Long Documents

Wednesday, October 28, 2015

Why the OAS MACCIH Will Likely Fail

Multiple articles (here and here, for example) appeared in the press Wednesday echoing what we have been saying in for some time: that the OAS proposal for a Mission de Apoyo Contra la Corrupción y la Impunidad en Honduras (MACCIH) seems designed to fail, given Honduras's, and more particularly Juan Orlando Hernández's, history of meddling in the judicial system.

The indignados marches formed the context and motivation when Juan Orlando Hernández proposed the Sistema Integral Hondureño de Combate a la Impunidad y Corrupcion (SIHCIC).  He made the proposal as an attempt to shut the indignados protests down.

At the same time he proposed a "national dialogue" to open up the process to improvement, but no part of the SIHCIC process involved actually generating concrete suggestions from the dialogues, and there was no actual legislative proposal or even a report resulting from them. 

Hernández chaired the first several meetings, with groups usually allied politically with him, then turned the entire process over to a congressman to oversee.

The SIHCIC proposal has five basic components:
  • first, a support committee for the Public Prosecutor's office to include both Honduran and international jurists that would audit the actions of the Public Prosecutor's office and aid in the pursuit of corruption
  • second, a similar support committee to oversee the Consejo de la Judicatura, the group that disciplines judicial misbehavior
  • third, a group responsible for the security of judges and their families
  • fourth, an observatory of the judicial system involving academic and civil society members
  • fifth, a business integrity group that would promote transparency and ethical standards for businesses and could propose rules and legislation to support them.

The proposal suggests nothing about judicial independence. It keeps the existing balance of power, tilted extraordinarily strongly towards the executive branch, and in fact, would reinforce it. 

The indignados rejected this proposal precisely because it did nothing to further judicial independence.  They continued to call for the establishment of a CICIH along the lines of the CICIG which has been successful in Guatemala. 

However, some of the indignados, including a leader, Tomás Andino, believe that even a CICIH might not work.  Andino said:
Guatemala has a relatively greater independence of powers than Honduras, which does not function as a democratic state...Here, a U.N. commission would be embedded in a corrupt system.

Because the indignados and other groups refused to participate in Hernández' dialogue, given its closed nature and lack of a mechanism for incorporating any results of the dialogues into legislation, Hernández eventually asked both the OAS and UN for mediators and facilitators. 

The OAS sent John Biehl del Rio who met with many of the same groups that Hernández had, then met in turn with the indignados and other groups that had not participated in the dialogues.  However, he was partisan from the start.  He openly rejected the indignados' call for a CICIH and dismissed the opposition in Honduras in inappropriate ways. 

As a result of his recommendations the OAS instead proposed, and Juan Orlando Hernández accepted, the Mission de Apoyo Contra la Corrupción y la Impunidad en Honduras (MACCIH), designed to take another two years to perform studies and make recommendations.

MACCIH, not unsurprisingly given John Biehl's antipathy for the indignados, parallels and expands on the SIHCIC proposal of Hernández.  It calls for the formation of a set of international judges and lawyers to advise the Public Prosecutor's office and provide technical support to the investigative services.  It uses the Centro de Estudios de Justicia de las Americas (CEJA) to write a series of reports and recommendations on the justice system in Honduras.  It invokes the OAS's Mecanismo de Seguimiento del Implementación del Convención InterAmericana contra la Corrupción (MESICIC) to evaluate and recommend legal changes necessary to fight corruption and bring Honduras into line with the Inter-American Convention against Corruption.  It also calls for the establishment of an observatory of the judicial system to monitor its progress.

A Woodrow Wilson Center report authored by Eric Olsen and Katherine Hyde pointed out nine weaknesses of the MACCIH proposal that, they say, "must be addressed if this and other efforts are to be more than mere window dressing".

For us the most relevant and pressing of their questions is this one, which we also have been asking:
The priority of the MACCIH seems to be assessment and recommendations for institutional reform.  There is little question that institutional reforms are needed, but I know of at least two internationally sanctioned, highly credible assessments of Honduras's law enforcement institutions and justice system in the last four years, and their findings and recommendations are very sound.  Yet the government of Honduras (both current and previous) failed to act on the vast majority of these recommendations.  The question is whether it is really necessary at this point to carry out additional costly assessments and evaluations and again develop reform proposals when much of the work has already been done.  Why not adopt the recommendations that have already been made by international bodies -- including ironically, the OAS just six months ago -- and get to work now.

We would go further and suggest that Juan Orlando Hernández himself, while head of the Honduran Congress, was one of those who "failed to act on the vast majority of recommendations" for judicial reforms. While head of Congress he initiated questionable procedures to remove four sitting Supreme Court justices because he didn't like their ruling on Model Cities. Why does anyone, including the OAS, think that suddenly this will change, that the Honduran government will now act to implement the suggestions?

The MACCIH proposal has won support from James Nealon, US Ambassador to Honduras, who immediately after its announcement tweeted his approval.  But Foreign Policy magazine called it "more like a tool to appease the masses rather than an effective tool for reform."  Carlos Ponce of Freedom House said recently:
"The solution is not making more reports, but bringing change to Honduras.  We’re not talking about India or Brazil but a small country with lots of potential — but a lack of will to change. The families in power are in bed with factions in the government that also control the media. Corruption is linked directly to political parties, so you have to change the power structure."

Nothing in MACCIH even seeks to addresses this fundamental problem.  Without a demonstrated "will to change" there is no reason to expect MACCIH to bring about meaningful change in Honduras and more than previous studies cited in the Wilson Center report have.

 Meanwhile, Judicial independence in Honduras and Corruption in Honduras were the topics of two hearings last week at the Inter American Commission on Human Rights (IACHR in English and CIDH in Spanish). 

The government of Honduras boycotted the hearings. That should give those supporting the MACCIH pause; is there any will to examine these basic questions?

Yani Rosenthal Voluntarily Surrenders to DEA

Noti Cortos de Honduras reports that yesterday Yani Rosenthal voluntarily surrendered to the US Drug Enforcement Agency.

Saturday, October 24, 2015

Drug Planes: They're Back!

After an interlude of almost 18 months, drug planes are again using illicit landing strips in central Honduras, even as Honduras completes is radar coverage.

In February 2014, Willaim Brownfield,  US State Department Assistant Secretary of the Bureau of International Narcotics and Law Enforcement Affairs, told El Heraldo that drug flights had dropped off precipitously:
"In the last 12-18 months the number of traces, flights, that go to Honduras have enormously been reduced.  We are talking about a reduction of more than 80%."
That trend was still true as of May, 2015 when General Kelly of US Southern Command said drug flights in general were down all over, and that Honduras had dropped from first to fifth place as a destination for drug flights.

However, there were signs earlier that 2015 was not going to be like 2014.

In February, long before General Kelly's speech, the Honduran military allowed as how they were having trouble keeping up with clandestine landing strips in the Mosquitia.  As fast as the Honduran military would blow deep holes in them to stop planes from landing, the drug runners would fix them up.  One clandestine strip was destroyed on January 28, only to be usable again when visited on February 3 of this year.

In April of this year, a Brazilian newspaper revealed a new drug ring that was buying drugs from the FARC in Colombia, and loading it onto planes in Venezuela and flying it to Honduras.  From Honduras it was flown to Mexico for the Sinaloa cartel.  This seemed to be confirmed in May, when Honduran authorities found a Brazilian pilot with severe third degree burns in a hospital in Tocoa, Olancho the day after they found a crashed and burned drug plane in the Mosquitia.

But its not just the landing strips being renewed.  After a long absence, drug planes are crashing and being abandoned in Honduras again.  The crash in May was just the start.

On September 14, authorities found a burned plane in El Jobo, San Esteban, Olancho.  There was no landing strip here, just a broad expanse of flat land.  The plane was completely burned except for the tail section, and so far no identifying numbers were recovered from the crash.  Local residents reported hearing the plane crash the previous day.

On September 25, a plane with two pilots from Olancho, crashed and burned in Tripoli, La Masica, Atlantida, killing both pilots.  No drugs were found but a Mexican bank book, extra gas cans, and a satellite phone were found at the crash site.

Finally, on October 22, a plane crashed in La Cuarenta, Progreso, Yoro.  The plane, a US registered (N40212) Piper Aztec from 1973, is currently registered to an owner in Miami, Florida but will probably turn out to have been recently sold.  Locals said the plane attempted to land around 2 or 3 am that morning, but crashed.  Several vehicles were observed around the plane.  The crash was not reported to authorities until 6 am, by which time the pilot(s) and any cargo were long gone.  Found inside the plane were buoys, colored lanterns for a landing strip, gas cans, a portable pump, and an inflatable raft.

All this activity comes as Honduras prepares to install its third and final radar bought from Israel for $30 million.  Honduras bought these 3 radar systems explaining that they would put an aerial shield over Honduras.  Two were supposed to be small, directional radar systems and this new one, a mobile system that does full 360 degree scans.  In April, the military's commander, General Freddy Diaz said:
"With this equipment we will complete the oversight system which Honduras should have.  This radar is part of a system of equipment with capacity to cover all of the national territory and parts of the Atlantic and Pacific oceans."
But now he's saying its not enough:
"Its not sufficient, we need more radars for us to do a strict watch over all the airspace."


Friday, October 23, 2015

Yoro Mayors Lead Drug Gangs

Since 2014 three different Mayors in the Honduran department of Yoro have been identified as criminals participating in murder for hire and the drug trade in Honduras.

The Department of Yoro, readers will remember, is important to the Zetas.  It's where their drug planes historically have landed, both in clandestine airstrips and along established paved roads.

In July 2014, the Mayor of the town of Yoro, Arnulfo Urbina Soto, was arrested for drug trafficking, murder, rape, money laundering, and the possession of illegal weapons.  After a two year long investigation, the National Police alleged that Urbina Soto led a drug trafficking gang of 37 people that had been operating at least since 2009.  The National Police allege that Urbina Soto expropriated land in the small towns of Rio Nance and Rio Abajo, Locomapa, Yoro and converted them to landing strips for drug planes.

At the time of his arrest Urbina Soto, in addition to being Mayor, was a National Party operative, having coordinated the Presidential campaign of Juan Orlando Hernandez in 2013 in Yoro.  His daughter, Diana, is a member of the Honduran Congress.

Urbina Soto is not alone.

In August 2015 the Fuerza de Seguridad Interinstitutional (FUSINA) went to Jocon, Yoro, to arrest members of Los Solis, wanted for being hit men, murderers, and cattle thieves, among other crimes.  They captured five alleged members of Los Solis, but failed to capture the alleged leader, Mayor Santos Gabriel Elvir Arteaga.  Los Solis was established around 2000 by the Solis family, but when Elvir Arteaga became Mayor in 2009 he also gained control of Los Solis, according to Police, and only two Solis family members are thought to be still part of the group.  Mayor Santos Elvir is a member of the Liberal Party and still at large.

Thursday the Mayor of Sulaco, Yoro, was arrested on charges of homicide, murder, illicit association, and carrying illegal weapons.  Mayor José Adalid Gonzalez Morales is alleged to be the leader of Los Banegas, a group operating in and around Sulaco, Yoro, consisting of 30-40 members.  They are wanted for cattle theft, extortion, robbing buses and trucks, murder, and distribution of narcotics in Sulaco.  The investigation into Gonzales Morales began three months ago when police arrested seven members of the group.

Los Banegas are alleged to have killed eight people in and around Sulaco.  Gonzalez Morales is accused of killing peasant activist Secundino Orellana, who previously had been arrested and shot during peasant land protests.

In the 2013 elections, Gonzales Morales, a member of the National Party, received a verbal endorsement at a National Party rally by then Presidential Candidate Juan Orlando Hernandez, who called him "one of the best Mayors Honduras has ever had."

Thursday, October 22, 2015

Honduras Allegedly Bugs Telephones of Supreme Court Justices?

The Honduran Public Prosecutor's office is alleged to have tapped the telephones of its Supreme Court Justices in an apparent violation of its own laws.  So said one of the defense lawyers of Teodoro Bonilla in court yesterday.

Teodoro Bonilla is the Vice President of the Judicial Counsel, the group which oversees the performance of Judges in Honduras.  He is accused of getting two different judges to change guilty rulings against two of his relatives for money laundering and having illegal weapons among other charges.

Yesterday in court, the Public Prosecutor's office made a motion for Justice Victor Manual Lozano Urbina to recuse himself from hearing the case because of his manifest friendship with the accused, Bonilla.  They introduced as supporting evidence of that friendship a recording of a phone call, from a tapped telephone, between Justice Lozano and Bonilla.

Justice Lozano, in all fairness, had attempted to recuse himself from the case precisely because of his friendship with Bonilla at the beginning of October, but the Justices of the Supreme Court denied his motion to recuse himself and ordered him to hear the case.

The Defense argued:
"They have a phone intercept on the communications of Justice Victor Manuel Lozano.  We assume that they have intercepts on the telephones of all of the Justices of the Supreme Court, for which the defense alleges that this is an illegal piece of evidence that violates the Constitution of the Republic, treaties and human rights agreements of which Honduras is a part."

Never-the-less the defense argued that Justice Lozano should hear the case.

We have to remember that it was the defendant's lawyer who concluded that it was Justice Lozano's phone, and not Bonilla's phone that was tapped.  Other statements, including by another defense lawyer, suggest it was Bonilla's phone that was tapped.  Furthermore, they argue that the date of the phone call is from prior to the opening of an investigation of Bonilla and therefore was illegally obtained and used.

Honduran law is clear on the collection and use of wiretaps.  To legally listen in on phone calls in Honduras requires an active investigation against the person by the Public Prosecutor's office, and a judge's signed order authorizing the wiretap.

To get a wiretap warrant, the Prosecutor's Office must present to the Judge in writing, the full name of the person(s) whose communications are to be tapped, a description of the illegal activities that warrant the wiretap, the legal code being violated, what communications are to be intercepted (eg, phone carries, IMEI number of phone, etc), the duration of the tap, the name and title of the person requesting the wiretap, and most importantly, the number of the open investigation.  Wiretaps are related to a particular investigation and may not be used in another case.

To use wiretap information in a legal case in Honduras, the Public Prosecutor must request judicial approval to use the wiretap data.  It does not appear that the Public Prosecutor did so in this case.  Instead he introduced wiretap information in a pre-trial motion.

The law says a wiretap may not be used in any other case other than the specific investigation that made it necessary.  This becomes relevant because the defense has argued that it dates from before the investigation of Bonilla began and therefore is not legally admissible. 

Bonilla's lawyer has requested the judicial order authorizing the phone tap on Bonilla in order to make it public.

Justice Lozano admitted the prosecutor's motion to recuse himself and denied the motion by the defense to remain on the case.  The motion to recuse now goes to the named appeals court, consisting of 3 other Supreme Court Justices:  Silvia Santos, German Garcia, and Elmer Lizardo.

Friday, October 16, 2015

CONATEL attempts to shut down Cholusat Sur

(updated to link to image of CONATEL order)
The government of Honduras, in the form of the Comision Nacional de Telecommunicaciones (CONATEL), has issued an order to close the opposition TV station, Cholusat Sur, Channel 36 in Tegucigalpa in 4 days.

Why? you might ask.

For an "attempt against the economy" of Honduras. 

It all begins in June of this year, with Channel 36 covering the news story that the Banco Ficohsa and more importantly, its Honduran owner, Camilo Atala, have been charged in Panama with money laundering.

This is not speculation.  This is not rumor.  It's a fact.

Atala is head of the Honduran branch of the Consejo Empresarial de America Latina (CEAL). This was the group that hired Lanny Davis in 2009 to lobby then- Secretary of State Hillary Clinton not to declare the Honduran coup a military coup. Atala is a powerful member of the Honduran elite.

In the current news coverage, Esdras Amado López has been reporting how Banco Ficohsa in Honduras moved $1.5 million dollars (about 33 million lempiras) as part of the IHSS scandal, without fulfilling the CNBS paperwork requirements for the transfer. The IHSS scandal is what initially fueled and continues to inspire the torchlit marches against corruption that also include demands for the resignation of President Juan Orlando Hernández.

The money moved by Banco Ficohsa, Amado Lopez reports, was requested by IHSS head Mario Zelaya to pay bribes to facilitate payment of the Compania de Servicios Multiples and its subsidiary, Central American Technologies. These were payments for goods and services that were never delivered.

Amado Lopez says that both the US Department of Justice and the Fiscalia de Chile have documentation linking the Banco Ficohsa to the illegal movement of IHSS monies.

Chile is where one of Mario Zelaya's mistresses lives and she is charged in the IHSS scandal.

The US Department of Justice allegedly knows about the money sent from Honduras to Panama by the Banco Ficohsa, then deposited in MultiBank in Panama. Reportedly, the funds were then transferred to a bank in Louisiana where Mario Zelaya used them to buy real estate, property now confiscated for the government of Honduras by the US Department of Justice.

Other news sources have reported on this story, both inside of and outside of Honduras, citing court papers in Louisiana as the source of their information.

CONATEL, in its notification to Cholusat Sur that it was beginning procedures to shut down the station, said that this reporting was "an attempt against the economy" of Honduras in violation of the Constitution, the Telecommunications regulations, and the Administrative regulations.

So, it is now officially an "attempt against the economy" to report facts in Honduras.

Monday, October 12, 2015

Deconstructing the Grupo Continental?

Jaime Rosenthal Oliva wants to take steps that will preserve the business of the Grupo Continental while his family contests charges brought against them.

Honduras' Comisión Nacional de Bancos y Seguros (CNBS) has other ideas. On Saturday, it voted to force liquidation of the Banco Continental.

In response, the Rosenthal family issued its third public statement, calling for a voluntary liquidation that would
safeguard the interests of thousands of families employed by the Grupo, and maintain other enterprises such as the newspaper Tiempo and Channel 11.

The Rosenthal family proposed that they would voluntarily liquidate the Grupo Continental:
the family would give a bond to increase the capital in the bank to 100 million lempiras, in order to reach the index of capital adequacy demanded by the CNBS at 6% (currently, it is at 5.2%).

In proposing this action, the Rosenthal family is directly addressing the technical weakness that allowed the CNBS to propose forced liquidation. They argue that this action would directly affect 11,000 employees and 25,000 more people indirectly, as well as cutting off access to account holders, estimated to number 220,000.

The CNBS did not agree to the plan offered by the Rosenthal family. In his statement acknowledging this decision, calling again for its reconsideration, Jaime Rosenthal noted that the Grupo Continental is responsible for 5% of the Gross National Product of Honduras.

It is probably worth noting that at this point, no one has been convicted of a crime. What have been alleged is not drug trafficking itself (although some Honduran media are happily applying that term to the charges) but money laundering.

Basically, this could happen through the bank accepting deposits from people who the US prosecutor thinks the bank should have suspected produced their income through illegal activities. Under US law, deposits of more than $10,000 a day need to be reported, so someone could deposit amounts under that ceiling, repeatedly, creating a suspicious pattern of activities that a bank might ignore. Another option to launder money is to use a business that can bring in cash of varying amounts without suspicion-- antiquities and art, for example. Deposits from front businesses would not necessarily be questioned by a bank.

Banks also are used in money laundering through "layering":

Layering involves the wire transfer of funds through a series of accounts in an attempt to hide the funds' true origins. This often means transferring funds to countries outside the United States that have strict bank-secrecy laws. Such countries include the Cayman Islands, the Bahamas, and Panama. Once deposited in a foreign bank, the funds can be moved through accounts of "shell" corporations, which exist solely for laundering purposes. The high daily volume of wire transfers makes it difficult for law enforcement agencies to trace these transactions.

The details of the charges are not available, so we do not know precisely how the alleged money laundering took place. (A charge of suborning a public official is also mentioned in Honduras press coverage, but until further details are available, it is difficult to be certain what the basis of that charge might be.)

Honduran media are reporting that it was the Banco Continental's relationship with the Rivera Maradiaga family, which was swept up in drug trafficking investigations in 2013, that is the basis of the money laundering charges. Jaime Rosenthal is quoted as saying "no bank in the world has the ability to investigate all its clients". Yani Rosenthal noted that the Empacadora Continental had bought cattle from the River Maradiaga ranching enterprise ("as I think all the packers in Honduras did"), and Jaime Rosenthal admitted that the bank had made business loans for some of the Rivera Maradiaga companies.

It would have been hard for a major bank in Honduras to avoid doing business with them: reportedly, they owned gas stations, shopping malls, palm oil processing plants, cattle ranches, hotels, and transport businesses-- not to mention their private zoo.

The meat-packing deals of the Grupo Continental with the Rivera Maradiaga family date back to the 1970s and 1980s, which appears to predate the Rivera family move into drug trafficking. More recent loans described by Rosenthal provided funding for the agricultural businesses.

And then there is that zoo, also financed with a loan from the Banco Continental, seized in the drug raids. Jaime Rosenthal explained that loan as part of his philosophy of improving public goods:
“When we did the analysis of that loan we realized that it was a very good loan, not just for them but for the country. The loan would be paid by them and would promote a part of the country for tourism where normally people do not go. They would do a great job because it would begin to bring people from throughout Central America”.

There is a lot yet to learn about this case. That it will be consequential in Honduran culture and politics is already evident on the front page of Tiempo, which emerged during the coup of 2009 as the only newspaper in Honduras that reported factually what was happening, and which now has an uncertain future, due to a prosecution that Tiempo today links to their continued support for opposition to the current government:

Neither the president of Editorial Honduras, nor the director, nor the editor in chief, editors or reporters were clear until last night if DIARIO TIEMPO would circulate today because a rumor emerged that the OABI would interrupt the offices at any moment.

As if it were the last time, and under a dense cloud of uncertainty, the journalistic team of  DIARIO TIEMPO closed the edition corresponding to today last night.
...
This Monday, the employees of Editorial Honduras and the whole journalistic team will return to the offices, nonetheless, last night they left believing that today they would encounter it taken over by the security and police that the government of Juan Orlando Hernández would send.
The Plataforma de Indignados, in a communique last night, has characterized the government of Juan Orlando Hernández as “an authoritarian regime”.
“We call upon the regime to free itself from foreign interference in this case and place the human element before diplomatic or financial interests of external and internal agents”, the communique asks.

Rosenthals Accused of Money Laundering

Thursday while we were traveling back to California, the Department of the Treasury identified three members of the powerful Rosenthal family as Specially Designated Narcotics Traffickers.

Accused are Jaime Rosenthal Oliva, his son, Yani Rosenthal Hidalgo, his nephew, Yankel Rosenthal Coello, and the family lawyer, Andres Acosta Garcia.  Each has been charged "in connection with a multi-year scheme to launder the proceeds of narcotics trafficking offenses and foreign bribery offenses through accounts located in the United States".

Thursday night Yankel Rosenthal Coello was arrested as he got off a flight in Miami, and Friday he was charged in court.

The Rosenthal family is one of the richest in Honduras.  Together they form Inversiones Continental, better known as Grupo Continental, an amalgamation of some 35 companies run largely as a family business.

As a result of this action, the Office of Foreign Assets Control of the US Treasury has designated Inversiones Continental, chartered in Panama, and three of its Honduran businesses, Inversiones Continental SA de CV, Empacadora Continental SA de CV, and the Banco Continental as companies that US businesses and citizens may not do business with.  Also included in the list were three companies they owned chartered in the British Virgin Islands, and three more in Florida.  The Florida companies were in real estate and investment.  Any US assets of these individuals and these companies are now frozen.

Oscar Chinchilla, the Honduran Public Prosecutor, said on Friday that he had no knowledge of the US investigation. The Rosenthal family has hired a US lawyer to defend themselves.


Yankel Rosenthal, whose arrest made the indictment known publicly, is a soccer executive in Honduras and runs the popular Marathon soccer team.  Yani Rosenthal is a Liberal Party activist who has tried to run for President.  He is Vice President of Grupo Continental and runs Alimentos Continental and was an adviser to President Juan Orlando Hernandez on investment until June of this year.  He was Chief of Staff of the Executive branch for President Jose Manuel Zelaya Rosales, and a Congressman from 2010 to 2014.  Jaime Rosenthal Oliva is an MIT educated civil engineer who was greatly affected by the economics of Paul Samuelson while at MIT.  He is President of Grupo Continental.  He has been a Vice President of Honduras and is still active in politics in the Liberal Party.

Yani Rosenthal gave an interview Thursday on the Honduran television program Frente y Frente in which he said that to his knowledge, they have had no dealings with the Valle Valle family or any of its businesses. In two cases his Empacadora bought cattle from a company owned by the Rivera Maradiaga family, and loaned money to some of their businesses.

This news will have major political effects in Honduras.  The Rosenthal family and money fuels a major faction within the Liberal Party, where Jaime has been, until recently, a perpetual candidate for President.  This is the current of the Liberal Party that has maintained opposition to the ultra-conservative wing of the party headed by Roberto Micheletti Bain, which rose to power as a result of the 2009 coup against Zelaya and still controls the party Central Committee. Jaime Rosenthal has been widely seen as preparing his son, Yani, to both take his place in the party, and to run for President from the Liberal party.

The Rosenthal family also owns the opposition newspaper, El Tiempo, and one of the opposition Television broadcasters, Channel 11.

In his first response to the developments, Jaime Rosenthal issued a statement thanking people for trusting his family with their bank deposits and assuring them that all deposits, loans, etc. will be honored.  He continued:  "The Rosenthal Hidalgo family has decided to sell whatever business or investment that they own so that anyone who has had confidence in us can feel secure  that they will never have a loss because of our responsibility. All deposits and investments made with us will be supported by the family with all that we have."

Since then, however, the Honduran banking commission has announced its own plans to address the situation. These plans, and their potential impacts, are the subject of a our next blog post.