was doing a much better job than his predecessor. 
(COMMENT:  Power in Honduras remains extremely concentrated 
in a few powerful political figures.  For some time, GOH 
officials have blamed inaction on uncooperative independent 
agencies.  However, Post believes that if the President was 
determined to tackle high-level corruption these agencies 
could be "persuaded" to move cases forward.  END COMMENT) 
 
¶4. (C) Maduro also noted that his administration was in the 
process of seeking a USD one million World Bank loan to hire 
more qualified people to make the TSC (the government agency 
tasked with auditing public accounts) more effective.  The 
TSC currently employees over 600 people, many of whom have no 
 
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knowledge of standard accounting or public procurement 
practices.  In two years of existence, the TSC has yet to 
uncover a single meaningful case of corruption.  It is also 
of some concern that the GOH is seeking World Bank support 
for what should be a key budgeted recurring expenditure.  If 
it is ever to be effective, the TSC must, among other things, 
have a secure and predictable budget. 
 
-------------------------------------------- 
Whither Honduras' Anti-Corruption Commission? 
-------------------------------------------- 
 
¶5. (C) Ambassador raised U.S. concerns over the ongoing 
demise of Honduras' independent National Anti-Corruption 
Council (CNA) and rumors that the GOH was considering placing 
a reformed CNA under the control of the PM.  Maduro 
vehemently denied the GOH ever considered putting the CNA 
under the PM and queried Ambassador on who was spreading such 
rumors.  Minister of the Presidency Cosenza told Ambassador 
that he knew Roman Catholic Cardinal Oscar Andres Rodriguez 
was considering stepping down as Chairman of the CNA, but 
claimed that this was related to the Cardinal's concerns over 
a dispute regarding the GOH's recognition of several 
homosexual rights NGOs, not with corruption.  Cosenza also 
claimed that German Espinal, ex-executive director of the 
CNA, was unanimously dismissed by the CNA's board because of 
his poor leadership.  Cosenza's explanation regarding the 
reasons for Cardinal Rodriguez's possible resignation from 
the CNA contradicts statements made to PolCouns by the 
Cardinal's executive assistant, who stated that the Cardinal 
was aware of corruption in Honduras and would not continue to 
participate in the moribund CNA.  Cosenza went on to say that 
the administration has a plan for a reformed CNA that would 
keep the entity independent. 
 
------------------------------------------ 
Callejas Vindicated of Political Charges?? 
------------------------------------------ 
 
¶6. (C)  Cosenza informed Ambassador that the politically 
motivated charges against ex-president Rafael Leonardo 
Callejas (1990-94) of the National Party and his associates 
were legitimately dismissed by the PM after several 
tribunals, including the Honduran Supreme Court, ruled to 
dismiss charges.  The Supreme Court voted over a year ago, 
8-7, along strict party lines, with the Nationalists in the 
majority.  Also, Maduro claimed no prior knowledge of the 
PM's decision, stating that, just like Attorney General 
Ovidio Navarro, he felt the need to recuse himself because of 
his past involvement as head of the Honduran Central Bank 
during the Callejas administration.  This statement by Maduro 
directly contradicts reports that Navarro met with Maduro and 
President of the Supreme Court Vilma Morales to discuss his 
proposed dismissal of these cases.  While Cosenza felt the PM 
no longer had any reason to pursue corruption charges against 
Callejas, he did acknowledge that the PM's timing was poor. 
(COMMENT:  Maduro, like many figures in the National Party, 
owes his political allegiance to Callejas.  It is clear that 
Callejas enjoys a patron/client relationship with many 
National Party figures who have a vested interest in 
protecting him.  It is widely believed in and outside of 
Honduras that Callejas was one of the most corrupt Honduran 
presidents since the re-establishment of democracy.  END 
COMMENT). 
 
------------------------------- 
Maduro Sees Regional Conspiracy 
------------------------------- 
 
¶7. (C) Recalling comments he made to the Secretary during 
their October 21 meeting, Maduro told Ambassador he believed 
there was a region-wide conspiracy to destabilize the 
governments of Central America by prosecuting ex-presidents 
on corruption issues.  Maduro was not specific about who the 
organizers of this conspiracy are.  In Honduras, fewer than 
500 members of the Popular Block and other popular 
organizations and labor groups have demonstrated in support 
of the dismissed fiscales and against corruption.  He told 
Ambassador that this movement intended to replace the ruling 
classes and, if successful, could throw the region into 
turmoil. 
 
--------------- 
MCC Eligibility 
--------------- 
 
¶8. (C) Ambassador reminded Maduro both of the necessity for 
Honduras to continue making meaningful progress on the 
anti-corruption front, noting Transparency International (TI) 
had given Honduras a poor score on its latest survey and that 
public perception is growing that Honduras is backsliding on 
corruption issues.  While granting that Honduras had made 
some progress on structural issues, Ambassador reminded 
Maduro that even when overwhelming corruption evidence is 
presented (as in the case of Deputy Attorney General Yuri 
Melara and a list of 16 judges that the Minister of Public 
Security provided to the Supreme Court President), the GOH 
has found reasons not to act.  Ambassador emphasized that the 
GOH must do a better job of fighting high-level corruption. 
Minister Cosenza told Ambassador that the Maduro 
administration was well aware of the MCC eligibility criteria 
and felt that on more measurable issues, Honduras was doing 
fine.  He added that it would be a shame if Honduras were not 
selected to receive funds based on distorted misperceptions 
that Honduras was not doing enough to fight corruption. 
Cosenza did note, however, that the GOH was open to the MCC 
requiring certain anti-corruption benchmarks be met to 
receive MCA funding, saying he had discussed this with two 
MCC Vice Presidents during recent meetings in Washington. 
 
------------------------------------- 
A Clear Lack of Leadership at the Top 
------------------------------------- 
 
¶9. (C) COMMENT: While the GOH remains rhetorically committed 
to fighting corruption, at the highest levels the political 
will and required leadership to address high-level corruption 
in Honduras falls short of what is needed.  Maduro was 
visibly put-off by the Ambassador's suggestion that Honduras 
needed to do more on the anti-corruption front.  Apart from 
the fact that Honduras could be found ineligible to receive 
future MCA funds based on its undistinguished anti-corruption 
record, Maduro appears more preoccupied with maintaining the 
political status quo.  Post also notes that Maduro's strawman 
of a conspiracy to threaten the political stability of 
Honduras and other Central American countries has been a 
constant throughout his administration whenever Maduro is 
facing political controversy.  While this alleged conspiracy 
has been attributed to many (public teachers unions, the 
leftist Popular Block currently protesting the PM 
controversy, the Cubans, etc.), the GOH has never presented 
concrete evidence to support its claims.  Post believes 
Maduro should confront the issue head-on by calling for a 
high-level review of the PM's recent decisions and of alleged 
corrupt sitting judges.  END COMMENT. 
Palmer