Honduras' dispensazo scandal

"Melito" Zelaya Castro and Dariela María Pineda Mendoza

Photo: El Heraldo

Subtitled: The tale of the 2010 Porsche Cayenne,

or
How Zelaya* and other officials continue
to rape the country of Honduras

Oh what a tangled web we weave, when first we practice to deceive.

And this is such a tangled web that it has taken me days to write this, with new and/or corrected information coming out daily.

Glossary:

constancia - a statement or oath sworn to by the signer; may or may not have legal standing
denuncia — a formal legal complaint
diputado — congressman elected by the people
dispensa — a legal document issued by the government granting exoneration of taxes and import duties, in this case regarding vehicles
-azo — a far-reaching (usually corruption-related) scandal; the suffix is used similarly to '-gate' scandals in the US.

Background

Since 1993, Honduran diputados have had the right to import two vehicles completely tax and duty free during their term.


On March 16, 2010, the National Congress, led by Nacionalista President Juan Orlando Hernández (photo La Tribuna), unanimously (supposedly) agreed to repeal (supposedly) the right of diputados to two vehicle dispensas each, a special political privilege which costs the government an estimated L.100-300 million per year in lost taxes and duties. At least 'repeal' is what the public was led to believe. Hernández's announcement on the Congressional web page speaks of the unanimous vote as "contributing to a greater transparency, improving the finances of the country, reducing the privileges of the political class, and setting an example."

However, in a July 29 editorial, El Heraldo points to the old adage, "quien hace la ley, hace la trampa" (he who makes the law, makes the fraud/mockery/loophole). All is not what it seemed.


The tale of the Porsche

A few days ago, Director Ejecutivo de Ingresos (DEI—similar to IRS), Oswaldo Guillén (photo La Tribuna), announced in a press conference the completed investigation of the March 1 importation of a US $88,000 2010 Porsche Cayenne by a diputado, who he named as José Mauricio Rosales Cardoza (related to Manuel Zelaya Rosales?) Guillén stated that the automobile was declared abandoned on March 28 due to failure to pay the taxes. It was included in the list of vehicles to be auctioned by the state for failure to pay the importation fees and taxes, which in the case of the Porsche, amount to L. 1,313,788 (US $69,500). (Note that a diputado suplante (substitute) like Rosales Cardoza net earnings are less than US $1,000 per month.)

After the Porsche was declared abandoned, on May 12, the Panamanian seller of the vehicle reported — oops! — an "error" in which the actual owner of the vehicle should have been named as Dariela María Pineda Mendoza and the actual shipping destination should have been the Dominican Republic, home to former president Mel Zelaya. This request was denied as it is illegal to reexport property previously declared abandoned. On May 20, a dispensa was requested, processed, and presented to the port authorities in little more than 24 hours, a near impossibility for mere mortals, which raised a red flag to DEI. Use of the dispensa was denied because it was not presented by the deadline. Guillen made the statement to the media, "If this costs me my job, so be it."

El Heraldo reported that 22-year-old Dariela Pineda Mendoza is the girlfriend of "Melito" (little Mel) Zelaya, youngest son of Manuel Zelaya and demonstrated photos of several trips to Paris and elsewhere taken by Dariela and Melito during Zelaya's administration as proudly displayed on Dariela's Facebook page, which has since been eliminated. During Zelaya's term in office, the family and girlfriends/boyfriends made trips, allegedly in the presidential jet, to Europe and the US. Photos of those trips, with the "kids" sporting their Rolexes and drinking champagne also disappeared from Facebook last year.

On July 21, the young lady, accompanied by Melito, visited the offices of the DEI to take care of the little problemita but were refused an audience with the director.

Diputado José Rosales Cardoza (photo La Tribuna) has belligerently stated that the car is his, he will have it, and he can send it or sell it to whomever he wants under the law. He says that it is one of two cars he has imported under the dispensas he is entitled to as a member of congress in the previous term. He implies that someone in the DEI wants to keep his car. He did not explain why he waited two months after the importation of the car to apply for a dispensa, but it is likely that he thought "other arrangements" had been made to avoid payment of the taxes (wink, wink).

The tip of the iceberg

Back in March, during the time that the repeal of the vehicle dispensas was being discussed, Juan Orlando Hernández told reporters that dispensas were a focal point of corruption, including fraudulent use of photocopies of dispensas, but at that time, Hernández failed to mention where that knowledge came from or whether he or anyone else had filed a denuncia or whether it was or would ever be investigated, something that struck me as very wrong.

On a Tuesday morning talk show, I learned that the law doesn't apply to current officials after all because it "wouldn't be fair" to them since they were elected under the assumption that they would receive this benefit (though when the law was changed in 2002, it retroactively granted privileges). I also learned that the constancias in which some (not "all but one" as was previously reported) of the diputados swore to not use the dispensas have no legal effect but should be morally and ethically binding. Two diputados on the show said that the names of those who have requested and/or received dispensas should be made public.

Later in the day, the National Congress published two lists on their website. One was a list of 18 current diputados and 6 prior diputados who applied for dispensas after the date of the decree. The other was a list of 10 diputados who have used dispensas since March 16, 2010. The list reflects mostly luxury cars, though not to the extent of a Porsche. Interestingly, only Liberal diputados were listed.

Channel 10 news speculated that the list was not complete as it included no Nacionalistas and did not include Diputado Rosales, importer of the infamous 2010 Porsche. Additionally, not all of the ten diputados who have used dispensas are reflected on the list of 18 who have requested dispensas, nor does the list reflect those who have used two dispensas after March 16. Providing further doubt, it appears that #4 on the list has been deleted and the preparer of the list forgot to renumber it.

Diputado Carlos Martínez Zepeda (who has used a dispensa this year) was quoted in La Prensa as saying that "members of both [major political] parties have submitted dispensas" and that "this is nothing more than a circus to divert attention from the true [crime of] clonation."

Cortina de Humo

Secretario de Finanzas, William Chong Wong (photo Hondudiario), states that all this talk of the diputados' dispensas is just a cortina de humo (curtain of smoke) to prevent the investigation of fraudulent dispensas. Chong was named llorón (crybaby) by President Lobo, for his constant calls to cut costs and quit giving out handouts because the country is going bankrupt.

Chong Wong states that they have investigated the clonation of five dispensas but there are many, many more from, he says, prior administrations. He also denounced that a large legal firm in Tegucigalpa has processed forged dispensas, without naming the firm, of course. Guillén reported that 128 vehicles have been determined by DEI to have been imported with fraudulent dispensas by those from the "political, economic, and non-profit sectors", who have not been named. Another report was that 160 vehicles are circulating in Honduras with cloned dispensas.

The dispensa scandal not only includes Honduran citizens and officials, but also foreign embassies, who have not been named. Minister Chong has promised to post a list of all of the functionaries (diputados and others) who have requested dispensas. Will charges be brought? Current talk is that the perpetrators will be required to pay the taxes, but is it not a crime to forge government documents? Shouldn't these people go to jail? Which government employees approved and processed the fraudulent documents? Have they no responsibility? Will this all be hush-hushed so that no one important suffers embarrassment as is usually done?

Incredibly, the answer came on the Friday night news. Guillén announced that the proprietors of the 128 vehicles which were fraudulently exonerated will have until September 30 to pay the taxes or the vehicles would be confiscated and auctioned. What does this mean? Anyone in Honduras can just decide that crimes don't need to be prosecuted? Shouldn't this be a decision for the Ministerio Publico?

This is exactly why corruption runs rampant in Honduras. Everything is forgiven. The worst that can happen if one is caught (extremely rare) is that he may have to pay what he would have originally had to pay anyway. There is no punishment, ever. It is things like this that make me despair that anything can ever change in Honduras.

Chong Wong told reporters that dispensas for a "lot" of Hummers was requested by the Minister of Tourism for a car rental business. The Minister of Turismo, Nelly Jerez, denies that Tourism has approved any Hummers, but has approved cars, buses, and pickups for tourism and car rental business. She also says that the prior administration approved a helicopter.

Full disclosure:

La Ceiba Diputada Margarita Dabdoub Sikaffi, known locally as Margie Dip, is one of the listed diputados who requested a dispensa after March 16.

Additionally, as an incentive to attract expatriates to move to Honduras, the immigration law provides that expatriates who are approved for residency as a pensionado (retiree with a proven pension) or rentista (other proven foreign source of income) are entitled to apply for a dispensa for the importation of one vehicle and their personal household belongings. In every case that I know of (a lot!), the dispensas were used to bring the immigrant's current used vehicle to Honduras. The law relating to foreign residents differs greatly from the law relating to government officials in that expatriates who sell the vehicle within 5 years must repay the tax.

I used a dispensa to bring my 2-year-old car to Honduras and saved about US $12,000 which at that time was approximately 50% of the value of the car! That is the only residency benefit that I have received from the government in almost 9 years in Honduras. As happens to many (most?) expatriates moving to Honduras, various governmental inefficiencies and misinformation resulted in my receiving, but not being able to use a dispensa for personal belongings. I have never heard of any expatriate selling a dispensa or using his dispensa for nefarious purposes though I suppose it is possible.

Nothing new

This is not a new scandal, nor does it only affect diputados. News articles from February 2009 during Mel Zelaya's administration read exactly like the current ones, with everyone accusing everyone else of fraud. Only the names and dates have changed.

In an El Heraldo investigation in early 2009, it was reported that a Corvette Z06, 17 Porsche Cayennes, two Ferraris, a Lincoln Navigator, a Maserati, five Hummers y eight Cadillac Escalades, among other luxury cars had been imported with dispensas by diputados who earn about US $2,500 net per month. El Heraldo reported that Supreme Court Justices, members of the Central American Parliament, embassies, NGOs and churches are eligible to receive dispensas, for a total of more than 3,000 vehicles from 2006 to 2008. There were even accusations of organized crime being involved in the trafficking of diputados' dispensas.

Diputado Marco Antonio Andino (photo El Heraldo) imported a Maserati and was accused of using fraudulently using a dispensa exonerating him of more than a million lempiras in taxes. As far as I know, no action was ever taken and the scandal didn't hurt him at all — he was reelected!

Two members of the UD party (now associated with the Resistance) were denounced for selling their four dispensas to an auto importer for US $90,000. The UD party responded by demanding an investigation of the diputados of other parties, some of whom they claimed were using more than two dispensas each. The then director of the DEI denounced that some diputados had used up to eight dispensas, though only two are allowed by law. UD Diputado Marvin Ponce claimed that bands of organized crime were using the constancias and dispensas of diputados. Accusations were thrown in every direction, investigations were started, and .... nothing ever happened.

El Heraldo also reported that when he was President of the Congress (2001-2005), current President Pepe Lobo was against any restrictions against vehicle dispensas as was Roberto Micheletti, when he was President of the Congress. In fact, three decrees under Lobo's leadership significantly liberalized the rules in 2002. If a diputado was not able to use both of his dispensas during his term, he was given an extra year to do so. If the diputado died before using them, his heirs inherited that right. And worst of all, the law which originally only allowed "work" vehicles, was changed to remove restrictions so that luxury vehicles could be included and provided that the vehicle owners did not have to pay annual registration taxes for five years. The ability to import any type of luxury vehicle compounded the problems of corruption because now "real money" was involved.

Presidential candidate Pepe Lobo later decided he was for eliminating the dispensas.

Same old, same old

One thing that all of Honduras' '-azos' have in common is that usually no one 'important' is ever named and certainly not punished, restitution is never made, and rarely does anyone ever even lose a job over it, much less go to court. In fact, generally whatever the scandal is, it usually continues year after year unfettered by the government no matter who is in power. Corruptos protect corruptos.

And sadly, this is only one of many -azos right now and it represents a grain of sand in the ocean compared to income tax evasion, fraud, and exonerations which are estimated to cost the state in the tens of billions of lempiras each year. Meanwhile people are dying every day from lack of medical care for dengue and even more so from lack of police protection against crime.


* While no evidence has been made public yet that the Porsche was going to Mel Zelaya in the Dominican Republic, Hondurans aren't stupid! Even President Lobo in an assembly yesterday in Trujillo said, "Everyone knows for whom this car came."