Congressional Corruption Part 1

Lest we think that all is well in the Honduran Congress as a deliberative body, recent news reports in Honduras document widespread corruption in the Honduran Congress; everything from the way money ends up back in Congressperson's pockets to the way laws as published in the official newspaper, are completely different than what was voted on in Congress.  Corruption here is widespread, and deep.

The OAS mission to support the fight against corruption and impunity in Honduras (MACCIH for its acronym in Spanish) found out this week that the problem in Honduras with impunity and corruption isn't that they don't know how to follow the internationally recommended ways to combat corruption and write a legal framework that combats corruption.  Since the 2009 coup numerous panels have made legislative suggestions that have been totally ignored. Honduran legislators, the Judicial and Executive branches have have deliberately ignored them for a reason.

The problem in Honduras continues to be that the government at all levels, from the legislative, to the Judicial, and the Executive branches, is rife with corruption.   They actively choose to write legislation that facilitates corruption and impunity.  No amount of MACCIH investigating crimes and suggesting model legislation will fix that.  But only now is MACCIH waking up to the reality of Honduras.

This week the Honduran Supreme Court dismissed the first  corruption case that MACCIH brought to trial.  This was the case of the five Congresspeople who were paid off by the Executive branch for changing their allegiances to the National Party.  In return they were paid using funds Congress allocated to an NGO for social programs.  The money, some $300-$400,000 ended up in the private bank accounts of these five Congressmen.

It was a well documented case that should have easily resulted in a conviction.  Instead, the Honduran Supreme Court threw one roadblock after another at the prosecution.  First, they refused the request to have the Congressmen arrested to await trial in jail.  Next they scheduled the first trial date to be the Dia de Innocentes (Innocents’ Day).  The Supreme Couirt judge postponed hearings time after time.

Then Congress acted, or maybe the corrupt leaders of Congress acted would be more precise.  All those leaders were, at the time, members of the National Party.  The lame duck Congress came back after New Years and passed a series of laws, among then on January 18th a new "Ley Organica de Presupuesto"(decreto 117-2017)  with some interesting clauses.  The new law, as written, takes away from the Public Prosecutor's office the right to pursue crimes related to the budget of Honduras, instead giving it to the Tribunal Superior de Cuentas (TSC).  The law particularly states that while the TSC is auditing any budget item, the judicial branch cannot act.  To rub MACCIH's face in it, they made the law retroactive.

Given the new law, the Supreme Court judge dismissed the case against the five Congresspersons because the Public Prosecutor's office had no standing to bring the case.  MACCIH works with the Public Prosecutor's office, not the Tribunal Superior de Cuentas.  Not only does this destroy MACCIH's ability to investigate and prosecute the crimes it was set up to pursue, but it also closes investigations it had open on over 60 Congresspeople, including the President of the Congress, Mauricio Oliva.

Article 16 of the law gave Congresspeople the right to request, administer, and spend public funds from any source (government, NGOs, etc) that are for community development, social aid, and the improvement of law and democracy.  This change in the law legitimates the transfer of funds to the five charged Congresspersons.

Article 131 of the new law authorized the Tribunal Superior de Cuentas (TSC) to audit the use of these funds, specifically funds from 2006-2018, retroactively.  It gives the TSE 3 years to perform the audit of those years and only when it is done, and publishes its report, will changes be adduced and filed against anyone.  No criminal charges can be filed against anyone on these grounds while the TSC is investigating and writing its report.  Nor can civil charges be filed.

These changes passed with 69 votes for, and only 2 against, with 11 abstentions.  The changes shut down MACCIH's investigations and ability to bring charges against this kind of financial corruption.

Electing a Supreme Court, Badly.

The Honduran Congress is responsible for electing a new Supreme Court every 7 years under the Honduran Constitution.  Yesterday the National and Liberal parties tried to carry on as they have for the last 34 years, nominating a suite of 8 National Party members, and 7 Liberal Party members.  Mauricio Oliva, the president of Congress and a National Party member, then forced the procedure of voting on the entire slate, rather than approving each justice individually.  He was certain he had the votes because of the alliance between the crumbling Liberal Party and the ruling National Party.  He needed 86 votes.  He got 82 (or 84 depending on which Honduran newspaper you read).  Congress failed to appoint a new Supreme Court.

But that's only the tip of the iceberg of corruption around the election of this Supreme Court in Honduras. Lets turn to the candidates themselves.  Last October,  American Bar Association joined the Centro por la Justica y el Derecho Internacional (CEJIL), the Fundacion para el Debido Proceso (DPLF), and Impunity Watch to form an international oversight committee reviewing the election of justices in Honduras.  They met with the nominating committee and held workshops for them on international standards and best practices for selecting justices.  It mostly seems to have been in vain.

The master slate of some 200 candidates was formed by the Nominating committee in a procedure that privileged some institutions, such as the business community, labor unions, and civil society, with making their own nominations.  Others candidates self-nominated.  The list of 200 candidates filled out questionaires, underwent drug testing, answered questions about affiliation or participation in drug trafficking with a polygraph.  Each candidate received a numerical score, and all of this information was supposedly used to winnow the list down to the 45 "best" candidates, if by "best" you include 12 who failed the polygraph test, and some whose legal qualifications are suspect.  During the process, the US Embassy in Tegucigalpa twice submitted lists of candidates that it said required more investigation or that should be eliminated outright, supposedly based on an FBI evaluation of candidates. 

In the end, the Nominating committee submitted a list of 45 candidates to the Honduran Congress, including candidates that failed the polygraph portion of the test, and those that had numeric scores less than 50%.  These are the ones the Nominating Committee said were the "best" candidates, but they refused to make public the selection criteria. 

On January 21, the Human Rights Center of the ABA issued a 9 page report on the work of the Nominating committee, saying that it failed to meet international standards for transparency and follow the best practices for the selection of justices.  So much for those workshops in October.  The ABA said the Nominating committee had made an effort, but had not gone far enough to investigate the candidates, and that the whole process lacked transparency.  They pointed out that the "election" of the Nominating committee itself was problematic.  They made a long list of suggested improvements to the process. 

Once Congress had the list, Mauricio Oliva appointed a review committee of 10 Congress people to review the nominations and recommend a slate of candidates.  The committee was composed of members of the 5 political parties which have Congresspeople, with a majority of the positions going to the National and Liberal parties and the supporting Christian Democrats.  All committee members were selected by Oliva, not their parties.

Monday started badly for transparency when Congress blocked most of the press corp in Honduras from entering to cover the election of the Supreme Court. Blocked press included Padre Melo of Radio Progreso.

The vote failed because Oliva did nothing to court the opposition party members into supporting the slate of hand picked candidates.  He did get 9 votes from opposition party members, but clearly expected more.  After the vote, Salvador Nasralla said that only 5 of the 15 candidates were qualified in his opinion.  PAC, Libre, and PINU have together called for an open, public vote for the Supreme Court candidates, but Mauricio Oliva has instead imposed a secret vote, using paper ballots rather than the electronic voting system in Congress.  Its far easier to manipulate the results of paper ballots, as both the Liberal and National parties have done in the general elections for the last 34 years.

Congress meets again at 4 pm to reportedly reconsider electing the same slate of 15 candidates again, only this time with a secret vote instead of a public one, using paper ballots instead of the electronic voting system installed in Congress.

Post-Election Analysis from Honduran Experts

Radio Progreso, a project of the Jesuit organization ERIC (the Equipo de Reflexión, Investigación, y Comunicación) located in El Progreso, Yoro, has a commentary on their website with insight from a number of Honduran commentators about where the post-election phase is headed. It starts:

Two weeks after the general elections, their results continue to be the object of critique for the suspicious way in which the count of votes in the local polling places developed and the filling out of the actas electorales (vote tallies).

 
Then it moves to a series of comments from Honduran perspectives. The most intriguing of these is the perspective of the new student movement, the so-called Camisas Negras or Movimiento anti JOH. This is the group whose protests in Tegucigalpa were met with immediate suppression by the military police in the days after the vote.

Radio Progreso quotes Marcos Rubí, a member of this movement, on its origins and aims:

"it grew in the heat of what pretended to be an electoral fiesta, with university students that from before the beginning of the process already had seen certain anomalies, certain signs of fraud, and then in the electoral process of Sunday the 24th, now that the fraud was confirmed, indignation grew and we decided to organize ourselves... The Movement is heterogeneous, there are ideologies involved that run from the right to the extreme left, but there is a consensus that there was fraud and we all have the same purpose".

The disillusionment of students with the electoral process has been under-reported in the international press. University students took the place formerly occupied by representatives of the church in this election, as custodians for the individual election polling places. That means they were witnesses to the most egregious irregularities: the selling of party credentials, voter intimidation and mis-information-- irregularities international observers dismissed as minor, but that these Honduran youths (in our view, rightly) saw as shocking and unacceptable.

Honduran sociologist Eugenio Sosa criticizes the Tribunal Supremo Electoral, and was blunt about the possible impact of challenges to the TSE:  "I believe that the results will stand, the Tribunal has announced them and it isn't going to reverse itself even though they will make a pretense of reviewing the actas":

"I believe that the Tribunal, despite having launched itself affirming that these were the most transparent elections and despite having all the backing of official organizations such as the OAS, EU, the US Embassy and Department of State, little by little has been showing aspects that demonstrate that in these elections there were as many problems, irregularities, and alteration of results as in the primaries."

Hermilo Soto, national coordinator in Honduras for the Lutheran World Federarion, characterizes reforming the electoral system as a "great challenge" for Honduras going forward, because "the great problem that we have today is that the people do not trust in the present institutionality directing the electoral process".

The article notes that Congress will play a key role in determining whether and how the electoral system might be revised, as well as having a key role to play in the subsequent elections of the Supreme Court and Ministerio Público.

As we have noted previously, no single party has a large enough delegation to congress to control these processes. Radio Progreso quotes the opinion of Antonio Rivera Callejas, a re-elected Partido Nacional congress member, about what may happen:

"It's too early to talk about the composition of the junta directiva (executive committee), that is going to be defined in January, I figure, you should remember that there will be many political factions making up the congress, there will not be a simple ajority for any of the political parties, this is going to require the consensus of many... What there is not yet are concrete names, of candidates for the presidency, vicepresidency, and secretariat [of the congress], so it is normal that there are conversations among all the political parties but that will take a concrete form only in the month of January".

Sociologist Armando Orellana is skeptical of the vision of harmonious consensus advanced by Rivera, and raises instead warnings of backroom deals and corruption as usual in the negotiation of a congressional majority:

"The party of the government [Partido Nacional] is buying consciences, there has been talk of payments of up to five million lempiras [about $240,000] to procrue the presidency of the Congreso Nacional. The ally that it has had during this period [the Lobo Sosa administration] has been the Partido Liberal, nevertheless they are not going to succeed in controlling the two-thirds majority necessary to manage constitutional reforms"

This is a critical point: many of the more alarming legislative initiatives under the Hernández Congress required constitutional amendments, which sailed through with unprecedented ease due to the alliance between the two dominant parties.

Radio Progreso cites Orellana's observation that LIBRE and PAC could, along with smaller parties (such as PINU and UD) form a large enough block that, with a few Partido Liberal congress members acting more independently they could push congress in a different direction.

While Antonio Rivera dismisses this, his argument for a more centralized authority in Congress-- which is that the hegemony and harmony under Juan Orlando Hernández was critical to the legislation that the current congress passed-- actually cuts both ways: for those who question the wisdom of such rapid, unreflective passage of major changes to the legal and economic framework of Honduras, slowing down the process may be the best outcome of this election.

And Radio Progreso's coverage suggests that the incoming Congress will operate not only with internal dissent, but with the scrutiny of a newly mobilized younger generation of Hondurans whose outrage about the way the election was conducted is unlikely to be settled simply because the international community declares that this election was good enough, if not really as good as it could have been.

Honduran Congress will be Transformed

Like many others, we have been waiting to hear what the effects would be on the Honduran Congreso Nacional would be from the high voter turnout and extremely split voting evident in the presidential election.

According to El Heraldo, the Partido Nacional has lost control of the congress, retaining only 47 seats. While that is the largest delegation, it is nowhere near a majority of the 128 seat body.
Even though some results have not been tallied, and the Partido Nacional delegation may grow, it is not projected to have a majority. If Juan Orlando Hernández intends to govern, he and his party will have to work with others.

And if others don't want to cooperate, they can form their own coalitions and control congress-- the body which, ironically, has concentrated power continuously under the leadership of Hernández.

The Partido Liberal, traditionally the other powerhouse, will end up with 26 congress members.

But it is the two new parties that have made a really astonishing showing. There was no necessary connection to be assumed between the presidential and congressional elections; ballots for each are separate, and it could easily have been the case that a voter would reject the traditional party candidate for president (as a majority did reject Hernández) and still give their votes to the congress member of that party.

So it reflects a broader strength of LIBRE that it has the second largest congressional delegation, with 39 members. And, as El Heraldo notes, the real surprise was the strength of the Partido Anti-Corrupción, which will participate in the new congress with 13 members.

Three other long-established small parties, the Christian Democrats, the left-leaning Partido de Unificación Democrática, and PINU, each are projected to have a single delegate in congress.

We can do no better than to quote the conclusion drawn by El Heraldo:

The results of the 2013 general elections break with the hegemony that has been maintained in the last 32 years of democracy by the Partido Nacional and Partido Liberal, and LIBRE and PAC have converted themselves into two new political forces that will have a counterweight in approving the laws and decisions that the new Congress will take.

While it may seem like little consolation to the myriads of LIBRE voters who truly think they won at the polls, only to see the TSE count emerge otherwise, having such a strong presence in Congress has put LIBRE, in its first foray into national politics, into a place from which to argue for changes in the direction the country has been headed.

That makes Honduras worth continued international attention as the new government takes over in January, and for the rest of the four year term until the next election.

Selling the Wind, or How Honduras Will Finance Its Debt

The government of Honduras wants to sell you the wind. Literally.

The proposal is for a new kind of investment instrument.

On July 20, the Honduran Congress passed a law called the Ley de promocón del desarrollo y reconversion de deuda publica, which can be read here in its entirety. 

The newly passed law, proposed by the Executive Branch, creates a special commission of trustees sited in the Central Bank of Honduras.  That commission, which includes the Minister of Natural Resources, will identify "idle" assets.  It will also create a technical committee to analyze the financial potential and return on such assets, and oversee the concession of assets to private parties.

So what are these "idle resources" that Honduras proposes selling?  The wind, for wind power; the rivers and the land for hydroelectric power; and mineral rights - gold, silver, and iron in particular, though it also just sold petroleum exploration rights. They can be pretty much anything not already under the control of the Comisión para la Promoción de la Alianza Público-Privada (COALIANZA).

Once the resource is identified as idle, the government will seek to lease it in concession to a third party. The lease process will involve estimating the income-producing potential of the asset, both for the party leasing it, and for the government.

The lease will produce, among other things, a future income stream for the government for the length of the lease. The leasing part of the law merely makes references to the processes used by COALIANZA for its concessions.  The same rules will apply.

Normally income from a lease would trickle in to the government coffers over the length of a lease, producing income for both the present and future governments of Honduras. 

But the new law empowers the Central Bank, or someone delegated by it, to securitize this future income stream and sell it to others, based on the discounted present value of that future income stream. 

This discounted present value of the future income stream will come to the government in a lump sum, rather than as several smaller payments over the lease duration.

The law specifies that it must be used to pay down the Honduran government's debt.

The Financial Minister, Wilfredo Cerrato, argued that the state would be getting the future income that this resource would generate over longer periods, like 20 years, but getting it all now instead of year by year over the 20 years, and that the money would then be used to pay down the national debt, because at least for now, the law prohibits it to be used to pay current expenses. 

Cerrato added:

What we want is to pay the internal debt, which is short term at high interest rates, to achieve what the law's title says, "reconversion of the debt".

Cerrato characterized the "idle resources" that are covered by the new law as not generating wealth but rather producing poverty.  He suggested that Honduran pension plans would be likely purchasers of the assets.

The law, which originated with Lobo Sosa's executive branch, was introduced and passed during a Congressional session held in Lempira rather than the capital of Tegucigalpa. 

The bill had not previously been disclosed or put through committee.  Its content was unknown to most at the start of this Congressional session.

Because the session was held outside the capital, fewer members attended, and those who did attend were primarily National Party members.

During the Congressional session, Congress voted to suspend the requirement for three debates and to hold only one debate on this law.  It then passed the law in a single debate. This has brought about much grousing from almost all sectors.

The law, by not going through the committee review, passed pretty much as it was submitted by the Executive Branch.  It was not publicly disclosed, so there was no discussion about what Congress was enacting. That seems to have been by design.

As Ralph Flores, an executive of the Foro Social de la Deuda Externa y Desarrollo de Honduras (FOSDEH) stated, the people should have been consulted.  FOSDEH is one place where the Honduran public gets to comment on proposed government policy.

Flores said that he thought the law probably was a good financial move, but that the government of Honduras shouldn't be managed like a private company.  As these are resources belonging to all the citizens, he said, probably they should have been consulted before the law was approved:

Unfortunately here they only talk about this type of activity as beneficial.  There needs to be an objective balance.  There are methodologies to analyze if an investment is positive or negative for the economy or for a society.  Here we only look at the financial stream as a positive element.

Mauricio Oliva, the new head of Congress, says that such lease arrangements are nothing new, that the approach has been used successfully by many other countries, and points to Costa Rica and Colombia. 

Cerrato vehemently defends the law, claiming that without it Honduras won't make payroll for government employees in November.  That in turn suggests they already have assets identified and potential buyers of concessions lined up and presume they can bring securities on these assets to market before November.

Hugo Noé Pino, who represents the  Instituto Centroamericano de Estudios Fiscales (ICEFI) in Honduras, told La Prensa that the law was suspicious because not only of the rapidity with which it was proposed and passed, but for the lateness in Lobo Sosa's term.  This made him suspect that there were some ulterior motives.  He said the law sells Honduras in pieces:

"The most worrying part of this affair, given that the government has not shown itself to be trustworthy, is that  through this hurried law, just as with the model cities, [it has] committed all the resources of the state of Honduras without leaving to the next government any possibility of structuring its own recovery and investment plan for the country.  The next government will have its hands tied by these decisions."

Lobo Sosa says the law helps, not hinders, future governments.  Lobo Sosa goes on to claim this will not benefit his government one bit, a statement seemly contradicted by his Finance Minister's statement that without this law the government will not be able to meet the November payroll, implying income to this government, surely a benefit.

By using the processes specific to COALIANZA, the government avoids its own contracting law which would impose a greater transparency on the process.  It was this process that resulted in COALIANZA signing an MOU with Michael Strong for a model city somewhere other than where Congress had stated it wanted model cities (eg, San Pedro Sula instead of Puerto Cortes). 

COALIANZA's processes are not transparent nor do they always work towards the same goals as the government, as the model cities bungle demonstrated.  Civil society has no input into what the new commission decides to license. 

All resource-based projects involve expropriation (with long delays in payment in cases like the Patuca III dam project now underway). They may involve the dislocation of populations living on the concession, without any compensation.

There are no controls on either the number of employees, or the budget of the oversight commission set up in the new law.  It is unconstrained, and at this time, unfunded. Future governments will have to allocate it a budget for salaries and operations.
 
Civil society should pause at the statements of the Finance Minister that employee pension funds should invest in these financial instruments, which are effectively unsecured bets where a payment to the government up front gives the lease holder the "right" to profits from exploitation of a resources that may or may not be successful.

It has been an expressed goal of Honduran governments since at least 2009 to use the large government employee pension funds to improve the liquidity of the central government. It sounds like Cerrato sees this as one such mechanism.

This is just the latest of a series of laws passed by this administration that takes control of national assets and turns them over to private parties. 

These include the original model cities law, and the COALIANZA law that has sold concessions to airports, roadways, and railways. It includes the ZEDE law (aka model cities 2) which creates private economic development zones that can have their own laws, as well as the new mining law, which pretty much gives mining companies permission to do what they want on their concession.

There apparently is nothing that the Lobo Sosa government won't privatize.

Even the wind.

Another Questionable Power Deal?

On February 12 Emil Hawit, the head of the National Electric Company (ENEE in Spanish), and Porfirio Lobo Sosa signed a letter of intent with the Spanish company Isofotón, to construct a 50 megawatt photovoltaic power station in Honduras.

The powerplant is supposed to be expandable to 150 megawatts.  The investment needed to make this happen is estimated at $200 million dollars.  The location of the proposed power plant was not announced, but is said by the press to be somewhere in the south of the country in Choluteca.  Hawitt told El Heraldo

 "they've been working on locating the right place and gave me the required information in meetings held at ENEE."

Juan Orlando Hernandez told Congress that an important agreement had been signed for the construction of a solar power plant in the south of the country as part of the reborn model cities initiative.

Hmm...model cities initiative in Choluteca.  That should sound familiar to our readers.  Choluteca is one of the three locations mentioned in every discussion of model cities in Honduras.

Isofotón is a privately owned company and as such releases no financial information.  The Affirma Business Group owns 80 percent, and a Korean company called TOPTEC owns the other 20 percent.  TOPTEC, a specialist in industrial automation, reportedly already has an office in Honduras.

But Isofotón is in financial hot water.  According to PV Magazine, which covers photovoltaic markets, it is contemplating bankruptcy filings.  It has told Spanish government officials that it has begun negotiations to refinance its debt.  A Madrid law firm has set up a web page soliciting Isofotón's creditors to represent their interests in insolvency proceedings against Isofotón.

In 2009, Isofotón's sales dropped 83%.  It had three different CEOs in less than a year.  Then in 2010 it was acquired by Affirma Energy Engineering and TOPTEC.  Its profits have dropped from a high of 10 million euros to less than 5 million this year.  Meanwhile in Spain Isofotón has responded to three days of protests by its employees threatened with layoffs by announcing that on March 5 it will release the terms under which it will lay off 380 of its 600 Spanish employees.

It is currently building a manufacturing plant in Toledo, Ohio, scheduled to open in July, and in February partnered with China National to acquire minority share in Tianjin Lishen Battery Co. to build solar panels in China.  At the same time as Isofotón announced the Honduras deal, it announced a new partnership to build a photovoltaic manufacturing line and polysilicon plant in Kazakhstan.

Isfotón CEO Angel Luis Serrano told Bloomberg:

We want to increase manufacturing capacity and that will happen in the United States, China and Latin America rather than in our plant in Spain.

Its Latin American presence is limited. In addition to Honduras, Isofotón signed a memorandum of understanding with the government of the state of Yucatan in Mexico for a 150 megawatt photovoltaic generation plant to be built starting in 2014.

As with other proposed investments in power generation in Honduras, this deal seems rocky from the start. Where will this $200 million investment in Honduras come from?

Reading between the lines, Isofotón is depending on the Honduran government to act as intermediary and connect it with either governmental, NGO, or private money interested in actually investing in the project.  It does not have access to the funding to build the plant on its own. We aren't quite in the position of concluding this is another questionable power deal-- but we certainly can raise the question: is this another deal doomed to fail?

Please Buy My Bonds.....

Honduras is broke.

It can't pay government employees, contractors, or suppliers.  Its not unusual for teachers to go six months between paychecks under Porfirio Lobo Sosa.  Road construction has stopped again due to government debts to the construction companies.  It stopped paying the IHSS, the government health provider, the fees it collected from government employees to pay for their health care, prompting IHSS to threaten to cut off government employees.

So what does a bankrupt government do?

Honduras is now seeking to privately place over $750 million dollars in bonds.  In that private placement, it is using Barclays and Deutsche Bank as its agents.  These two banking firms have been hired by the government of Honduras to set up meetings with potential investors.  Meetings have now been set up in London (March 4), New York (March 6), Boston (March 6) and Los Angeles (March 7).

But there's a last minute hitch. Congress, which had to vote to allow the issuance of these bonds, changed the term from 8 years to 10 years.  This increases the amount the government of Honduras will have to pay out to investors by prolonging interest payments for two more years.

If that wasn't enough, both Moody's and Standard and Poor's dropped Honduras's bond rating this week because of what they called the risk of investing in a country where there the government cannot pay its existing debts.  Moody's also changed their outlook from "stable" to "negative".  This in turn will raise the interest rate that Honduras will have to pay on the bonds.  Moody's indicated that the downgrade was caused by

a worsening in the external finances of the country's economy, reflected in an increase of the deficit which is only partially covered by foreign direct investment.

The public debt in Honduras, according to Moody's, is about 35% of its gross domestic product, which is moderate. 

But that is not the whole story. Because of the temporary cessation of international funding under the de facto regime that ruled in 2009 following the June coup d'etat, the country had to rely on internal credit markets, which were costlier, raising the government's debt payment burden.  Debt service (principal and interest payments) was about 10% of the budget last year, up from 3% of the budget in 2008.  Much of this increase is due to the debt shift from external to internal credit markets under the seven month de facto regime.  Both Moody's and Standard and Poor's cited the increased costs from using internal credit markets in their downgrades.

So off to market with $750 million dollars in bonds with a newly downgraded credit rating and an extended term of payment, just a week before the private placement meetings kick off in Europe and North America. Not the kind of bargaining position anyone would like to be in.

Honduran Government vs. Freedom of the Press

Porfirio Lobo Sosa neither understands, nor likes, freedom of the press. He laments the fact that the Honduran press can print things that he thinks are not true, and threatens publishers for not supporting government policies.

Stories demonstrating this are not uncommon. On February 8, La Prensa published an account, headlined "President Lobo returns to threatening the media of communication", quoting Lobo Sosa complaining that newspapers shouldn't display images of violence because they affect young people:

"I don't know how Ana Pineda has not entered a complaint with the UN or before whoever it should be, you know the damage that the media of communication does to children, some of them in their front page display the violence".

Back in December, Lobo Sosa personalized his attack, decrying the publisher of two Honduran daily newspapers, La Prensa and El Heraldo, Jorge Canahuati, for allegedly opposing his police purification campaign, because they covered the rejection of the law by justices of the Supreme Court (later removed in a legally dubious way by Congress).

In February Lobo Sosa again singled out the same two papers, this time for criticizing his lack of progress against the level of fatal violence in the country:

Here we have two newspapers that greet me every day, what they forget is that although the days are passing by rapidly, they will never make me bend, I am going to impose order in Honduras, you can be sure.

We make no claim that the Honduran press is exceptionally reliable, or lacking in bias. But Lobo Sosa wants to stop the press from doing anything that makes his government uncomfortable, even though part of the role of a free press is just that: making the powerful uncomfortable.

Lobo Sosa's government has now developed a proposal for a new Ley Marco de Telecomunicaciones (Telecommunications Law).  As La Prensa reports, the proposed law would allow the government to close media outlets, and would introduce an unprecedented censorship body.

The target is broadcast media, radio and television, whose ownership overlaps with the print media against whom Lobo Sosa has railed, but which are more easily subject to government control because they are dependent on licensing of the broadcast spectrum.

At the end of last week, press reports on proposed reforms presented to Lobo Sosa by CONATEL (Comisión Nacional de Telecomunicaciones) said the new law would

seek to regulate the granting of radio and television frequencies and to create mechanisms to censor radio, television, and print media. The proposal has been based on a proposal presented by the non-governmental organization Comité por la Libre Expresión (C-Libre), whose content turned out to be more injurious than the Government's proposal for the regulation of media, since it even spoke of Committees of Censorship for radio and television news programs...

 C-Libre is a consortium formed in June 2001, with a stated mission to promote freedom of expression and freedom of the press in Honduras. It had previously made its proposed telecommunications law revisions available on its website. While much of their proposal has to do with ensuring access to broadcast spectrum by different sectors of society (including a proposal to limit ownership of broadcast media to one channel per family), it also included a passage that seems intended to respond to Lobo Sosa's critiques of the media: a call for a national council for the regulation of ethics in communications.

The new body they proposed would oversee programming to assure that it conforms to morals, to avoid what C-Libre called the loss of national moral values and identity.  It would have oversight to determine if programming was appropriate for a Honduran audience.  It would be able to make lists of the kind of programming considered damaging to the Honduran population.

While in theory it could  not restrict the rights of the media with respect to guarantees of freedom of religion, ideas, or politics, this provision in C-Libre's proposal was denounced by a representative of the Sociedad Interamericana de Prensa (SIP) in Honduras, Rodolfo Dumas:

“It disturbs us very much when the proposal of C-Libre speaks of a national council of regulation of ethics in communication, that is worrying because we already known that both the Convención Americana [de Derechos Humanos], la Declaración Universal [de Derechos Humanos] and our internal law prohibits advance censorship, and it is an absolute prohibition, This type of article has to be approached with great caution."

He also noted that there even is a section of the proposal that speaks of the need for truth. It demands that the news should be true, which is a term that today many politicians like to use when they refer to these issues, he added, He noted that "there is already a declaration of principles issued by all those related in regard to liberty of expression in which the demands of truthfulness, expedience, and impartiality are incompatible with liberty of expression and liberty of the press, because the concept of truth is ethereal, it is subjective, so to demand the truth, whose truth will it be? The official truth? Your truth or mine?"

On Monday, La Prensa published an analysis comparing the law actually proposed by the Lobo Sosa government to the existing legal code. They found an inserted passage in the first article giving the government the right to regulate the content transmitted for the "protection of the ethical principles and cultural values of society".

What the government can demand is framed entirely in vague and lofty-sounding language, that nonetheless falls into the debatable terrain Dumas noted in the C-Libre model law:

“In regard to the content of transmissions... these should be subjected to the regulations, parameters, policies, dispositions and administrative rulings that for reasons of social interests shall be established in conformity with the law".

In other words: the government can say that you shouldn't broadcast stories about any topic it thinks would be against "social interests".

And if a broadcaster does violate this clause, the new law is ready, having established a new basis for formal sanctions if media "promote lack of respect either for the reputation of someone, or weakening of national security, public order, public health or the fundamental rights and liberties of infancy, childhood, and adolescence.” The fines approved would rise from a maximum of 500,000 lempiras in the present law (about $25,000), to 3% to 5% of the gross income of the enterprise.

Added to the call for a Regulatory Commission on Programming, the new language would put the government in a position to impose its perspective on what programming would be in keeping with government policies and views on ethics and values.

Whatever else that might be, it is not a free press.

But then: Porfirio Lobo Sosa doesn't like a free press. 

Honduran Congress Consolidates More Power

If it wasn't clear to outside observers, it certainly should be now.  The Honduran Congress is bent on controlling every aspect of the government, and by control, I mean, removing any trace of the constitutionally specified independence of powers. 

Their current obsession is with disciplining the Supreme  Court.

The new Congressional session started on January 25 of this year.  Since they started this new session they passed the so-called model cities legislation (decreto 236-2012) that gives Congress the ability to transfer territory to the sovereignty of a foreign set of investors. 

Honduran analysts note that this law includes special tourist zones that could see the transfer of the Copan archaeological site to foreign control.

Congress also passed the law of political judgement (decreto 231-2012). The US Embassy seems to believe this is an impeachment law, but it isn't: it circumvents Honduran due process guarantees.  It would allow Congress to continue to do what it did illegally in removing Supreme Court justices in December, leading to the current constitutional crisis.

Under the law of political judgment, Congress now has the authority to remove Supreme Court justices or even Presidents because Congress doesn't like their policies. It supersedes the existing law that already allowed the Public Prosecutor to bring charges against any high government official, which would be heard in the Supreme Court, and could lead to removal from office (which is why the Honduran Constitution no longer has an impeachment procedure: they provided a due process procedure in the legal code instead).

Congress also passed the new Minerals and Mines law, which allows concessions to be given to foreign governments in addition to private companies. This law is potentially unconstitutional because it presents the same kind of sovereignty issues raised by the model cities legislation that was found unconstitutional by the now neutered Supreme Court.  The new law governs concessions of gemstone (Honduras has opals and other gemstones in commercial quantities) and metallic mineral mines for a maximun of two (non-metallic minerals) to five (metallic minerals) years starting from the issuance of an environmental license.  It splits the income from such concessions between the municipality in which the mine is located, and the central government.

Congress also restricted, though changes to Article 17 of the constitution, the international treaties and agreements in which the government can participate. This pre-empts the role of the executive branch. Congress has always had to ratify treaties; this way, they do not have to pay the political price for it.

But these are almost minor violations of the Constitution, taken with impunity knowing that they have already reshaped the current Supreme Court into a rubber stamp. What they did next is bolder, clearer, and completely guts separation of powers.

This was to pass a new set of constitutional amendments that restricts what the Justices of the Constitutional branch, and only the Constitutional branch, can do. It also strengthens the powers of the Chief Justice, who, current experience shows, can be an ally of the Congress against the court. 

To understand the new law, a reminder: the Honduran Supreme Court's Constitutional branch hears challenges to laws as unconstitutional. Their decisions have to be unanimous. If their decision is not unanimous, the next step has been for the full court-- including the justices of the Constitutional Branch-- hear the matter. The full court merely needs to reach a majority decision. Since the Sala Constitucional includes one-third of the full court, the idea is, the other two-thirds will clarify the signal.

The new law passed by Congress makes a mockery of that provision. It specifies that in the event of a non-unanimous vote by the Constitutional branch on a case, those justices cannot vote on the matter when the full Supreme Court meets, or participate in the deliberations. 

This amendment was concealed in a series of constitutional amendments passed without discussion at the end of the previous session, on January 24, 2012 (Decreto 237-2012).  Maybe Congress doesn't trust the justices they just appointed?  In the opinion of most lawyers in Honduras, this amendment will undermine judicial certainty in Honduras. It certainly reshapes the balance of powers, depriving the Supreme Court of autonomy in action.

But that wasn't enough. Congress also passed legislation that deprives citizens of the right to even appeal the constitutionality of a law! 

Congress put this in place because of threatened challenges to their newly ratified replacement for the defeated model cities law, establishing Regimenes Especiales de Desarrollo. Citizen appeals of the constitutionality of the original model cities law worked as the Honduran Constitution provided.

That won't happen again.

Citizens may now only challenge the constitutionality of rules implemented by the government to enforce a law. Although Congress has shown it has no difficulty passing sweeping changes to the Constitution, apparently it irritates them to have to get it right, legally. Now, all their laws are, by law, constitutional.

Isn't democracy wonderful?

Congress Votes to Dismiss Four Justices

At 4 am this morning the Honduran Congress voted to dismiss four justices of the Constitutional Branch of the Supreme Court, finding "administrative cause" for them to be dismissed.  

The cause?

The report of the congressional commission indicated that the decision of the Sala Constitucional of the Supreme Court that the law to cleanse the police was unconstitutional was "not in line with the the security plans of the Executive and Legislative Branches".

Thus does the principle of separation of powers suffer its next blow. If anyone is unaware of the imbalance in Honduran governance, where the Congress already claimed unconstitutional power to replace the president and now has claimed such power over the legislative branch, this should be the wake-up call.

In a floor speech congress member Jeffrey Flores called the actions of the four justices "negligent" and called their dismissal "patriotic".

As if that was not illegal enough,  Congress named German Vicente García, Silvia Trinidad Santos, Victor Lozano, and Elmer Lizardo as replacement justices and swore three of them in. Congress plans to swear the fourth in next Monday when he returns from his ranch in Olancho.

Supreme Court judges in Honduras are selected by Congress from a list of candidates put together by a nominating committee constructed to represent all sectors of society (in theory).

The four people named as replacement judges were reportedly on the initial list of 45 candidates proposed by the last nominating committee.

There is no reported reaction from the Supreme Court or the Executive Branch so far.  Ramón Custodio, the Human Rights Commissioner for Honduras, said

It is sad that the National Congress legislated this morning to break the constitutional order in the country.

Emergency Police Cleanup

The Honduran Congress, which went into recess six days ago, was called back into session today to vote on an emergency decree requested by the Security Minister, Pompeyo Bonilla. 

The bill they are considering suspends all of the guarantees police have about due process before being dismissed.  Specifically, the new law requested by Bonilla suspends chapters V, and VI of the Police Charter contained in decree 67-2008, about disciplinary acts and protection against suspension, for 90 days.

The decree is for an initial 90 days but may be extended indefinitely at the determination of the Dirección y Evaluación de la Carrera Policial (DIECP).

Oscar Alvarez was fired last September as Minister of Security for proposing a law to clean up the police that similarly would have suspended the existing due process guarantees of police officers.  At the time, Lobo Sosa thought it was important to continue those guarantees.

Its not clear why the concerns about constitutional guarantees that called Alvarez's law into question don't equally apply to this law.

It's been a busy Congressional recess so far. 

Congress was called back Wednesday to create a new Executive Branch Directorate of Investigation and Intelligence, to be directed by General Julian Pacheco Tinoco. 

This morning Congress approved an anti-doping law which allows the DIECP to conduct drug tests of police officers and then act on them.

Added to the abrupt dismissal of the chief of police earlier this week, it seems something has made reform of the police urgent.

Churches

The concept of a church and how to define one is hard for Honduran legislators to grasp.

For most of Honduras' history, you needed to have a formal act of Congress declaring your organization a religious entity to officially be considered a church. Until now, only the Catholic Church had been declared a "church" by Congress.

Instead, most churches in Honduras today operate as the Honduran equivalent of 501(c)(3) civil non-governmental organizations.

Why, exactly, is the Honduran government in the business of deciding what's a real church?

The Honduran constitution establishes Honduras as a secular state with freedom of religion and the separation of church and state. In Article 77, on the topic of religion, it states:

The right to exercise any religion or worship is guaranteed without any precedence (for one over the others) as long as they don't go against the public order. Ministers of the many religions may not hold public office, nor promote political materials, even by invoking religious principles or values as a means to that end.

Honduras has signed international treaties relevant to religious freedom, such as the International Declaration of Human Rights (articles 2, 18 in particular), the Interamerican Democratic Letter (article 9), and the American Convention on Human Rights (article 12).

The Honduran Penal Code enshrines the right of religious freedom by making it a crime to interfere with someone's religion (articles 210-213).

Honduran law also addresses the separation of church and state. The Law of Political Organizations imagines that political entities should be divorced from subordination to or dependency on ministers of any religion or sect. Political parties are prohibited from using religious symbols (article 80). It is illegal to tell someone to join or leave a political party for religious beliefs or reasons (article 104).

The treaties, constitution, and law are pretty clear. All religions are permissible; church and state are separate; and no religion should be favored.

But in practice, Honduras favors two religious groups in particular in its government. The Catholic Church and the Confraternity of Evangelical Churches are asked for input by all government commissions. They hold reserved seats in some government commissions, involvement not extended to other religions. By having a position on the nominating committee they influence the selection of candidates for the Supreme Court.

That existing favoritism and involvement of these two church bodies makes it not particularly surprising that Congress in 2010 passed the Ley Marco de la Íglesia Evangelica de Honduras (decreto 185-2010) to give a blanket declaration of juridical personhood to any church that was a member of the Confraternity of Evangelical Churches.

Passage of this law was set against a background of threats by Africo Madrid, Interior Minister, to review every NGO in the country and deny many of them NGO status, particularly religious ones that he felt were "fringe". The law transformed evangelical churches from NGOs with a religious and charitable mission, to churches with juridical personhood, no longer NGOs, no longer under threat from the particular prejudices of one government minister.

Article 2 of the law says that an Evangelical Church bases its actions in the teachings of Jesus Christ and the sacred writings of the Bible. Article 3 shares with us the values of an Evangelical Church:

1. Respect for life and the gift of God, his preservation and dignification.
2. Integrity based on truth, sincerity, rectitude and compromise.
3. Unity, based in the love of God and one's fellow mankind in total respect of their denominations and doctrinal convictions.
4. Fidelity to the eternal principles contained in the word of God and the Church and the body of Christ.
5. The family as the basis of the church, Society, and the Nation; its integration, harmony, solidarity and stability.
6. Social responsibility, as the human being is indivisible, requires material and spiritual solidarity, giving it dignified housing, food, clothing, health and basic education.
7. Sociopolitical responsibility, the church submits itself to authority, respecting the law, because there is no authority except on the part of God and those that have it, have been established by God.
8. Only god is just and has permitted that people exercise justice to punish and instill fear of those that do bad and not of those who do good, as a path to achieve peace, security, and the prosperity of the Nation.
9. Excellence: all the actions of the Evangelical Church of Honduras are done as if for God, characterized by searching and finding the best results for people and the Country, optimizing with wisdom the resources of the faithful, and
10. Leadership: the Evangelical Church of Honduras promotes and makes clear the wise and good administration of all of the assets and talents which God has placed under his administration, along with the spiritual and material resources.

See the problem? Its not that all these principles are bad; any religion might conceivably adopt them, although we find the claim of divine authority for the political authorities (point 7) somewhat disturbing for a secular state.

But the biggest problem is that Congress, in this law, is making these principles of church behavior into legal norms. Congress was never granted the power to codify the religious beliefs of its citizens. This violates Article 77 of the constitution; it is government establishment of religion, pure and simple.

And of course, there is the glaring fact that the law restricts the definition of evangelical church to those that adhere to these beliefs and practices and are members of a specific organization, the Confraternity of Evangelical Churches. Remember that in the background Africo Madrid was threatening to remove the NGO status of religious NGOs he felt were "fringe": these were not members of the Confraternity.

The Confraternity, a constellation of evangelical churches in Honduras, does not represent all evangelical churches. There are evangelical churches that don't belong to the Confraternity either because they don't want to, or they don't share some of the required beliefs for membership.What happens with this law: are they suddenly not evangelical churches? Congress has established a religion that includes some and excludes others.

Article 6 gives the Confraternity the sole right to represent the evangelical church before the government and to communicate with the government. Article 7 says that to convert an existing organization from a civil NGO to a religious organization, the Evangelical Confraternity of Honduras must petition the Interior Minister (Africo Madrid, remember) to change their status.

Article 8 says the Evangelical Confraternity can exclude any organization that violates the norms included in this law, as well as its own regulations. By membership in the Confraternity, churches get exoneration from all taxes and surcharges, including the free importation of goods and services (Article 4, clause 11).

Any church that calls itself evangelical must get the permission of the Evangelical Confraternity to call itself "evangelical" whether it wants to be an NGO or considered a "church", just as a church needs the permission of the Catholic church to call itself "catholic".

It is implicit in the text of Article 7 that evangelical organizations should associate with the Evangelical Confraternity. It's only through petitions from the Confraternity that they may convert themselves from civil to religious legal entities. This probably violates the legal right to free association.

Should a government be able to set up a particular organization as the sole way to petition or communicate with the government and government officials?

It's not particularly surprising that the Sala Constitucional of the Supreme Court found the law unconstitutional. It was challenged by evangelical churches that were not part of the Confraternity, either because they did not want to be members or because of their beliefs. The Public Prosecutor filed a report with the Court finding the law unconstitutional, and the Sala Constitucional of the Supreme Court concurred.

So now pressure is being exerted by both the leadership of Congress, and Porfirio Lobo Sosa for the full Supreme Court to reverse the decision of the Sala Constitucional.

Here's to the constitutional separation of church and state and the protection of religious freedom in Honduras today.

Separation of Powers 2 (the sequel)

We wrote before how Porfirio Lobo Sosa doesn't understand the Honduran Constitution's separation of powers.

Today he made that even clearer: he said that he would be forming a commission of jurists to examine whether the recent decisions by the Supreme Court were based in the law, saying

"The only [state] power without anything over it is the Judicial power; whatever they do or decide is the last recourse, which doesn't seem fair to me in the balance of power".

Yes, the Judicial branch is the ultimate arbiter of the law under the Honduran constitution, just as it is under the US constitution.

Apparently that's news to Lobo Sosa, and he knows what he thinks he can do about it:

"There are things that are not fair, them perhaps it is adhering to the Constitution, but I have the right as well to put in place jurists who will analyze for me if the decision of [the Supreme Court] really adheres to the Constitution of the Republic".

The only saving grace here is that Lobo Sosa isn't saying what he will do after his selected commission reports on their opinion of the Supreme Court's recent opinions.

There is no question the Honduran judicial system, including the Supreme Court, is politicized. We've blogged about the problems with the selection process for the court before. Heather Berkman's scholarly article on the subject provides a good analysis.

But the problem is not that the Judicial Branch has no oversight; the problem is in how the justices are selected for the Supreme Court. The problem is that the judicial system is partitioned as "spoils" by the two major political parties. The process is heavily politicized.

The selection process is spelled out in Article 311 and 312 of the Honduran constitution. Nominations are made by a commission composed of seven members:

(1) one Supreme Court justice, elected by 2/3 of the justices on the Supreme Court
(2) one lawyer, from the Lawyer's Union, elected by the assembly.
(3) The Human Rights Commissioner
(4) one representative from the Honduran Council of Private Business (Consejo Hondureño de la Empresa Privada (COHEP)) elected in assembly
(5) one representative of the Law Professors, election run by the National Autonomous University
(6) one representative of Civil Society
(7) one representative of the Workers Unions

The law that governs the operation of this group is Decreto 140-2001.

It calls for these people to get together and propose at least 3 nominations for each of the 15 places in the Supreme Court.

Members of the nominating committee cannot themselves be candidates for the Supreme Court, nor related to a candidate. Each representative comes to the committee meeting with a slate of up to 20 candidates proposed by their organization, which cannot be modified once it is proposed. They then discuss each of the candidates and vote to arrive at a slate of no fewer than 45 total candidates which are then proposed to Congress.

At this point, the nominating committee dissolves itself. Congress winnows the list down to 15 members of the Supreme Court, each appointed to 7 year terms.

In theory, it's a law designed to incorporate the views of a large part, though not all, of Honduran society. Campesinos are not represented, nor are indigenous people, for example.

In practice, it ends up being dominated by the political parties that control government. The Misión de Observación del proceso de selección de los nuevos miembros de la Corte Suprema de Honduras reported in 2008 that there was much pressure by political parties to make bargains on the slate of candidates. They wrote:

They [the Mission] received information from multiple sources about alleged irregularities in the elaboration of certain lists, and information concerning alleged political influence, which if true, only serves to undermine the selection process. The Mission also verified a widespread distrust in the selection process, and more specifically, a belief that the candidate lists are a result of political and powerful interest groups interferences.

The Mission reported that the selection criteria were not transparent, but seemed to be limited to the candidate's educational background and work experience with no attempt to determine the candidate's legal skills, philosophy, ideology, or ethical positions.

In 2008 the Congress voted on slates of candidates from the pool proposed by the selection committee. Two slates were created, sponsored by the two main political parties in Honduras, the Liberal Party and the National Party.

As a result, the current Supreme Court consists of 8 Liberal Party members, and 7 National Party members. Each of the current justices is a member of a political faction in one of the two major parties. For example, Tomas Arita Valle, who issued the legal warrant that precipitated and sanctioned the coup, belongs to the Liberal Party faction headed by former president Carlos Flores Facussé.

So it may not be surprising that Porfirio Lobo Sosa does not understand separation of powers, and the place of the Supreme Court in that separation of powers.

He is certainly free to appoint a panel to give him an opinion about the current crop of Supreme Court decisions with which he disagrees.

And there have been a lot of them. His 1 percent security tax, model cities, and the Evangelical Church Law were all found unconstitutional. It is the last of these that seems to have roused him to greatest outrage.

In response, he said

"They declared the law unconstitutional, a Court, but not God and we'll move forward until that law is valid because it is the law that rules and what the Honduran people want so they can be with God".

The Supreme Court found the Evangelical Church Law unconstitutional because it mandates that to be a legal "church" in Honduras, you must belong to the Evangelical Confraternity of Churches.

Lobo Sosa's legal options to make good on his promise are few. Any revision of the form of government and separation of powers would require major constitutional surgery, which in turn, would need the tacit approval of this Supreme Court, to avoid triggering another constitutional crisis.

Lobo Sosa has, oddly, been citing as support for his position the official Truth and Reconciliation Commission. That group suggested Honduras create a Constitutional Court to review the determinations of the Supreme Court. What is unclear is why they think that will help at all.

How do you select members of the Constitutional Court in order to avoid the politicization of the selection of justices that created the current set of problems with the Supreme Court? Wouldn't it be easier, legislatively and structurally, to change the way Supreme Court justices are selected, rather than trying to shoehorn in an entirely new level of court?

Coincidentally, just when Lobo Sosa is airing his unusual theories of constitutional separation of powers, on Thursday a delegation of German judges left Honduras after reviewing its legal system.

Their conclusion: it's worse than they thought. They indicated that there was impunity and corruption in the judicial system and that the Honduran justices where not up to the fight.

A new Supreme Court will be selected on January 25, 2015. There is no particular reason to think that changes will happen by then that would fix the broken selection system.

Meanwhile, we have the spectacle of a Honduran president, faced with decisions he doesn't like, proposing to institute some sort of ad hoc oversight to decide which decisions he really has to accept.

Anyone who thinks Honduras has a functional form of government should probably pause to consider that.

Too Many Generals

The Honduran armed forces are restless because for the last two years, the Honduran Congress has sat on the promotion of officers.

This is unprecedented in Honduran history.

Like in the United States, in Honduras, once you get above a certain grade, the military proposes career advancement, and the legislative branch (in Honduras, the Congress; in the US, the Senate) ratifies the promotion.

The US Senate routinely fails to promote officers proposed by the armed forces, for a variety of reasons. Now the Honduran Congress is using its authority to do the same in Honduras.

Among proposed advancements now under consideration are the Head of the Joint Chiefs of Staff, Brigadier General René Osorio Canales (to Major General) and Coronel Wilfredo Oliva Lopez (to Brigadier General). Left over from last year are Coronel Marco Vitelio Castillo (Air Force), General Jose Gerardo Funtes Gonzalez, and General Javier Prince Suazo.

Congress has said that some of these promotions don't make sense because the individuals will shortly retire (Fuentes Gonzalez, for example).

The advancement of Vitelio is rumored to have been withheld as a punishment for the theft of an airplane in San Pedro Sula while it was under the control of the Air Force there.

General Prince is clearly not in good regard; he was removed from the Joint Chiefs council and installed instead as Auditor of the Armed Forces last year.

Whatever the truth is about the motivations for not advancing these officers, the large number of pending promotions draws attention to a peculiarity of the Honduran military: it is top heavy.

In 1993 it had as many senior officers as the Salvadoran Army (about 250), yet the Salvadoran army was, at that time, double the size of the Honduran one.

The Honduran military is still top heavy today. Honduras has 12 flag officers (Generals and Admirals) for around 11,000 troops (2009 data), or about 1 General for every 916 soldiers. In contrast, the United States has 1.4 million troops, and 919 Generals (and Admirals), or one General for every 1536 troops (2009 data).

What that means in day to day practice is worth further consideration. Meanwhile, the excess generals-- and other high officers-- are getting restless as the Honduran congress appears less motivated to grant what once were automatic advancements.

Congress Enables Embezzlers

Congress just made it easier to steal from the government.

In a reform to the Ley Orgánica del Tribunal Superior de Cuentas (TSE), the national auditing body, they removed imprisonment as a punishment for embezzling government funds, for amounts under a million lempiras (about $52, 770 ).

Now an embezzler who steals less than a million lempiras can only be fined up to the amount they embezzled, or, if they lack the funds, a lien can be put on their property.

There's practically no incentive not to steal, since the worst they can do is ask for the money back-- without interest!-- if they catch you.

Good job Congress! You've streamlined petty corruption in a bold reversal of all those old-fashioned good government initiatives intended to discourage this traditional political pastime.

Privatize Copan? Why Not.

Copan Ruinas asks for its rights over the archaeological park.

That headline in El Tiempo on Monday caught our eye.

What "rights", do you ask?

The newspaper reported Monday that in a town meeting over the weekend, the residents of Copan Ruinas (the town adjacent to the Maya archaeological site) voted to demand that the Institute of Anthropology and History turn over 50% of the gross revenues generated by the archaeological park.

Congress member Julio Cesar Gamez Interiano will reportedly introduce legislation to this effect. The legislation reportedly would enable the town of Copan Ruinas to sell tickets outside the country, keeping all of that revenue, although it leaves undefined the mechanism for these direct sales to foreign tourists.

This is exactly what was predicted in a letter from the Union of Employees of the Institute of Anthropology and History on June 8, 2011. As we said then, the consequences of such a shift in distribution of income from this national monument would be disastrous, both for the archaeological site itself, and for the Institute of Anthropology and History.

Why? Copan's income is currently the main source of funding for preservation of the cultural patrimony in Honduras.

That includes Copan. In fact, most of Copan's income is dedicated to preserving that very site.

The former director of the Institute of Anthropology and History, Dario Euraque, demonstrated in his book El golpe de Estado del 28 de junio de 2009, el Patrimonio Cultural y la Identidad Nacional that funds generated by admission to the archaeological site of Copan are used almost entirely in the maintenance and administration of Copan.

The article in El Tiempo includes no arguments to justify this grab by the town, no explanation for why the town thinks it has the right to the income from admissions to the site.

It's not like it isn't already receiving economic benefits from visitation to the site.

The government pays taxes on the land to the town every year; about 500,000 lempiras according to the El Tiempo article.

And of course, the town derives income from all the visitors who come and stay in the hotels, eat in the restaurants, and buy things in the stores. Anyone who remembers sleepy Copan Ruinas in the 1970s and visits today can see the economic growth there fueled by proximity to the archaeological site.

The call to take 50% of the revenues used to maintain the national monument is nothing more than a plan to kill the goose that lays the golden eggs for the town of Copan Ruinas.

Model Cities Law

The National Congress completed and passed Model City legislation last Wednesday and while the details continue to trickle out, the law is very different than the prototype they started with.

This was one of the first laws that Congress passed with its new electronic voting system. Instead of debating and passing the law as a whole, Congress debated and voted on each of the 72 individual articles of the law. They also added four new ones. Paul Romer, the Stanford economist whose brainchild this is, was available in Congress all week during the debate and consulted on the legislation without charge.

The new law firmly establishes that any Región Especial de Desarollo (RED) or Model City is part of Honduras and cannot be alienated. The territories encompassed will be subject to the constitutional clauses about national sovereignty, territory, national defense, identity papers, and foreign relations. This explicit bow to Honduran sovereignty was necessary to gain the support of the Liberal Party members of Congress.

Congress will be able to create a RED from either an unpopulated region, or from urban regions that request conversion through a binding local referendum.

Congress will vote on and approve charter legislation for any proposed RED. Congress made it particularly difficult to change approved charters, reportedly to keep from having to respond to jockeying for gains.

Any RED approved will have an Executive Governor, responsible to a "Transparency Commission", appointed for a seven year term.

Here's where things get strange. The Transparency Commission will consist of elected foreigners who reside in the RED. The Transparency Commission-- a group of non-Hondurans-- will function as the governing council of the RED.

An Auditing Commission will be responsible for the day-to-day administration of the RED and will report to the Transparency Commission.

Finally, the law calls for a "Norms Commission" which will function to set the laws and regulations of the RED. It will function somewhat like Congress. Its members will be elected by residents within the RED.

The RED will have its own judges, though in part, they will enforce the Honduran Penal Code. It will have its own police force. It will be able to administer airports and ports freely. It will be free to set its own currency and taxes, though some taxes will also be imposed by the Honduran government.

A RED will have its own labor law. By law, 90 percent of the jobs in a RED must be filled by Honduran citizens. Each RED can set up its own education system and health care system. The import of automobiles into and out of the RED will be regulated by the RED.

Hondurans will, by law, be able to travel freely into a RED, but foreigners will require special immigration procedures. These were not spelled out in press coverage.

So what should we think of this version of the idea? we have previously covered the reasons we think model cities is a bad fit for Honduras-- even if we set aside all the qualms we have about corporatizing governance, it does not seem to us that model cities will deliver on their hype. The places held up as illustrations of the potential benefit from conditions not present in Honduras.

Reaction to the new law in Honduras also is negative-- including from sectors that might have been expected to be more positive.

COHEP, the business council, hates the law, calling it unconstitutional and filled with inconsistencies. According to COHEP it does not provide sufficient guarantees for investors, be they Honduran or foreign.

The law is unclear about whether absolute title to the land involved transfers to the RED, and thus whether they may transfer title when they sell or lease it to others within the RED. COHEP believes title does transfer. This could, depending on the location of any proposed RED, contradict Honduran laws about foreign ownership of lands near the coast or international borders.

From our perspective, the law simply concretizes a lot of the concerns we and others have expressed.

It provides no protections (either through labor law, or social protections like payments to IHSS) for the Honduran workers who work in any future RED.

It is up to the RED to set labor law, including protections for workers, and to establish its own health care system. The law is vague about who will have access to that healthcare system, if created. Nor do employers have to provide health care for workers.

The law is equally vague about an educational system, and whether it would be only for residents, or potentially also for employees who work in the RED.

But regardless of concerns like these, or even those of the Honduran business community, the enabling legislation has been sent to Porfirio Lobo Sosa for signing and publication in La Gaceta.

There is one enthusiastic supporter of the law: Paul Romer told El Heraldo that in six months all kinds of investors will be coming to Honduras to take advantage of this legislation.

Honduras is indeed open for business-- what is utterly unclear is whether predictions like these will actually prove to be accurate; and if they do, whether Honduran workers will benefit or see their social supports erode even more.

Lobo: Honduras Wants Change

Porfirio Lobo Sosa will start his dialogue with the organized social and political organizations this coming Saturday.

Already he's saying that the results of that dialogue need to be proposed as constitutional changes before the end of this year, because changes proposed in 2012 would require approval by whoever wins the 2013 elections.

Speaking to his Cabinet, he said

"There are those who don't want us to listen to the people, being mixed up; leave them behind; they're not important; I tell those of you who have confidence in me that no one will remove me from my path, no one. Why? because, just as some of you don't like to read much, some, but I read every day: the doctrine of christian socialism; that's where I am placed and no one will remove me unless they do something (he laughs) which violates the norms."

Lobo announced that each session of his dialogue will last three or four hours and participants will be encouraged to present their vision of necessary changes: not just political, but economic and social as well.

"There go those crickets who go, the assembly which Pepe Lobo is talking about is the Constituyente. I have not said a Constituyente. I have said that we cannot sit waiting for a Constituyente, if a Constituyente comes, or does not come, I have the responsibility to make changes because Honduras wants change."

Lobo Sosa's consultations do not depend on the much-touted law that was supposed to enable plebiscites and referenda, because that law is gathering dust in Congress.

The law was passed by two-thirds of Congress, but the actual operationalization, drafted in committee, sits in a drawer somewhere.

As drafted in committee, the law actually makes it almost impossible to hold a referendum, requiring signatures of at least 2 percent of the registered electorate, plus the support of ten congress persons and a Presidential resolution, in order to get considered by the Congress.

Then, and only then, Congress has to discuss the issue and vote to move it forward or not, and determine the language used in the referendum before handing it off to the Election Tribunal.

Any referendum approved following this process will pass if it receives the support of 51 percent of an electorate equal in size to that which voted in the last general election.

These are high barriers that predictably will have the result of preventing anything controversial from being considered by the voting public.

As El Heraldo noted, every proposal has to pass through Congress, where members can halt anything that damages their interests.

Pepe Lobo may be right about Honduras wanting change.

But the law that is supposed to make that possible shows that Congress clearly does not.

"Constitutional Coup" Revisited

In 2009, shortly after the Honduran coup d'etat, we followed opinions rapidly posted all over the internet.

Most were uninformed; a majority in the early days were from apologists for the coup.

A repeated claim was made, that luckily disappeared as the opinions of constitutional scholars were published. This can be paraphrased simply:

"They aren't like us; they can't afford the kind of rule of law we have; they have to let the army have a stronger role."

Now, two years later, that line of argument has been resurrected, and expanded to cover much of the rest of Latin America.

The Center for Strategic and International Studies argues that what it calls "extra-electoral means" of politics (aka military interventions) "may enjoy both legitimacy and constitutional mandate".

Here's all you really need to know about this "report":

• it cites no opinions of constitutional legal scholars.

• it cites almost nothing specifically about any of the countries involved

• in the one instance where it cites a recent research resource, the report it cites doesn't say what they claim it does.

The poster child for their argument is, not surprisingly, Honduras. The "facts" about Honduras that the CSIS authors present are inaccurate, and their analysis of the Honduran Constitution diverges from all those produced by actual constitutional law experts.

The authors say the 2009 coup in Honduras "exemplified" what they label a "dilemma":

while the United States and the OAS push the democracy agenda, the Honduran and other Latin American constitutions say something different. Because Americans strongly believe in civilian control over the military-- and that any armed forces meddling in the political order represents a usurpation-- it is hard to conceive that other norms, even constitutional ones, may prevail in other countries.

Or, to paraphrase:

"They aren't like us; they can't afford the kind of rule of law we have; they have to let the army have a stronger role."

The authors summarize their understanding of sections of the Honduran constitution concerning the role of the armed forces as if they were contradictory:

the armed forces are 'permanent, apolitical, essentially professional, obedient, and non-deliberative'. But then it says 'members of the military are not obliged to carry out illegal orders or those which involve committing a crime'.... The mission of the armed forces is the familiar one of defending the territorial integrity and sovereignty of the republic, but then the constitution adds, 'the order and respect of the Constitution, the principle of free vote, and the rotation of the Presidents of the Republic'...

By stringing those three quotes together, the CSIS authors make it sound like these sections of the Honduran Constitution are all specific to the Armed Forces.

But in fact, the middle clause-- about not following illegal orders-- is not specific to the military. Contained in Article 323, it reads in full

Officials are trustees of authority, responsible legally for their official conduct, subject to the law and never above it.

No official or public employee, civil or military, is obligated to carry out illegal orders or those that would require the commission of a crime.

The CSIS authors use this clause to support their argument that in many Latin American countries, including Honduras, the military has a specific constitutional mandate to intervene in government.

But in the Honduran constitution, this is not a part of the articles defining the role and functions of the military; it is part of a general exhortation for government employees to follow the law.

The authors argue that the cited language was

precisely the issue when President José Manuel Zelaya ordered the military to carry out an illegal referendum he had engineered to amend the constitution to provide for an unconstitutional second term for him.

Except that, as any reader of this blog knows, that is not what happened.

We are weary of reiterating the facts, but for the record: the public opinion poll scheduled on June 28, 2009 was on the narrow question of whether the populace did or did not want to see an item on the November ballot asking whether voters at that election were in favor of convening a constitutional assembly at some future point.

Neither the June poll nor the November vote, had either actually occurred, would have allowed or required a second presidential term.

We actually have some bases to know what the Zelaya administration saw as goals for a constitutional assembly, from published statements by the former minister of defense and minister of culture, sports and arts.

In addition, the Zelaya administration had prepared materials-- seized and publicized by the Armed Forces-- for the campaign for the November vote. These describe reforming the political system so the votes of the citizenry mattered; so that a wider range of civil rights enshrined in international treaties would be guaranteed in the constitution; and so that the rights of a variety of marginalized groups would be protected.

Leaving aside the errors of fact about what actually happened, what constitutional law scholars have the authors of the CSIS paper consulted in reaching their conclusion about the legitimacy of military intervention in Honduran government?

In a word: none.

They do reference a Congressional Research Service report they say supports the idea that the coup was constitutional under Honduran law.

The report they reference, though, says no such thing: instead, it does a good job of accurately reporting the facts, including those the CSIS could not get right (e.g. that the June 28 vote was a non-binding opinion poll).

Perhaps they intended to reference an earlier Congressional Research Service report by the same author, Peter J. Meyer, recapitulating the main events of the 2009 political crisis.

But that report, which does consider the constitutionality of the actions taken, says correctly that "most analysts" labeled the military's actions as unconstitutional.

It includes explicit citation of Honduran legal scholars who have produced some of the most authoritative legal opinions against the "constitutionality" argument, including distinguished legal scholar Edmundo Orellana-- the man who resigned rather than follow Zelaya's orders as defense secretary.

There are actually many more examples of such opinions written in Spanish, which perhaps the CSIS authors thought were inaccessible to their readers. But they might have included reference to a highly visible English language report by constitutional legal scholar Doug Cassel.

It seems most likely that CSIS actually intended to reference an amply critiqued report by the Congressional Law Library (not the well-regarded CRS), a report that got its opinions about Honduran constitutional law from personal communications from a Honduran lawyer, not a constitutional law expert, who came to Washington to advocate for the Roberto Micheletti regime in summer 2009.

The conclusions this CLL report reached were explicitly disclaimed by members of the Honduran Congress in late 2009; that is, they were repudiated by some of the very people whose authority and procedures it purported to describe accurately.

Following their protest, members of the US Congress also wrote to ask that this document be corrected.

Outrageously, with no citation of any constitutional legal publications, the CSIS publication concludes that everything done by the Honduran Armed Forces in June 2009 was fine, "except for the possibly unconstitutional act of expelling Zelaya from the country without a trial, and even that was arguable".

To our knowledge, no one has ever argued that the expatriation was legal.

The CSIS analysis can be looked at from another perspective: it actually overemphasizes the role of the military in the Honduran coup.

In their zeal to argue for an inherent constitutional right of the Honduran military to commit a coup, they missed the point that this coup was actually carried out by the civilian authorities: the Supreme Court and Congress.

The Honduran Armed Forces themselves were at some pains throughout 2009 to make clear that they had not, in fact, initiated anything, claiming that they acted under orders of the Supreme Court.

If they actually had the constitutional mandate that CSIS imagines, why did they distance themselves from it?

Because no such mandate existed.

Let's look at what the Honduran Constitution actually says about the role of the Armed Forces.

Article 272 defines the role of the Armed Forces. Here is is in its entirety, rather than in the shreds that CSIS chose to excerpt in support of their very odd argument:

The Armed Forces of Honduras is a National Institution of permanent character, essentially professional, apolitical, obedient and non deliberative. It is constituted to defend the territorial integrity and the sovereignty of the Republic, to maintain the peace, the public order, and the dominion of the Constitution, the principles of free suffrage and the alternation in the exercise of the Presidency of the Republic.

To cooperate with the National Police in the conservation of public order to the effect of guaranteeing the free exercise of suffrage, the custody, transport, and vigilance of the electoral materials and all the other aspects of the security of that process, the President of the Republic shall place the Armed Forces at the disposition of the Supreme Electoral Tribunal, from one month before the elections, until the decision of the same.

Article 274 expands on other missions that the Armed Forces can have. Nothing in it includes or implies the kind of role that the CSIS authors propose. The closest is a paragraph that specifies that the Armed Forces will have a role in combating terrorism, drug trafficking, and organized crime, which ends with the phrase

as well as in the protection of the Powers of State [branches of government] and the Supreme Electoral Tribunal, at their request, during their installation and functioning.

This would seem to mean that Congress, the Supreme Court, the Executive branch, or the TSE can request security from the Armed Forces.

Nothing here seems to say that a branch of government could request the Armed Forces to attack another branch of government over a dispute-- that would violate the very fundamental requirement that the Armed Forces be apolitical and non-deliberative.

Far from having a constitutionally mandated role to intervene in government, members of the Armed Forces are subject to unique limitations in Article 37, on the rights of citizens, specifying that some members of the Armed Forces may not have the right to vote.

Article 240 specifies that members of the military, or those who were in the military in the previous 12 months, are ineligible for election as President or Vice President.

It seems remarkably clear, if one reads all the constitutional language pertinent to the military, that the Honduran constitution was intended to ward off the specter of military intervention in governance.

The failure by the CSIS authors to cite actual discussions by constitutional experts; the selective culling of fragments of language from the constitution, presenting them out of context; and their failure to meet the minimal criterion of describing what actually happened, makes this report a practice of ideological rhetoric, not-- as it purports to be-- an analysis of the facts.

Constitutional coups may be written into founding documents somewhere in Latin America. But not in Honduras, and no amount of wishful thinking will make it so.