ADVERTISEMENT

DEA Investigated Honduras President for Cocaine Trafficking

President of Honduras Investigated by U.S. for Drug-Trafficking

(Bloomberg) -- The U.S. Drug Enforcement Administration investigated the president of Honduras for drug-trafficking according to court documents, potentially weakening his grip on power and spooking markets.

Hernandez and eight others were the targets of a DEA probe that began in 2013 into “large-scale drug-trafficking and money laundering activities relating to the importation of cocaine into the United States,” according to documents filed by prosecutors with the U.S. District Court Southern District of New York.

The document, filed Tuesday, sought a court order to force tech companies including Apple, Google and Microsoft, to turn over email information from eight targets of the investigation, including President Juan Orlando Hernandez and Security Minister Julian Pacheco.

Prosecutors sought non-content information, such as to/from headers, according to the document. The document was filed as part of a case against Hernandez’s brother, Juan Antonio “Tony” Hernandez, who U.S. authorities arrested in Miami in November. He is awaiting trial.

The Honduran presidency said in a statement that the Justice Department found no evidence to support accusations against Hernandez, which had been made by alleged drug traffickers.

“This investigation, undertaken in 2015, showed that there were no grounds for bringing charges against the Honduran government or any of its close associates,” the presidency said.

The DEA said it doesn’t confirm or deny whether investigations are ongoing.

Hernandez is a key U.S. ally in the region, and the administration of President Donald Trump recognized his victory in a 2017 vote that election monitors said was flawed.

‘Market Friendly’

Hernandez’s pro-business policies have made him popular with foreign investors, and the nation’s assets will probably sell off if it looks as though he could lose his grip on power, said Risa Grais-Targow, an analyst at Eurasia Group.

“This government has generally been very market friendly,” Grais-Targow said. “I would think that the Trump administration is going to be inclined to still support him, especially considering the uncertainty around what the alternative would be.”

Honduras was already a “tinderbox”, with frequent street protests and calls for a general strike, said Eric L. Olson, Director of Policy for the Seattle International Foundation, a charity that funds development projects in Central America.

“It’s going to add fuel to the fire of polarization, anger, frustration that is happening now in Honduras,” Olson said in a phone interview.

Trump said in March that he would cut hundreds of millions of dollars in aid to Honduras, Guatemala and El Salvador over their failure to curb migration to the U.S.

House Democrats have opposed the cuts and introduced legislation to restore the funding. Honduras has been one of the main sources of so-called “caravans” of migrants heading north through Mexico toward the U.S. border.

--With assistance from Michael McDonald.

To contact the reporters on this story: Ezra Fieser in Bogota at efieser@bloomberg.net;Matthew Bristow in Bogota at mbristow5@bloomberg.net

To contact the editors responsible for this story: Matthew Bristow at mbristow5@bloomberg.net, Robert Jameson

©2019 Bloomberg L.P.