Corruption in Honduras

In Honduras corruption has deep historical roots and is, thus, entrenched in society. It is no longer characterized by the iniquitous doings of individual perpetrators. Throughout the years, operating system of kleptocratic networks emerged, dominating the country’s political, social, and economic spheres. These networks have assumed cross-sectoral and transnational forms. Corruption today is committed not only for individual gain but at a scale that resembles a bureaucracy, benefitting a large swathe of members.^[3]

One of the most serious types of corruption in Honduras involves the misappropriation of funds meant for the delivery of essential public services. Public funds lost to corruption in 2018 amounted to more than $2 billion, constituting 12.5% of the Honduran GDP.^[2] Examples of notable cases include the $300-million embezzlement case in the public health care system. The National Anti-Corruption Council found that from 2014 to 2016, a civil society organization diverted $300 million from the public health system to private businesses. The fund was then used to finance political campaigns such as Hernandez’ 2013 presidential campaign.^[4]

In 2019, 176 politicians and a string of non-governmental organizations (NGOs) were also prosecuted for embezzlement. It involved a corrupt network of nonprofits that obtained more than $70 million from the public coffers over the past decade. Again, several of these organizations funneled the funds to politicians and to campaigns that were launched to influence the outcome of Honduran elections.^[5]

By October 2023, prosecutors indicted two former conservative presidents for diverting $12 million of public funds to bankroll their political campaigns. These were Juan Orlando Hernandez and his predecessor Porfirio Lobo. The former was also extradited to the United States in 2022 due to drug trafficking charges.^[6] Like the earlier case of embezzlement scandal, this case also involved a network of corruption, which was constituted by organizations formed between 2010 and 2013. Lobo's wife, the former first lady Rosa Elena Bonilla, was convicted in 2019 for embezzling around $600,000 during the course of her husband's term. The corruption charges against her were initially lodged by the Organization of American States’ anti-corruption mission.^[7]

The growth in power and influence of criminal organizations, particularly, drug traffickers, contribute to the persistence of systemic corruption in Honduras. The country is part of the primary transit route of drugs from South America bound for sale in the U.S. market. It is already described as a critical narco-state since almost all the important institutions of governance work in favor of the drug trade. As a severely compromised state, this corruption tied to drugs exists not only at the highest levels of the police, judicial system, and national government but also in civil society, which is either co-opted or cowed by the influence of the drug cartels.^[8] The situation became critical in the 2000s as Mexico started cracking down on its drug cartels. Drug traffickers in search of an alternative overland route found in Honduras a weak and pliant government.

By 2012, the U.S. Department of State reported that “more than 80 percent of the primary flow of the cocaine trafficked to the United States first transited through the Central American corridor” and that 87 percent of cocaine smuggling flights that depart in South America first land in Honduras.^[9] Around this period, it is estimated that the total value of the drug trade is equivalent to 13 percent of the Honduran GDP or 2/3 of the total budget allocated by the government for crime prevention.^[10]

The most prominent bribery involved Juan Antonio Hernandez, who was convicted in the U.S. for drug trafficking in October 2019. He was the brother of President Hernandez and was a previous member of the Honduran legislature. It was revealed that he received bribes from Mexican, Colombian, and Honduran drug cartels.^[4]

A UN-backed international commission on human rights and legal reforms found that corruption in Honduras undermines human rights. This is demonstrated in a study by the Human Rights Watch evaluating the judicial files of corruption investigations. It found that corruption is linked to human rights abuses.^[2] The systemic corruption in the country has led to the inability of the government to fund and support public health, education, clean water, housing, and other rights.^[2]

Corruption also has an adverse impact on the private sector as it results in an increase of the cost of investment due to red tape and increased uncertainty on the part of private firms. In addition, the misappropriation of funds not only reduces the efficiency of government spending but it also increases public mistrust of its revenue collection, which leads to tax evasion.^[2]