When Corruption Is the Operating System: The Case of Honduras

On March 3, 2016, news came of one more violent crime. A woman, Berta Cáceres, had been shot in the predawn in her home in southern Honduras. It was one of those stories that abruptly fuses attention to an unfamiliar, seemingly random place: a country with an unpronounceable capital, a segment of the slender serpentine that separates the Caribbean Sea from the Pacific, a country known for forests and cigars and the northward flight of tens of thousands of children, and, yes, for murder. But Cáceres was no ordinary woman, and her assassination had an import all its own: it somehow encapsulated the nature of the corruption that Honduras shares with at least sixty-five countries worldwide²—and the nature of some of the civic movements that are most successfully fighting it.

Honduras may seem a relatively insignificant country, of interest largely to Latin Americanists who came of age in the waning years of the Cold War. But the ways in which power is exercised there, and to what ends, are no local idiosyncrasy. Honduran dynamics illustrate core features of the way politics are taking shape worldwide in the twenty-first century, how reputedly open or even apparently chaotic economies are in reality structured, and how those dynamics help propel climate change, persistent inequality, and spiraling conflict.

It is no longer possible to think of corruption as just the iniquitous doings of individuals, be they street-level bribe payers, government officials, or business executives. In the five dozen or so countries of which Honduras is emblematic, corruption is the operating system of sophisticated networks that link together public and private sectors and out-and-out criminals—including killers—and whose main objective is maximizing returns for network members.³ Corruption is built into the functioning of such countries’ institutions. And, like the criminal organizations that are threaded through their fabrics, the networks cross international boundaries. Exchanging favors and establishing beachheads with partners and service-providers around the globe, they might best be considered transnational kleptocratic networks.

Populations from Afghanistan to Brazil, Iraq to South Korea have lashed out in recent years at this self-interested structuring of their economies and politics in a variety of ways. Many, in Brazil and Egypt, for example, Malaysia and Tunisia, have risen up in protest, sometimes toppling their political leaders. Others have joined extremist movements or criminal gangs, as in Afghanistan, Iraq, Mexico, and Nigeria. Elsewhere, people have voted for fringe political parties or champions, who promise fundamental—even radical—change. The most spectacular version of the latter may have been the 2016 U.S. presidential election, which took place as some 60 percent of the Americans polled reported fearing corrupt politicians more than any other threat, according to an annual survey,⁴ and both the unexpectedly popular Democratic Party candidate Bernie Sanders, and the victor, Donald Trump, made corruption central to their electoral campaigns.

Embedded in these extreme reactions to the scourge of corruption is an indictment: despite the efforts of thousands of people worldwide, in government oversight bodies, corporate compliance offices, nonprofit organizations, and development agencies, the mainstream response to corruption has not come close to meeting popular demand for a solution. Sometimes this failure has been due to the kleptocrats’ ability to co-opt or disable independent authorities. The pursuit of monetary returns above other considerations on the part of many, or else willful blindness, or competing incentives or inattention, have led to policies that reinforce and facilitate these networks and their practices at home and abroad. Civil society organizations often seek ways of working “with” the corrupt government and businesses they wish to reform, with uneven results.

But at least part of the failure may be attributed to an honest misunderstanding of the way corruption operates.

Not, of course, that studies of power dynamics in developing countries have never been undertaken. On the contrary, the field of political economy analysis burgeoned in the early 2000s, with many aid agencies and international lending institutions conducting country studies.⁵ But those efforts often focused on formal institutions and informal practices, not de facto structures, and largely discounted corruption as a general and inevitable feature. And within a few years, as development experts Thomas Carothers and Diane de Gramont chart in Development Aid Confronts Politics, the studies’ utility came into question—due to the “sensitivity and resistance” of host-country governments and the difficulty of translating often academic insights into concrete development approaches.⁶ The result was a shift to more sector- or project-specific analysis.⁷

But that shift means that the true dimensions and architecture of the problem go unnoticed. The sophistication, resilience, and adaptability of kleptocratic networks have escaped an equally cold-blooded understanding of their structures, modes of operation, and true scale. Too often, Western government officials still seem almost frightened to conduct such overarching analysis at all, concerned that even to try to inform themselves would be, once again, “too sensitive.”⁸ The work of investigative journalists or civil society organizations is usually tightly focused on the details of specific cases. A picture of the network as a whole fails to emerge, making strategic approaches difficult to develop.

Given the importance of corruption, its contribution to upheavals, violent conflict, and environmental damage worldwide, such disregard of its modalities is dangerous. It is time to return to bigger picture analysis.

This study seeks to do so by applying a framework for mapping kleptocratic networks and their practices to the case of Honduras, and by providing a reasonably legible depiction of that country’s integrated kleptocratic system. The framework and graphic template can be used to guide the study of any state or region,⁹ with a resulting picture that will differ depending on such factors as geography and natural environment, political history, economic fundamentals, and diplomatic context.

The principle is to examine in turn the public, private, and criminal sectors, as well as outside people and institutions that are interacting with the political economy of a given country, for signs that they are colluding in the illegitimate capture of wealth on behalf of network members—that they are, in effect, looting the commons.

In the case of the public sector, the inquiry must determine whether elements of state function have been tooled to serve the purpose of wealth-maximization, while government agencies that represent potential obstacles to it have been expressly disabled. For the private sector, the question is not just whether the structure of the economy is skewed toward the capture of rents by a limited number of people. The analysis must also find out whether these individuals exploit inordinately privileged state protection or relationships with members of government to secure those rents. In examining the criminal sector, similarly, it is potential personnel-sharing as well as active, system-wide government protection in return for a portion of the revenue stream generated by illicit activities that are of interest.

To draw the conclusion that a given government is functioning as an integrated kleptocratic network, it is necessary to see a pattern across many institutions and industries. Just as human rights reporters must demonstrate a repeated and consistent series of actions in order to dub their aggregate a “gross violation” and not just random acts of violence, so must this analysis make a distinction between merely opportunistic acts of corruption and the species of deliberate design that leaves distinctively consonant traces.

The novelty of this framing is its focus on the interpenetration of the three sectors. A ranking government official may have a brother who provides legal services to a drug cartel, or be married to the CEO of a company that depends on public contracts or permits. Individuals may cycle in and out of business and government. This flexible interweaving of the strands of kleptocratic networks is what makes them so resilient. So it is worth exploring the different ways that interpenetration is manifested. Are individuals wearing two hats, for example, playing a role in the public and the private sectors simultaneously and thus serving as a node linking the networks? Are key leaders in one sector represented in others by a nephew or a confidante? Or does an exchange of favors constitute the main form of interaction between one sector and another?

In Honduras, examples of all three categories of intersection are abundant.

These deep, real-world ties binding the sectors beneath the surface of ostensibly separate formal designations make the job of well-meaning, outside interlocutors difficult. Partners—in either foreign governments or business—tend to accept stated distinctions between public, private, and criminal sectors at face value, and treat each as though it were qualitatively different from the others. Some outsiders, taking the apolitical nature of their actions for granted, may be unaware of ways that their investments or support may reward this mode of operation. Other interlocutors may not care if they are facilitating kleptocratic capture of the local economy. In yet other cases, services are rendered to the network with eyes wide open. This analysis examines such supportive external actors. A distinction is made between enablers whose cooperation may be unwitting or well-intentioned, and service-providers better thought of as network employees. The geopolitical context or other conditions that favor permissiveness toward the Honduran government are also considered.

Like the webs of some species of spiders, the picture of such a complex and dynamic system can seem hopelessly chaotic—especially given the rivalries that periodically disrupt the configuration. Within the political-economic elite, such competition may play out in divergent party allegiances and political partisanship. Rivalries among those whose primary occupation is criminal can get more violent, and may draw selective enforcement campaigns in their wake. This project’s research and design team has developed an infographic that visually alludes to this complexity, while simplifying it to the point of legibility. The long illustrative text in this report, divided up by the four sectors outlined above (public sector, private sector, criminal sector, and enablers, followed by a brief treatment of the places where the captured money tends to flow) will inevitably be more cumbersome, and may occasionally seem repetitive as it revisits some of the same strands as they weave back and forth from one sector to another. It also includes at least a glance at potential countervailing forces.

The research required to build up such a picture is quite literally infinite, since conditions are continually changing. The best way to construct one of these analyses would be to do so as an open-ended project, with ongoing contributions from teams that include trained investigators experienced in financial investigation, corporate due diligence, and network analysis. It would make sense for foreign ministries and businesses or philanthropies with long-standing interests in specific countries to invest in such open-ended analyses.

Short of a commitment of that order, this report reflects a necessary degree of selectivity. Some of it is keyed to specific impacts of network operations. In particular, our research was sensitive to ways this type of political economy threatens the environment. That emphasis was deliberate, given the significant long-term security threat represented by environmental degradation. The team gave a light touch, by contrast, to some perhaps better known aspects of the Honduran context. The relatively shallow examination of the structure of Honduran security forces—and of U.S. assistance to them—will disappoint some readers.

This study also underemphasizes the truly transnational nature of these kleptocratic networks, whose tendrils wind through similar structures in neighboring Colombia and El Salvador, Guatemala, Mexico, Panama, and the United States, extractive industry interests in Canada, and Washington lobbyists, among others. The global nature of kleptocratic networks like Honduras’s urgently needs further work.

We had to make more prosaic compromises as well—striking a balance between clarity and detail, between dynamic, multidimensional realities and static, two-dimensional depictions, and between suspicions and documented proof.

Nevertheless, what follows provides a relatively in-depth effort to analyze systematically a problem that is certainly systemic. And it casts light on some of the most preoccupying repercussions for Honduras and its region.

Known for the drug trafficking and gang violence that turned whole neighborhoods into no-go zones, for example, where drivers had to roll down their windows and submit to interrogation by local lookouts before entering, and houses were mysteriously emptied of occupants overnight, Honduras has lost tens of thousands of young people in recent years, “disappeared” or driven onto the perilous routes north.¹⁰

The violence and intimidation they have fled are largely chalked up to the behavior of criminal organizations alone. Corrupt government officials, such as police or border personnel, are usually cast in supporting roles—as individuals who looked the other way in exchange for a bribe.¹¹ Or their venal behavior is counted among the obstacles to combating crime, but not as a dimension of the criminal activity itself.

In reality, as our findings make clear, the reinforcing relationships between public officials up to the highest level, business elites, and criminal organizations are much more organic and intrinsic than that framing suggests. In some cases, gangs serve as police auxiliaries. In others, gang membership can be understood as a reaction to the systematized corruption—an effort to build an autonomous social space. While Hondurans point to evidence of progress in curbing drug trafficking, most interviewees for this report agree it was achieved only reluctantly, under U.S. pressure. Urban violence and out-migration, in other words, are by-products of the corruption of the very government that enjoys U.S. (and European Union) support to combat those ills.

The reinforcement of corrupt operating principles in the past decade has also led to a concerted assault on Honduras’s remarkable landscape. From a state of emergency to combat the mountain pine beetle, which has loosened the controls on logging and contributed to the expansion of inefficient biomass power generators, to the dozens of concessions for mines and hydroelectric dams awarded since the 2009 military coup, to drug-traffickers’ penchant for laundering money by clearing rainforest for cattle ranches, a blitz is under way to convert nature into cash. Local campaigners like Cáceres, who have protested these developments, often inspired by a profoundly different attitude toward the relationship between human beings and the world around them, have been subjected to an onslaught that has made Honduras the most dangerous country in the world for environmental activists.¹²

One of the most striking developments revealed in this research is how the kleptocratic network has cynically exploited international climate concerns to corner a sweetheart market for solar energy production and revive large-scale hydroelectric installations—after their destructiveness to the environment and local communities led to a reduction in new dam construction worldwide in recent decades. In this way, though Honduras is not endowed with hydrocarbons, it is suffering its own version of the resource curse.¹³ Arrayed against this nefarious variety of carbon neutral development, often vulnerable indigenous communities and their allies are drawing inspiration from strands of traditional beliefs and practices to weave a new vision for the future.

Notes

² For the full list and methodology, see Corruption: Violent Extremism, Kleptocracy, and the Dangers of Failing Governance, Before the Senate Comm. on Foreign Relations, 113th Cong., (June 30, 2016) (statement of Sarah Chayes, https://www.foreign.senate.gov/imo/media/doc/063016_Chayes_Testimony.pdf).

³ For explorations of how these systems work in a variety of settings, see for example Tom Burgis, The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth (New York: Pegasus, 2013); Sarah Chayes, “The Structure of Corruption: A Systemic Analysis Using Eurasian Cases,” Carnegie Endowment for International Peace, June 30, 2016, http://carnegieendowment.org/2016/06/30/structure-of-corruption-systemic-analysis-using-eurasian-cases-pub-63991; Sarah Chayes, Thieves of State (New York: Norton, 2015); Karen Dawisha, Putin’s Kleptocracy: Who Owns Russia? (New York: Simon & Schuster, 2014); Balint Magyar, Post-Communist Mafia State: The Case of Hungary (Budapest: Central European University Press, 2016); and Minxin Pei, China’s Crony Capitalism (Cambridge, MA: Harvard University Press, 2016).

⁴ Chapman University Survey of American Fears, “America’s Top Fears, 2016,” Wilkinson College of Arts, Humanities, and Social Sciences, October 11 2016, https://blogs.chapman.edu/wilkinson/2016/10/11/americas-top-fears-2016/.

⁵ See, for example, Tom Dahl-Østergaard et al., “Lessons Learned on the Use of Power and Drivers of Change Analyses in Development Cooperation,” OECD DAC Network on Governance, Organization for Economic Cooperation and Development, September 20, 2005, https://www.oecd.org/dac/governance-peace/governance/docs/37957900.pdf.

⁶ Thomas Carothers and Diane de Gramont, Development Aid Confronts Politics: The Almost Revolution (Washington, DC: Carnegie Endowment for International Peace, 2013), 148–49.

⁷ Ibid., 164. “Mainstream aid organizations are both expanding and rethinking their use of political economy analysis. The thrust of this move is toward more focused studies, moving from the country level to sector-level or problem-focused approaches.”

⁸ During briefings on this methodology, the sentiment was expressed, in these terms, by government officials in Germany, Sweden, and the United States, among other countries.

⁹ This was first tested on Azerbaijan, Kyrgyzstan, and Moldova in June 2016. See Chayes, “Structure of Corruption.”

¹⁰ For an in-depth and relatively recent look at the Central American migrant crisis, see “Easy Prey: Criminal Violence and Central American Migration” (Latin America Report No. 57), International Crisis Group, July 28, 2016, https://d2071andvip0wj.cloudfront.net/057-easy-prey-criminal-violence-and-central-american-migration.pdf.

¹¹ Including at the U.S. border. See Ron Nixon, “The Enemy Within: Bribes Bore a Hole in the U.S. Border,” New York Times, December 28, 2016, http://www.nytimes.com/2016/12/28/us/homeland-security-border-bribes.html?emc=eta1&_r=0.

¹² See “On Dangerous Ground,” Global Witness, June 20, 2016, https://www.globalwitness.org/en/reports/dangerous-ground/; as well as “Honduras: The Deadliest Place to Defend the Planet,” Global Witness, January 31, 2017, https://www.globalwitness.org/en-gb/campaigns/environmental-activists/honduras-deadliest-country-world-environmental-activism/.

¹³ See Sarah Peck and Sarah Chayes, “The Oil Curse: A Remedial Role for the Oil Industry,” Carnegie Endowment for International Peace, September 30, 2015, http://carnegieendowment.org/2015/09/30/oil-curse-remedial-role-for-oil-industry-pub-61445.

Just a few more than 8 million people live in Honduras, generating an official gross domestic product (GDP) of $20.93 billion in 2015—meaning, if it were divided up evenly, that everyone would get about $2,527 per year. But like most Latin American countries, Honduras has a grossly unequal distribution of income,¹⁴ and an even more unequal distribution of wealth. In other words, a great many Hondurans make due with much less. Agriculture, including timber, accounts for nearly 14 percent of GDP, and industry, such as textile manufacturing, twice that, though the latter category includes processed agricultural goods such as sugar and coffee. A full 18 percent of GDP is provided by remittances sent home by Hondurans working abroad,¹⁵ with at least one-fifth of households benefiting from such assistance.¹⁶ No sign of the bloated illicit sector—the drug trade, the lively traffic in consumer goods or migrants or weapons—is to be seen in such official figures, so they present a highly distorted picture of the economy.

Leaving Bananas (But Not the United States) Behind

The original exemplar of the pejorative term “banana republic,” Honduras at the turn of the twentieth century was dominated both politically and economically by three competitive U.S.-owned banana growers.¹⁷ In a symbol of these companies’ raw power, the owner of one of them, Samuel Zemurray, fomented a coup in 1910 to secure desired land and trade concessions.¹⁸ While not formally a U.S. colony, in other words, Honduras resembled one in many aspects of its political and economic structure. When practices stopped short of violent regime change, the banana industry still sewed corruption into the fabric of the state, regularly bribing and leaning on officials, pursuing self-enriching land policies, and eventually drawing the Honduran government into a protracted intra-banana-company feud.¹⁹

Hit by crop blights and the Great Depression in the 1930s and 1940s, banana exports declined and the local economy diversified a bit.²⁰ A professional middle class began emerging;²¹ the government made investments in infrastructure and paid down its public debt;²² and legislative reforms opened the way for labor and peasant (campesino) leaders to organize.²³ But the preoccupation of the then president, former general Tiburcio Carías Andino, with maintaining his grip on power during this relatively stable period forestalled the germination of robust democratic institutions at a time when rising expectations were about to clash with the landed aristocracy’s sense of entitlement.²⁴ Political and economic upheaval marked the 1950s and early 1960s.25

Tensions over demands for social reforms, such as labor and social protections but especially land distribution, came to a head with a coup in 1963.²⁶ Honduras embarked upon two decades of rule by the military, in loose alliance with landowning elites. The social justice aspirations of the rural and urban poor went largely ignored.²⁷ Compared to neighboring Guatemala and El Salvador, however, the Honduran military practiced relative restraint and allowed for a measure of civic pluralism. Honduras was largely spared the death squads, disappearances, and torture that plagued other Central American countries.

Domestic discontent with economic stagnation and a procession of corruption scandals—but also pressure from the human rights conscious administration of then U.S. president Jimmy Carter—prompted the military to organize first a vote for a constituent assembly in 1980, and finally a presidential election in 1981.²⁸

But, hemmed in as it was by its more violent neighbors, Honduras could not escape the repercussions of conflicts in Nicaragua and El Salvador. Ronald Reagan’s administration demanded that the country serve in one case, and not serve in the other, as a rear base for rebel groups from both countries.²⁹ The militarization of the 1980s substantially impacted the character of Honduras.

Referred to as the USS Honduras due to its launching function for American troops,³⁰ the country received hundreds of millions of dollars in U.S. military aid through the 1980s—when the United States was gripped by outsized fears about the national security threat emanating from Nicaragua—with an average annual assistance of $57.7 million during the peak of the Contra conflict.³¹ Significant increases in funding for the military expanded its power, and though Honduras remained under civilian government during this time, political assassinations, kidnapping, and disappearances all increased.³²

The combination of military power and ideological context brought with it persecution of leftist activists, including the well-publicized kidnapping and torture of union leader Rolando Vindel González, and purges of left-leaning faculty from Honduran universities.³³ Impunity was the rule in these cases, with no repercussions for military units or officers widely believed to have been involved in human rights abuses,³⁴ even as evidence of state terrorism, secret detention centers, and hidden cemeteries and mass graves came to light.³⁵ U.S. involvement at this time also served to empower the growing drug-trafficking sector in Honduras, as the United States contracted with narco-entrepreneur Juan Ramón Matta Ballesteros’s air fleet to distribute arms to the Contras.³⁶

The Economy: Battered And Restructured

In the 1990s, Honduras (like many other countries worldwide) embarked on a process of privatization, economic liberalization, and insertion into the globalizing economy, promoted by the United States and many multilateral institutions.³⁷ International Monetary Fund (IMF)–sponsored structural adjustment programs called for curbs to government expenditures, and an opening of the market to foreign investment, new export commodities (including sweatshop textiles), and tourism.³⁸

In mid-October 1998, a swirl of high winds that had been making its way across the Atlantic from West Africa churned into the Caribbean. Stalling and jerking forward again on its westward drift, dumping several feet of rain in places, the lumbering system took a full week to reach Honduras. But when it did, Hurricane Mitch wreaked historic destruction. Storm surges, flooding, and mudslides resulted in over 11,000 deaths across the region, left 3 million people homeless and displaced, and tore up as much as three-quarters of crops in the field, alongside other economic losses.³⁹

The Honduran government, led by the recently elected president from the Liberal Party, Carlos Roberto Flores Facussé, was ill-equipped to deal with the most destructive storm to hit the region in two centuries, and moved to concentrate power to manage the crisis.⁴⁰ On October 29, Flores declared a state of emergency, deploying the military to the most affected areas to impose public order and prevent looting. He suspended civil liberties and imposed a curfew on November 3.⁴¹

To tackle the longer-term recovery from the crisis, Flores brought in a new cabinet of five ministers. Inaccessible to local officials and congressional representatives alike, according to critics, the team designed the national reconstruction plan largely in secret.⁴² In early 1999, shortly after the government unveiled the blueprint, then human rights commissioner Leo Valladares reported on alleged widespread misuse of foreign aid.⁴³

The economic wreckage, nationwide disorientation, and crisis atmosphere made it easier to implement contested economic restructuring: further opening the Honduran market to foreign investment, including expansion of the maquiladora textile, export agriculture and tourism industries, and sales of public infrastructure. Many of the initiatives were tied to IMF debt renegotiations, described by proponents inside the government and abroad as vital.⁴⁴ Disproportionately benefiting a small group of families, these initiatives propelled the class of immigrants from Syria and Palestine, of which Flores was a member,⁴⁵ to prominence and gave them control of much of the “modern” economy.⁴⁶

Unsurprisingly, given the devastation wrought by Mitch, abrupt shifts in economic practices, and deportations from the United States, the same period also saw a proliferation of gangs and a rise in urban violence.⁴⁷ This crime boom was further fueled by the rising importance of overland trafficking routes through Central America for U.S.-destined cocaine, among other illicit goods.⁴⁸

The Road Almost Taken

In 2005, amid frightening levels of crime and unrest, Liberal Party candidate Manuel Zelaya narrowly won a presidential bid on a platform that emphasized rehabilitation of violent offenders—a departure from the more traditional mano dura (tough on crime) approach of his predecessor—as well as a more inclusive exercise of power.⁴⁹

Indeed, although Zelaya belonged to the old power structure,⁵⁰ he seemed to pivot away from the inner circle of elite business families when he became president. He adopted an ostentatiously populist personal style, appointed a number of bona fide reformers to his cabinet, and took such provocative steps as increasing the minimum wage and opening investigations into violent land disputes between farmers in a fertile valley along the Caribbean coast and palm oil producers, including one belonging to the enormously powerful patriarch of the new business elite, Miguel Facussé.⁵¹ Zelaya overhauled the way Honduras’s fuel was sourced and distributed, reducing profits for the principal families in the energy business. Neither they nor the United States appreciated his decision to seek cheaper fuel from Venezuela, or his growing friendliness with that country’s president at the time, Hugo Chávez.⁵²

When Zelaya began campaigning in late 2008 for a referendum on constitutional reform, military and economic elites drew the line, seizing on the move as an attempt to eliminate presidential term limits and extend his time in office. The streets filled with demonstrators for and against the referendum as the political crisis grew acute, and the U.S. embassy organized several meetings in 2009 to try to chart a way through it.⁵³

To no avail. In the early hours of Sunday, June 28, soldiers marched on the presidential palace, disarming the guard and shooting out the locks, broke into Zelaya’s bedroom, handcuffed him, and bustled him onto a plane bound for Costa Rica. A forged resignation was produced in Congress (the date was wrong), which swore in its president, Roberto Micheletti, as interim president of the country.⁵⁴ Though soldiers carried out the final acts of this drama, the military did not have the type of independent grievance against the government that, for example, ill-paid and -supplied Malian forces did when they toppled their president in 2012. The 2009 Honduran upheaval is best understood as a corporate coup.⁵⁵ Semantics matter, though, as U.S. law provides for automatic cutoffs in aid in the wake of a military coup.

Strikes, protests, and civic disruption were met with widespread arrests, disappearances, and beatings; meanwhile, media outlets and lobbyists launched both a national and an international campaign to legitimize the new government.⁵⁶ At the end of November, under international pressure but amid an atmosphere of insurrection and ferocious crackdowns to quell it, another election was held, resulting in the victory of a National Party stalwart, Porfirio Lobo.

The attitude to these events struck by then U.S. president Barack Obama’s young administration, beset by two wars in the Middle East and an epic financial meltdown, has sparked heated controversy. After an initially firm reaction to what the U.S. ambassador unequivocally termed a coup⁵⁷—including condemnation and a suspension of non-humanitarian aid⁵⁸—Washington reversed course. Urging Zelaya not to seek reinstatement, then secretary of state Hillary Clinton pushed for speedy elections to normalize the situation.⁵⁹ (The role of her longtime friend and lobbyist, Lanny Davis, in this change of direction is discussed below, pages 99–100.)

The 2014 elections that allowed Lobo’s successor at the helm of Congress to rise in his foot-steps to the presidency itself were only somewhat less problematic than the violence-wracked polls of 2009.⁶⁰ The victor, President Juan Orlando Hernández, is now campaigning for re-election in November 2017—precisely the purported ambition for which Zelaya was toppled.

In two phases, then, this difficult history has helped shape today’s Honduran political economy, selecting for certain groups and practices. In the late-nineteenth and early twentieth centuries, colonial worldviews perceived and treated less-developed countries as suppliers of raw materials and agricultural inputs for the benefit of the dominant industrialized powers. The United States played the latter role with respect to Honduras. Later, the Cold War and deep concerns about leftist subversion defined U.S. policy.

These phenomena have been discussed and argued over elsewhere at length, and this report does not purport to re-litigate them. However, external actors had a heavy hand in creating today’s Honduras, and thus, in our view, bear a responsibility to help fix what they have wrought.

Notes

¹⁴ Honduras had a GINI coefficient of 50.64 in 2014, where 0 is perfectly equal. The U.S. scored 41.06 the same year. See “Data: Honduras,” World Bank, http://data.worldbank.org/country/honduras.

¹⁵ “Honduras,” CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/ho.html, and “Data: Honduras,” World Bank, http://data.worldbank.org/country/honduras.

¹⁶ Katherine Brogan and Elizabeth McGuiness, “FIELD Report No. 19: Assessment of Remittances in Honduras,” USAID, ACDU/VOCA, and FHI360, October 2013, https://www.microlinks.org/sites/default/files/resource/files/FIELD%20Report%20No%2019%20Honduras%20Remittances%20Assessment.pdf. Note that internal remittances are also
important, as city-dwellers send part of their wages back to family members who have remained on the land.

¹⁷ Thomas M. Leonard, The History of Honduras (Santa Barbara, CA: Greenwood Publishing, 2011), 83.

¹⁸ Ibid., 84–85.

¹⁹ See Kirk Bowman, “The Public Battles Over Militarization and Democracy in Honduras, 1954–1963,” Journal of Latin American Studies 33, no. 3 (August 2001): 539–60.

²⁰ Tim Merrill, Honduras: A Country Study (Washington, DC: Federal Research Division, Library of Congress, 1995), 29.

²¹ Leonard, The History, 135–36.

²² Merrill, Honduras, 32.

²³ Leonard, The History, 138.

²⁴ Merrill, Honduras, 32.

²⁵ Leonard, The History, 143. See also John A. Booth, Christine J. Wade, and Thomas W. Walker, Understanding Central America: Global Forces, Rebellion, and Change (Boulder, CO: Westview Press, 2010), 211; and Thomas P. Anderson, Politics in Central America: Guatemala, El Salvador, Honduras, and Nicaragua (New York: Praeger Publishers, 1982), 112.

²⁶ Anderson, Politics, 113.

²⁷ Booth, Wade, and Walker, Understanding, 210–12.

²⁸ Ibid., 212.

²⁹ Ibid., 213.

³⁰ Ibid., 213.

³¹ Ibid., 347.

³² Nancy Peckenham and Anne Street, eds., Honduras (New York: Praeger Publishers, 1985), 194.

³³ Ibid., 211–18.

³⁴ Ibid., 211.

³⁵ See James LeMoyne, “Testifying to Torture,” New York Times, June 5, 1988, http://www.nytimes.com/1988/06/05/magazine/testifying-to-torture.html?pagewanted=all.

³⁶ “Honduras,” InSight Crime, December 6, 2016, http://www.insightcrime.org/honduras-organized-crime-news/honduras.

³⁷ Booth, Wade, and Walker, Understanding, 220.

³⁸ Ibid., 219.

³⁹ “1998- Hurricane Mitch,” Hurricanes: Science and History, 2015, http://www.hurricanescience.org/history/storms/1990s/mitch/; “Mitch: The Deadliest Hurricane Since 1780,” National Climate Data Center, January 23, 2009, https://www.ncdc.noaa.gov/oa/reports/mitch/mitch.html; and “1998: Hurricane Mitch slams into Central America,” History.com, http://www.history.com/this-day-in-history/hurricane-mitch-slams-into-central-america.

⁴⁰ Vilma Elisa Fuentes, “Post-Disaster Reconstruction: An Opportunity for Political Change,” in The Legacy of Hurricane Mitch: Lessons From Post-Disaster Reconstruction in Honduras, ed. Marisa O. Ensor (Tucson, AZ: University of Arizona Press, 2009), 106.

⁴¹ Ibid., 106–7.

⁴² Ibid., 107.

⁴³ Ibid., 113. See also Naomi Klein, “The Rise of Disaster Capitalism,” Nation, April 14, 2005, https://www.thenation.com/article/rise-disaster-capitalism/. For a look at an interesting twist on this “disaster capitalism,” see Benjamin F. Timms, “The (Mis)use of Disaster as Opportunity: Coerced Relocation From Celaque National Park, Honduras,” Antipode: A Radical Journal of Geography 43, no. 4 (2011): 1,357–79.

⁴⁴ Booth, Wade, and Walker, Understanding, 221.

⁴⁵ William Aviles, “The Political Economy of Low-Intensity Democracy: Colombia, Honduras, and Venezuela,” in Corporate Power and Globalization in U.S. Foreign Policy, ed. Richard W. Cox (London: Routledge, 2012), 146.

⁴⁶ Ibid., 147. See also the section on private-sector network members, pages 67–76.

⁴⁷ Booth, Wade, and Walker, Understanding, 221.

⁴⁸ “Honduras,” InSight Crime, December 6, 2016, http://www.insightcrime.org/honduras-organized-crime-news/honduras.

⁴⁹ Booth, Wade, and Walker, Understanding, 223.

⁵⁰ For a history of the Zelaya family, see Will Weissert, “Zelaya Hometown Provides Look at Divided Honduras,” San Diego Union-Tribune, July 7, 2009, http://www.sandiegouniontribune.com/sdut-lt-honduras-divided-070709-2009jul07-story.html. For links between Zelaya and the Sarmiento family, see Steven Dudley, “WikiLeaks: Zelaya and Organized Crime,” InSight Crime, December 12, 2010, http://www.insightcrime.org/investigations/zelaya-and-organized-crime; and “Un hijo de Ulises Sarmiento sustituye a ‘Mel’ Zelaya en Olancho,” El Heraldo, October 6, 2016, http://www.elheraldo.hn/pais/1004221-466/un-hijo-de-ulises-sarmiento-sustituye-a-mel-zelaya-en-olancho.

⁵¹ “Noticia: Plantaciones de palma in Honduras,” Salva la Selva, February 4, 2011, www.salvalaselva.org/noticias/3324/plantaciones-de-palma-en-honduras.

⁵² Fiona Forde, “Oil Negotiation Between Honduras and Venezuela Rankles Washington,” Irish Times, May 20, 2006, http://www.irishtimes.com/news/oil-negotiation-between-honduras-and-venezuela-rankles-washington-1.1005625; “Can President Zelaya Be Brought Back to the Fold?” (U.S. Embassy Tegucigalpa cable to Washington), WikiLeaks, September 19, 2008, http://wikileaks.redfoxcenter.org/cable/2008/09/08TEGUCIGALPA863.html. We heard one account from a former minister of a speech by Zelaya in which a patriarch of one of the families issued a direct threat, to the effect that an attack on any of their interests would be treated as an attack on all of them.

⁵³ Booth, Wade, and Walker, Understanding, 224. For the contemporary view from the U.S. embassy, see “Honduras: A Political Crisis Brews,” WikiLeaks, June 25, 2009, https://wikileaks.org/gifiles/docs/16/1687739_honduras-a-political-crisis-brews-.html; and “Zelaya and the Fourth Urn” (U.S. Embassy Tegucigalpa cable to Washington), WikiLeaks, June 9, 2009, https://wikileaks.org/plusd/cables/09TEGUCIGALPA438_a.html. It is worth noting that Zelaya himself never mentioned eliminating term limits. And now that President Juan Orlando Hernández has announced his plans to run for reelection, it is clear that this ostensible reason for toppling Zelaya was a pretext.

⁵⁴ Booth, Wade, and Walker, Understanding, 225. See also, for example, Elisabeth Malkin, “Honduran President Is Ousted in Coup,” New York Times, June 28, 2009; or William Finnegan, “An Old-Fashioned Coup,” New Yorker, November 30, 2009. One former official showed me cell-phone video of a group of golpistas entering his office with a forged resignation letter and demanding he read it, which he refused to do.

⁵⁵ Much thoughtful and sometimes fraught study and analysis has been devoted to this question. U.S. policy response to a “coup” uses the terminology “military coup,” so much effort has been devoted to proving that it was indeed that. For a selection of some of the more substantive analysis, see Leticia Salomon, “Conozca las diez familias que financiaron el golpe de Estado en Honduras,” El Libertador, August 8, 2009, which identifies Jose Rafael Ferrari, Juan Canahuati, Camilo Atala, Fredy Nasser, and Miguel Facussé, among others, as its primary architects. See also Geoff Thale, “Behind the Honduran Coup,” Foreign Policy in Focus, July 1, 2009. This anonymous slide presentation, oddly branded with an Israeli flag, is suggestive: “Esquema del golpe de estado en Honduras el dia 28 de junio 2009, SlideShare, August 9, 2009, https://www.slideshare.net/xatruchmorazan/esquema-del-golpe-de-estado-en-honduras-el-dia-28-de-junio-2009.

⁵⁶ Salomon, “Conozca las diez.”

⁵⁷ See “Open and Shut: The Case of the Honduran Coup” (U.S. Embassy Tegucigalpa cable to Washington), WikiLeaks, June 28, 2009, https://wikileaks.org/plusd/cables/09TEGUCIGALPA645_a.htm.

⁵⁸ See Arshad Mohammed and David Alexander, “Obama Says Coup in Honduras Is Illegal,” Reuters, June 29, 2009; Ben Feller, “Obama’s Stand on the Honduran Coup,” Associated Press, June 30, 2009; and Tim Padgett, “Why Obama Won’t Use the M-Word for Honduras’ Coup,” Time, September 5, 2009.

⁵⁹ See, among multiple analyses during the 2016 presidential campaign, Robert Naiman, “Did Secretary of State Hillary Clinton Enable the Coup in Honduras?,” Huffington Post, February 19, 2016; or Tim Shorrock, “How Hillary Clinton Militarized U.S. Policy in Honduras,” Nation, April 5, 2016.

⁶⁰ Booth, Wade, and Walker, Understanding, 228.

View Infographic: The Structure of Corruption in Honduras

The networks that have been ushered into control of the Honduran political economy by this process are perhaps less unitary than those of such highly structured kleptocracies as Azerbaijan, or Cambodia, or Zine el-Abidine Ben Ali’s Tunisia.⁶¹ In those countries, the private sector is or was almost entirely dominated by subordinate members of the ruler’s clan. In today’s Honduras, by contrast, the public, private, and criminal sectors, while closely intertwined, are quite fractious and retain at least some autonomy.

For example, much of the modern private sector (banking, energy production, fast food and tourism, telecommunications, a few export commodities) lies in the hands of a small number of families whose shared Levantine origins isolate them somewhat from the rest of Honduran society. Such families—the Facussés, the Canahuatis, the Goldsteins, the Kafies, the Laraches, the Nassers, the Rosenthals, among others—moved to Honduras from the Middle East in the first part of the twentieth century and have benefited from post-Mitch economic policies. Until very recently, they tended to marry endogenously, thus preserving their distinct culture and identity.⁶² (Those marriages can largely be understood as economic alliances.) Several individual members have served in high public office, such as Flores, who was a nephew of the group’s late patriarch, Miguel Facussé; Carlos Facussé’s daughter, Mary Elizabeth Flores Flake, the current ambassador to the United Nations, or former minister to the presidency Yani Rosenthal.

But according to most (though not all) Hondurans interviewed for this study, this dominant Levantine private-sector strand and the public-sector element of Honduras’s kleptocratic networks are not identical, but rather are bound together by a kind of elite bargain. “‘I have to have someone to manage the state,’” a Latin American official working in Tegucigalpa represented the elite’s viewpoint. “‘You do it in my service. You’re there to guarantee our businesses. In return, you can steal as much as you want.’”⁶³ Or, in the words of another highly placed interviewee, “The politicians are at the service of the economic elite. When the president tries to be a real president and doesn’t obey the ten families, you get a coup d’état.”⁶⁴

To put the exchange in strictly material terms, it appears that different revenue streams tend to accrue to different elements of the network. Looting of state coffers, by way of the public health system budget or padded public procurement contracts or self-dealing concessions for hydroelectric dams,⁶⁵ for example, enriches members of the public-sector element, as does the extortion of bribes. To capture returns from public procurement fraud, of course, government officials or their family members have to found private companies: pharmaceutical businesses or contracting firms, for example. So this strand of the private-sector element does fully overlap with the public sector.

But the dominant private-sector network elements reap their gains by way of laws, regulations, and selective enforcement that guarantee them undue profits. At the summit of the network, recompense for these official favors has increasingly taken the form of shares in the companies that stand to benefit, according to multiple interviewees. But the secrecy of corporate records and the use of proxies to hide the identity of the true beneficiaries of such shares made confirming these suspicions impossible.

In the past decade or so, both the elite public- and private-sector circles have been establishing increasingly close connections with the out-and-out criminal networks that run the narcotics trade as well as other types of smuggling, such as trafficking in people. Individuals and families that have tied their fortunes to government service provide legal or other help to criminal organizations, or ensure protection and impunity for their activities. In several cases, members of notorious drug-trafficking families have held local office, thus constituting a node connecting those two sectors. For their part, members of the economic elite connect with criminal organizations by providing money-laundering services or engaging in joint business ventures.

By sheer monetary value, this criminal sector likely dwarfs the other two,⁶⁶ and many experts suggest it should therefore be understood as the dominant element in Honduras’s kleptocratic network. Yet ordinary people’s perceptions and expectations of their government, and their keen desire to find a way to function in the licit economy, suggest that the criminalization and abuse of power of those two sectors may weigh just as heavily on the national psyche. The three sectors will therefore be treated here as of roughly equal consequence.

Notes

⁶¹ See Chayes, Thieves of State; and Chayes, “Structure of Corruption”; as well as “Cambodia’s Family Trees: Illegal Logging and the Stripping of Public Assets by Cambodia’s Elite,” Global Witness, June 2007.

⁶² Victor Meza et al., Poderes Fácticos y Sistema Político (Tegucigalpa: Centro de Documentación de Honduras [CEDOH], 2014); Dario Euraque, “La configuracion historica de las elites en Honduras hasta 1990: una aproximacion” (seminar paper and presentation for “Elites and the Reconfiguration of Power in Central America,” Antigua: American University, February 16–18, 2012); Stephen Dudley, “Honduran Elites and Organized Crime: Introduction,” InSight Crime, April 9, 2016; and numerous interviews.

⁶³ Topping the world in unexplained deaths of environmental activists, Honduras is an extremely dangerous country for those who threaten the regime. For this reason, the names of all interlocutors will be withheld from this publication (interview by author, Tegucigalpa, August, 3, 2016).

⁶⁴ Interview by author, Tegucigalpa, August 3, 2016. Among other versions of the idea we heard, from Hondurans of all walks of life: “It’s financial and media support, and freedom to steal, in return for stability.” “It functions via favors: you do this for me, I do this for you. It’s good for the president and his family and his town.” Leticia Salomón, “La percepción de la relación entre grupos económicos y poder politico,” in Meza et al., Poderes Facticos, 49–50: “Businessmen see the relationship [with politicians] as a bet whose prize is political security for their business, which pushes them to become close to anyone who could win, and ultimately, those who have the possibility of controlling government groups or institutions.” Or, “The quantity of institutions in which private business has institutional representation is worrying, as are the growing amounts of power they are acquiring with each new government. . . . [And] the instrumental vision businesspeople have of the state, which they perceive less as an arbiter and more as a means to transmit their corporate interests” (52).

⁶⁵ See section below on the IHSS scandal on the health budget. On padded procurement contracts, see “Exgerente Roberto Martinez acusado de millonario fraude,” La Prensa, September 5, 2016, http://www.laprensa.hn/honduras/997184-410/exgerente-roberto-mart%C3%ADnez-acusado-de-millonario-fraude. On hydroelectric dams, see “Honduras: The Deadliest Place to Defend the Planet,” Global Witness.

⁶⁶ Although there is not a clear-cut estimate for the size of the criminal sector in Honduras, it has been estimated that extortion alone costs Hondurans upward of $200 million per year (see Mike LaSusa, “Honduras Authorities Grapple With Social, Economic Impacts of Extortion,” InSight Crime, May 2, 2016), whereas cocaine flowing through Honduras has an estimated eventual value of up to $25.2 billion, based on estimates that 90 percent of the United States’ $28-billion cocaine market passes through the Central American corridor; see World Drug Report 2016, (Vienna: United Nations Office on Drugs and Crime [UNODC], 2016), 77, http://www.unodc.org/doc/wdr2016/WORLD_DRUG_REPORT_2016_web.pdf.

“Juan Orlando has all state powers. There is a face of a democracy here in Honduras, but behind it is dictatorship.”
—Austra Bertha Flores López, mother of Berta Cáceres

Several people interviewed for this study echoed this assessment that Honduran President Juan Orlando Hernández is making a strategic effort to consolidate the levers of government power, placing them within his personal grasp. While the means by which he himself may be extracting material gain from this arrangement are difficult to prove, several of them have been persuasively identified. And regardless, a pattern of subjecting institutions to his personal authority—or of ensuring their weakness—is clearly visible. The bulk of the actions or inactions of these agencies has served to facilitate or defend revenue maximization for the principal private-sector network members, or has provided siphoning opportunities for public officials.

National Defense and Security Council

A visible step in the process of consolidation of power was the creation of this powerful and secretive body in 2011. Its stated mission is to design, supervise, and coordinate policy on all matters relating to security, defense, and intelligence, including the appointment and supervision of the director of national intelligence. Made up of the president, the president of Congress, the minister to the presidency, the ministers of defense and security, the chief justice of the Supreme Court, and the attorney general, this council controls all electronic surveillance capabilities and activities, including judicial wiretaps. It also provides the operational command for the interdisciplinary security force, FUSINA. (For more, see the section on military elements on pages 32–35 below.) The mingling of all three branches of government on this council formalizes the violation of the separation of powers that we frequently heard criticized during interviews. Its activities are protected by a law enacted in 2014 establishing broad categories of state secrets.

Congress

The point of capturing a legislative body is to write the rules governing political and economic activity in such a way as to further advantage network members—people who already enjoy disproportionate power in both realms. Integral to that objective is disabling the body’s capacity to serve as an effective check on executive power. In other words, control over a majority of seats in a legislature does not in and of itself constitute “capture” of that body. But if that majority is consistent, election after election, or if ostensibly opposing parties frequently band together to defend network interests, or if internal rules are consistently exploited or violated in such a way as to disable the legislators’ ability to weigh on decisionmaking or exercise nonpartisan control functions at all, then its purpose is subverted.

Just a few minutes contemplating the Palacio Legislativo, the building in downtown Tegucigalpa where the Honduran Congress meets, is instructive regarding the accomplishment of these objectives. The 1950s building, its exterior walls made of dusty glass slats, contains no private offices for the 128 legislators, for example, and only two conference rooms where they can meet in caucus or with constituents. In the chamber, the electronic tally machines frequently malfunction, so when bills come up for a vote, members may not be able to see the score. Everything about the institution indicates its deficit of status, power, and independence.

Beneath the building, however, the contrast is striking: the garage is packed with late-model SUVs, spotlessly black.

Here’s the significance: opposition parties, if they vote together, outnumber the ruling Nationalist Party, and have on occasion thwarted its plans. It is to reduce this likelihood that the Honduran Congress has been weakened, both in its operating procedures and its physical plant.

The president of Congress is firmly in charge of all proceedings. “The ground rules say he decides who speaks and for how long and the agenda,” explains a member of the young Anti-Corruption Party (PAC). At his discretion, the congressional president can also constitute special committees, to which he can divert business, circumventing the formal committee structure. “When there’s a special committee,” comments the PAC member ruefully, “watch out.”⁶⁷

Prior to his inauguration as president of the country, Hernández served for four years in this leadership post. Under his aegis, the systematic process of creating a favorable legislative climate for network practices ignited. Congress passed numerous laws framing economic rules so as to favor activities dominated by private-sector network members. The calendar in December 2013 and January 2014 (when Hernández was still serving as president of Congress but had been elected president of the country) was particularly full—like a final flourish to this fireworks display.

Some of the key laws from his tenure at the head of Congress are described below in chronological order.

The Public-Private Partnership Law (September 2010)⁶⁸

Ostensibly responding to a dearth of government funding for public works projects, this law caters to the interests of private-sector network members by allowing businesses to carry out public works projects under highly flexible and nontransparent arrangements, which allow for the capture of some portion of the public moneys invested, as well as the fees, tolls, or profits realized. Successful bidders may also be paid a “service fee” of up to 2 percent of the total project budget. Typically, project financing is held in trust by a bank (especially Ficohsa and to a lesser extent Atlantida, controlled respectively by members of the Atala Faraj and Nasser-Facussé-Barjum, and the Goldstein and Bueso families), which is in charge of project implementation. Because activities are covered by commercial contract, accounts are not available to the public. (For further discussion, please see the sections below on the Coalianza, and banks, pages 35–36.)

Seven months after the passage of this law, then president Porfirio Lobo and foreign minister Mario Canahuati (a leader of one of the Levantine business clans) hosted an investment conference in San Pedro Sula and announced that Honduras was “Open for Business.” At this event, some 160 projects in the sectors of tourism, energy, infrastructure, forestry, and agribusiness were presented to more than 500 potential international investors, along with a package of complementary laws. The measures protected private investment, set conditions for hourly wage labor, and established free trade zones (referred to as “Model Cities”) whose territory would have been effectively removed from government control and placed under a separate tax and judicial system. (Such zones were ruled unconstitutional in 2012.)⁶⁹

The initiative was crafted to attract an injection of foreign direct investment into Honduras and is believed to have been largely designed by members of the Consejo Hondureño de la Empresa Privada (COHEP), the chamber of commerce dominated by private-sector elements of the ruling network. Conference co-host Canahuati was a past COHEP president.⁷⁰ There were no public consultations, for example, to help constitute the list of projects to be funded.

It was specifically the businesses belonging to these network members that stood to benefit from the enticements on offer, including low interest rates and tax exemptions, but public-sector network members could also take advantage of the secrecy shrouding the contracts in play to move money away from normal budget scrutiny and the strictures of the public procurement law. A further point of the exercise was to garner the injection of outside capital that businesses needed to complete the pet projects.⁷¹ Many of the laws’ benefits apply only to large investments, while a heavier tax burden continues to weigh upon small and medium enterprises.

The Anti-Terrorism Financing Law (December 2010)⁷²

Similar to recently enacted strictures in dozens of countries worldwide,⁷³ this law requires nonprofit organizations to declare any contribution higher than $2,000. The National Commission of Banks and Securities is empowered to act unilaterally against organizations suspected of financial involvement with a group organized for the purpose of committing terrorist acts. A broad definition of that term allows for selective use of this instrument against inconvenient organizations.

Special Law on Wiretapping (December 2011)⁷⁴

While this law includes apparent safeguards, such as the requirement for a court order before personal communications can be intercepted, interviewees were convinced that the government makes wide use of its significant wiretapping capabilities outside the scope of criminal investigations. At a time when Internet-connected devices are vacuuming up unprecedented quantities of personal information, the implications are significant. Hondurans with an interest in public affairs rarely put anything of substance into writing that is sent electronically, and systematically use encrypted platforms for communication.⁷⁵ One journalist we met was so frightened about electronic surveillance that he insisted on writing down his answers to our questions rather than speaking out loud. Honduras scholar Adrienne Pine recounted that before launching into a conversation, one of her contacts requires interlocutors not only to turn off their cell phones, but to remove the batteries.⁷⁶

Special Law of the National Security and Defense Council (December 2011)⁷⁷

This law establishes the permanent council referred to above, consisting of the president, his minister, the president of Congress, the chief justice of the Supreme Court, the attorney general, and the ministers of security and defense.

Secrecy Law (January 2014)⁷⁸

While guaranteeing its own access to citizens’ intimate information by way of the 2011 wiretapping law, the government took care to protect itself from any reciprocal scrutiny. This legislation establishes a level of classification for information described in very general terms as likely to produce “undesired institutional effects,” or whose dissemination might be “counter to the effective development of state policy or normal functioning of public sector institutions.”

The law has made it exceedingly difficult for Honduran citizens to obtain information on most government actions, including key public procurement contracts. As one community leader put it, “There is a privatization of information in this country: if you ask who owns a mine or a dam in your village, those facts are private.”⁷⁹ Among the agencies whose information is considered confidential (not to be released before ten years) are the Supreme Court, the Foreign Affairs and International Cooperation Directorate, the National Migration Institute, the National Registry of People, the Social Security Institute, the Property Institute, the Merchant Marines, and the National Electrical Energy Enterprise (ENEE).⁸⁰ Any transactions these agencies carry out with private entities are also covered by the law.

Some earlier legislation also fits the pattern above, such as a 1992 agricultural modernization law that allowed for the titling and sale of small parcels of land, previously inalienable. Its effect was to undermine collective ownership traditions and open the way for big businesses to buy up and consolidate tracts of land. A 1998 law to promote tourism afforded generous tax breaks to fast food chains as well as a variety of other network-linked businesses. In 2001, a law transferred swaths of forest land from collective indigenous control to the government, opening the way for large-scale commercial, as well as illegal, logging.⁸¹ A 2003 anti-gang law modified the penal code to establish a minimum prison term and fine for leaders of gangs or other groups organized for the purpose of committing crimes.⁸² Critics charge that its broad terminology has allowed it to be used against land rights activists, and blame it for the sharp increase in incarceration in Honduras in recent years. (See below, pages 31–32.)⁸³ A 2007 renewable energy promotion law inordinately benefited large investors by requiring the government to buy all renewable electricity generated by its private contractees, at a rate 10 percent above the base level set in 2007, among other incentives.

Judiciary

One of the most important bonds that hold kleptocratic structures in place is the delivery of impunity in return for a portion of the cash generated by network activities.⁸⁴ Such a bargain can only be upheld if the judiciary and its affiliated institutions—or at least some portion of them—serve at the behest of network members. These institutions can then also be weaponized to punish and deter individuals who contest the ruling order.

More blatantly than in many other corrupt countries, Honduras’s justice sector has been retooled to serve as just such an instrument. The changes it has undergone in the past decade reflect an unmistakable pattern. The justice sector is now openly deployed on behalf of private-sector network members as well as the president himself.

Even before the 2009 coup, some legal professionals strenuously contested what they saw as political influence and obstruction of justice within judicial institutions. In April 2008, for example, eight prosecutors—soon joined by dozens of members of civil society—underwent a thirty-eight-day hunger strike, setting up tents in the Legislative Palace, to demand that charges be brought in more than a dozen stalled anti-corruption cases, and that the attorney general be removed and the professional conduct of his office be investigated.⁸⁵

In the days immediately following the June 2009 coup that toppled Manuel Zelaya, a similar coalition of judges, prosecutors, and civil society activists challenged the legality of its outcome before the Supreme Court. Some of them and others filed a criminal complaint against named members of the military and Congress for their role in the coup. Signatories to the complaint, as well as other judges who took part in public protests or merely expressed concerns about the events, were dismissed, and judicial purges have continued.⁸⁶

In subsequent years, especially 2011 and 2012, despite substantial corruption within the judicial branch, the Supreme Court stood out as one of the few government institutions that pursued an independent path, challenging a number of legislative initiatives favorable to ruling business interests, such as the bill creating the Model Cities and a police reform bill that the court determined violated officers’ due process rights.⁸⁷

In December 2012, Congress, under the leadership of its then president Hernández, set up a special committee to investigate the four judges who had voted to strike down the legislation. Based on a report delivered within twenty-four hours, Congress met in a 4:00 a.m. session and voted to remove all four, though the Honduran Constitution stipulates that judges may only leave office in cases of resignation, incapacitating illness, or death. Amid widespread protests, Hernández immediately appointed replacements.⁸⁸ This series of events was so irregular that it was quickly dubbed the “technical coup.”

Supporters of the earlier corporate/military coup against Manuel Zelaya had rationalized their actions by accusing him of intending to change the constitution in order to run for reelection.⁸⁹ Ironically, Hernández announced his plans to do just that on November 9, 2016.⁹⁰ His takedown of the Supreme Court was widely seen as preparation for this step. “We knew that one of the reasons Hernández needed to control the Supreme Court was the reelection issue,” said a PAC member of Congress. And indeed, on April 23, 2015, his handpicked justices struck down the constitutional provision preventing officeholders from running for more than one term.⁹¹

Less than a year later, in February 2016, Congress approved the new slate of justices, considered close to Hernández. Libre Party’s Jorge Calix alleged that the going rate for votes in Congress was $10,000,⁹² and party Chairman Manuel Zelaya filed a legal complaint.⁹³ “They bought even members of the Anti-Corruption Party,” the PAC member lamented, “by way of family members and suspect elections. They worked on it for months ahead of time. And now, one of our biggest sorrows is that we are stuck with this court for the next seven years. Already we saw their first ruling was not to review the decision allowing presidential reelection.”⁹⁴

In March, the same newly packed Supreme Court invalidated several provisions of the law governing the professional attributes of the judiciary and the structure of its institutions (such as procedures for promotion and removal of judges, which were seen in the profession as guaranteeing its independence).⁹⁵

But it’s not just at the highest levels of judicial function that legal proceedings are distorted, even bent to network purposes. Journalists, opposition politicians, human rights defenders, and civil society activists opposed to mining or hydroelectric concessions complain of frequent spurious prosecutions.⁹⁶

Radio and TV Globo Director David Romero Ellner, who broke a major scandal in the public health system in 2015 that led to weeks of mass demonstrations, was prosecuted and convicted for defamation.⁹⁷ Some see judicial scrutiny of members of Manuel Zelaya’s Libre Party in a similar light.⁹⁸

A lawyer who specializes in anti-corruption cases says his briefs are regularly rejected on spurious pretexts, “once because the seal at the bottom of the page was halfway over the margin.” He recounts examples of blatant evidence-tampering, for example, when a car stopped by police in traffic proved to have $50,000 in cash aboard, and a phony name was put on the affidavit to protect the well-known driver from scrutiny.⁹⁹ Even more ostentatiously, the evidence files in the most celebrated case in Honduras, the investigation of the murder of Berta Cáceres, were lost when alleged carjackers stole the vehicle of a judge on the case, who said she had taken them out of court to study at home.¹⁰⁰

A pig, representing government officials who have looted huge sums from the public health service (IHSS), flings the epithet “criminal!” at a young protester spraying a slogan on a wall. Behind the pig (outside the frame), education is being flushed down a toilet.

Blatant evidence-tampering seems to be a trademark of today’s kleptocrats. In Moldova, a 2014 vehicle fire sent twelve sacks of documents recording $1 billion in corrupt bank loans up in smoke. In an earlier and even more shocking case, Serbia’s Slobodan Milošević had bodies of victims of his forces’ atrocities in Kosovo dug up and reburied well inside Serbia.¹⁰¹

To ordinary Hondurans, practices like these define injustice. “A government has the right to make any laws it wants,” remarked a small farmer and shopkeeper serving the canoe traffic on the Patuca River in the country’s far east. “But it has to apply them equally. Here they catch the little street delinquents and make them rot in jail, but the big ones? The vice president of Congress who made phony medicine? [See the section on the IHSS scandal, pages 48–50 below.] That’s a crime, she should be in prison. But not only do they go free, they get protection.”¹⁰²

A retired agriculture professor in Juticalpa points to a similar discrepancy in the treatment of the assets of different Hondurans charged or convicted in the United States. He noted that the Rosenthals—a banking and business family, members of which were indicted in 2015 on money-laundering, narcotics, bribery, and embezzlement charges¹⁰³—“were expropriated right away because they’re from the opposing party. But other people who have been extradited, like [Juan Ramón Matta] Ballesteros or the son of Pepe [former president Porfirio Lobo] are different. Their families are still enjoying their property.”¹⁰⁴ In this case, the differential treatment meted out may reflect either efforts to discipline the network or rivalries among its separate and competing strands.

Police

Some instrument of force is invariably included in kleptocrats’ toolboxes, for intimidating or punishing the most recalcitrant rivals or opponents. In some countries (such as Cameroon), a specialized army unit can play that role. In others (Egypt, Pakistan), the army itself constitutes the principal kleptocratic network. But very often, the police or a special branch within it, together with internal security services whose remit includes spying on the population, provide both muscle and a revenue stream.¹⁰⁵ Almost always, some informal armed groups—“thugs,” “insurgents,” or private security guards—also play a role.

In the case of Honduras, police officials at every level consistently serve on behalf of all three elements of the networks. They rarely seem to work in the interests of the ordinary population. Independent access to large sums of money, however, via relationships with trafficking organizations and youth gangs, affords police on the local level some degree of autonomy from top levels of the political hierarchy. Also, U.S. programming, whose stated aims are professionalizing the force and cracking down on violence and drug trafficking, may inhibit some ways of using this instrument. Responding to both of these realities, Hernández has consistently sought to insert the Honduran military, which he may deem more biddable, into domestic security roles that in most democracies are reserved for the police.

That police is a national force divided into two branches operating out of the cities of San Pedro Sula and Tegucigalpa, with regional and departmental headquarters and delegations in 298 municipalities. Numbering between 13,000 and 14,000 men and women (though thousands of those may not actually exist¹⁰⁶), the Honduran police force is described by a member of a nongovernmental organization (NGO) that is involved in police reform, Asociación Para una Sociedad Más Justa (ASJ, or Association for a More Just Society), as the “biggest state institution. It has arms, a national coverage, vehicles, and detailed intelligence on the population, including people’s financial information and where they live.”¹⁰⁷

“There was a politicization of the police before, during, and after the coup,” judges another ASJ member. “The police were instrumentalized by politicians. Combine that with a nonrigorous selection process—anyone can join—and the glorification of tough practices. The police were converted into an instrument of repression.”¹⁰⁸

Even U.S. diplomats—rarely seen as critics of Tegucigalpa—seem to agree with such assessments, which have been widespread inside and outside Honduras for years.¹⁰⁹ “There are a disturbing number of indications that police personnel are involved in some crimes,” notes a March 2006 embassy cable, “though such allegations . . . are not unique to this [Zelaya’s] government.” The minister of public security, the cable concluded, “despite his bold statements about police being part of the problem, has yet to take any measures to shake up the corrupt ranks.”¹¹⁰

Three and a half years later, in a cable alerting Washington to dramatically rising violent crime in postcoup Honduras, the U.S. embassy emphasized the “lack of resources . . . corruption and politicization resulting from the 2009 political crisis” as factors contributing to the wave of violence. “Prosecutors,” the cable adds, “do not trust the police to carry out effective investigations of crime, citing cases where police have warned suspects or divulged information to them.” But also, U.S. officials noted, “police have been politicized, defending the de facto regime against those who have taken to the streets to oppose the coup. . . . The Attorney General has initiated a series of politically-motivated prosecutions against President Zelaya and his cabinet members, undermining the Public Ministry’s credibility as an agent for equal justice.”¹¹¹

The police, in other words, were being used as a weapon to enforce the results of a manifestly illegal coup d’état.

Before the end of that year, the country’s chief counternarcotics official, Julián Arístides González Irías, was slain, an almost textbook case of police enforcement of the integrated network’s financial interests—in this case, its narcotics business. Top police and elected officials and a notorious narcotics trafficking organization allegedly colluded in the murder.¹¹²

This was just the most dramatic recent example of the widespread and long-standing evidence that Honduran police, at every echelon, have been actively collaborating with—have essentially been functioning as a part of—the country’s drug cartels,¹¹³ even becoming “subordinate” to them, in the view of some at the ASJ. “They would even commit assassinations for them.”¹¹⁴ (For more, see the section on criminal network elements, pages 79–83 below.) Since that time, nothing has transpired to improve the reputation of the Honduran police.

The force is still frequently accused of harassing people opposed to government policies, for example. “It started in 2012,” recounted the head of one community organization that tallies nine suspicious deaths in its ranks in a little over a year. “When we began contesting permits for dams on all the rivers around here and the mayor’s plans to measure off our land into individual parcels, we started getting problems with the police. They’ll stop you, ask who are you, where are you going, what did you eat today. They charge people with sedition, plant drugs on them.”¹¹⁵

Human rights defender Marlene Cruz was charged with aggression against the police.¹¹⁶ Luis Galdamez, another reporter for the dissent-minded Radio Globo, was dragged from his car and beaten, allegedly for a routine traffic violation. In Honduras in Dangerous Times,anthropology and international studies professor James Phillips documents this and other arrests for illogical or trumped-up charges, such as trespassing.¹¹⁷

Beleaguered activists who have turned to the Inter-American Commission on Human Rights joke darkly about one of the remedies it frequently orders—police protection. “The police aren’t giving me protection,” scoffs one. “I need protection from the police!”¹¹⁸

Hondurans in the capital and the countryside complain about the type of street-level shakedowns that are typical of police in most corrupt countries. “The police stop you for anything,” said a private school language teacher. “It’s ‘Pay me, or you get a ticket.’ So either way you pay. They usually ask for 200 lempiras. The ticket is 600.”¹¹⁹ Another sufferer concurred, adding: “Especially if you are hauling cargo. They’ll ask what do you have, where are you going, they’ll demand your documents, find some problem with your vehicle; the whole point is to make the driver give them money.”¹²⁰

Of greater concern are the reports we heard in interviews of collusion between police and the youth gangs whose depredations it is their job to curb.¹²¹ “What worries me most,” said a Western implementer of a street-level anti-gang program, “are neighborhoods where there is a lot of gang-police interaction, where people with gang markings are in and out of police stations, where conversations suddenly change when you walk in the room. Those are the hardest neighborhoods to work in.”¹²² Recent investigations indicate that more than sixty police officers, including commissioners, were actually on the payroll of the notorious gang MS-13.¹²³

One purpose of this murky relationship, according to many Hondurans, is revenue generation. Extortion—of homeowners, small businesses, and providers and users of public transport, among other victims—developed into a major gang activity beginning around 2012.¹²⁴ But the general atmosphere of violence and anonymity made it hard to know exactly who was profiting. At the height of the chaos a few years ago, says a professional driver, “everyone was terrified of a call in the night.” Even now, “if someone is shot for not paying extortion money, no one wants to report it, because they’re afraid the police will inform the gang.”¹²⁵ The anti-gang expert agrees. “The atmosphere of violence allows for more criminality. If someone calls saying ‘I’m MS-13 and I want X amount of money,’ you give it.”¹²⁶

The resulting confusion can be exploited by the police. “Everyone says it’s gang violence,” remarks the driver, “but no one knows.” For the retired agriculture professor who noted the discrepancy in how laws are enforced against connected versus unconnected people, there is no question: “The police take part of the extortion money,” he affirms.¹²⁷ “The police are totally involved in extortion,” concurs one of the ASJ members. Commenting on cases the ASJ has investigated and passed to the new police reform commission, he concludes that police “see, advise, protect, and facilitate extortion—to protect family members who are in gangs, and to get money.”¹²⁸

In other words, though they are known to shake people down for spurious traffic violations just like their counterparts in Nigeria or Uzbekistan or dozens of other corrupt countries, Honduran police can also outsource their extortion activities to gangs. And that relationship may go further: gangs may serve as informal police auxiliaries, “for certain purposes—dirty work,” the retired professor puts it.

Anthropologist Phillips writes, “Sometimes people ask whether there is collusion or even integration between death squad activities and police actions.”¹²⁹ Indeed, most of those interviewed in Honduras, Western as well as Honduran, suspect the police of participating in a policy of what has sometimes been called “social cleansing”—extrajudicial killings and round-ups or disappearances in tough neighborhoods.¹³⁰

The impact on Honduran youth is devastating. “The police are integrated into gangs and form part of inter-gang fighting,” the former senior Honduran official whose quote serves as the epigraph for this paper is convinced. “Young people, the best of our country, are being killed at a rate of fifteen or sixteen a day. What can they do? Migrate or die.”

In these ways, a very consistent pattern of police participation with criminal elements of the kleptocratic networks as well as public- and private-sector network members in committing crimes or protecting illicit capture of revenue streams is evident, as is its role in interweaving the networks. This brand of corruption may thus lie at the heart of the recent Central American refugee crisis.¹³¹

It is in this context, and in the wake of the 2016 revelations about police involvement in the 2009 murder of the counternarcotics czar, that Hernández announced the establishment of a special commission to reform the police.¹³² While there is no doubt the force needs reforming, most Honduran interviewees expressed deep doubts about the true objectives or likely effects of this commission.

Consisting of Security Minister Julian Pacheco, former Supreme Court president Vilma Morales (an outspoken advocate of the 2009 coup and a Hernández confidante), Honduran Fellowship of Evangelical Churches President Alberto Solórzano, and the ASJ’s Omar Rivera, it is empowered to “determine [police officers’] suitability for service,” as well as supervise those who are purged from the ranks.¹³³ By late 2016, some 2,100 officers, many of them high-ranking, had been removed from (or had left) their positions out of a total of approximately 14,000,¹³⁴ while about 2,500 new graduates of the police academy were sworn in.

“Some [of the purged officers] are corrupt, some aren’t corrupt or delinquent, they’re just too old, or they’re mediocre or negligent,” judges one of the ASJ members involved in the effort, who salutes the commission’s results so far. For this faith-based nonprofit, the chance to help guide the process is worth the potential risk of inadvertently serving (and whitewashing) the Hernández administration’s purposes. The ASJ member sees the effort as an opportunity for genuine reform, especially at the street level. “We can get rid of the worst officers, substitute better trained new police, establish a new curriculum, including human rights training; reinforce police capacity with better communications equipment, arms, and vehicles; and create mechanisms for citizens’ oversight.”¹³⁵

But, though many observers have hailed the efficiency of the purge, others suspect ulterior motives. Some suggest that the leak of documents implicating police leadership in the 2009 assassination scheme was suspiciously convenient for Hernández, who has long sought to establish personal control over Honduran policing. In the view of the lawyer who specializes in anti-corruption cases, the reform process may be allowing Hernández to selectively weed out those officers who are not at his beck and call. “The steps taken against the police have come very fast, and are based on unreliable information. The president is using this commission to protect his faithful people. You can tell which police officers are in favor with the government by the fancy cars they drive.”¹³⁶

When Hernández was still president of Congress, he spurred legislation creating a specialized organized crime response unit called the TIGRES.¹³⁷ Though it officially reports to the Security Ministry like ordinary police, this 250-man unit is now under the operational command of the military-led interagency task force, FUSINA. (See below, page 34.) The TIGRES are housed and trained side-by-side with military battalions,¹³⁸ including, on occasion, by U.S. Special Forces.¹³⁹ Indeed, given the U.S. preference for partnering with police rather than military units for domestic security, the TIGRES may have been set up and maintained partly for the express purpose of attracting U.S. security assistance.¹⁴⁰ TIGRES personnel have been observed at the construction site for the Agua Zarca dam, the project Berta Cáceres was assassinated for opposing.¹⁴¹

Since he became president, Hernández has pursued the transfer of policing function into the hands of the professional military¹⁴²—implying the army is his preference among the instruments of force available to him. Apart from the creation of a new and favored military police, discussed below, he has further anchored this transformation by appointing an active military officer (who has since resigned his commission) as security minister, with jurisdiction over the police. Current or former military brass also serve as heads of customs and the prison system.

Prisons

Indeed, it is hard to separate concerns about the police from concerns about the penitentiary system, which also falls under the security minister’s purview. Police often serve as prison guards. Honduran jails, which were hit with a steep increase in detainees in 2012 and 2013 (see figure 1), are notorious for inhumane conditions, including overcrowding, violence, filth, uncontrolled self-government by prisoners, corruption, and extortion. Money is ubiquitous, with officials taking a cut for all of the practices they condone, from the outright sale of private cells to inspection-free visits to intra-inmate shakedowns.¹⁴³ Given the high likelihood that at least some portion of this take is passed further up the chain,¹⁴⁴ prison administration must be understood to represent a revenue stream for certain elements of the kleptocratic network.

The sudden 30 percent increase in the number of Hondurans behind bars between 2012 and 2014 is consistent with rumors about social cleansing that the research team kept hearing: reported arbitrary sweeps and detentions in gang neighborhoods. More ominous are widespread suspicions that police or other government officials may take advantage of insalubrious prison conditions to dispose of specific, unwanted detainees. “There has been this kind of event in different prisons,” one observer told us. “There’s a big jail, and suddenly, a big fire. People say there’s an electrical problem, but the cells won’t be opened. Because they want certain people to die.” Reports on the most famous of these prison fires—in 2003, 2004, and 2012—describe volleys of gunfire, and the death of some victims by gunshot wounds.¹⁴⁵

Armed Forces

Given the Honduran military’s history often at the center of politics—running the country outright from 1963 through to 1982, and then enjoying significant U.S. patronage during the civil wars in neighboring Nicaragua and El Salvador in the 1980s—it is somewhat misleading to include the armed forces among other clearly subordinate elements of state function that are at the disposition of the country’s interwoven elites. To some extent, the armed forces represent an autonomous bloc.

Nevertheless, almost every report on Honduras or interview with experts inside or outside the country contains information on the increasing use of the Honduran military for purposes other than national defense—more specifically to patrol indigenous communities, to protect land or developments claimed by private-sector network members as their property, to suppress protests against the transfer of such land or natural features into network hands, to curtail the exercise of free speech, and, most broadly (via Hernández’s new Military Police for Public Order, or PMOP from its Spanish name), to assume a wide variety of domestic security and policing roles.

Examples of the inappropriate or repressive use of the army are legion, especially and most recently in connection with the Agua Zarca dam project. The First Engineer Battalion worked on the dam, for example, setting up its premises inside the construction company’s camp perimeter.¹⁴⁶ On July 15, 2013, soldiers stationed within the camp opened fire on local protesters, killing one.¹⁴⁷ Members of the leading opposition organization were arrested at military checkpoints.¹⁴⁸ And one serving and two former military officers are among the eight suspects who have been arrested for Cáceres’s killing. One of them had been appointed chief of army intelligence in 2015. He and another suspect had served in the Honduran special forces.¹⁴⁹

One unexpected use of soldiers is (purportedly) to protect and replant Honduran national forests. According to an assessment conducted for the U.S. Agency for International Development (USAID), 100 million lempiras (approximately $4.2 million) per year is allocated for these forest conservation purposes, of which 70 million is transferred to the armed forces.¹⁵⁰ On a trip down the Patuca River in the isolated eastern reaches of the country, my sister and colleague on this investigation, Eve Lyman, and I and two Honduran naturalists witnessed soldiers patrolling small, far-flung villages such as Wampusirpi and Bilalmo. Residents told us they were there to protect the woods, but they did not appear to have the vehicles or other specialized equipment required for such duties, and there was no evidence of any effort to curb illegal tree-felling along the river.

But it is through the PMOP that Hernández’s use of the military has had by far the broadest impact, and been the most controversial.

Even in the decades since the end of military rule in 1982, the idea is not new. It was former president Zelaya who first swelled police ranks by assigning military police officers who had completed their service to the civilian force. Still, they then came under police hierarchy and supervision. Hernández, by contrast, has launched the most concerted effort to shift internal security responsibilities to the military since Honduras completed its transition to civilian rule.¹⁵¹

The law creating the PMOP that he pushed through the Congress went into effect in the fall of 2013.¹⁵² Now this unit, charged with “maintaining and conserving public order”—especially against gangs and drug traffickers—as well as enforcing the law against terrorist financing, numbers at least 4,000 officers.¹⁵³ “They are in the personal service of the president,” says a resident of the eastern Olancho Department. “They are acting like gods or kings, instilling fear, not security.”

In January 2015, Hernández tried to amend the constitution to enshrine the PMOP as a permanent element of the Honduran security apparatus. Congress demurred,¹⁵⁴ but the issue is now up for popular vote in a 2017 referendum. The ASJ’s lead on police reform issues is confident the unit won’t expand further, that it is mainly “a marketing gimmick,” and that Hernández will be prevented by the United States as well as local civil society from further transfers of policing functions to the military.

Others aren’t so sure. One veteran American advocate of local civil society organizations described what she called a disturbing new phenomenon: small groups of PMOP officers fanning out into the countryside, allying with local retired military personnel, and hiring hitmen to keep tabs on opposition groups.¹⁵⁵ Ordinary Hondurans don’t underestimate the PMOP either. “They act like kings,” says the Olancho resident. “People part in front of them. They order people to do this or do that. They take whatever they want. People are really afraid of them—afraid to demonstrate because of tear gas and beatings and imprisonment.”¹⁵⁶

One of the two active duty military officers arrested in connection with Cáceres’s murder, Major Mariano Díaz Chávez, was a trainer at the PMOP academy.¹⁵⁷

Responsibility for domestic security—and protection of network interests—is further confused, however, via the apparently interchangeable roles of military and police elite units such as the PMOP and the TIGRES and others, and the conduct of joint operations by private security guards or hired civilian toughs together with police or military personnel.¹⁵⁸ The ill-defined and overlapping roles of these various units and individuals add to the shroud of impunity protecting them, since they make it hard to pinpoint their official mandates and determine if lines have been violated and by whom.

Hernández has institutionalized this commingling by way of a variety of joint task forces in which soldiers serve side-by-side with police officers, prosecutors, customs agents, intelligence personnel, and other civilian authorities. From about 2010 to 2014, Xatruch, an early such force, held sway over the lush Bajo Aguán valley, where locals protested land grabs by palm oil interests.¹⁵⁹ Now, the most active and well-known of these is the National Interagency Task Force (FUSINA), which reports directly to the National Security Council and is under operational command of the military. It reportedly comprises some 6,300 military officers, including the entire PMOP, the TIGRES, plus much of the navy. It can be deployed throughout the country’s territory.¹⁶⁰

The Honduran military is thus being utilized for various inappropriate purposes. Apart from deployment to gang-ridden neighborhoods and involvement in counternarcotics, it is an instrument for the consolidation of power, the protection of the private property or business interests of private-sector network members, and intimidation.¹⁶¹

In 2011, Congress passed a special tax levied on some of the key economic sectors held by private-sector elements of the network: financial transactions, profits from fast food and mobile phones and mining exports. The proceeds are earmarked for materiel purchases for the security services. Businesses protested the tax as onerous and opaque.¹⁶² U.S. State Department personnel interviewed in July 2016 confirmed that what the department had initially supported as a commitment to improving the security situation proved disappointing in its execution, given nontransparency and indications that funds were being syphoned off for other purposes.¹⁶³ Honduran interviewees corroborated the murkiness of this tax, including deposit of the funds it generates into numerous accounts in several different banks.

Hernández himself attended military academy as a young adult. The choice may have been no more freighted with meaning than the choice of some American families to send their children to Catholic school: military academies are a relatively inexpensive way to get a decent education and useful contacts. The longer-term service of his brother and confidante Amilcar, who retired as a colonel, is more significant, and cemented a family connection to the armed forces. That and the persistence of Hernández’s efforts in applying the Honduran military to domestic tasks strongly suggest that the army is Hernández’s personal preference among the instruments of force at his disposal.

Coalianza (Comisión Para la Promoción de la Alianza Público-Privada)

A vital stitch knitting together the public- and private-sector skeins of Honduras’s kleptocratic networks is the Coalianza, or the Commission for the Promotion of Public-Private Partnerships. Created in 2010 to further the objectives of the public-private partnerships (PPP) law, the commission’s stated role is to promote, conclude, and oversee contracts whereby private companies execute public works projects ranging from road and port construction to passport delivery and the purchase of medicine for the public health system.

In practice, that means funneling public financing into private contracts via a nontransparent bidding process (if any),¹⁶⁴ and typically a trust arrangement managed by a private bank.¹⁶⁵ Responsibility for completing and operating the public installation or service is ceded to a technical committee, which may include government officials as well as bank or other private-sector executives. Procurement takes place according to special processes, not those set forth in the general law of public procurement.

Coalianza chooses prospective projects, then coordinates any tender process and enters into the contracts. By this means, the president can personally direct or approve projects, including such terms as tolls to be taken or purchase guarantees. Called by a former cabinet member “a son of Juan Orlando,” the Coalianza operates in close cooperation with the Honduran president. The current finance minister is a former head of the agency.

Coalianza officials resisted the enactment of a 2014 reform that marginally increased supervision, including the creation of a new Fiscal Contingency Unit that reports to the finance ministry (SEFIN), which is supposed to examine risks and develop mitigation strategies and to rule on the suitability of a given concept for this type of public-private partnership arrangement. But according to a 2015 Inter-American Development Bank (IDB) report, “in practice SEFIN has not yet built up the capacity to examine and authorize PPP proposals . . . even now that it has the main role in the approval flow.”¹⁶⁶ As is frequently the case in such documents, the question is left open as to whether the government is even seeking to build up such capacity, or whether the deficit is deliberate.

Similar confusion reigns with respect to the inclusion (or not) of Coalianza projects within the overall national budgetary processes, as well as independent financial monitoring. “The constitutional responsibility for performing this task falls within the Comptroller and Auditor General in Honduras, yet the institutional capacity to oversee the PPP portfolio is shallow,” reports the IDB. “For example, no guidelines for auditing infrastructure projects under the PPP model have been issued by the Auditor General.”¹⁶⁷

To date, neither the Supreme Court of Accounts, nor the Finance Ministry, nor the Banking and Securities Commission has published an audit of a single Coalianza project.¹⁶⁸ Contracts are made available to the public only after signature, and even then only partially.

Indeed, according to one interviewee, a member of Congress who has been researching these arrangements in an effort to exercise constitutional oversight, their primary purpose is to “hide money from the budget and from the public procurement law and associated oversight.”¹⁶⁹

The confusion may enable not just bank executives but also public officials on the technical committee to extract undue benefits, according to the member of Congress. Some bankers have reportedly expressed reluctance to continue taking on such projects, given the conduct witnessed on the seventeen currently contracted.¹⁷⁰ The implication is that government officials, as well as their private-sector partners, are exploiting these off-budget expenditures for personal gain while the bank retains statutory responsibility for any wrongdoing—such as violations of international money-laundering provisions.

The Honduran government may guarantee loans taken out in support of such projects, thus assuming institutional risk and compounding debt, although that engagement of state reputation does not benefit from normal government oversight procedures.¹⁷¹ International development financing is applied to these projects too, providing a potential additional windfall for their managers. According to an economist for one of the main regional development banks, even these rather lenient institutions are uneasy. “The World Bank, us, even the IMF are always trying to push the Honduran government to reduce the role of trust funds. But they don’t want to.”¹⁷²

ENEE (Empresa Nacional de Energia Electrica)

It may seem odd to include an electricity company in a list of state agencies bent to the services of a country’s kleptocratic network. But when the financial situation of that enterprise is so catastrophic as to block the government’s qualification for international loans;¹⁷³ when senior management positions are filled by close relatives of influential politicians;¹⁷⁴ and when the enterprise seems to do business exclusively with families at the core of the kleptocratic network’s private-sector segment, then the attention is warranted. The Honduran electricity sector, moreover, has attracted many of the network’s external enablers,¹⁷⁵ and given rise to protracted conflicts between kleptocratic elites and rural populations. The energy sector generates both a key revenue stream for the network and a significant threat to the environment.

In 2013, the national electricity enterprise, ENEE, was hemorrhaging money at a record rate of more than 20 million lempiras, or approximately $1.3 million, per day. The annual total, nearly 9.6 billion lempiras, or roughly $477 million, was about 2.5 percent of GDP.¹⁷⁶ International lenders (also known as international financial institutions, or IFIs) clamored for reform of the power sector. But most of the changes they demanded concerned the structure of the enterprise, rather than outcomes that demonstrated repair of its weaknesses. The IFIs wanted ENEE privatized (though that reality is typically masked by the bland terminology of “structural reform”). A December 2014 IMF press release about the fund’s approval of nearly $190 million in low-interest financing, for example, noted that “structural reforms are expected to play a crucial role in supporting fiscal consolidation and improving growth prospects. The program comprises reforms in the electricity sector, including ENEE.” Elsewhere, the IMF was explicit that such reforms should “foster competition in the electricity sector.”¹⁷⁷

The Honduran government began breaking ENEE apart in 2014, with a view toward inviting in private capital. The enterprise has been split into three entities with responsibility respectively for power generation, transmission, and distribution. The ongoing privatization process is to be managed via one of the Coalianza’s trust funds, held as usual by Bancos Ficohsa and Atlantida.¹⁷⁸

It was not so much this transformation, however, as falling oil prices—and 2,000 layoffs out of a total workforce of 5,000¹⁷⁹—that helped bring ENEE’s operating losses down by some 180 million lempiras by 2015, or about $30 million, approximately 1.9 percent of the total.¹⁸⁰ But, though the enterprise is on very slightly better financial footing, and though the catastrophic electricity outages that plagued the region in the early 1990s have not recurred, blackouts remain common,¹⁸¹ and rural areas are underserved.¹⁸² According to some experts, as much as 15 percent of the Honduran population has no access to electricity.¹⁸³

That’s why, explained Giovanni Ayestas of UEPER (a unit of ENEE in charge of large generation projects) in an interview in his office in the summer of 2016, government plans call for a significant expansion of Honduras’s generation capacity. He was clicking through PowerPoint slides as he made the argument. But the numbers on the screen did not support the policy choice. Current electricity production, Ayestas acknowledged, exceeds demand. Honduras even exports approximately 1 percent of its power.

The most startling figure, however, was the one for leakages: fully 30 percent of Honduras’s current disappears through faulty lines and connections and customer theft.¹⁸⁴ Yet, rather than launch a nationwide campaign to renovate materiel; tighten connections; and identify disabled meters, unauthorized hook-ups, or connivance with favored businesses, the government has rushed to sign contracts with private companies for more generation capacity.¹⁸⁵

ENEE has long relied largely on private generation for the electricity it sells to customers, producing only about one-third of the country’s total supply itself. And this outsourcing has generated significant rents for private-sector network members for more than two decades.

In the early 1990s, crippling shortages throughout the region prompted a fifteen-year state of emergency, under whose terms ENEE granted generous contracts to well-connected industrialists who built oil- and coal-fired power plants. Indeed, it was the renegotiation of some of those contracts that helped reduce the enterprise’s deficit after 2014.¹⁸⁶

The 2007 law promoting renewable energy was aimed at shifting sourcing away from these costly fossil fuel plants. However, its terms were even kinder to the private electricity generators (largely the same people) than the 1994 legislation. Renewable generators enjoy a 10 percent premium over market rates, guaranteed annual increases on those higher prices, a variety of tax breaks (including dispensation from income and sales tax), as well as a $0.03-per-kilowatt-hour (kWh) bonus for the first 300 megawatts from projects that went online by July 31, 2015.¹⁸⁷

These terms are locked in for the life of the contract—typically at least twenty years—at a time when solar energy prices are falling as much as 10 percent per year.¹⁸⁸ “The private producers enjoy undue benefits,” says Ramon Romero, who has studied the interconnection between what he calls electrical elites and political power-brokers.¹⁸⁹ “They get a higher price than thermal [fossil fuel] plants, without any reasonable justification. The inputs are cheaper.”¹⁹⁰ By way of comparison, coal-fired electricity averages between $0.07 and $0.09 per kWh, while the government-guaranteed prices for solar are about double, at slightly above $0.15 per kWh, not including the 3 cent bonus.¹⁹¹

It was in this context that Congress enacted a law restructuring ENEE, changing the contracting framework, and establishing a new regulatory agency charged with supervising an open bidding process, approving contracts, and publishing a list of energy production companies. But according to several experts, an odd delay occurred between submission of the bill to Congress, its passage, and its entry into force in July 2014. (Almost a year after that, the regulatory agency was still not up and running.)¹⁹²

During that unusual lapse, ENEE signed at least thirty of the old, no-bid sweetheart contracts, totaling an estimated 400 megawatts of renewable electricity.¹⁹³ Beneficiaries were none other than members of the same families that had enjoyed the overpriced fossil fuel contracts the government was renegotiating with the help of the Inter-American Development Bank, families at the heart of the private-sector element of the Honduran kleptocracy: the Facussés, the Kafies, the Larashes, the Nassers (who are allied to the Facussés by marriage).¹⁹⁴ Indeed, the timing of the two developments suggests that the excessively generous terms for renewables may have served as a sweetener to facilitate renegotiation of the older fossil fuel contracts. In the case of both types of electricity generation, the contract terms are so liberal as to constitute a direct transfer of public funds into the pockets of private-sector network members. (See also the section on private-sector control of the energy industry, pages 70–73 below.)

In this context, international pressure to reduce or end electricity subsidies may be misguided. It obliges poor customers—many of whom may not be subject to income or other taxes—to directly finance private generators’ excessive profits.

These developments rubbed even some of ENEE’s own officials the wrong way. Ayestas’s resentment was palpable when he referred to the government’s “weak bargaining position” in these negotiations. “The concessions set a lower limit below which the price cannot fall; but it can rise. By law and by contract, the state is required to buy all the renewable energy they produce,” whether or not the grid even has the capacity to carry it. “It is an expensive, nontransparent market.”¹⁹⁵

Oddly, given the sector’s advantages and the high costs of these contracts, ENEE did not seek to make its own investments in solar electricity generation. It abandoned that segment of the market, instead choosing to commit to large, expensive, and technically and environmentally questionable hydropower projects.¹⁹⁶

IHSS (Instituto Hondureño de Seguridad Social)

The story that aired on Globo TV on May 8, 2015, would hardly have won points for technical artistry. Balding and dressed in a casual denim shirt, the reporter practically shouted into the microphone. B-roll footage of hospital waiting rooms, ambulances, and buildings sporting the IHSS logo ran on a loop.²³⁰ But the revelations David Romero Ellner unveiled in the segment were explosive. No less than 7 billion lempiras (about $297 million) had been siphoned out of the national healthcare system, of which at least 3 million may have wound up in the coffers of President Hernández’s Nationalist party, where they had helped finance his 2014 presidential election campaign.²³¹ Globo’s cameras zoomed in on some of the canceled checks as Romero recited the numbers.

Honduras erupted. The realization that the notoriously indebted public health system²³²—wracked by shortages of medicine for months²³³—was the target of systematic embezzlement at such a scale, and for such blatant purposes, galvanized even corruption-inured Hondurans. Adding to the anguish, as many as 3,000 people may have died ingesting useless or dangerous compounds they thought were medicine, or due to corruption-linked shortages or other system dysfunctions.²³⁴

In evening marches, protesters dressed in doctor’s whites and carrying torches clogged the streets of Tegucigalpa.²³⁵ Throughout June and July, the demonstrations continued in the capital and at least a dozen other cities nationwide, as well as in Miami and Washington, DC. Signs and banners blared the bare facts: “L7,300,000,000 Robados! 2,800 Muertos!” (7.3 billion lempiras stolen; 2,800 dead). Demonstrators demanded the resignation of President Hernández and the establishment of an internationally backed investigation and prosecution commission along the lines of the Comisión Internacional Contra la Impunidad en Guatemala(CICIG) that was indicting officials in the neighboring country.

In the not-too-distant past, the IHSS (the Honduran Social Security Institute) had been known for providing a reputable standard of medical care to Hondurans employed in the formal economy, who contributed to the system monthly on a sliding scale. But according to interviewees we asked, the quality of care had been declining and the price increasing for a number of years. By 2013, equipment, staff, and supply shortages were capturing the attention of patients and healthcare professionals.

In 2014, the first major revelations about the causes of these shortages were made public. An investigation by the National Anti-Corruption Council (CNA) and the public prosecutor (ministerio publico)discovered that some 600 million lempiras per month were bleeding away in fraud and corruption.²³⁶ At the heart of the scheme was a chocolate-box assortment of procurement frauds, including unjustified purchases, contracts or purchases at prices in some cases more than twice the global average, and purchases of medicine that proved not to contain the requisite active ingredients—that were, in effect, placebos.²³⁷ According to reports and some trial documents, an array of shell companies—Insumedic, for example, or Sumimed, or Improme—were incorporated to obtain contracts for which no goods or services were delivered, or to bank inflated payments. Some were incorporated in Panama, but many in Honduras.²³⁸

President Lobo’s declaration of a dengue fever emergency in 2010 reportedly facilitated some of these fraudulent purchases.²³⁹ And from that year through the next four, according to one of our interviewees (an international official who is involved in ongoing investigations), 60 to 70 percent of the IHSS operating budget was siphoned off.

The 2014 investigation examined the potential implication of as many as 400 individuals, most of them either public officials themselves or related to or close friends of officials. The IHSS commissioner and the chief of supplies and purchases (both with the family name Zelaya, though unrelated to each other or the former president) topped the list alongside the agency’s treasurer, Vivian Melissa Juárez Fiallos, and Edita Lizbeth Lopez, the wife of IHSS administrative and financial manager José Ramon Bertetty.²⁴⁰ Most spectacularly, a drug company founded by Congress Vice President Lena Gutiérrez, her father, and two of her brothers sold placebos and charged the health system vastly inflated prices for other supplies. Arrested in July 2015, she has been on trial since August 2016.²⁴¹ Other suspects have been convicted and are serving prison sentences, but none of these cases have yet cast light on the links between the IHSS scandal and the presidential reelection fund.

This case illustrates the rough division of labor or territory that characterizes the Honduran kleptocratic network, with most of the outright looting of government coffers perpetrated by public-sector members, often via private companies in the hands of relatives or immediate proxies. In general, companies that win public procurement contracts from government agencies like the IHSS tend not to belong to members of the self-contained, Levantine-descended business elite.

But the “ten families,” as they are sometimes called, were not entirely unspattered by the scandal. In June 2015, business magnate Shukri Kafie was arrested on suspicion that his company had overcharged the IHSS in contracts for the acquisition, maintenance, and repair of medical machinery worth some $118 million (though he was immediately released upon his assertion of a medical emergency, and there is no indication that legal proceedings have gone forward).²⁴² Banco Ficohsa was also implicated, reportedly participating in an illegal transfer of IHSS funds as part of the scheme.²⁴³

A number of the people involved in breaking or investigating the case have suffered reprisals. Both the lead prosecutor and the attorney general were transferred to other posts (though the attorney general was made a justice of the Supreme Court). Globo’s Romero and several key witnesses were shot and wounded in the weeks following the 2015 television report.²⁴⁴

Yet the IHSS scandal and the massive demonstrations it sparked eventually forced the government to acquiesce to the establishment of a version of CICIG in Honduras. The MACCIH, as it is called (Misión de Apoyo Contra la Corrupción y la Impunidad en Honduras, or Support mission against corruption and impunity in Honduras), can assist Honduran legal authorities in investigating and bringing corruption cases—but it cannot bring them itself, as can the CICIG. The MACCIH does, however, have the authority to help design institutional reforms that might constrain the incentive structure and opportunities favoring corruption, such as changes to campaign finance or corporate laws. (For more, see the section on MACCIH, pages 105–106 below.)

In a notable parallel to the national electricity company, ENEE, discussed above, the International Monetary Fund identified the losses incurred by the IHSS as a major contributor to the Honduran government’s deficit. But rather than pinpoint the actual cause of those losses—in both cases, corruption—and require specific measures to address the problem, such as the investigation and sanctioning of wrongdoers and improvements in government oversight, the IMF seems to have found sufficient explanation for the poor financial performance in the bare fact that the IHSS was a public institution. The “restructuring” of the IHSS (read: privatization), like that of ENEE, was a prerequisite to delivery of the IMF’s 2014 package of financial assistance. Tegucigalpa was not required to increase the independence of its anti-corruption agencies, or to demonstrate robust legal action against high-ranking IHSS suspects and their beneficiaries, or even to demonstrate how privatization would be conducted in such a way as not automatically to benefit the very companies that had exfiltrated the public funds.²⁴⁵

Notes

67  Interview by author, Tegucigalpa, August 3, 2016.

⁶⁸   “Ley de Promocion de la Alianza Publico-Privada,”La Gaceta de la Republica de Honduras, September 16, 2010, http://www.poderjudicial.gob.hn/CEDIJ/Leyes/Documents/LeyPromocionAlianzaPublicoPrivada.pdf.

⁶⁹   See “170 Companies at ‘Honduras Open for Business,’” Central America Data, March 11, 2011, http://www.centralamericadata.com/en/article/home/170_Companies_at_Honduras_Open_for_Business; “Este jueves comienza la ronda de negocios ‘Honduras is Open for Business,’” America economica, May 5, 2011, http://www.americaeconomia.com/economia-mercados/comercio/este-jueves-comienza-la -ronda-de-negocios-honduras-open-business; “Honduras Is Open for Business,” Council for Hemispheric Affairs, July 26, 2011, http://www.coha.org/honduras-is-open-for-business/; “Renewable Energy Sector Investment Opportunities: Honduras Is Open for Business,” Honduran National Investment Promotion Program, April 2011; and Associated Press, “Honduran Judges Rule Against Privately Run ‘Model Cities’ Project,’” Guardian, October 4, 2012, https://www.theguardian.com/world/2012/oct/04/honduran-judges-reject-model-cities.

⁷⁰   Current top COHEP officials are also in the inner circle of the private-sector element of this network, such as its president, Luis Napoleón Larach, and director, Luis Alberto Atala.

⁷¹   Interviews by author, Tegucigalpa, August 2016.

⁷²   “Ley Contra el Financiamiento del Terorismo,” Government of Honduras, November 2011, https://www.unodc.org/tldb/pdf/Honduras/Ley_Contra_el_Financiamiento_del_Terorismo_Honduras_.pdf.

⁷³   See Thomas Carothers and Saskia Brechenmacher, “Closing Space: Democracy and Human Rights Support Under Fire,” Carnegie Endowment for International Peace, 2014, 29–30.

⁷⁴   “Ley Especial sobre la Intervencion de las Comunicaciones Privadas,” Government of Honduras, December 12, 2011, http://www.poderjudicial.gob.hn/CEDIJ/Leyes/Documents/Ley%20Especial%20sobre%20Intervencion%20de%20las%20Comunicaciones%20Privadas%20(8,2mb).pdf.

⁷⁵   See “Junta Nominadora Exige cese de espionaje telefonico,” El Libertador, January 8, 2016, https://honduprensa.wordpress.com/2016/01/10/junta-nominadora-exige-cese-de-espionaje-telefonico-junta-nominadora-confirma-espionaje-telefonico-en-honduras-asesor-presidencial-revela-nombres-de-proximos-magistrados/; “Honduras: Gobierno paga L.8 millones en software de espionaje telefonico,” Conexihon, July 6, 2015, https://honduprensa.wordpress.com/2015/07/06/honduras-gobierno-paga-l-8-millones-en-software-de-e spionaje-telefonico/; “Revelado espionaje contra Rafael Leonardo Callejas,” Cholusat Sur Canal 36, May 21, 2015, http://cholusatsur.com/noticias/?p=10621; Inter-American Commission on Human Rights, “Situation of Human Rights in Honduras,” Organization of American States, 2015, 187.

⁷⁶   Interview by author, Washington, DC, February 16, 2017.

⁷⁷   “Ley Especial del Consejo Nacional de Defensa y Seguridad,” Government of Honduras, December 12, 2011, http://www.poderjudicial.gob.hn/CEDIJ/Leyes/Documents/Ley%20Especial%20del%20Consejo%20Nacional%20de%20Defensa%20y%20Seguridad%20(2,9mb).pdf.

⁷⁸   “Ley Para la Clasificacion de Documentos Publicos Relacionados con la Seguridad y Defensa Nacional,” Government of Honduras, January 24, 2014, http://www.tsc.gob.hn/leyes/Ley%20para%20la%20Clasificaci%C3%B3n%20de%20Documentos%20P%C3%BAblicos%20relacionados%20con%20la%20Seguridad%20y%20Defensa%20Nacional.pdf.

⁷⁹   Interview by author, Monte Capado, July 23, 2016.

⁸⁰   Inter-American Commission on Human Rights, “Situation of Human Rights,” 183–84.

⁸¹   See James Phillips, Honduras in Dangerous Times: Resistance and Resilience (Lanham, MD: Lexington Books, 2015), 45; and “Illegal Logging in the Rio Platano Biosphere: A Farce in Three Acts,” Global Witness, January 2009.

⁸²   “Presidente envia al CN revision de Ley Antimaras,” La Tribuna, March 16, 2015, http://www.latribuna.hn/2015/03/16/presidente-envia-al-cn-revision-de-ley-antimaras/.

⁸³   “‘Ley Antimaras’ debia ser derogada tras sentencia de CORTEIDH pero al contrario sera endurecida,” Radio Progreso y el ERIC, March 27, 2015, http://radioprogresohn.net/index.php/comunicaciones/noticias/item/1959-%E2%80%9Cley-antimaras %E2%80%9D-deb%C3%ADa-ser-derogada-tras-sentencia-de-corteidh-pero-al-contrario-ser%C3%A1-endurecida; and interview with Adrienne Pine, Washington, DC, February 16, 2017.

⁸⁴   See Chayes, “Vertically Integrated Criminal Syndicates,” chap. 5 in Thieves of State, 58–67.

⁸⁵   Alvaro Morales Molina, “Public Prosecutors’ Hunger Strike Becoming a Complicated Affair,” Honduras Weekly, December 12, 2008, http://www.hondurasweekly.com/joomla-pages-iii/archieved-articles/53-news/national/6899-public-prosecutors-hunger-strike-becoming-a-complicated-affair; Guido Eguigure, “Notes for Understanding the Hunger Strike of the Public Prosecutors in Honduras,” DanChurchAid, May 5, 2008; Thelma Mejia, “Honduras: Prosecutors on Hunger Strike Against Corruption,” Inter-Press Service, May 6, 2008, http://www.ipsnews.net/2008/05/honduras-prosecutors-on-hunger-strike-against-corruption/; Bureau of Democracy, Human Rights, and Labor, “Honduras: 2008 Country Report on Human Rights Practices,” U.S. Department of State, February 25, 2009, https://www.state.gov/j/drl/rls/hrrpt/2008/wha/119164.htm. For a close account of the prosecutor strike, see Adrienne Pine, “Caso Gasolinazo,” Quotha (blog), June 8, 2008, http://quotha.net/node/17.

⁸⁶   See Phillips, Honduras in Dangerous Times, 51; Dana Frank, “The Long Judicial Arm of the Honduran Coup,” World Post, February 4, 2015; and Inter-American Commission on Human Rights, “Situation of Human Rights,” 113–18, including examination of later purges. In October, 2015, in a case brought by four judges, the Inter-American Commission on Human Rights found Honduras guilty of violating the right to judicial guarantees, the principle of legality, the victims’ freedom of expression and association, political rights, and judicial protection. None has been reinstated. For further, see “Situation of the Judgment of the Inter-American Court of Human Rights in the Case of López Lone vs Honduras; Expiration of the Term of Compliance,” Peace Brigades International, November 10, 2016, http://www.pbi-honduras.org/fileadmin/user_files/projects/honduras/Publications/161110Briefing_AJD_EN.pdf.

⁸⁷   “Reacciones al golpe tecnico a la Corte Suprema de Honduras,” La Prensa, December 13, 2012, http://www.laprensa.hn/especiales/377761-273/reacciones-al-golpe-t%C3%A9cnico-a-la-corte-suprema-de-honduras.

⁸⁸   “Presidente de la Corte Suprema niega participacion en destitucion de magistrados,” Proceso Digital, December 13, 2012, http://www.proceso.hn/component/k2/item/28446.html; “Corte Suprema de Honduras esta de luto por golpe,” La Prensa, December 14, 2012, http://www.laprensa.hn/especiales/330939-273/corte-suprema-de-honduras-est%C3%A1-de-luto-por-golpe; “Claves 2012: Las noticias mas importantes en Honduras,” La Prensa, December 17, 2012, http://www.laprensa.hn/especiales/377778-273/claves-2012-las-noticias-m%C3%A1s-importantes-en-honduras; “Integrantes de la Corte Suprema de Justicia,” Poder Judicial de Honduras, 2016, http://www.poderjudicial.gob.hn/Corte%20Suprema%20de%20Justicia,%20Per%C3%ADodo%202009-2016/Paginas/Integrantes.aspx.

⁸⁹   For parliamentarians criticizing Zelaya’s mentioning of reelection for officials as a “grave error,” see “Turba encabezada por ‘mel’ se tome base aerea,” El Heraldo, June 25, 2009.

⁹⁰   “Honduran President to Seek a Second Term, Opposition Cries Foul,” Reuters, November 9, 2016, http://www.reuters.com/article/us-honduras-election-idUSKBN1343L7.

⁹¹   See Tracy Wilkinson, “A Honduran Coup Comes Full Circle,” Los Angeles Times, April 27, 2015, http://www.latimes.com/world/mexico-americas/la-fg-a-honduran-coup-20150427-story.html; and “Re-election a Done Deal,” Honduras Culture and Politics (blog), April 25, 2015, http://hondurasculturepolitics.blogspot.com/2015/04/re-election-done-deal.html. See also Brian Sheppard and David Landau, “Why Honduras’s Judiciary Is Its Most Dangerous Branch,” New York Times, June 25, 2015, https://www.nytimes.com/2015/06/26/opinion/why-hondurass-judiciary-is-its-most-dangerous-branch.html?_r=0.

⁹²   “Honduras: Libre revela nombre de diputados del Congreso que recibieron sobornos,” El Heraldo, February 9, 2016, http://www.elheraldo.hn/pais/928027-466/honduras-libre-revela-nombre-de-diputados-del-congreso-que-recibieron-sobornos.

⁹³   “Mel: ocho diputados recibieron hasta medio millon de lempiras,” La Prensa, February 9, 2016, http://www.laprensa.hn/honduras/927879-410/mel-ocho-diputados-recibieron-hasta-medio-mill%C3%B3n-de-lempiras.

⁹⁴   Interview, Tegucigalpa, August 3, 2016.

⁹⁵   See also “Honduras Report: Situation of Human Rights, Judiciary Independence, Militarization of Police Functions Within the Framework of the Alliance for Prosperity Plan,” Coalition Against Impunity, June 18, 2016, 1–2.

⁹⁶   Ibid., 4–7; Inter-American Commission on Human Rights, “Situation of Human Rights,” 29–30, 40, 43–44; “The Voice of Greatest Authority Is That of the Victims,” Commission of Truth, April 2013, 98–102; “Declaran culpable por seis delitos de difamacion e injuria a David Romero,” El Heraldo, November 13, 2015, http://www.elheraldo.hn/pais/900815-466/declaran-culpable-por-seis-delitos-de-difamaci%C3%B3n-e-injuria-a-david-romero; and “Estado Hondureno Recrudece Persecucion Contra Defensores y Defensoras de Derechos Humanos,” Radio Progreso el ERIC, March 14, 2014, http://radioprogresohn.net/index.php/comunicaciones/noticias/item/793-estado-hondure%C3%B1o-recrudece-persecuci%C3%B3n-contra-defensores-y-defensoras-de-derechos-humanos.

⁹⁷   “Declaran culpable por seis delitos de difamacion e injuria a David Romero,” El Heraldo, November 13, 2015, http://www.elheraldo.hn/pais/900815-466/declaran-culpable-por-seis-delitos-de-difamaci%C3%B3n-e-injuria-a-david-romero.

⁹⁸   See also Honduprensa’s blog archives relating to political persecution, at: “Entradas etiquetadas como persecucion politica,” Hondurprensa (blog), May 25, 2015, https://honduprensa.wordpress.com/tag/persecucion-politica/.

⁹⁹   Interview, Tegucigalpa, August 6, 2016. See also examples of mishandled evidence in “‘There Are No Investigations Here’: Impunity for Killings and Other Abuses in Bajo Aguán, Honduras,” Human Rights Watch, February 2014, https://www.hrw.org/sites/default/files/reports/honduras0214web.pdf.

¹⁰⁰ See Chris Arsenault, “Court Files Stolen in Case of Murdered Honduran Land Rights Activist: U.N.,” Reuters, October 4, 2016, http://www.reuters.com/article/us-honduras-landrights-activist-idUSKCN1241X9; or “Honduras: Explican Porqué Expediente de Berta Cáceres Estaba Fuera de CSJ” [Honduras: Explain why Berta Cáceres’s file was taken from the Supreme Court], El Heraldo, September 30, 2016, http://www.elheraldo.hn/pais/1004614-466/honduras-explican-porqué-expediente-de-berta-cáceres-estaba-fuera-de-csj; or Sarah Faithful, “Conspiracy Surrounding Cáceres Stolen Files,” Council on Hemispheric Affairs, October 12, 2016, http://www.coha.org/conspiracy-surrounding-caceres-stolen-case-files/.

¹⁰¹ Andrew Higgins, “Moldova: Hunting for Missing Millions, Finds Only Ash,” New York Times, June 4, 2015, http://www.nytimes.com/2015/06/05/world/europe/moldova-bank-theft.html?_r=0; Serbia’s Slobodan Milošević went further, actually transporting the bodies of war crimes victims in refrigerator trucks deep inside Serbia, where they were dumped in rivers or buried under highways. I reported this story for the BBC-WGBH radio program The World in 2001. See also “Serbian Minister Comments on Exhumed Bodies,” BBC Worldwide Monitoring, June 13, 2001, https://www.globalpolicy.org/component/content/article/163/28718.html.

¹⁰² Interview by author, Nueva Palestina, August 1, 2016. The reference is to the 2015 scandal in the public health care system, IHSS, discussed on pages 48–50.

¹⁰³ See United States of America v. Jaime Rolando Rosenthal Oliva, Yani Benjamin Rosenthal Hidalgo, Yankel Rosenthal Coello, and Andres Acosta Garcia, S2 13 Cr. 413 (JGK), https://www.justice.gov/usao-sdny/file/781866/download. Yani and Yankel are in U.S. custody and standing trial as of April 1, 2017.

¹⁰⁴ Interview by author, Juticalpa, July 24, 2016.

¹⁰⁵ Some portion of the money from street-level shakedowns and bribes extorted from passers-by, arrestees, and even the victims of crime is typically sent upward within the hierarchy. The total sum is very significant. For examples, see Chayes, chap. 5 in Thieves of State.

¹⁰⁶ Inter-American Commission on Human Rights, “Situation of Human Rights,” 102.

¹⁰⁷ See “Results of the First 60 Days” (materials presented at Wilson Center event, June 16, 2016) Special Commission for the Clean-up and Transformation of the National Police, https://www.scribd.com/doc/316032212/Honduras-Police-Depuracion-Documents; or “Honduras Organized Crime News,” InSight Crime, December 6, 2016, http://www.insightcrime.org/honduras-organized-crime-news/honduras#security. Quote from an interview in Tegucigalpa, August 5, 2016.

¹⁰⁸ Interview in Tegucigalpa, August 5, 2016.

¹⁰⁹ See for example Inter-American Commission on Human Rights, “Situation of Human Rights,” 28–29, 42, 44, http://www.oas.org/en/iachr/reports/pdfs/Honduras-en-2015.pdf.

¹¹⁰ Charles Ford, “Zelaya Administration’s First 45 Days” (leaked cable available in the public record), WikiLeaks, March 16, 2006, https://wikileaks.org/plusd/cables/06TEGUCIGALPA526_a.html.

¹¹¹ Hugo Llorens, “Merida 2.0 in Honduras” (leaked cable available in the public record), WikiLeaks, October 29, 2009, https://wikileaks.org/plusd/cables/09TEGUCIGALPA1090_a.html.

¹¹² Elisabeth Malkin and Alberto Arce, “Files Suggest Honduran Police Leaders Ordered Killing of Antidrug Officials,” New York Times, April 15, 2016, https://www.nytimes.com/2016/04/16/world/americas/files-suggest-honduras-police-leaders-ordered-killing-of-antidrug-officials.html?_r=0; and Alberto Arce, “Honduran Ex-Police Chief Says Government Faked Documents in Assassination Case,” New York Times, April 22, 2016, http://www.nytimes.com/2016/04/23/world/americas/honduras-ramn-sabilln-pineda-police-antidrug-assassination.html suggest that the 2016 leak of information on the conspiracy that he reported may have been part of a ruse to allow Hernández to hobble the police and exert more direct control over internal security.

¹¹³ Just two examples: U.S. Attorney’s Office, Southern District of New York, “Manhattan US Attorney Announces Charges Against Members of the Honduran National Police for Drug Trafficking and Related Firearms Offenses,” press release, U.S. Department of Justice, June 29, 2016, https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-charges-against-members-honduran-national-police-drug; Malkin and Arce, “Files Suggest,” New York Times.

¹¹⁴ Interview, Tegucigalpa, August 5, 2016.

¹¹⁵ Interview, Monte Copado, July 22, 2016.

¹¹⁶ “Estado Hondureño Recrudece Persecución Contra Defensores y Defensoras de Derechos Humanos” [Honduran state intensifies persecution of human rights defenders], Radio Progreso, March 14, 2014, http://radioprogresohn.net/index.php/comunicaciones/noticias/item/793-estado-hondureño-recrudece-persecución-contra-defensores-y-defensoras-de-derechos-humanos.

¹¹⁷ Phillips, Honduras in Dangerous Times, 149–51, 158.

¹¹⁸ Interview, La Paz Department, July 22, 2016. See also “Honduras Indigenous Leader Under Police Protection Arrested,” TelesSUR TV, January 11, 2017, http://www.telesurtv.net/english/news/Honduras-Indigenous-Leader-Under-Police-Protection-Arrested-20170111-0024.html.

¹¹⁹ Interview, Tegucigalpa, August 2, 2016.

¹²⁰ Interview, Nueva Palestina, August 1, 2016.

¹²¹ Links between the police and narco-traffickers are more well-known and better documented, and are discussed below in the section on local officials.

¹²² Interview, Tegucigalpa, July 23, 2016.

¹²³ “La Pandilla Tenía a sus Servivios a 13 Jefes Policiales” [13 police chiefs in the gang], La Prensa, January 10, 2016, http://www.laprensa.hn/honduras/1033698-410/la-pandilla-ten%C3%ADa-a-sus-servicios-a-13-jefes-policiales.

¹²⁴ “Honduras Gangs Extort Homeowners,” Fox News, August 9, 2012, http://www.foxnews.com/world/2012/08/09/honduras-gangs-extort-homeowners.html.

¹²⁵ Interview, July 21, 2016.

¹²⁶ Interview, Tegucigalpa, July 23, 2016.

¹²⁷ Interview, Juticalpa, July 25, 2016.

¹²⁸ Interview, Tegucigalpa, August 3, 2016. See also “Caen Dos Policias por Extorsion y Tres Civiles en Honduras” [Two policemen and three civilians arrested by National Anti-Extortion Force], El Tiempo, September 18, 2015, http://tiempo.hn/caen-dos-policias-por-extorsion-y-tres-civiles-en-honduras/.

¹²⁹ Phillips, Honduras in Dangerous Times, 58. Also see Adrienne Pine, Working Hard, Drinking Hard: On Violence and Survival in Honduras, 1st ed. (Berkeley: University of California Press, 2008), 56–69.

¹³⁰ Interviews, and see Adrienne Pine, “Waging War on the Wageless: Extrajudicial Killings, Private Armies, and the Poor of Honduras,” in The War Machine and Global Health: A Critical Medical Anthropological Examination of the Human Costs of Armed Conflict and the International Violence Industry, eds. Merrill Singer and G. Derrick Hodge (Lanham, MD: AltaMira Press, 2010), 241–76; Inter-American Commission on Human Rights, “Situation of Human Rights,” 47–48.

¹³¹ And yet, many major initiatives aimed at curbing these flows focus on reinforcing these very same police. See Office of the Press Secretary, “Fact Sheet: Alliance for Prosperity,” White House, March 3, 2015, https://obamawhitehouse.archives.gov/the-press-office/2015/03/03/fact-sheet-support-alliance-prosperity-northern-triangle; Esther Yu His Lee “Experts Say US Aid Package to Central America Is Backfiring Big Time,” Think Progress, February 4, 2016, https://thinkprogress.org/experts-say-u-s-aid-package-to-central-america-is-backfiring-big-time-c0928534f91c#.sacjx04s2.

¹³² “Decreto 21-2016” [Decree no. 21-2016], La Gaceta de la Republica de Honduras, April 8, 2016, http://www.observatoriodescentralizacion.org/download/decretos_vigentes/DECRETO-DE-EMERGENCIA-DEPURACION-POLICIAL-08-DE-ABRIL-2016.pdf; for an assessment, see Mike LaSusa, “Breaking Precedent, Honduras Police Reform Commission Making Progress,” InSight Crime, June 17, 2016 http://www.insightcrime.org/news-analysis/honduras-police-reform-commission-making-progress-members-say.

¹³³ For the text of the law setting up the commission, see Decreto 21-2016 [Decree No. 21-2016], La Gaceta de la Republica de Honduras, April 8, 2016, http://www.acnur.org/t3/fileadmin/Documentos/BDL/2016/10611.pdf.

¹³⁴ “Depuracion Policial Ceso a Mas de Dos Mil Agentes en Honduras” [More than two thousand officers and agents let go in purge], Prensa Latina, December 27, 2016, http://prensa-latina.cu/index.php?o=rn&id=53004&SEO=depuracion-policial-ceso-a-mas-de-dos-mil-agentes-en-honduras.

¹³⁵ Interview, Tegucigalpa, August 5, 2016.

¹³⁶ Interview, Tegucigalpa, August 6, 2016. Several other interviewees echoed these sentiments. For other concerns about the commission’s independence, see Laura Jung, “Honduras Special Commission on Police Reform: Genuine Cleanup Effort or Yet Another PR Scheme,” The Americas (blog), Center for Economic and Policy Research, July 8, 2016, http://cepr.net/blogs/the-americas-blog/honduras-special-commission-on-police-reform-genuine-cleanup-effort-or-yet-another-pr-scheme. In an interview on October 13, 2016, Honduras officers at USAID’s Office of Transition Initiatives (OTI) confirmed that they had no knowledge of a systematic analysis of which officers are getting purged. They emphasized that the focus of OTI’s work is on street-level officers.

¹³⁷ See R. Evan Ellis, Honduras: A Pariah State, or Innovative Solutions to Organized Crime Deserving of U.S. Support? (Carlisle, PA: Strategic Studies Institute, U.S. Army War College, June 2016), 24–26.

¹³⁸ Watch “Alianza – Creacion de la Policia los TIGRES” [Police creation of the Tigers],” YouTube video, uploaded by “Alianza por la Paz y la Justicia” [Alliance for peace and justice], October 18, 2012, https://www.youtube.com/watch?v=r5mIPqYWNko. See also: Marguerite Cawley, “Plans for New Military Police in Honduras Backed by Congress,” InSight Crime, May 9, 2013, http://www.insightcrime.org/news-briefs/honduras-police-military-unit-organized-crime; Thelma Mejia, “Government Puts Tigers on the Streets,” Inter-Press Service, August 7, 2012, http://www.ipsnews.net/2012/08/honduran-president-puts-tigers-on-the-streets/.

¹³⁹ Capt. Thomas Cieslak, “Special Forces Soldiers Train Honduran Force,” U.S. Army, March 3, 2015, https://www.army.mil/article/143821/Special_Forces_Soldiers_train_Honduran_force. A U.S. army officer, recently returned from a year in Honduras, confirmed that most U.S. cooperation in-country with Honduran units is with the TIGRES. In his assessment, most work done by U.S. forces stationed in Honduras is focused outside Honduran territories, in cooperation with non-Honduran forces.

¹⁴⁰ Deduction based on experience with military assistance, and see Ellis, Honduras: A Pariah State, 25. For evidence regarding policy decisions made with the express purpose of attracting U.S. military assistance, see then Ambassador Larry Palmer’s assessment of the quid-pro-quo expected by the Honduran government in return for its dispatch of some 300 soldiers and officers to Iraq. Larry Palmer, “Status of Honduran Troop Deployment to Iraq” (U.S. embassy cable), WikiLeaks, July 22, 2003, http://cables.mrkva.eu/cable.php?id=9590.

¹⁴¹ Interviews in La Esperanza, July 22, 2016, Joshua Partlow and Gabriela Martinez, “Suspicions Mount in Slaying of Honduran Environmentalist,” Washington Post, March 18, 2016, https://www.washingtonpost.com/world/the_americas/suspicions-mount-in-murder-of-noted-honduran-environmentalist/2016/03/17/cbac766c-ea2d-11e5-a9ce-681055c7a05f_story.html?utm_term=.cf0e436c4a77.

¹⁴² See pages 32–35, and among other studies, Victor Meza et al., “La Militarizacion de la Seguridad Publica en Honduras [The militarization of public security in Honduras],” CEDOH, 2015.

¹⁴³ “World Prison Brief Data: Honduras,” Institute for Criminal Policy Research, University of London, http://www.prisonstudies.org/country/honduras; Inter-American Commission on Human Rights, “Situation of Human Rights,” 193, http://www.oas.org/en/iachr/reports/pdfs/Honduras-en-2015.pdf; “Honduras: Events of 2015,” Human Rights Watch, 2015, https://www.hrw.org/world-report/2016/country-chapters/honduras; “Shadow Report From Honduran Civil Society to the UN Committee Against Torture (CAT),” World Organization Against Tortune, 2016, 12, http://www.omct.org/files/2016/07/23875/informe_alternativo_honduras_cat_e.pdf. Also see José Martínez d’Aubuisson and Steven Dudley, “Where Chaos Reigns: Inside San Pedro Sula Prison,” InSight Crime, February 2, 2017, http://www.insightcrime.org/investigations/where-chaos-reigns-inside-the-san-pedro-sula-prison.

¹⁴⁴ According to Fiona Mangan, an international corrections expert, the likelihood of money flowing upward to the capital from individual prison administrators depends on the government’s awareness of prison corruption and its control over prison administration (e-mail communication, March 21, 2017). Given the notorious nature of prison corruption in Honduras, and Hernández’s appointment of a former military officer to run the system, both of those factors are likely to be high in Honduras.

¹⁴⁵ Tim Weiner, “At Least 100 Are Killed in Prison Fire in Honduras,” New York Times, May 18, 2004, http://www.nytimes.com/2004/05/18/world/at-least-100-are-killed-in-prison-fire-in-honduras.html?_r=0; “Honduras Prison Fire Video Purportedly Captures Deadly Blaze,” Huffington Post, February 16, 2012, http://www.huffingtonpost.com/2012/02/16/honduras-prison-fire-video-deadly-blaze_n_1281941.html; Inter-American Commission on Human Rights, “Situation of Human Rights,” 54-56, http://www.oas.org/en/iachr/reports/pdfs/Honduras-en-2015.pdf; José Martínez d’Aubuisson and Steven Dudley, “Where Chaos Reigns: Inside San Pedro Sula Prison,” InSight Crime, February 2, 2017, http://www.insightcrime.org/investigations/where-chaos-reigns-inside-the-san-pedro-sula-prison.

¹⁴⁶ Annie Bird, “The Agua Zarca Dam and Lenca Communities in Honduras,” Rights Action, October 3, 2013, 7. See also Jordy Willems and Anne de Jonghe, “Protest and Violence Over the Agua Zarca Dam,” Bankwatch, February 2016, 27–28.

¹⁴⁷ Ariel Torres Fuenes, “El Destino de Agua Zarca” [The destiny of Agua Zarca], El Pulso, March 2, 2017, http://elpulso.hn/el-destino-de-agua-zarca/.

¹⁴⁸ “Por Los Intereses Oligarcas, Detienen Ilegalmente en Rio Blanco Tres Companeros Lencas del COPINH” [In the interest of oligarchs, three fellow Lenca COPINH members illegally detained], COPINH, November 2, 2012, https://www.copinh.org/article/por-los-intereses-oligarcas-detienen-ilegalmente-e/; “Arbitrary Detention, Subsequent Release of Ms Berta Cáceres and Mr Tomas Gomez Membreno,” Protection International, May 27, 2013.

¹⁴⁹ Both were deployed to the Bajo Aguán, where clashes over the expansion of palm plantations involved numerous human rights violations. (See various mentions below.) Nina Lakhani, “Berta Cáceres Court Papers Show Murder Suspects’ Links to US-Trained Elite Troops,” Guardian, February 28, 2017, www.theguardian.com/world/2017/feb/28/berta-cacereshonduras-military-intelligence-us-trained-special-forces; see also Jason McGahan, “Army Major, Corporate Goons Charged in Murder of Berta Cáceres in Honduras,” Daily Beast, May 8, 2016, http://www.thedailybeast.com/articles/2016/05/08/did-corporate-goons-plot-to-murder-activist-berta-caceres.html.

¹⁵⁰ Becky Myton et al., “Honduras Tropical Forest and Biodiversity Assessment,” USAID Honduras, September 2014, A21.

¹⁵¹ See Victor Meza et al., “La Militarizacio.”

¹⁵² It is law 168-2013, and has gone through a few modifications since. See: “Decreto No. 168-2013,” UNHCR ACNUR, http://www.acnur.org/t3/fileadmin/Documentos/BDL/2016/10608.pdf; “Decreto No. 168-2013,” La Gaceta de la Republica de Honduras, http://www.tsc.gob.hn/leyes/Ley_Policia_militar_orden_publico_2013.pdf; “Decreto No. 410-2013,” La Gaceta de la Republica de Honduras, http://www.tsc.gob.hn/leyes/Ref_PMOP_2014.pdf.

¹⁵³ “Memoria Annual, 2015: Ano del fortalecimiento de La Policia National,” Honduran National Police, 2015, 18, http://www.seguridad.gob.hn/policiaNacional/media/MEMORIA%202015.pdf.

¹⁵⁴ “Permanent Parallel Police Forces?,” Honduras Culture and Politics (blog), January 19, 2015, http://hondurasculturepolitics.blogspot.com/2015/01/permanent-parallel-police-forces.html; http://www.laprensa.hn/honduras/788396-410/diputados-no-ratifican-rango-constitucional-de-la-polic%C3%ADa-militar?utm_source=laprensa.hn&utm_medium=website&utm_campaign=temasdestacados.

¹⁵⁵ Private conversation, Washington, DC, December 22, 2016. See also Sarah Kinosian, “Honduras’ Military: On the Streets and in the Government,” Latin America Working Group, February 10, 2015; and Inter-American Commission on Human Rights, “Situation of Human Rights,” 93; and a blogger identified as RNS, “Permanent Parallel Police Forces?,” Honduras Culture and Politics (blog), January 19, 2015, http://hondurasculturepolitics.blogspot.com/2015/01/permanent-parallel-police-forces.html.

¹⁵⁶ And see Agence France-Presse and Agencia EFE, “Creacion de policia military levanta temor en Honduras,” La Nacion, August 23, 2013, http://www.nacion.com/mundo/centroamerica/Creacion-policia-militar-levanta-Honduras_0_1361663860.html. For a description of its official makeup, training, and duties, see Ellis, Honduras: A Pariah State, 20–24.

¹⁵⁷ The most careful recent round-up of information on military involvement in the Cáceres assassination is in “Honduras: The Deadliest Place to Defend the Planet,” Global Witness, 14.

¹⁵⁸ Such private security companies may be owned by former military officials. Servicos Especiales de Seguridad (SESER), which belongs to the former commander of a military intelligence unit, was used by the Canadian mining company Aura Minerals. See Karen Spring, “Mining in a State of Impunity,” MiningWatch Canada, June 28, 2016, http://miningwatch.ca/sites/default/files/mining-in-a-state-of-impunity-web_1.pdf.

¹⁵⁹ Anna Jover Segura, “Honduras, Bajo Aguan: Nuevo Coronel de la Operacion Xatruch, ¿Mas de lo Mismo?,” Upside Down World, March 21, 2014, http://upsidedownworld.org/noticias-en-espa/noticias-en-espa-noticias-en-espa/honduras-bajo-aguan-nuevo-coronel-de-la-operacion-xatruch-imas-de-lo-mismo/. See also detailed reporting in “‘There Are No Investigations Here,’” Human Rights Watch.

¹⁶⁰ Ellis, Honduras: A Pariah State, 17. See, on its use against gang extortion, “Presidente Hondureno Asegura que en 2016 ‘Combatira la Extortion,’” El Libertador, December 30, 2015, http://www.web.ellibertador.hn/index.php/noticias/nacionales/889-presidente-hondureno-asegura-que-en-2016-combatira-la-extorsion; other sources detail on abuses at Radio-TV Globo and assert the force reports directly to Hernández, see “Militares intimidan a personal de Radio y TV Globo,” Criterio, May 24, 2016, http://criterio.hn/2016/05/24/militares-intimidan-personal-radio-tv-globo/.

¹⁶¹ See InSight Crime’s roundup on Honduras, “Honduras,” InSight Crime, December 6, 2016, http://www.insightcrime.org/honduras-organized-crime-news/honduras; Reuters, “Police Militarization in Honduras Has Helped Cut Violence, but Soldiers Are Being Accused of Murder and Torture,” Business Insider, July 9, 2015, http://www.businessinsider.com/r-military-helps-cut-honduras-murder-rate-but-abuses-spike-2015-7; Inter-American Commission on Human Rights, “The Situation of Human Rights,” 93; Sarah Kinosian, “Honduras’ Military: On the Streets and in the Government,” Security Assistance Monitor, February 10, 2015, http://securityassistance.org/blog/honduras-military-streets-and-government.

¹⁶² “Honduras Cuts Security Tax After Angering Businesses,” Reuters, September 14, 2011, http://www.reuters.com/article/honduras-tax-idAFS1E78D23920110914.

¹⁶³ Meeting with two members of the State Department Bureau of Conflict and Stabilization Operations, June 28, 2016.

¹⁶⁴ Hugo Noe Pino, “Honduras: The Fragility of Gains in Budget Transparency,” International Budget Partnership, October 2016, http://www.internationalbudget.org/wp-content/uploads/ibp-case-study-honduras-budget-transparency-2016.pdf.

¹⁶⁵ Gerardo Reyes-Tagle and Mikel Tejada, “The Fiscal Implications of Public-Private Partnerships in Honduras,” Inter-American Development Bank, July 2015, https://publications.iadb.org/bitstream/handle/11319/6991/FMM_DP_Fiscal_Implications_of_Public_Private_Partnerships_Honduras.pdf?sequence=1, 32.

¹⁶⁶ Ibid., 27.

¹⁶⁷ Ibid., 29. The assessment of the supreme audit institution was corroborated by interviewees, including a Honduran oversight professional, who called it “a joke. It is no control institution.”

¹⁶⁸ “Informe Consolidado de Rendicion de Cuentas del Sector Publico, Periodo 2015,” Tribunal Superior de Cuentas, July 31, 2016, http://www.tsc.gob.hn/Rendicion_de_cuentas/2015/Informe_001-DF-2016.pdf; and telephone interview, February 8, 2017.

¹⁶⁹ Ibid.

¹⁷⁰ Ibid.

¹⁷¹ “Debt Management Reform Plan: The Republic of Honduras,” World Bank Group, October 2014, http://www.sefin.gob.hn/wp-content/uploads/2015/09/plan_mejoradeuda.pdf.

¹⁷² Interview with an IDB official, Tegucigalpa, August 3, 2016. But cf. the IDB’s own website: “Trust Funds,” Inter-American Development Bank, http://www.iadb.org/aboutus/trustfunds/fundsearch.cfm. See also Stephan Lefebvre, “Honduras: IMF Austerity, Macroeconomic Policy, and Foreign Investment,” Center for Economic and Policy Research, September 2015, http://cepr.net/documents/Honduras_IMF-2015-08.pdf, 14–18. This feature of Honduran kleptocratic operations has uncomfortable similarities in the West, including the privatization of public services in Chicago, where a bank-backed consortium won key contracts there. According to Hilari Rantakarii, of Transparency International Finland, the contracting out of Helsinki public services to private companies has also resulted in loss of public access to the terms of the deals or oversight on their implementation in that country.

¹⁷³ Marco Caceres, “Honduras: Bargaining Away the State Power Company,” World Post, no date, http://www.huffingtonpost.com/marco-caceres/honduras-bargaining-away_b_5767394.html; “IMF Executive Board Approves $113.2 Million Stand-By Arrangement and $75.4 Million Stand-By Credit Facility for Honduras,” press release, International Monetary Fund (IMF), December 4, 2014, http://www.imf.org/en/News/Articles/2015/09/14/01/49/pr14545; “Debt Management Reform,” World Bank Group, 11; Marco Antonio Hernandez et al., “Honduras Economic DNA,” World Bank, June 2015, http://documents.worldbank.org/curated/en/150731468189533027/pdf/97361-WP-PUBLIC-Box391473B-Honduras-Economic-DNA-First-Edition-11Jun2015-FINAL-PUBLIC.pdf, 10: “One of the main contributors to persistent deficits to the combined public sector has been the state-owned electricity company (ENEE).”

¹⁷⁴ Luciano Gonzalez, “Concerning Developments Over at ENEE,” Honduras News, October 19, 2015, http://www.hondurasnews.com/concerning-developments-over-at-enee/.

¹⁷⁵ Kyrgyzstan, Brazil, subsidies, and so on.

¹⁷⁶ Figures on ENEE losses from “Perdidas Electricas de la ENEE suman L 47,296 millones en seis años,” El Heraldo, April 24, 2016, http://www.elheraldo.hn/pais/953306-466/p%C3%A9rdidas-el%C3%A9ctricas-de-la-enee-suman-l-47296-millones-en-seis-a%C3%B1os. GDP figures from “Data: Honduras,” World Bank, http://data.worldbank.org/country/honduras.

¹⁷⁷ “IMF Executive Board,” press release, IMF, December 4, 2014; “IMF Completes Third and Fourth Reviews Under SBA and SCF With Honduras,” press release, IMF, November 2, 2016, https://www.imf.org/en/News/Articles/2016/11/02/PR16482-Honduras-IMF-Completes-Third-Fourth-Reviews-Under-SBA-SCF.

¹⁷⁸ Kelssin Vasquez, “Congreso aprobo liberalizer la generacion de energia electrica,” El Heraldo, April 7, 2014, http://www.elheraldo.hn/csp/mediapool/sites/ElHeraldo/Economia/story.csp?cid=611117&sid=294&fid=216.

¹⁷⁹ Cesar Pantin, “Honduras: Sacan de la Enee a 2,000 empliados,” La Prensa, November 24, 2014, http://www.laprensa.hn/honduras/770871-410/honduras-sacan-de-la-enee-a-2000-empleados; “Masivos despidos en la ENEE,” Tiempo Digital, November 4, 2016, http://tiempo.hn/masivos-despidos-en-la-enee/.

¹⁸⁰ Luis Rodriguez, “Perdidas electricas de la ENEE suman L 47,296 en seis anos,” El Heraldo, April 24, 2016, http://www.elheraldo.hn/pais/953306-466/p%C3%A9rdidas-el%C3%A9ctricas-de-la-enee-suman-l-47296-millones-en-seis-a%C3%B1os. But note the lempira lost value against the dollar in 2014, making dollar comparisons misleading. See “Devaluation in Honduras,” Central America Data, http://www.centralamericadata.com/en/search?q1=content_en_le:%22devaluation%22&q2=mattersInCountry_es_le:%22Honduras%22.

¹⁸¹ Interview with resident of Choluteca (where there are at least three large electricity generators, two oil-fired and one solar), August 6, 2016. Interviewee recorded blackouts for as long as eight hours a day for several days a week.

¹⁸² According to figures cited by the World Bank for 2011 and 2012, a little over 82 percent of the population had electricity, but only 65 percent of rural households. See “Access to Electricity (% of Population),” World Bank, accessed April 14, 2017, http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=HN.

¹⁸³ Interview, Tegucigalpa, August 2, 2016.

¹⁸⁴ Interview, Tegucigalpa, October 2014; and see Jose Ernesto Calix Mendoza, “Origen, Causa-Efecto de los Problemas Financieros de la ENEE, y las Medidas Alterntivas para Afrontarlos,” Colegio de Ingenieros Mecanicos, Electricistas y Quimicos de Honduras, October 2014, http://www.cimeqh.org/index.php/noticias/351-origen-causa-efecto-de-los-problemas-financieros-de-la-enee-y-las-medidas-alternativas-para-afrontarlos, 15.

¹⁸⁵ Ibid., which is a plan drawn up by Mendoza, ENEE’s national coordinator for loss control, projecting a “realistic” reduction target of 60 percent of nontechnical losses only. Congress approved forty-one renewable energy contracts in September 2010. “Empleados hondureños entraran a las 7:30 AM,” La Prensa, March 1, 2011, http://www.laprensa.hn/honduras/548392-97/empleados-hondurenos-entraran-a-las-730-am.

¹⁸⁶ “Continua revision de contratos termicos en Honduras,” America Economia, March 24, 2014, http://www.americaeconomia.com/negocios-industrias/continua-revision-de-contratos-termicos-en-honduras; and ibid., Marco Caceres. See also motivation for a potential loan by the Inter-American Development bank, “Programmatic Support for Structural Reforms in the Electricity Sector,” for consideration by Board of Directors, December 2, 2017, p. 5, https://www.gtai.de/GTAI/Content/DE/Trade/Fachdaten/PRO/2015/01/Anlagen/PRO201501275005.pdf?v=1.

¹⁸⁷ Ley de Promocion a la Generacion de Energia Electrica con Recursos Renovables” [Law to promote electricity generation using renewable resources], La Gaceta de la Republica de Honduras, October 2, 2007, http://www.poderjudicial.gob.hn/juris/Leyes/Ley%20de%20Promocion%20a%20la%20Generacion%20de%20Energia%20Electrica%20con%20Recursos%20Renovables.pdf. See also Climatescope’s 2016 profile of Honduras: “Honduras,” Climatescope, December 14, 2016, http://global-climatescope.org/en/country/honduras/#/details.

¹⁸⁸ Robert Fares, “Price of Solar Is Declining to Unprecedented Lows,” Plugged In (blog), Scientific American, August 27, 2016, https://blogs.scientificamerican.com/plugged-in/the-price-of-solar-is-declining-to-unprecedented-lows/.

¹⁸⁹ “Electrical Elites and Political Power,” in Meza et al., Poderes Facticos, 119–34.

¹⁹⁰ Interview (telephone), October 3, 2016.

¹⁹¹ “Incentivos elevaran el costo del kilovatio de energia solar,” La Prensa, April 13, 2013, http://www.laprensa.hn/economia/laeconomia/830712-410/incentivos-elevar%C3%A1n-el-costo-del-kilovatio-de-energ%C3%ADa-solar.

¹⁹² According to unpublished research co