Clinton Continued Funding For Honduras Coup Regime

By Bill Conroy

July 10, 2015 "Information Clearing House" - "Narco News" - Clinton Asked Lanny Davis, Longtime Clinton Operative and Lobbyist for Pro-Coup Honduran Businesses, to Arrange Phone Meeting with Coup Dictator

Buried in the latest trove of Hillary Clinton emails made public last week are some missives that shed new light on the former Secretary of State’s role in seemingly undermining President Barack Obama’s policy in dealing with the 2009 coup d’état in Honduras.

The official emails recently made public by the State Department —more than 3,000 pages worth — were sent or received primarily in 2009 through Clinton’s private email account — via an email server set up outside the government’s system and used to conduct official business.

One email exchange discovered in the recently released batch of State Department communications reveals that Clinton personally signed off on continuing the flow of US funds to the putsch regime in Honduras in the fall of 2009 — even as the White House was telling the world that such aid had been suspended.

Another email exchange involving Clinton shows that she turned to a lobbyist employed by Honduran business interests suspected of orchestrating the coup to get access to the Roberto Micheletti, the “de facto” president of the putsch regime. Micheletti assumed power after the democratically elected president of Honduras, Manuel Zelaya, was removed from office at gunpoint on June 28, 2009.

The lobbyist Clinton favored in her dealings with Micheletti was Lanny Davis — a long-time friend whom she had met while at Yale Law School and a former White House Counsel to Bill Clinton [as well as a consummate shill for the Clinton agenda].

Davis also is a lawyer and lobbyist and in the latter capacity was retained in July 2009 by the Business Council of Latin America (CEAL) to hawk for the Honduran coup regime, including Micheletti’s illegal administration.  

In an Oct. 22, 2009, email sent by one of her top aides, with the subject line, “Re: Lanny Davis,” Clinton asks: “Can he [Lanny Davis] help me talk w Micheletti?

Although there is not enough context in the email trail to determine precisely why Clinton wanted to speak with Micheletti, or why she felt a need to go through Davis to do so, the date on the email offers a clue as to what might have been going on at the time.

Late October of 2009 is around the time that the US, in particular the State Department, was pressing the coup government in Honduras to accept the Tegucigalpa-San José Accord, which, among other things, called for a unity government, a truth commission and the return of Zelaya to the president’s office to finish the final few months of his term. It was essentially a deal designed to end the political crisis sparked by the coup d’état and to also create an air of legitimacy for the fall 2009 elections in Honduras.

The accord ultimately fell apart, with Davis penning an op/ed for the Wall Street Journal in which he blamed its demise on Zelaya. The November 2009 elections went forward under the terror imposed by the coup government, with less than 50 percent voter turnout, and Clinton’s State Department was quick to claim a victory for democracy in Honduras in the wake of the ballot.

The man ultimately elected to replace Micheletti as president, Porfirio “Pepe” Lobo Sosa of the conservative National Party, was himself one of the backers of the coup and ultimately granted amnesty to all those involved in planning the putsch. His administration then proceeded to hire Davis’ firm, Lanny J. Davis & Associates, to help with the task of putting a PR shine on the new Lobo government.

But as Davis attempted to orchestrate his magic spin over the last half of 2009, he and his Honduran employers had to confront the harsh reality of an Obama White House that had declared that the coup regime was not legitimate. Consequently, the White House had taken the draconian step of suspending all US aid to Honduras that legally had to be terminated in the event of a military coup d’état — as mandated under Section 7008 of the U.S. Foreign Operations Appropriations Law.

That White House-invoked aid suspension, which was supposed to apply to all programs implicated under Section 7008, should also have included any funds being provided to Honduras through a US-backed aid agency known as the Millennium Challenge Corporation. MCC is funded by taxpayers and overseen by a board that is chaired by the Secretary of State. But despite the White House policy on aid suspension to Honduras, the MCC continued to send millions of dollars monthly to the putsch regime in Honduras.

In fact, a Narco News investigation at the time showed the MCC delivered $10.7 million to Honduras in the two months following the June 28 coup and had another $100 million or so in contractually committed funds in the pipeline to be delivered in 2010. As chair of the MCC, Clinton should have been well aware of this flow of dollars to a regime deemed illegitimate by her boss, President Obama, but proof of that direct knowledge could not be verified previously.

The State Department email trail recently made public, however, shows for the first time that Clinton did know that MCC funding was continuing to pour into Honduras — even as publicly the White House, as well as the State Department, were telling the nation that such US aid had been suspended.

In an Aug. 29, 2009, email exchange involving Clinton and one of her top aides, Clinton is made aware of a looming deadline related to a report the MCC was required to make to Congress. The communication made clear that Clinton had to let Congress know by Sept. 10, 2009 — during the heat of the Honduran-putsch crisis — whether the MCC board planned to prohibit Honduras from receiving further funds because its legitimate head of government had been deposed by a military coup.

Further, Clinton herself was being asked to weigh in on that funding decision, according to the email exchange — which included the following analysis from a State Department legal advisor:

The Millennium Challenge Act of 2003 requires the submission of a report to Congress and publication in the Federal Register of a list of countries that are candidate countries for MCC assistance, and countries that would be candidate countries but for "specified legal prohibitions on assistance."

Honduras is a candidate country. If Honduras is subject to the restrictions in section 7008 [of the Foreign Operations Appropriations Law], it would be listed in that section of the report that identifies countries that would be candidate countries but for legal prohibitions that prohibit assistance. The report would also provide an explanation of the legal prohibition (in fact, other coup restricted countries, such as Cote d'Ivoire, Madagascar, Mauritania, and Sudan, are on the prohibited list and section 7008 is explicitly mentioned).

The list must be approved by the Board of the MCC, of which the Secretary [Hillary Clinton] is the chair, and is due on 9/10. It is our understanding that an action memo will be presented to the Secretary, perhaps as early as next week, so that she can approve submission of the report. The action memo will require the Secretary to decide whether Honduras is a country without a "specified legal prohibition" or whether such a prohibition has in fact attached. [Emphasis added.]

It’s worth noting again, that in July and August of 2009 alone, seemingly in direct opposition to the Obama administration’s wishes, the MCC funneled nearly $11 million to the coup regime in Honduras. Among the Honduran companies benefiting from the MCC aid in 2009, in the form of a  $7.5 million road-improvement contract, was Santos y Compañia, whose CEO, Elvin Santos, was a former vice president of Honduras, a 2009 presidential candidate and a key supporter of the putsch that drove Zelaya from power.

Now, with a report due to Congress, MCC and Clinton could no longer continue propping up the putsch government’s finances in the shadows. Congress wanted an official report.

If Clinton listed Honduras as a prohibited country in terms of Section 7008, the balance of the $100 million in MCC funds slated for the Honduran regime would be suspended. If not, the aid would continue to flow.

As important, the wording of the email from the State Department legal advisor makes clear that the MCC funding did fall into the category of US aid that would be suspended under a Section 7008 trigger event, such as a “military coup.” And the Obama administration’s position at the time was to suspend immediately all aid to Honduras that is subject to Section 7008, whether it was officially triggered or not.

Regardless, Clinton did not act to prohibit Honduras from receiving the MCC funding. A copy of the Sept. 16, 2009, Federal Register shows the report the MCC board sent to Congress includes Honduras as a nation still eligible to receive assistance.

And so, over the balance of 2009 and through most of 2010, MCC funds continued to flow into the coffers of the Honduran coup regime and its successor government, which was empowered by the suspect November 2009 elections and embraced by pro-putsch lobbyist Lanny Davis and then-Secretary of State Hillary Clinton.

In early September 2010, the five-year MCC funding program in Honduras, known as a compact, came to an end marked by these words from Secretary Clinton:

“The Millennium Challenge Corporation compact is a crucial part of our commitment to work as partners with the people and Government of Honduras to reduce poverty and promote effective, sustainable development throughout the country and across Central America. … The MCC compact has helped lay the foundation for a brighter future for all Hondurans.”

But not everyone agrees that “brighter future” has materialized in the wake of the Honduran coup regime, which the MCC funding arguably helped to empower.

Dana Frank, professor of history at the University of California, Santa Cruz, and an expert on human rights and U.S. policy in Honduras, told Narco News previously that the “2009 military coup that deposed democratically-elected President Manuel Zelaya … opened the door to a free-for-all of criminality in Honduras.”

“Since then,” she added, “organized crime, drug traffickers and gangs have flourished, worming their way ever-higher within the Honduran government, courts, attorney general's office and congress.”

Likewise Joy Olson, executive director of the Washington Office on Latin America, a nongovernmental organization focused on human rights, democracy and social justice, said the coup did have a major destabilizing influence on the institutions in Honduras that were already very weak, “and criminal elements took advantage of that space.”

Honduras as of 2014 had the highest murder rate in the world, United Nations data shows. And both the police and military have been implicated in extrajudicial murders in Honduras, according to a 2013 State Department human rights report.