<i>"The Name of Our Country is América" - Simon Bolivar</i> The Narco News Bulletin<br><small>Reporting on the War on Drugs and Democracy from Latin America
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Pro-Coup Honduras Presidential Candidate Elvin Santos Is a Key Beneficiary of Continued US Government Funding

The Liberal Party Nominee’s Construction Company Enjoys a Multi-Million Dollar Contract, Government Records Show


By Bill Conroy and Al Giordano
Special to The Narco News Bulletin

August 14, 2009

A taxpayer funded US foreign aid agency, chaired by Secretary of State Hillary Clinton, earlier this year inked a multi-million dollar contract with a company controlled by one of the ringleaders of the recent coup d’état against the democratically elected president of Honduras, according to documents obtained by Narco News.

Despite representations to the contrary by the State Department, that foreign-aid agency, called the Millennium Challenge Corp., has continued to funnel money — some $6.5 million in July alone — into Honduras since the coup, money that is going into the coffers of the companies it contracts with in Honduras.


US Secretary of State Hillary Clinton in June 2009 with Honduras Pro-Coup Presidential Candidate Elvin Santos, a Construction Contractor Who Receives $7.5 Million in US Taxpayer Dollars through the Millennium Challenge Corporation, on which Clinton Chairs the Board of Directors
One of those companies, MCC’s own documents confirm, is Santos y Compañia, whose CEO is the former vice president of Honduras, the Honduran Liberal Party’s presidential candidate in the upcoming November elections and a key figure in the putsch that drove Honduran President Manuel Zelaya from power at gunpoint on June 28. In February of this year, MCC’s partner agency in Honduras, a Honduran government-controlled entity called MCA-Honduras, effected a $7.5 million road-improvement contract with Santos y Compañia as part of the U.S. agency’s broader five-year, $215 million aid package to Honduras.

Santos stepped down as vice president of Honduras last December upon winning the Liberal Party nomination for president for the November 2009 elections. In the wake of the June 28 coup, the putsch government of Honduras installed the head of Congress, Roberto Micheletti, also of the Liberal Party, as the regime’s de facto president. Santos, who would end up the next leader of the coup regime if successful in Honduras’ November “election,” has described Zelaya’s pre-coup efforts to explore amending the Honduran constitution, with voter consent, as a path to dictatorship.

Subsequent to the June 28 coup d’etat Santos – who, as a presidential candidate has access to top-shelf public opinion polling data – has attempted to backpedal from his golpista reputation. “I will go to all corners of the country to explain that I was in no way a part of the events of June 28,” Santos told Channel 5’s “Frente a Frente” program on August 5. “The huge mistake was taking him (Zelaya) out of the country and leaving him defenseless.”

But on that same day last week, Santos then went to the national university and upon being booed and cat-called by students, his private bodyguards pulled out pistols – caught on video – to threaten the youths. Students responded to his provocation by blocking a street outside the university, and National Police troops were nearby, ready and waiting with a violent attack that included knocking the university’s rector to the pavement.

Santos’ company is not alone in benefiting from U.S. taxpayer funding via MCC. Two other large road-construction contracts awarded as part of MCC’s aid compact with Honduras were snared by multi-national companies — both of which have done their part to advance the great NAFTA highway through the heart of Latin America.

And that’s what the MCC assistance seems, in the main, to be directed at in Honduras — providing millions of dollars for highway improvements that will help speed the delivery of maquiladora-produced goods through the heart of the nation to a port on its northern Caribbean coast.

In the Oven

In September of last year, MCA-Honduras awarded a $48.4 million highway-improvement contract to a consortium formed by Costa Rica-based FCC Construction Central America SA (formerly known as M&S International Corp. CA). FCC describes itself as a pioneer in opening up international markets with a history of success in Central America.

Earlier this year, FCC also retained a law firm in-country, Garcia & Bodan Honduras, to advise it on corporate and tax matters. Interestingly, FCC, as part of its global aspirations, also is doing contract roadwork in Nicaragua on MCC’s dime. (Actually, that would be on your dime, if you’re a U.S. citizen, given MCC is funded by taxpayers).

Another big winner in the MCC funding game in Honduras is the Italian construction giant Astaldi, which shows up in the MCA-Honduras contracting records as having been awarded two highway-improvement contracts with a total value of some $40 million — both of which went into effect in July 2008.

In 2007, Astaldi also landed a contract from the government of Honduras to complete the infrastructure work for a huge tourism project (a hotel, condos, retail and eventually a golf course) in Tela Bay on Honduras’ Caribbean coast. The indigenous Garifuna peoples who live in the area oppose the project, fearing it will wreak havoc on their lands and way of life.

From a September 2007 report by Chiapas Indymedia:

In the next few weeks the Atlantic Coast of Honduras will once again be featured in the Italian TV reality show “The Island of the Famous.” This year’s participants will include Astaldi, the second-largest Italian construction company. Astaldi has just won a contract from the government of Honduras to build the basic infrastructure of a mega-tourist resort “Los Micos Beach & Resort Centre” along the coast of Tela Bay, on the Caribbean coast of Honduras. The local Garífuna residents are adamantly opposed to the project, which will have a devastating environmental, social and economic impact on their lands.

So it appears, along with the company run by golpista Santos, MCC also puts its money into some big multi-national players, such as FCC and Astaldi, all in the interest of free trade — a universal trump card that appears to trump even democracy in the MCC playbook.

The highway-improvements project FCC is tackling with MCC funding in Honduras, for example, specifically involves a stretch of road that is used by some 7,000 vehicles daily, a third of which is truck traffic. Arguably, the entire MCC-funded highway-improvements effort in Honduras, including Astaldi and Santos’ parts, is aimed at juicing up the lanes of commerce for free trade.

So this may well be a case where the interests of the Honduran coup leaders, many of them oligarchs of the business class, go hand in hand with the free-trade agenda of the MCC — with all the consequent negative impact on poor populations in terms of displacement and environmental degradation.

If so, it certainly seems to be a lucrative business. An audit of MCC’s Honduras program conducted by the Office of Inspector General for USAID and made public in late December 2008 reveals that the $126 million reserved for road work — out of the MCC’s total five-year, $215 million Honduran aid package — was not quite cutting the mustard due to unexpected costs associated with the work. As a result, the OIG reports, the government of Honduras secured an additional $130 million loan from the Central American Bank of Economic Integration to supplement the MCC funding for the planned highway work.

So, when the bank loan money is added to the total MCC kitty, the entire wad in play — and now under the watch of an illegal putsch regime — is some $345 million. To date, only about $80 million of those MCC funds have been disbursed in Honduras, including at least $6.5 million in July alone — post-coup. That means there is a big chunk of change still in the pipeline that by necessity of MCC’s structure will flow through the Honduran government first, a government now run by a criminal enterprise under increasing economic pressure due to worldwide isolation and sanctions.

Yet MCC is so far crossing the picket line erected by the Organization of American States (OAS) including the US State Department’s claims that it has put all financial aid “on pause” pending review. There are roads to build, goods to sell and company budgets to meet — including, apparently, the budgets of company’s controlled by coup-plotters like Santos.

MCC spokeswoman Sarah Stevenson confirmed to Narco News this week that her agency’s funding pipeline remains open in Honduras. And if it stays open, according to MCA-Honduras’s own records, another $135 million will be disbursed over the course of this year and 2010 to fund the $192 million in contracts already awarded — a figure that is expected to grow.

Stevenson said that Honduras is expected to be on the agenda at MCC’s next board meeting on Sept. 9,:

“… While the MCC board [chaired by Secretary of State Hillary Clinton] is concerned with the situation [in Honduras] and is monitoring it closely, we are moving ahead with projects underway in the country,” Stevenson says.

Contracts Online

For a list of MCC contracts awarded in Honduras through June of this year, go to this link.

If readers have additional information about the companies that are recipients of continued US aid, and the political activities of their owners, drop a dime: narconews@gmail.com.

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The Narco News Bulletin: Reporting on the Drug War and Democracy from Latin America