Powerful Honduran family charged with laundering drug money by U.S. (Oct. 8, 2015)
Three members of a powerful Honduran family -- including former vice president Jaime Rolando Rosenthal, one of the country's wealthiest men -- were indicted in the U.S. yesterday, charged with laundering money. Also charged was his son, Yani Rosenthal, a former cabinet minister, and his nephew Yankel Rosenthal, a soccer club manager and former minister of investment who was arrested Tuesday evening in Miami.
They are accused of laundering money for some of the largest Central American drug syndicates through accounts in the United States, according to the Treasury Department, which also announced sanctions against the three family members.
In a statement yesterday the U.S. Justice Department said the three, as well as seven businesses were labeled "specially designated narcotics traffickers" under the Kingpin Act, reports the Associated Press. The men "provide money laundering and other services that support the international narcotics trafficking activities of multiple Central American drug traffickers and their criminal organizations," the statement said.
All three Rosenthals were named "Specially Designated Narcotics Traffickers," and added the family bank, meat packing plant and investment arm, among other businesses, to its "Specially Designated Nationals" (SDN) list, which prohibits others from doing business with these companies or face sanctions, reports InSight Crime.
Jaime and Yani Rosenthal released a statement yesterday denying the accusations against them. "We have never been involved in illegal acts, much less in drug trafficking or money laundering activities." They are apparently still free in Honduras, but U.S. authorities arrested Yankel Rosenthal in Miami on Tuesday.
A senior U.S Treasury Department official, quoted in the AP said that it was the first time the Kingpin Act had been used against a foreign bank. He called it "one of the most significant money laundering networks in Central America."
The charges come as a shock in Honduras, where such powerful figures are generally granted impunity, reports the New York Times. The piece quotes Steven Dudley, co-director of InSight Crime, who says it might be a warning from U.S. officials to the small elite that controls most of the country. "This is a shot across all the elite’s bows in Honduras," he said.
Four months ago, InSight Crime actually interviewed Jaime Rosenthal and his daughter, asking them why they did extensive business with the Chachiros, formerly one of the region's most powerful drug trafficking clans. "The answer, it turns out, is pretty simple: it was good business."
The interview is pretty gripping, especially in light of this week's developments. "Rumors have swirled for years about the Rosenthals’ relationship with the Rivera Maradiaga (los Chachiros) family, but nothing has ever been written about it, until now. ... Despite their years of doing business together, the Rosenthals say they did not know the Rivera Maradiaga family was involved in drug trafficking and other nefarious activities until the US Treasury declared them targets in September 2013."
The NYTimes piece notes that the move comes as corruption is a headline issue in Honduras. Specifically reports about $350 million looted from the country's health and social security institute, parts of which were funneled into the election campaign of President Juan Orlando Hernández.
Yesterday the Miami Herald reported that corruption in Honduras -- rather despair caused by the entrenched and unpunished scandals -- is fueling immigration to the United States, joining more traditional causes like poverty and insecurity.
Calls for an international independent group to help root out corruption, like the U.N. backed International Commission against Impunity in Guatemala (CICIG) this year panned out into a less ambitious assistance from the Organization of American States to assist Honduran officials. The NYTimes quotes the Wilson Center's Eric Olsen who says the initiative might not be enough. "The internationals will supervise and advise the attorney general in Honduras, but that could mean just about anything and doesn't give them the solid legal ground to take on politically charged cases," he said.
The Brazilian Court of Accounts (TCU), the government-accounting watchdog, decided unanimously yesterday that President Dilma Rousseff's administration manipulated the country’s 2014 revenue and spending figures, reports the Wall Street Journal. The decision throws fuel onto possible plans to impeach Rousseff and add to the political and economic turmoil already affecting Brazil. The TCU found that the administration overstated tax receipts and hid expenses. It's recommending Congress reject the government accounts.
Andrés Oppenheimer at the Miami Herald makes the case -- building on an interview with Mario Vargas Llosa -- that corruption is the region's most important problem. He uses the example of Brazil, which he says is facing economic disaster almost entirely due to the fact that investor confidence is affected by the massive corruption scandals affecting the government and top politicians. He extends the example to Mexico, Chile, Venezuela and Argentina. Oppenheimer does quote the IMF's World Economic Outlook released earlier this week, but it still seems like a bit of an over-simplification ... Earlier this week the IMF pinned the fault for the region's likely recession to the Chinese economic slowdown which has reduced demand for Latin American commodities, reports the Associated Press. And a similarly negative forecast from the UN Economic Commission for Latin America and the Caribbean (ECLAC) also points to the strengthening of the dollar and increased volatility in financial markets, reports the Latin American Herald Tribune. World Bank officials emphasized the importance ofprotecting employment while at the same time designing support systems for the vulnerable that don't disincentivize employment. But hey, why allow complicating factors to mess up an interesting sounding argument?
Mexican army troops should be allowed to answer questions from the a panel of experts from the Inter-American Commission on Human Rights (IACHR) regarding the the abduction and apparent massacre of 43 trainee teachers last year in Iguala, said U.N. High Commissioner for Human Rights Zeid Raad al-Hussein, reports Reuters. Earlier this week Defense Secretary Salvador Cienfuegos rejected a request from the experts to interrogate soldiers who were in the area at the time of the attack on the students. Cienfuegos denies any possibility of involvement by soldiers. (See yesterday's briefs.) The case of the missing 43 students, along with the so-called Tlatlaya Massacre last year of 22 alleged gang members joins a growing list of human rights violations in Mexico. But the evidence isn't enough to convince some conservative factions, reports Proceso. Rather some pundits are pointing to a "conspiracy" of foreign funded human rights organizations to pin the blame for alleged violations on the Mexican army. "The delusions would be an exceptional case if we were not before an intense media campaign of the National Defense Secretary and it's head, Salvador Cienfuegos, to deny any responsibility "by commission or omission" in these cases and, above all, to warn that the Mexican Armed Forces are not accountable to any group of experts or international body," writes Jenaro Villamil. The accusations against military troops add force to the argument, also advanced by Zeid yesterday that the Mexican government must set a timetable for withdrawing military personnel from law-enforcement duties and replace them with a well-trained police force, reports the Associated Press. He was scathing in his evaluation of how Mexico's security and justice institutions have failed citizens: "No one in Mexico can feel safe," Zeid said. "They're not enjoying the protection of the law."
On the subject of militarized security strategies, InSight Crime reports that Peña Nieto's mass deployment of 5,000 federal agents (made up of federal police, army and marine units) to the southwest state of Michoacan is reminiscent of his predecessor's militarized security strategy in the violence-wracked state. But there is little reason to believe this surge will have better results than previous ones, argues the piece.
The Wall Street Journal reports on an advance draft of a bill Mexican President Enrique Peña Nieto will soon be sending to Congress, which aims to improve and coordinate efforts between federal and state authorities in the search of missing people. The issue is of critical importance in Mexico, where over 25,000 people are estimated missing in the past nine years or so -- since the government declared "war on drugs." (See Sept. 28th's post.) According to the WSJ, the proposal would include the creation of specialized units dedicated to the search for missing people at the federal and state attorneys general offices, these would have real-time information sharing mechanisms. In addition, the bill would enhance an existing registry of missing people, and a new national forensics registry would include genetic data from unclaimed corpses or corpses found in common graves. The bill would also define two new types of crimes: forced disappearance by private people, and forced disappearance by authorities, which would carry prison terms of 90 and 100 years, respectively.
Colombian President Juan Manuel Santos sent a trio of proposed candidates for the country's Constitutional Court to Congress yesterday. It's the first time the candidates were selected through a public process, rather than presidential prerogative. El Tiempo notes that the selection of the magistrate -- Congress must choose from the three candidates -- is key because the Constitutional Court will be a critical in consolidating the agreements reached with the FARC (see Sept. 24th's post). Silla Vacía reviews the three candidates, noting that all are well-considered prestigious lawyers, all liberal, who will safeguard the peace process.
Colombia's public prosecutor has called for an investigation into whether former president Alvaro Uribe was linked to a 15-person massacre carried out by paramilitaries in 1997, reports the Associated Press.
U.S. Secretary of State John Kerry pledged continued U.S. support for the Haitian presidential elections, slated to take place Oct. 25, and rejected the idea of an unelected transition government taking power, reports the Miami Herald. Opposition leader Andre Michel is rejecting that position, demanding the early resignation of President Michel Martelly and the head of the Provisional Electoral Council (CEP) that is responsible for the fraud and violence marred first round of voting in legislative elections in August. Observers are calling on the CEP to enact corrective measures ahead of this month's elections to preserve their integrity.
U.S. Commerce Secretary Penny Pritzker ending her Cuba trip yesterday said "the president wants to see the embargo lifted, but the president realizes it will take time," referring to opposition in Congress that would have to be overcome for the legislation to be changed. She also urged the Cuban government to let private enterprise thrive and to give its citizens greater access to the Internet, reports the Associated Press. Engage Cuba says "it is absurd that U.S. policy prohibits our own Secretary of Commerce from promoting American exports during her trip to Cuba," and calls on Congress to lift the embargo to improve businesses in both countries.
Tangentially, The Guardian has a photo-essay on "the Cuba tourists never see."
A piece in The Guardian looks at a novel new TV show in Brazil that stars black actors portraying an economically successful couple -- a first in a country where black people are often relegated to positions of subservience in productions.