Millions of dollars in USAID funding still flowing to Honduras

Agency bankrolling “good governance” programs to ensure the “rule of law in the country”


The taxpayer-funded Millennium Challenge Corporation has continued to move millions of dollars into Honduras since the June 28 coup d'état, but it is not alone, Narco News has now confirmed.

The U.S. Agency for International Development (USAID) is slated to provide Honduras with nearly $47 million in funding in fiscal 2009, which ends Sept. 30, 2009. Nearly all of that money (some $43 million) is scheduled to be delivered as previously planned to Honduras — which is now under the leadership of a putsch regime that President Obama has already described as “not legal.”

“Following the June 28 events [the coup] in Honduras, USAID suspended previously funded projects and activities totaling $3.7 million in basic education, family planning, and some environmental activities,” USAID press officer Lisa Hibbert-Simpson told Narco News this week. “USAID is avoiding taking actions that would undermine or interfere with humanitarian programs that directly benefit the people of Honduras and good governance activities with non-governmental organizations that are vital to ensuring stronger rule of law in the country.”

U.S. State Department spokeswoman Laura Tischler told Narco News recently that State has adopted a policy of “suspending programs we would have to legally terminate” if State declares the situation in Honduras a “military coup” under section 7008 of the US Foreign Operations Law. And she reiterated that the suspension of all such funds is still in place because State has not yet concluded its determination as to whether it will define the coup legally as such.

Section 7008 does not prevent U.S. agencies from continuing to provide assistance that is not directed to the government of the country deemed in violation of the provision, according to the State Department.

“Thus, among other things, all assistance supporting the provision of food aid, HIV/AIDS and other disease prevention, child survival, and disaster assistance, as well as elections assistance to facilitate free and fair presidential elections, is still being provided to the people of Honduras,” a State Department spokesman explained during a July 6 press briefing.

Most of that makes sense, with the exception of the last part about “elections assistance,” given that under the dictatorship of a coup regime, any hope of holding open and free elections would seem to involve stretching the laws of the universe — or at least modern democratic theory.

So where could this USAID “elections assistance/good governance” money actually be going in that case?

Well, the USAID’s Office of Inspector General provides one hint in an audit report released this past June.

The Consortium for Electoral and Political Processes (CEPPS) was awarded a $1.8 million cooperative agreement [by USAID] that is in effect from September 30, 2008 to January 30, 2010. The purpose of the agreement is to provide technical assistance to (1) the Tribunal Superior Electoral (TSE) to effectively and transparently carry out its new decentralized vote management responsibilities and to mitigate allegations of fraud; and (2) and civil society organizations to provide oversight through campaign finance monitoring, domestic election observation, and parallel vote tabulation. ...

Worth noting is the fact that TSE is the Honduran government entity charged with overseeing the nation’s elections (Honduras’ FEC of sorts) — and it is now under the control of Roberto Micheletti and company’s illegal coup regime. In addition, TSE was one of the government agencies in Honduras that played a key role in setting up the bogus legal justifications that led to the kidnapping and exiling of the democratically elected president of Honduras — Manuel Zelaya.

So it seems that CEPPS is currently providing advice on mitigating fraud to a TSE now controlled by a fraudulent regime.

And adding another layer of Alice in Wonderland plotting to the TSE/CEPPS relationship is the fact that CEPPS is a joint venture partnership involving the International Republican Institute (IRI), the National Democratic Institute (NDI) and a nongovernmental agency called IFES — the International Foundation for Election Systems.

The taxpayer-funded IRI, NDI, USAID and their sister organization, the National Endowment for Democracy (NED), have all been in the limelight in the past for allegedly playing roles in funding Hugo Chavez opposition groups linked to the failed 2002 coup d’état in Venezuela.

And along with its fellow acronym organizations, the NED is also a player in the “good governance” game in Honduras as well.

The NED’s Web site lists the following grants made to the IRI to advance “democracy” in Latin America, including Honduras:

International Republican Institute (IRI) $550,000
 To promote and enhance the participation of think tanks in Mexico and Honduras as “pressure groups” to impel political parties to develop concrete positions on key issues. Once these positions are developed, IRI will support initiatives to implement said positions into the 2009 campaigns. IRI will place special emphasis on Honduras, which has scheduled presidential and parliamentary elections in November 2009.

International Republican Institute (IRI) $400,000
 To provide elected officials with practical institutional management skills that will facilitate good governance practices, policies, and initiatives. IRI will partner with municipalities in the Dominican Republic, Guatemala, and Honduras to equip elected officials with practical institutional management skills to foster good governance practices, policies, and initiatives, and improve the quality of service delivery at the municipal level.

But what is most revealing is a “feature story,” dated July 20 (post-coup), that appears on the Web site of IFES, one of the partner organizations in CEPPS — which is now providing “good governance” services to the coup regime in Honduras.

From the story:

… To describe the events of June 28 as nothing more than a modern version of the old-style coup d’état is misguided. The coups that came to characterize much of 20th century Latin American history generally followed a common script in which the military declares martial law, discards the constitution, deposes the executive, shutters congress and the courts, and installs military officers to govern in their stead. However, in Honduras, the military acted on orders from the Supreme Court to detain a president intent on thumbing his nose at the court’s constitutional authority.

And following Zelaya’s removal from power, Honduras’s democratic institutions—its legislature, judiciary, and other government institutions—continued to function as normal. The constitution remained in force and an interim president succeeded Zelaya as the constitution mandated.

That sure sounds like a creed written to justify the usurper regime now ruling over Honduras and not a denouncement of the putsch government that the President of the United States has already publicly denounced as being “not legal.”

More from the Mad Hatters

But CEPPS is not alone in pouring gravy on the cake of democracy. Yet another USAID-funded group shows up in the mix of the coup batter: the Foundation for Investment and Development of Exports (FIDE).

FIDE is a nonprofit organization overseen by a board of directors composed of business leaders in Honduras and its president is Honduran. However, FIDE, was created by USAID some 20 years ago and its operations are funded by a trust fund set up by USAID.

One of the programs operated through FIDE, and financed by USAID, is the Trade, Investment and Competitiveness Policy (TIC). The program, launched in 2005, was slated to sunset in March of this year, according to a USAID OIG audit report released in February 2009. As of that date, a total of some $4.5 million had been awarded to FIDE for the TIC program.

And here’s what FIDE did with your U.S. tax money, according to the USAID OIG report:

The program has three interrelated components:

• Support for the Center for Economic and Social Research and Proposals (CIPRES), a think tank within FIDE.

• Direct support to the Government of Honduras in implementing free trade agreements — particularly DR-CAFTA.

• Support to a second think tank, the Economic and Social Research Center (CIES), within the Honduras National Business Council (COHEP).

In simple English, TIC was designed to advance free-trade policies in Honduras through the creation and dissemination of think-tank propaganda and by directly lobbying the Honduran government.

More from the February USAID OIG audit report:

FIDE helped draft a telecommunications law and helped garner support for the law. However, the law was subsequently tabled and its prospects are uncertain. Under component 2 of the cooperative agreement, in which FIDE hired consultants to work directly with Government of Honduras counterparts, USAID-financed consultants helped the Government weigh actions to increase competitiveness; helped it identify needed actions to comply with DR-CAFTA [a free-trade pact], especially in the area of labor rights; and drafted sanitary and phyto-sanitary regulations that were implemented by the Government.

So at least up until March of this year, a U.S.-created and -funded Honduran business group was helping to make Honduran law.

And its partner in that endeavor, COHEP, which also received USAID funding through FIDE, according to the USAID OIG report, is no friend of the left-leaning President Zelaya — who was ousted from office in late June after seeking to bring a nonbinding referendum to the people asking them to consider whether a national assembly should be convened to amend the Honduran constitution.

In fact, COHEP, an ardent free-trade advocacy organization representing more than 60 of the largest business organizations in Honduras across a range of industries, issued a statement about the June 28 coup that is remarkably similar in tone and in its flawed legal reasoning to the July 20 story appearing on the IFES Web site.

From the COHEP statement about the coup:

Following the events in the country this day, the Honduran National Business Council (COHEP) states the following:

… President Zelaya's departure comes as a result of a systematic violation, by the government he headed, of the Constitution and Honduran laws despite countless efforts by the major institutions of the country and by the majority of this country’s citizens expressed in the many calls for reflection and massive demonstrations that rejected the efforts of the Executive branch.

The new authorities headed by President Roberto Micheletti, whose mandate ends on January 27, 2010, are obligated to, during the short duration of their term; seek the general good of the country ahead of any partisan or personal interest. Honduras needs to, today more than ever, care for its democracy with unselfishness, generosity and service.

… What occurred today was the not changing of one president for another; today, framed in national unity, the respect for the Constitution, national laws, and institutionalism was achieved. …

And it is that vision of democracy that led one of COHEP’s member organizations, the Asociacion Hondureña de Maquiladores (AHM), to retain former U.S. Ambassador Roger Noriega as a lobbyist to shill for its cause in Washington, D.C. Noriega’s objective, as penned in his firm’s lobbying registration form: “Support the efforts of the Honduran private sector to help consolidate the democratic transition in their country.”

Noriega himself, of course, has a track record with USAID that dates back to the 1980s when, as part of the agency, he played a questionable role in allegedly moving around money in the shadows of the Iran/Contra scandal.

His fingerprints also mark the failed U.S.-backed coup carried out in Venezuela in 2002 and the successful U.S.-sponsored effort to oust President Jean-Bertrand Aristide from power in Haiti in 2004. Those efforts were undertaken while Noriega served in increasingly powerful roles within the State Department during the Bush administration.

Following the White Rabbit

If there is any clue as to when a push to more forcefully reverse the direction of the Honduran government under Zelaya might have gotten underway within the U.S. bureaucracy, if such an effort was indeed put into play, it seems logical to take a hard look at the waning months of the Bush administration — say in the summer of 2008, when Honduran President Zelaya made it very clear he was moving into the Bolivarian camp and away from the hyper-capitalist model being pushed b y Washington at the time.

And coincidently, at that time, the Department of State convened a major interagency meeting to brainstorm about ideas for developing a five-year Country Assistance Strategy for Honduras. The meeting — dubbed the Washington Interagency Focus Group — was attended by officials from USAID, State, the Department of Agriculture, the Department of Health, the Department of Defense, the Department of Treasury and the Millennium Challenge Corp. [the latter chaired by the Secretary of State and which counts among its board members the head of the IRI and USAID].

An Issue Paper that was drafted after that July 2008 interagency meeting, and which was based on what transpired at the meeting, makes specific reference to President Zelaya in a manner clearly characterizing him as a threat to Honduras’ democracy.

From the Issue Paper:

Although Honduras has a long history as a close friend and ally of the United States, it seems to be shifting to the left, along with the rest of Latin America. On August 26, 2008, in Tegucigalpa, Honduras, President José Manuel Zelaya Rosales signed an agreement making Honduras a member of the international cooperation organization the Bolivarian Alternative for the Americas (ALBA). ALBA is an alternative to the Free Trade Agreement of the Americas, which sought to reduce or eliminate obstacles that would hinder trade. ALBA's mission is not limited to commerce and trade; ALBA is also striving for political, economic and social integration among the countries of Latin America and the Caribbean.

Honduras’s democracy remains fragile, due mainly to endemic corruption and the government's failure to deliver on promises of economic and social development for all citizens. Equally damaging, Honduran leaders have failed to develop a truly open, transparent, and fair system of justice and rule of law, leaving the people cynical about the results of a democratic process. …

In the wake of that interagency meeting — beginning in October 2008 through the end of July 2009, as previously reported by Narco News — more than $45 million in Millennium Challenge Corp. funding was delivered to Honduras, including at least $6.5 million after the June 28 coup. The bulk of that funding was directed toward transportation projects designed to facilitate free-trade objectives in Honduras — including, MCC records show, a $7.5 million highway contract award to a construction company controlled by Elvin Santos, an alleged coup backer and the current Liberal Party candidate for president in Honduras.

In addition, in September 2008, the USAID’s $1.8 million contract with CEPPS kicked in — with the objective of advancing “good governance” in Honduras. In fact, USAID's entire budget for Honduras jumped from $37.3 million in fiscal 2008 to $46.8 million for fiscal 2009, which began Oct. 1, 2008, according to figures released by the agency. That represents a 25 percent boost in the midst of a national recession.

The $4.5 million USAID-funded TIC program involving FIDE and COHEP, according to the February USAID OIG report, was already in effect as of the summer of 2008 and was supposed to expire in March of this year — with a possibility for renewal. The OIG Audit report did make clear, however, that USAID/Honduras was not happy with FIDE’s success in pushing free-trade policies on Zelaya’s government.

From the USAID OIG audit report:

FIDE did not perform as well with respect to influencing actions by the Government of Honduras to make needed reforms to comply with DR-CAFTA requirements. … Current USAID/Honduras officials are frustrated that FIDE has not devoted more attention and energy to trying to influence the Government of Honduras to undertake needed reforms, …

The current agreement with FIDE is expected to end in March 2009, but USAID/Honduras expects to continue providing support for DR-CAFTA implementation under a new country assistance strategy that is currently under review. No firm decisions have been made about the form that this assistance will take or the organizations that will receive assistance. …

Narco News did try to determine the status of that program currently through USAID press officer Hibbert-Simpson.

“We are consulting with our Mission [in Honduras] regarding your questions about TIC and FIDE and will get back to you with more information,” she said.

Stay tuned …



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