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C O N F I D E N T I A L SECTION 01 OF 02 TEGUCIGALPA 000782 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/IFD, WHA/EPSC, INR/IAA, DRL/IL, AND L/LEI, 
STATE FOR EB/OMA AND WHA/CEN 
STATE PASS USTR 
JUSTICE FOR CRIMINAL DIVISION/FRAUD SECTION/MARK MENDELSOHN 
AND WILLIAM JACOBSON 
 
E.O. 12958: DECL: 05/09/2017 
TAGS: ECON ECPS EINV ELAB HO KJUS KPRV PGOV PINR
SUBJECT: HONDURAS: FACING CORRUPTION CHARGES, HONDUTEL 
MANAGER DEMOTED, THEN PROMOTED 
 
REF: A. TEGUCIGALPA 579 
     ¶B. TEGUCIGALPA 736 
 
Classified By: Classified by Ambassador Charles Ford for reasons 1.4 (B 
,D) 
 
¶1. (C) SUMMARY:  In a series of surprise moves, Hondutel 
operations director Marcelo Chimirri was essentially stripped 
of authority at the state run telecommunications company and 
all his legal actions during his tenure were nullified. 
However, Chimirri was then promoted several days later as the 
interim head of Hondutel.  President Jose Manual "Mel" Zelaya 
personally intervened to help Chimirri despite compelling 
evidence regarding his role in corruption presented by 
Hondutel Chief Jacobo Lagos, who subsequently resigned. 
Congressional members may be able to use this moment to 
present a CAFTA compliant version of the oft-delayed 
Telecommunications Law in Congress. END SUMMARY. 
 
¶2. (C) At a regularly scheduled board meeting for state 
telecommunications company Hondutel April 20, general manager 
Jacobo Lagos presented compelling evidence of corruption at 
the company, much of which was due to operations director 
Marcelo Chimirri (ref A).  Lagos presented evidence of 
international carrier contracts negotiated with seemingly 
arbitrary rates, and described a fraudulent scheme used by 
the carriers to isolate disputed charges every month which 
they never paid (Comment: Post issued a Foreign Corrupt 
Practices Act cable, ref B, that identifies the carriers and 
describes in more detail how the scheme works.  End Comment). 
 
 
¶3. (C) In response to the charges, the Hondutel board, led by 
Finance Minister Rebecca Santos, gave support to an 
initiative by Lagos to investigate the contracts and 
undertake a technical audit of Hondutel facilities.  The 
initiative, summed up in a memo to be released to all 
Hondutel personnel May 4, would also render any legal 
decisions made during Lagos' administration (which began 
January 15) subject to review by the audit committee.  The 
memo specifically stated that any decisions made without his 
consent during this period would be declared illegal and void 
(Comment: This was specifically aimed at actions committed by 
Chimirri.  End Comment). 
 
¶4. (C) The memo was sent out on May 4 and, on May 7, the 
situation took another dramatic turn.  Another meeting of the 
board of directors was called in the afternoon, and by early 
evening Lagos' authority had been reduced and Chimirri was 
reinstated, this time as the interim head of Hondutel. 
President Zelaya has stated that he "could not permit two 
officials to continue fighting," and he had to fire Lagos 
because of their "incompatibility of characters."  When asked 
why Lagos was fired instead of Chimirri, Zelaya responded 
that Chimirri simply had more experience on the job. 
 
¶5. (C) In a meeting May 8 with EconChief, Lagos indicated 
that he was called to the President's office May 7 and was 
told by Zelaya that the President had a "moral commitment to 
reinstate Chimirri. Also in the meeting with Lagos and Zelaya 
were the Vice Minister of Industry and Commerce (SIC) Jorge 
"Coki" Rosa, and the President's son Hector Zelaya. 
(Comment: Lagos was convinced that Rosa, a board member of 
Hondutel, was positioning himself as the next head of 
Hondutel.  Post has not been impressed with Rosa's 
contentious tenure at SIC, and his naming to Hondutel would 
not bode well for a future market opening.  The presence of 
Hector Zelaya, a close confidant of his cousin Chimirri, 
reinforces the strong bond the Hondutel manager has with the 
President.  End Comment). 
 
¶6. (C) President of Congress Roberto Micheletti reacted with 
anger at the change of events, and met with Ambassador on May 
¶8.  In the meeting he detailed a new legislative strategy 
that would present a CAFTA compliant version of the 
telecommunications law to Congress within the next few days. 
(Comment: Historically the office of the President would 
submit this type of legislation for Congressional review, but 
the latest version of the law submitted by the President was 
 
TEGUCIGALP 00000782  002 OF 002 
 
 
roundly criticized by the telecommunications community and 
eventually withdrawn by the President.  End Comment).  The 
plan would be to have a member of a minor party present the 
legislation on the floor of the Congress, and Micheletti in 
turn would quickly place the draft law on the agenda.  Post 
has worked extensively with Congressional members from both 
major parties involved with the legislation, and most have 
appeared supportive of the CAFTA compliant version of the 
law.  It is hoped that this strategy, coupled with more 
scandal at Hondutel, may enable Congress to pass the law even 
with executive office opposition. 
 
¶7. (C) SUMMARY:  The news that Chimirri had lost out in a 
power struggle for Hondutel was a pleasant but somewhat 
confusing surprise ) Post had assumed the connection between 
Chimirri and President Zelaya, whether through family 
relations or illicit business dealings, was stronger.  In the 
end, with President Zelaya awkwardly reinstating Chimirri 
with even greater powers and sacking Lagos, the strong 
connection did prove out.  Post is still unclear on what role 
Rebecca Santos played in this drama ) did she have the 
President's permission to move against Chimirri and Zelaya 
changed his position, or did she not seek his approval?  In 
the more likely scenario Zelaya changed his position, perhaps 
after a talk with Chimirri.  While the bond between the two 
may be too strong to break, passage of a new 
telecommunications law that opens the market to competition 
promises to limit or eliminate Chimirri,s ability to 
intervene in the telecommunications industry. END SUMMARY. 
FORD