US State Dept to Create Central America Corruption ‘Blacklist’

On July 26, the US House and Senate approved a bill that will require the Secretary of State to share the identities of government officials in Central America's Northern Triangle countries who are involved in corruption and drug trafficking with Congress.

The bill specifies that the secretary must submit a report that includes "the names of senior government officials in Honduras, Guatemala, and El Salvador who are known to have committed or facilitated acts of grand corruption or narcotics trafficking."

This week's vote ended in favor of modifying an amendment to the National Defense Authorization Act (NDAA) originally introduced by Representative Norma Torres (D-CA), which was approved by the House of Representatives in May. In the first version, the Pentagon and the Director of National Intelligence were to deliver the information required by the amendment to Congress, but the modification shifts that responsibility to the Secretary of State.

The bill requires the Secretary of State, in coordination with his counterpart at the Defense Department, to present three lists of names to the appropriations, foreign relations and defense committees of both congressional chambers. The lists are to be part of a report on "narcotics trafficking, corruption and illicit campaign finance" in the three countries that make up the Northern Triangle region of Central America: Honduras, Guatemala and El Salvador.

The state and defense secretaries will be required to list, for example, the individuals who have donated to political campaigns in the Northern Triangle "with the proceeds of narco-trafficking or other illicit activities" over the past two years. They will also have to list the political candidates who have received such funds as campaign donations.

The congressional committees must receive the report within 180 days of the amendment's publication. Given that negotiators from both the House and Senate have now agreed to the amendment this week, and that a legislative official with first-hand knowledge of conversations about this bill said it could be enacted this September, the first report could be expected in Congress by the end of 2018.

"The expectation is that both chambers [of Congress] will pass the bill in the coming days and will send it on to the president's desk. Once the president signs it, the Secretary of State will be required by law to produce the report," another legislative source in Washington told InSight Crime.

InSight Crime Analysis

If the bill becomes law, which seems likely, it will create an uncomfortable situation for many Northern Triangle politicians who have been haunted by corruption, illicit campaign financing and even drug trafficking. The lists the law will require could include presidents, ministers and legislators.

If the US government complies with the approved amendment once it is enacted, the first of the three required lists the Secretary of State will produce could theoretically feature names like that of Guatemalan President Jimmy Morales. The Attorney General's Office of Guatemala has accused Morales of participating in an illicit campaign financing scheme during his 2015 bid for president.

In Honduras, President Juan Orlando Hernández admittedthat during his first term, from 2014 to 2018, his political party received funds from supposed acts of corruption in his country's social security system. At least part of that money was allegedly used to finance his election campaign.

Meanwhile, El Salvador's three most recent presidents have either been investigated, convicted or jailed for possible acts of corruption. In the cases of Antonio Saca and Mauricio Funes, the investigations have expanded to include charges against dozens of collaborators and former government officials for crimes such as corruption, illicit enrichment and even money laundering.

These political leaders and others could appear on the lists.

When it comes to Guatemala and Honduras, however, the US government's position has been ambivalent at best. Washington has admittedly been tough on businesspeople and lower-level politicians involved in financing political campaigns with potentially illegal funds. But it seems to be significantly more lenient in dealing with heads of state such as Morales and Hernández, whom it considers regional allies.

While the sitting presidents go unpunished, in Guatemala, the US embassy has focused on withdrawing the visas of dozens of people, among them government officials and private campaign financers, for suspected crimes or acts of corruption. And in Honduras, the US diplomatic representatives in Tegucigalpa did not hesitate to congratulate Honduran authorities for the Pandora Case that accuses former government officials and legislators of fraud, corruption, illicit enrichment and money laundering.

A blacklist like the one proposed by US Congress could have important consequences for anti-graft efforts in Central America's Northern Triangle. But it remains to be seen how the United States' political and diplomatic priorities in the region will affect whose names are added.