During the recently concluded U.S. presidential campaign, many Latin American journalists and academics asked why Latin America was hardly mentioned. Although Gov. Romney did mention the region in each of the three debates, the question deserves a more complete answer. This region is far too important to the U.S. to be ignored so widely by U.S. political leaders. Why is it?  

One of the many reasons is that Latin America does not present its best face to the world and is therefore not taken seriously. The image of these countries that Americans too often see is that of a caricature: that of a clownish demagogue, or a boisterous “caudillo” dressed in the combat fatigues he might have worn had he ever seen combat; or of an incessant talker in enamored with the sound of his or her voice; and in some cases someone who combines many of the above characteristics.

Fearful voters do not always make the best choices. Sometimes they need a little help from friends that live in countries with a free press.

- Otto Reich

Seldom do serious, wise, or even honest faces symbolize the rich continent to our South. Is it any wonder then, that senior policy-makers in the U.S. Government have difficulty focusing on this region?  It is especially hard when those policy-makers have access to information that documents the abuse of power, moral degradation and illicit enrichment in which many foreign “leaders” engage.

When U.S. audiences watch the occasional television report about this region, or read press accounts, which are the Latin American faces that stare back?  Frequently, those of an emaciated Fidel Castro of Cuba; a garrulous Hugo Chavez of Venezuela; an eccentric Evo Morales of Bolivia; a rabid Rafael Correa of Ecuador; and a devious Cristina Kirchner of Argentina. Those come to mind, at least to the few observers that even know what those characters look like.

Besides being dishonest and dangerous (for example, all the above preside over rampantly corrupt governments and some have close ties with Iran, regional terrorist groups or organized crime) these rulers have something else in common: they were all originally elected in votes that were relatively free and fair. We must ask how is it possible that otherwise intelligent constituencies choose so poorly? One reason is that they lack in balanced information about their candidates and leaders. In Latin America the press is frequently afraid of reporting negative material about powerful people running for office (for good reason, since scores of honest reporters have been and continue to be killed while investigating wrongdoing).

This well-founded media fear may result in the election of yet another candidate with a disturbing past: Yani Rosenthal Hidalgo, a candidate for President in the Liberal Party primaries in Honduras. Rosenthal was Minister of the Presidency (a kind of Super Cabinet Secretary and Presidential “fixer”) under a previous elected schemer, Mel Zelaya, who was removed from office in 2009 for violating the Constitution, by a unanimous vote of the Supreme Court of Honduras. Zelaya’s acolyte, Mr Rosenthal, apparently intends to take Zelaya’s place. If Mr. Rosenthal’s political background is insufficient to disqualify him from office, his illicit business activities should.

Mr. Rosenthal is the scion of what is alleged to be the richest family in Honduras. The family conglomerate, Grupo Continental, owns some of the leading companies in Honduras: banks, insurance, engineering and construction, newspapers, television, cable TV, cement alligator skins, coffee growing, free zone assembly plants, food packing, sugar, residential developments, bananas, cattle and sheep breeding and cacao, among others.

The family, especially Yani, is the object of pending judicial charges and investigations that run practically the entire gamut of their business activities. For example:

Since 2007, the Rosenthal telecommunications firm Cable Color has been accused by Honduran and international authorities of illegal use of its telephone lines for “grey traffic.”  Grey traffic is the false reporting of international long distance calls as domestic calls, thus avoiding additional charges associated with international calls, such as payment for the use of underwater cables, of international taxes paid to the foreign governments where the calls originate or terminate, etc. In Honduras, international traffic is controlled by the public telephone company, Hondutel, which is – or would be if were operated honestly and efficiently – the single largest source of revenue to the state.

In 2007 then-President Manuel (Mel) Zelaya, whom Yani Rosenthal was serving as Cabinet Minister at the time, appointed the First Lady’s nephew, Marcelo Chimirri, as General Manager of Hondutel. Chimirri so looted Hondutel’s treasury that he was indicted for corruption and abuse of power and eventually arrested (but only after his uncle and protector Zelaya was removed from office, of course).

Even in a country with a long history of high-level corruption, Chimirri and Zelaya’s avarice was unprecedented. In order to hide the plundering of Hondutel through the use of grey traffic by companies owned by their allies such as the Rosenthals, Chimirri and Zelaya designed a cynical smoke screen reminiscent of the famous order “round up the usual suspects” in the movie Casablanca.

To divert attention from the real culprits while making it appear that they were enforcing the law, Zelaya’s associates ordered Hondutel officials to raid the offices of over 50 small telecom companies that most often were not, and in some cases were, involved in grey traffic, confiscated their equipment and arbitrarily detained their executives. These firms had very few telephone lines, and none even approximated the hundreds of lines of Cable Color. Yet, Cable Color‘s offices were never raided. The reason was obvious; Chimirri, Zelaya and Yani knew the real culprit in the diversion of Hondutel profits was Yani’s own company, Cable Color.

That company still owes Hondutel the local currency equivalent of $259,044 for the use of submarine telephone cables. This figure is a pittance, however, in relation to the $5 Million per month – half its earnings - that Hondutel’s income dropped under Chimirri’s “management” because of the grey traffic scheme.

There are many Rosenthal companies that owe the Honduran treasury for fines. For example, Cementos del Norte (cement) owes $1,770,269. The Rosenthal newspaper firm, Editorial Honduras, owes $4,046,330 that it “refuses to pay” to the government.

A pending lawsuit accuses members of the Board of Banco Continental and members of the board of the Rosenthal newspaper Tiempo (Editorial Honduras) of the crime of “infidencia,” or using the newspaper to publish confidential information to the detriment of official investigations of the National Banking and Insurance Commission. Moreover, the newspaper’s labor union has complained that the Rosenthals refuse to pay their “labor obligations” (equivalent to employees benefits in the U.S.).

Those are just some examples. A more comprehensive list of transgressions, corruption and abuse of power by the Rosenthal family, whose heir now seeks Honduras’ top office, is too long for a newspaper article.

The reason I am writing this article is because I was asked to do so by some honest persons I know in Honduras. When I inquired why they did not do so themselves, they frankly admitted that they are afraid. They point to cases such as a murder in 2007 of a telephone company owner, Alejandro Laprade, that threatened to blow the whistle on the Hondutel grey traffic scheme, from which the Rosenthal family prospered, but which in turn focused the attention of the country on out-of-control Zelaya corruption and led to his downfall.

Fearful voters do not always make the best choices. Sometimes they need a little help from friends that live in countries with a free press.

Otto Reich is a former U.S. Ambassador to Venezuela, Assistant Secretary of State for Western Hemisphere Affairs and Senior Staff member of the National Security Council. He heads his own international government relations firm in Washington, DC.  

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