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C O N F I D E N T I A L SECTION 01 OF 03 TEGUCIGALPA 000765 
 
SIPDIS 
 
E.O. 12958: DECL: 08/18/2018 
TAGS: PREL ECIN ETRD PGOV HO
SUBJECT: ALBA EXPECTED TO BE SIGNED ON AUGUST 25 AT A HUGE 
RALLY, BUT CONGRESSIONAL PASSAGE NOT SECURED 
 
REF: A. A. 07 TEGUCIGALPA 1915 
     ¶B. B. TEGUCIGALPA 41 
     ¶C. C. TEGUCIGALPA 336 
     ¶D. D. TEGUCIGALPA 458 
 
Classified By: Charge d'Affaires, a.i. Simon Henshaw, reasons 1.4 (b & 
d) 
 
¶1. (C) Summary: Local press continues to spin about the 
Honduran government's impending signature to Hugo Chavez's 
Bolivarian Alternative for the Americas (ALBA), currently 
scheduled to take place with much fanfare on August 25.  The 
private sector has publicly announced its opposition to the 
agreement and lamented its harmful effects on the investment 
climate to Embassy officials, but has shown scant leadership 
to stop it.  Constitutionally required Congressional approval 
is needed to adopt ALBA, which, in turn, requires the support 
of President of Congress Roberto Micheletti, who has been 
suffering from low polling numbers and has been desperately 
looking for allies to support his presidential bid.  After 
reportedly reaching an agreement with Zelaya to support ALBA, 
Micheletti may have backed off, and is reportedly now asking 
individual members of Congress to take on ALBA without him, 
privately declaring his own political capital with the 
Presidential palace spent.  The outcome may depend on what is 
more important to Micheletti - his anti-communist sentiments 
or his desire to repair his relationship with Zelaya, 
improving his chances of being the next Liberal candidate for 
the Presidency.  End Summary. 
 
Private Sector Publicly Opposes ALBA, But Lacks Action 
--------------------- 
¶2. (C) Emboffs met with private sector representatives August 
14, including President of the National Council for Private 
Enterprise (COHEP), Amilcar Bulnes, Acting President of the 
Tegucigalpa Chamber of Commerce, Carlos Bueso, and President 
of the Private Banking Association (AHIBA), Roque Rivera. 
These representatives had publicly announced their opposition 
to ALBA the day after a meeting with President Zelaya.  These 
private sector representatives told Emboffs that membership 
in ALBA would define Honduras as a "communist" country, and 
said it would give the GOH impetus to nationalize private 
enterprises on a mass scale.  Rivera said a growing climate 
of economic uncertainty over last two years is punctuated by 
increasing aggression toward foreign banks, changes to the 
fuel price formula, a flagrantly mismanaged state budget, and 
an increasing tendency to issue public procurements through 
no-bid contracts under the guise of "emergencies."  But, he 
said none of this matches the damage that would be done by 
ALBA. 
 
¶3. (C) Despite his expression of opposition, Bulnes excused 
himself from leading the charge against ALBA, citing the 
political risks of confronting the President.  Nevertheless, 
he did not hesitate to encourage the Embassy to act against 
ALBA before it is "too late," suggesting we should place a 
call to Micheletti.  (Note: Bulnes has a reputation as a 
strong supporter and close friend of President Zelaya, which 
he demonstrated through unmitigated support during the 
Toncontin airport crisis.  In a separate meeting, National 
Party insider xxxxxxxxxxxx told Emboffs that Bulnes is 
being paid by media magnate Jaime Rosenthal not to stand up 
to President Zelaya.  Others, including Liberal Party 
Congresswoman Martha Alvarado de Casco, have also lamented 
the private sector's lack of action on ALBA.  Two legal 
advisors employed by COHEP told Econoff that, while COHEP's 
official line is in opposition to ALBA, Bulnes secretly 
supports it due to his close ties to Zelaya.  End Note). 
 
Micheletti's Candidacy 
---------------------- 
¶4. (C) In order to actually put an ALBA accession into force, 
the constitution requires that Zelaya obtain the approval of 
the Congress -- which means Zeleya needs Micheletti's 
support.  With dismal polling numbers, formerly confident 
Micheletti has been looking for allies to boost his chances 
 
TEGUCIGALP 00000765  002 OF 003 
 
 
in the presidential election, bringing Yani Rosenthal 
(President Manuel Zelaya's former Minister of the Presidency) 
into his movement, and adding Roland Valenzuela, a suspected 
money launderer and drug trafficker who was publicly booted 
from Vice President Santos' camp.  Both figures bring a heavy 
bankroll to the Micheletti campaign and suggest growing ties 
to Zelaya.  On August 6, the press reported that Micheletti 
had allegedly reached a deal on ALBA with Zelaya.  In 
exchange for the President's support of his candidacy, 
Micheletti would reportedly ensure the approval of ALBA in 
the Congress.  To support this rumor, on August 11, Santos 
denounced publicly that a member of his movement - Jose 
Alfredo Saavedra - had been contacted by the secretary of one 
of Micheletti's strongest supporters and instructed to "come 
and pick up his one million lempiras" (approximately USD 
52,000) in exchange for his positive vote on ALBA. 
Apparently the secretary had been trying to reach Jose Angel 
Saavedra, but mistakenly contacted Liberal Party Congressman 
in Santos' camp.  The scandal brought to light what everyone 
already knew but could not prove - that the congress, and 
specifically the president of the congress, used 
discretionary congressional funds to buy votes.  This 
bolstered the argument that Micheletti supports ALBA. 
 
Micheletti Breaks with Zelaya? 
-------------------------- 
¶5.  (C) In an attempt to quash suspicion of a 
Zelaya-Micheletti pact, Congresswoman Alvarado reported to 
emboffs on August 18 that Micheletti and Zelaya had met on 
August 15 and had suffered a major break.  Zelaya reportedly 
declared that his government would continue to move towards a 
socialist system, to which Micheletti announced, "Then you 
will do it without me!"  Alvarado explained, however, that 
individual members of Congress would be speaking out against 
ALBA without Micheletti's leadership because he had spent his 
political capital on other recent battles with Zelaya, such 
as securing his own Presidential candidacy, killing "Hoy No 
Circula," overriding the electoral reform veto, and ending 
the battle with the prosecutors (see reftels A - D).  She and 
several other sources have told us that ALBA should only 
receive approximately 25 votes, and that it would die in 
Congress. 
 
August 25th - the Signing 
------------------------- 
¶6. (C) The ALBA signing ceremony is scheduled to take place 
on August 25th and according to multiple sources, the 
President will be pulling out all the stops to get massive 
public attendance.  On August 18, the President interrupted 
all television broadcasts (including private cable 
transmissions) to tout supposed IMF praise for the economic 
advances made by his administration, and then strongly urge 
people to attend the upcoming rally.  Multiple sources inform 
us that attendees will be each be paid 250 lempiras to show 
up for the rally (twice the average daily wage), plus lunch 
and transportation, plus 250 lempiras upon exiting the event. 
 This is a substantial sum for an average Honduran, and if 
the rumors are true, then we can expect huge crowds on August 
25, even if no one who attends understands what ALBA is all 
about. 
 
Comment 
------- 
¶7. (C) Although no draft of the Honduran agreement with ALBA 
seems to be under discussion or negotiation, Zelaya's 
signature on the agreement appears a forgone conclusion. 
Though the only hope for its defeat is in Congress, dearth of 
unified opposition there suggests it could succeed.  As with 
any Congressional action, Micheletti will be the key to the 
outcome on ALBA.  Micheletti has a long-standing reputation 
as a rabid anti-communist.  We have learned, however, that he 
is completely unreliable when it comes to promises made about 
what he will do in the Congress.  We also know that 
Micheletti is power-hungry and his desire to become president 
is paramount.  He has seen his candidacy and his polling 
numbers slip away and appears to be so desperate that he 
 
TEGUCIGALP 00000765  003 OF 003 
 
 
would include drug traffickers and other corrupt people on 
his candidate slates, just to get their money and support. 
If he believes supporting ALBA will help his presidential 
prospects, he may end up supporting it. End comment. 
HENSHAW