Fiscal Irresponsibility and the Security Tax

Who would think it was OK to spend 1,800 million lempiras ($90 million dollars) from a fund whose balance is only 500 million lempiras ($25 million dollars)?

That's spending more than 3 times your current balance!

Juan Ferrera, head of the government commission that decides how to spend the income from the security tax, thinks it's OK.  Not only that, but he plans to borrow perhaps 600 million lempiras ($30 million dollars) to cover the shortfall from his commission's irresponsible spending, as short term loans from domestic Honduran banks which will be at high interest rates. He proposes to pay the loans back with the projected income from the security tax in 2014.

The security tax, new in 2012, is a tax on bank transactions intended to pay for additional security efforts in the country in general. After the tax was approved, it was modified by Congress so that in addition to reinforcing security, it could be used to "fortify the finances" of the government. It has been used as a candy jar for everyone's pet idea of how to spend government funds, and ultimately, they spent more than they will take in this year, by a lot.

Ferrera made the astounding admission that his commission, which was set up to make decisions about administering funds from the security tax, has made no decisions.  Instead, he says the decisions were made by the Secretary of Defense and Security (Arturo Corrales), the Supreme Court (Jorge Rivera Aviles), the Public Prosecutor's office (formerly Luis Rubi, now Oscar Fernando Chinchilla), and municipalities. 

Basically, if anyone proposed using funds from the security tax for any old project, it simply was done.  The commission headed by Ferrera totally abdicated its responsibility.

Naturally they overspent. There was no one accountable. 

The biggest winner by far has been the Secretary of Defense and Security, who assigned himself a whopping 716.7 million lempiras ($35.8 million dollars).  This includes paying for both the new Military Police (24.5 million lempiras), and a Police Special Operations Unit (los Tigres), both championed by Juan Orlando Hernandez and approved by the Honduran Congress.  While the Military police unit has started operations, with between 600 and 1000 troops chosen from existing soldiers, the Tigres unit has not even begun organizing itself, despite having been authorized last spring.

The latest proposed charge to the security tax:  800,000 lempiras to electrify the island of Isla Conejo, subject of a dispute with El Salvador.  Ferrera said

"There's no doubt that it's part of our territory and we need to exercise sovereignty in this place and because of that the petition [to electrify the island] was immediately approved....the money is already in the hands of the company that will carry out the project."

Has any of this spending spree made a significant change in the security of the Honduran people?

Not significantly by any of the measures that matter.  The government predicts that the murder rate will be around 80 per 100,000 population, while the National University's Observatory of Violence sees the rate continuing at 85 per 100,000 for the rest of the year, off slightly from its observed rate of 91 per 100,000 in 2012.

More militarization of policing, and intensifying a border dispute with a neighbor over an uninhabited island hardly seems like enough to justify the over-spending and lack of accountability demonstrated.

Corruption and Anticorruption in Honduras

Recent news, such as the Gacetazo scandal over a lucrative dam contract in Nacaome, highlights the perennial problem of government corruption in Honduras. In the "scorecard" for FY 2010 released by the Millenium Challenge Corporation in October of 2009, "control of corruption" was one of the few indicators where Honduras failed to meet the standard required. According to that source, Honduras scored in the 44th percentile among its peer group of countries, a decline from its previous position close to the median for the peer group.

Coincidentally, this past week saw the release of the latest report from the the Consejo Nacional Anticorrupción (CNA), or National Anticorruption Council, on progress in government transparency and combatting corruption. As noted by Adrienne Pine, the report was publicly challenged by Isbella Orellana, a sociologist and professor at UNAH-VS, the campus of the national university located at San Pedro Sula. As reported in the original Tiempo article translated at quotha.net, Isbella Orellana questioned how the results reported were generated. The lack of definition of the population surveyed and method of sample selection identified by Isbella Orellana makes the report unreliable. The claims made are clearly biased and frankly unbelievable. And, Isbella Orellana argued, the commission mixes religion in a troubling way into what should be a secular activity, for example, claiming that the main reason for corruption is a decline in belief in God.

So what is the Consejo Nacional Anticorrupción?

According to its website, the CNA was founded in 2001 under Liberal Party President Carlos Flores through Decreto Ejecutivo 015-2001. It was renewed under Nationalist Party President Ricardo Maduro in 2005 via Decreto Legislativo No 07-2005. So it is an officially chartered body owing its existence to the national government of Honduras.

Today, the CNA incorporates representatives of local government, the leadership of Catholic and Evangelical Christian groups, business, media, and labor. It thus makes a claim to speak for "civil society" generally. Of course, not every organization is part of this umbrella group, as is perhaps most obvious in the area critiqued by Isbella Orellana, the reliance on organized Christian leadership groups. Specifically included in CNA are the following organizations:

Business and labor interests:
Consejo Hondureño de la Empresa Privada (COHEP)
Asociación de Medios de Communicación (AMC)
Confederación de Trabajadores de Honduras (CTH)
Consejo Coordinador de Organizaciones Campesinas de Hondura (COCOCH)

Education leaders:
Consejo de Rectores de Universidades de Honduras
Federación de Colegios Profesionales Universitarios de Honduras (FECOPRUH)

Public service and municipal governance:
Asociación Nacional de Empleados Públicos de Honduras (ANDEPH)
Asociación de Municipios de Honduras (AHMON)

Organized religion:
Confraternidad Evangélica de Honduras (CEH)
Conferencia Episcopal de Honduras de la Iglesia Católica (CEH)

Development:
Federación de Organizaciones Privadas de Desarrollo de Honduras (FOPRIDEH)
Foro Nacional de Convergencia (FONAC), National Convergence Forum

CNA leadership has historically been dominated by the religious sector. Its first director (from 1997 to 2005) was Cardinal Oscar Rodriguez, notoriously outspoken defender of the coup d'etat of 2009. The current leader of the CNA is José Oswaldo Canales, a pastor whose support for the coup d'etat and the Micheletti regime was equally open. Canales represents the Confraternidad Evangélica de Honduras (CEH).

Canales took over the leadership of CNA in October of 2009, succeeding Juan Ferrera. Ferrera is currently listed on the CNA website as representing COHEP in its general assembly. In March 2005, Ferrera was cited as a consultant to the federation of Chambers of Commerce and Industry, and Executive Secretary of FONAC, the Foro Nacional de Convergencia (National Convergence Forum) in a report on civil society consultation that paved the way for Honduras to receive Millenium Challenge Corporation support.

FONAC, one of the members of CNA today, was described in 2002 as an organization, again formed under President Carlos Flores,

whose mission is contributing to the adoption and execution of State policies that guarantee governability, participatory democracy and the integrated development of Honduras, as an expression of the consensus reached by participation and dialogue between civil society and the government,

At the time FONAC included

members of the Federation of University Professionals of Honduras, the School of Journalism, Teachers Associations, Workers Confederations, Farmers, Native ethnic groups, Cooperatives and the Association of Honduran Municipalities.

According to the CNA website, FONAC today represents

30 organizations of Civil Society, 5 representatives of the political parties, and 5 dependencies and institutions of the State.

This configuration raises some interesting questions about how far FONAC can represent itself as independent of the government and outside of politics, as would seem necessary for a truly independent watchdog on public corruption.

By June of 2007, when the CNA issued its first version of a "transparency" report, Juan Ferrera was its head. He was quoted shortly after that as saying that

corruption is creating such public disenchantment that Hondurans may even "put aside democratic options."

This seems eerily prophetic in retrospect, and it may therefore not be surprising that Ferrera has, like his predecessor Cardinal Rodriguez and his successor pastor Canales, voiced strong support for the coup d'etat. Ferrera was quoted on July 23 in La Tribuna describing one of the orchestrated marches in support of Micheletti as an

extraordinary manifestation of the people in support of democracy, justice, and liberty...While the ex-president Zelaya calls for discord, here we are united to seek the recovery of democracy.

Described as speaking for an "umbrella group of pro-business civic groups", which seems like a surprising way to characterize the CNA, on July 30 Ferrera was quoted as saying President Zelaya could only return

with some condition that guarantees that he doesn't turn over Honduras to people affiliated with Hugo Chavez.

So, the CNA clearly has in recent years been far from independent of Honduran politics. In the run-up to the coup and its aftermath, its religious and civic leadership has been aligned with the unconstitutional actions that led to the replacement of the legal government with a de facto regime.

Which brings us to Sergio Membreño Cedillo, named to the proposed Truth Commission. As we previously noted he was a director of CNA, preceding Juan Ferrera. After the coup d'etat, he posted a YouTube video as part of a series by people associated with the Association for a More Just Society of Honduras. In it he committed to being an agent of reconciliation and peace in a time of polarization, citing his position as a Christian leader, a role in which he contributed an article about confronting the global economic recession to a website in 2005.

Membreño was described as the representative of World Vision in an October 2009 article about a press conference given by a group of NGOs calling themselves Transformemos a Honduras (Let's Transform Honduras) that presented 15 proposals to transform Honduras, intended to outline a program for the next government that would have to pick up the pieces after the coup and government of the de facto regime. The Association for a More Just Society (AJS in Spanish) led the coalition, promulgating a rejection of both Zelaya and Micheletti and a commitment to building a more just Honduras. Other participating NGOs listed at the press conference included Caritas, Global Village Project, and the Confraternidad Evangélica de Honduras.

As might be suggested by the nature of the participating groups, one principle of Transformemos a Honduras is that partners want to "do the will of God". Additional participating organizations mentioned on the group's website include Save the Children, Committee of Christian Leaders, and Compasión Internacional. The English-language website of the organization describes it as "an ecumenical Christian movement".

Unlike the CNA-- which was created by the government-- this new ad hoc coalition insists that it has no political ties. This does not mean that constituent members were neutral or objected to the coup d'etat and the actions of the de facto regime; notably, AJS published an editorial that, while stopping short of supporting the coup d'etat, presented an argument for dismissing President Zelaya as an "enemy" of the poor. [Update: see commentary below for other ASJ information that establishes their intent to maintain an unaligned position equally critical of both Micheletti and Zelaya.]

Speaking at the press conference in October, Membreño is quoted as saying the five key structural problems facing the country are

poverty, iniquity, corruption, violence and injustice. Beginning from those major problems five major components can be defined which are: employment and growth, education, health, transparency and anti-corruption policies, and finally a component of security and justice.

"Transparency and anti-corruption policies" defines what up until now have been the arenas of the CNA. Unlike that body, Membreño's new association does not incorporate media or business groups.

Among its fifteen proposals, Transformemos a Honduras does call for reform producing depoliticized and participatory elections for the Supreme Court, Attorney General, Supreme Tribunal of Accounts, Supreme Electoral Tribunal, and Solicitor General. Many of these -- the Supreme Court, Attorney General, Supreme Electoral Tribunal, and Solicitor General-- were directly implicated in the coup d'etat and its aftermath, tied politically to Roberto Micheletti by the corrupt processes of their nomination and appointment. So presumably, this initiative would address one of the contributing factors that allowed the coup to take place.

Corruption in Honduran politics knows no party loyalty, and has been no monopoly of any one administration or party: while rabid apologists for the 2009 coup d'etat tally corruption during the Zelaya administration, the US State Department country summary singles out the Nationalist Callejas administration (1990-1994), and Liberal President Carlos Flores is recognized as running a government in which international aid intended to support recovery from Hurricane Mitch in 1998 was directed instead to the pockets of the powerful.

A 2000 report on governance and anti-corruption by the World Bank, in the wake of Hurricane Mitch, found that a statistically representative sample of Hondurans ranked the judiciary (excluding the Supreme Court), SOPTRAVI (the ministry that authorizes lucrative road construction contracts), and the National Police as the three most corrupt government agencies.

Not far behind came the National University, municipal governments, Supreme Court, the Army, Fondo Hondureño de Inversion Social, labor unions, and the Congress.

The five least corrupt public institutions identified in that survey were the Banco Nacional de Desarrollo Agrícola, the Ministry of Security, the Central Bank, the Ministry of Agriculture, and the Ministry of Finance.

In other words: while there has been plenty of corruption to go around in Honduran politics, from the local to the national level, Congress and the judicial branch have been more intensive sites of corruption than the executive branch.

The CNA, tied to many of the same governmental branches seen as corrupt, may have spelled its own end by its explicit endorsement of the coup d'etat. Sergio Membreño, with his prominent position in the attempt to get beyond the effects of the coup d'etat, appears to be something else.