Showing posts with label OABI. Show all posts
Showing posts with label OABI. Show all posts

Wednesday, September 11, 2013

The American Pedigree of Honduran Drug Planes

It started off simply enough.

A private jet made an unplanned stop at Goloson Airport in La Ceiba, Honduras on Sunday evening.  But it was suspicious.  The jet had not filed a flight plan with Goloson as its destination.  In fact, it had not filed a flight plan at all.  Yet its two Mexican pilots claimed Goloson was its destination, and that it was there to pick up cargo, but could not identify what cargo, or say who would provide it.  They identified the plane as belonging to a Mexican firm, but could not name it, and told Honduran authorities the plane was arriving from Toluca, Mexico. 

These authorities quickly became suspicious.  They noticed dirt on the tires of the plane, suggesting it had previously landed on a dirt airstrip, like the clandestine strips used for drug flights.  Mexican pilots have a history of showing up in Honduras on board an empty plane, leaving it parked at an airport, and flying out on a commercial flight the next day, so Mexican pilots, especially pilots who don't know what cargo they expect or who they expect it from, are suspicious.

The Honduran authorities detained the pilots and examined the jet.  All of the seats had been removed, and drug sniffing dogs reacted, suggesting that the plane had recently had a cargo of cocaine on board.

Residue from the plane later tested positive for cocaine.

But by then, the local prosecutor had released the Mexican pilots, who had flown home to Mexico the next day on a commercial flight.  She reportedly told her boss she saw no reason to hold them.

This sounds like a Mexican drug plane, right?

It did to the Honduran press, who identified the plane as Mexican, largely on the basis of who was flying it and what the pilots told them. 

But the identification number of the plane shown in pictures and reported in the news stories is N125DH.  Mexican registrations begin with the letters XA, XB, or XC. "N" begins an American registration number. Looking it up in the FAA N-number registry online shows this is officially an American-owned plane.

N125DH is registered to Aero Investments LLC, and the address on the registration is of an LLC clearinghouse in Cheyenne, Wyoming. According to the Wyoming Secretary of State's website, this LLC was founded in 2010 with the filing done by Wyoming Corporate Services, Inc..  The FAA registration indicates this plane was purchased in 2011. 

The filing address for the registration, 2710 Thomes Ave, Cheyenne, WY, was featured in this Reuters report about Wyoming Corporate Services. Reuters described the office on Thomes Street as "a little Cayman Island on the Great Plains", and described Wyoming Corporate Services as
a business-incorporation specialist that establishes firms which can be used as "shell" companies, paper entities able to hide assets.

At the time of the Reuters investigation in 2011, more than 2000 companies used 2710 Thomes Ave. as their official address.

This is not the only plane owned by Aero Investments LLC.  They also own a GulfStream 21 seat corporate jet, registration N366JA. In 2008, prior to when Aero Investments bought N366JA, it had been used by then-Senator Obama and Secret Service agents to fly from Chicago to Afghanistan. Until July, they also owned an AeroCommander 685 9 seat prop plane, N74CP, which they sold after it crashed and suffered significant damage in Texas in June.  The investigation noted that the flight was operating as a business charter at the time. 

Because the FAA database is only up to date as of August 6, we cannot know if Aero Investments LLC still owns the aircraft that landed in La Ceiba, or recently sold it to someone in Mexico.  Aero Investments could have sold the plane since then to someone in Mexico, with the paperwork waiting to get updated in the FAA backlog. The plane can be seen listed as for sale with an aircraft broker supporting the idea that it might recently have been sold to new owners.

The last entry for this aircraft in Flight Aware, which tracks flight plans, shows the plane flying from Ontario, California to Tijuana, Mexico on August 8.  After that, nothing.  This might also point to the plane having been recently sold. 

Under FAA regulations, "the seller is responsible for removing the N numbers from his/her exported aircraft when the aircraft is deregistered."  That apparently didn't happen here.

Murky ownership of drug planes is common. Several other narco-aircraft captured in Honduras have had alleged temporary or even expired Mexican registration, while their pictures showed clear N-numbers indicating American ownership.

Like the guns used in the drug trade, the aircraft used often have an American pedigree.  Aircraft confiscated in Honduras for allegedly having carried cocaine are overwhelmingly small corporate jets and twin prop planes that can carry 10 to 20 passengers and are nearing the end of their commercial lives. These planes are worth less than the drugs they can carry, and so frequently are treated as expendable.

N125DH is no exception. It was manufactured in 1971. So one last sale to a Mexican owner with a lucrative business that didn't require the plane to continue in service for very long would be profitable.

And if such a plane lands in Honduras, it might not actually be expendable. The director of the OABI, the government agency that controls confiscated planes in Honduras, recently told the press that the Public Prosecutor's office frequently returns the planes to whoever comes to reclaim them, even if there is proof the planes were used to haul drugs.

While small corporate jets predominate in Latin America, the drug trade frugally takes advantage of other aged planes. A 2008 article in the New York Daily News outlined the purchase and use of older large jets, such as DC-8s and 727s, to haul drugs between South America, especially Colombia, and Africa and Europe. Older passenger jets like this can be purchased for as little as $250,000, less than similar vintage corporate jets.

Like the US side of narco-weapons, the US side of drug planes remains largely uninvestigated by law enforcement, and largely unreported on by the US press.

One question that springs to mind that an investigative reporter might want to ask: why does the FAA have such a loose approach to transferring title on planes, and (apparently) no effective follow through when planes that were sold by US brokers to drug traffickers still carry their US registration numbers?

Friday, April 22, 2011

Mine! Mine! Mine! Oops!

The Honduran Congress is like the seagulls in the movie Finding Nemo. It shouts "mine! mine! mine!" at everything confiscated by the security forces directed by Oscar Alvarez. These government seagulls are using the funds "confiscated" from organized crime as if they are their own money, spending it outside of the official budget.

How much are we talking about? 211 million lempiras of confiscated funds and property to date. The confiscated money and property is managed by the Oficina de Administradora de Bienes Incautados (OABI) a division of the Public Prosecutor's office directed by Omar Zuniga, . The OABI has divided the 211 million lempiras between the security forces, the defense department, development projects, and funds for the poor (the 10 thousand lempira bonus program started by Lobo Sosa), as specified in the law rushed through congress last year.

Only one problem; the courts are ordering that the OABI give back some of the funds and property; three million lempiras here, another few thousand there. By the OABI's own projections they expect the courts to order restitution of an equivalent of 48 percent of the resources, or about 100 million lempiras of the 211 million lempiras currently controlled by the OABI.

This stupidity is the Ley de Disponibilidad Emergente de Activos Incautados which passed Congress in November 2010. The law demands that the OABI assign immediately, according to the specified percentages, the rights to use the funds under OABI control to the benefiting agencies. So who benefits?
The Public Prosecutor gets 26.6%
The Security Minister gets 26.7%
The Defense Minister gets 26.6%
The 10,000 lempira bonus fund gets 10%
The fund for marginal people gets 10%

Here's another stupid part: the law says the OABI guarantees the funds and guarantees the interest on any funds deposited with it. How can it do that, if it has to immediately give the funds out as windfalls to the above beneficiaries? There's no budgetary support for it to do this. The law says its up to the Finance Minister to guarantee the funds that need to be returned.

Thus, if restitutions are ordered by the court, the OABI is left with a budgetary problem, where to come up with the funds for restitution (not to mention property, which the OABI can sell). As the Zuniga, the director of the OABI notes, there is no budgetary support that guarantees the repayment should the OABI have to return funds, there's no budgetary line item in Congress for it. The law specifies that the Minister of Finance is the guarantor of the funds, so its his problem to find them, when the court orders a restitution.

Funding for the OABI comes out of the Public Prosecutor's office budget. Currently it does not include funds to manage the physical assets assigned to the OABI, the boats, houses, cars, and other physical property confiscated. Zuniga notes that for one confiscated property alone the OABI has spent 1.1 million lempiras on security and upkeep over the last several years.

Does the law seem poorly thought out, gentle reader? That's because it is. It allows the benefiting agencies to spend funds that don't really belong to the state, leaving future governments the responsibility of repaying those funds, when the courts order their repayment. By their own estimates, the courts will order repayment of about half those funds.

As we've said many times, the Honduran government is broke (and broken). This was an ill considered law that provided for windfall spending to reward a small number of powerful beneficiaries, and ones whose budgets for 2011 were already increased over previous levels. Now that the courts are ordering restitutions, the Lobo Sosa government will be forced to find funds it already doesn't have to pay back these obligations.

We doubt it will have the political will to take back these funds from future budgets of these powerful agencies, so look for further cuts in the budgets of education, culture, and development, already reduced in this year's Lobo Sosa budget.