MONEY TALKS IN U.S. POLICYC TOWARD HONDURAN PUTSCH REGIME

COMMENTARY ARCHIVES, 15 Sep 2009

Bill Conroy

Despite recent State Department aid-cut media show, millions of taxpayer dollars continue to flow into Central American country

The U.S. government’s policy toward the de facto government that now rules Honduras can best be described as two-faced — expressing rhetorical outrage publicly while quietly continuing to prop up the putsch regime economically behind the scenes.

To date, the U.S. government has declined to declare officially that the June 28 overthrow and exiling of democratically elected Honduran President Manuel Zelaya was carried out via a “military” coup d’état — thereby avoiding the invocation of a U.S. law that would mandate a draconian cutoff in U.S. aid to the Honduran government.

However, in its diplomatic dance with terminology, the Department of State, under the leadership of Secretary Hillary Clinton, is telling the media that what happened in Honduras on June 28 was still a coup d’état — absent the military modifier.

From a Sept. 3 press State Department press briefing:

… The President made clear very early on, and the Secretary [of State, Hillary Clinton] as well, this was a coup d’état. … The Secretary is not required by our law to come to a conclusion regarding what type of coup it is in order to cut off assistance. She cut off assistance because it was a coup d’état. …

But that’s where the rub is, the little matter of “assistance.”

Earlier this month, for the second time since the coup played out in late June, the Department of State ginned up U.S. press coverage of its efforts to ratchet up the economic pressure on the de facto Honduran regime, led by strongman Roberto Micheletti.

But despite the media show, as of today, more than two months after the coup and a little more than two months before Honduras’ scheduled presidential elections, nothing has changed — including the fact that the U.S. government continues to send millions of dollars in foreign aid to Honduras, which continues to be ruled by an illegal, thuggish junta.

The Evidence

The board of directors of the Millennium Challenge Corp., a U.S. aid agency funded by taxpayers and chaired by Secretary of State Clinton, on Sept. 9 issued a press release indicating that it had voted to terminate $11 million in funding for Honduras related to two transportation projects and also to "put on hold" another $4 million in assistance pegged for yet another road project.

The road-improvement funding is part of a five-year (2005-2010), $215 million aid compact between MCC and the government of Honduras.

“Good governance and accountability are at the heart of our poverty reduction programs, and governments that are inconsistent in these areas jeopardize not only MCC funding, but also the long-term impact that good policies can have on growth in their local economies,” MCC’s Acting CEO, Darius Mans, said in a prepared statement announcing the Honduran aid cut.

But was it really an aid cut?

MCC spokesperson Sarah Stevenson told Narco News last week that as part of her agency’s $215 million compact with Honduras, as of Aug. 31, MCC had “committed approximately $191 million to contracts; approximately $91 million has been disbursed” — actually sent to Honduras.

She added that the $11 million in funding terminated at the Sept. 9 board meeting involved money not yet committed under contract. Although she failed to address the $4 million put on hold, the MCC press release makes clear that money also is linked to funds that have not been “contractually obligated.”

A simple math computation tells us, then, that MCC still has some $100 million in contractually committed funding to deliver to the putsch regime in Honduras between now and the end of 2010.

In fact, according to recent reports released by the Honduran Central Bank, MCC has delivered $10.7 million to Honduras since the June 28 coup — including $3.8 million in late August, a little more than a week prior to MCC’s funding-termination media show. And the balance of the MCC funding can be expected to continue to flow into Honduras, to the benefit of the putsch regime, to the tune of an additional $100 million, in the weeks and months to come.

U.S. Ambassador to Honduras Hugo Llorens has previously stated that terminating the remaining $100 million in contractually committed MCC funding in Honduras would create major legal liabilities for the U.S. government. But that assessment seems to be a dodge, if not an outright fabrication.

The MCC aid funds are distributed to Honduras through an independent government agency, called MCA-Honduras, set up in Honduras under that nation’s laws and whose board is dominated by members of the putsch regime. In addition, MCC’s own compact language makes clear that “MCC is not a party” to the contracts inked by MCA-Honduras with vendors.

From MCC’s Web site:

These [contract] procurements are awarded and administered by the country [Honduras] through an “accountable entity” (also known as an “MCA Entity”) … established by the country to manage the programs identified in their Compact. MCC is not a party to these contracts.

So, it would appear, based on the structure of its funding program, if MCC chose to cut off the remaining $100 million in contractually committed aid under the Honduran compact, it would be the Honduran putsch regime that would be on the hook legally and economically for making good on the contracts— and not the U.S. government.

Deception or Dysfunction?

Within days of the June 28 coup in Honduras, the U.S. announced that it was suspending some $20 million in assistance to the Central American nation. Then, in early September, the State Department began beating the drums again over its plans to terminate some $30 million in aid to Honduras — a figure that includes the $11 million in terminated MCC funding.

What has consistently not been made clear in most mainstream press coverage of the State Department-trumpeted aid cuts is the fact that there was no new money involved between the initial announcement of aid cuts in July and the September announcement. As evidence of that fact, here’s what a senior administration official told the press at the Sept. 3 State Department press briefing announcing the $30 million in foreign aid cuts related to Honduras:

The [$20 million in] aid that was – as you know, that was suspended right after the coup … was formally terminated today.…

The MCC is another 11 million, which had already been suspended, and we are working very closely with MCC looking in terms of formalizing that. [That $11 million in already suspended aid was terminated officially at the MCC’s Sept. 9 board meeting. Emphasis added.]

So, in effect, since the earliest days of the coup regime in Honduras, the U.S. has done little more than repackage and rebroadcast the same aid cuts to appease the media and to complement its rhetorical position of being against the coup. But behind the scenes, the economic effect of the aid cuts has been little more than symbolic posturing.

As an illustration of this shifting repackaging effort, following are a series of statements issued by State Department and USAID officials since the June 28 coup — all referring to the same pool of USAID funding cuts that were part of the larger $20 million aid reduction announced in July and then re-announced in early September (along with the termination of the previously suspended $11 million in MCC aid).

[Emphasis added by Narco News.]

• From a July 6 State Department press briefing:

The assistance suspended by USAID thus far totals approximately $1.9 million. …

• From the Sept. 3 State Department press briefing:

The aid that was – as you know, that was suspended right after the coup … I’ll run down a couple numbers for you – 9.4 million from USAID. [Senior Administration Official Three], chime in here if I get any of this wrong.

• From an Aug. 27 statement provided to Narco News by USAID press officer Lisa Hibbert-Simpson:

USAID’s actual FY 2008 budget for Honduras was $37.3 million. In FY 2009, USAID expects to provide to Honduras $46.8 million. Following the June 28 events in Honduras, USAID suspended previously funded projects and activities totalling $3.7 million in basic education, family planning, and some environmental activities.

• From a follow-up Aug. 31 statement provided to Narco News by Hibbert-Simpson — which relays the official response of USAID’s Honduras Mission:

Thanks for your inquiry. USAID’s actual FY 2008 budget for Honduras was $37.3 million. In FY 2009, USAID expects to provide to Honduras $41.7 million. Following the June 28 events in Honduras, USAID suspended previously funded projects and activities totaling $3.7 million in basic education, family planning, and some environmental activities.

• From a Sept. 4 statement provided by USAID’s Hibbert-Simpson, which attempts to reconcile the varying USAID funding-cut figures:

The $3.7 million is a part of the $9.4 million. There was $3.7 million in remaining previous year’s money and $5.7 million in FY09 money which brings the total to $9.4 million.

As those statements illustrate, the supposed USAID component of the $20 million/$30 million in funding cuts targeting the Honduran junta announced initially in early July has fluctuated from $1.9 million, to $3.7 million to $9.4 million at the same time USAID itself reports two different fiscal 2009 total funding figures for Honduras.

In addition, as the State Department itself acknowledges, the supposed new $11 million funding termination related to MCC was, in fact, simply a formalization of a previously announced (in mid-July) funding suspension.

But despite the barrage of convoluted number schemes unleashed on the media, no matter how you cut it, at a minimum in the case of MCC and USAID combined, Honduras is still in line to receive more than $130 million in U.S. tax dollars. And that continues to be the case even though the country is now ruled by a coup regime publicly deemed illegitimate by both the U.S. President and Secretary of State.

In addition, the “funding cuts” announced to date with respect to MCC — the major source of foreign aid to Honduras — involve only a promise of future aid and not the tens of millions of dollars already committed to the country to fund contracts now under the legal control of the putsch regime.

That is the story not being told by the mainstream media.

But this two-faced U.S. policy toward the Honduran coup regime is really nothing new in the history of U.S./Latin American relations — which are marked by a tendency on the part of the U.S. government to undermine Latin American democracies when it proves convenient (and in the interest of the oligarchs in control of the region’s crony capitalism). In that dynamic, the now-exiled President Zelaya crossed a line in his move to embrace synergy with Venezuela’s Hugo Chavez — including Zelaya’s decision to join the ALBA, the Bolivarian alternative to U.S.-backed free-trade initiatives.

Henry Kissinger was brutally honest about the U.S. diplomatic reality in Latin America, when commenting decades ago on the government of democratically elected President Salvador Allende of Chile — who was overthrown in a 1973 U.S.-backed coup that led to Allende’s assassination and a subsequent reign of terror by the dictator General Augusto Pinochet.

I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its own people. The issues are much too important for the Chilean voters to be left to decide for themselves. — Henry Kissinger, Secretary of State under President Richard Nixon

Under Secretary of State Clinton, that fundamentally anti-democratic foreign policy appears to continue to be the status quo for Latin America — absent a much more hands-on effort to change that course by the president of the United States.

Stay tuned. …

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