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Zelaya Legacy: Corruption and Deficits

Manuel Zelaya's administration pilfered education funds, accepted bribes and made unauthorized budget increases, officials say.


Manuel Zelaya, the ousted president of Honduras, not only caused a political crisis before being forced from office last month. He also significantly deteriorated Honduras’ economy while boosting corruption.

While Zelaya inherited a Honduras with a fiscal deficit of 2.6 percent of GDP from his predecessor, Ricardo Maduro, he left behind a country with an estimated deficit of 5 percent. That’s more than twice the rate budgeted in the official monetary program for 2009-10, Honduran newspaper La Prensa reports.

Among the key reasons was a boost in public sector salary expenditure, which jumped from 17 billion lempira (US$918 million) in 2006 to 27.5 billion this year, the paper reports.

Former finance minister Arturo Alvarado tells La Prensa that Zelaya repeatedly broke the law by boosting expenditures that weren’t authorized by the country’s national assembly.


Meanwhile, Honduran authorities are reporting massive embezzlements during the Zelaya government in entities ranging from the state telecom company Hondutel to the education ministry.

Zelaya’s nephew, Marcelo Chimirri, was arrested earlier this month on charges of corruption at Hondutel while he led the company. He has been specifically linked to a $1 million bribe he and four other Hondutel officials allegedly received from LatiNode, a now-defunct telecom company in the United States. As a result of the illegal deal with LatiNode, Hondutel lost an estimated $400 million in business it otherwise would have gained, La Prensa reports.

“About $100 million ''disappeared'' from the company after Chimirri's arrival,” Otto Reich, a former Latin America advisor for President George W Bush, wrote in The Miami Herald recently.


After Reich had complained that Zelaya had condoned the corruption at Hondutel, Zelaya said he would sue him for slander. He sent emissaries to Miami to find a law firm, but never actually filed any suit.

”I have yet to receive notification of a suit, nor do I expect one,” Reich wrote. “Not because Zelaya is no longer in power but, because, like so many of Mel Zelaya's actions, the much-ballyhooed lawsuit was a fake, a ruse to portray him as the innocent victim.”

Authorities are also investigating embezzlements at the Education Ministry worth some 1.3 billion lempira, La Prensa reports.


Honduran business leaders yesterday reiterated their support for the ouster of Zelaya in a meeting with president Roberto Micheletti. “We’re here to support the brave actions of the new government,” stated Santiago Ruiz, president of the Agriculture Association of Honduras. He urged Honduras’ new government to formally leave ALBA, the political-economic alliance led by Venezuelan strongman Hugo Chavez.

Adolfo Facusse, the president of the National Association of Industrialists (ANDI), assured Micheletti that any foreign sanctions would be met with a united effort by local business leaders to mitigate the effects, including accepting additional taxes to help the government, La Prensa reports.

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