Honduras prosecutors accuse two ex-presidents of diverting public funds to campaigns

By Gustavo Palencia

TEGUCIGALPA (Reuters) – A Honduran special anti-corruption unit indicted two former conservative presidents on Wednesday on charges of fraud for the diversion of over $12 million of public funds into political campaigns, the state prosecutors office said.

Ex-President Juan Orlando Hernandez, who is awaiting trial in the United States on drug trafficking charges following his extradition last year, and his predecessor, Porfirio Lobo, were indicted alongside six other former officials including ex-finance minister Wilfredo Cerrato.

Lawyers for the accused could not immediately be reached for comment.

The indictment, filed to the country’s Supreme Court, accuses both Hernandez and Lobo of fraud for the diversion of a combined total of some 288 million lempiras ($12 million) to finance political campaigns, as well as money laundering by Hernandez, Carlos Morazan, a spokesman for the prosecutors’ office, told Reuters.

The indictments come amid an expansion of the so-called Pandora case, an investigation that has for five years probed some 38 people for corruption – mostly politicians, deputies and former officials. Almost all have been acquitted.

The six former officials indicted stand accused of fraud and abusing their authority.

According to Honduras’ public ministry, the public funds were diverted into a political campaign for Hernandez’ National Party in 2013, to pay debts for the Liberal Party, and finance two other fringe political groups.

A “network of corruption” was formed between 2010 and 2013 that helped extend and approve the transfer of over $12 million through private foundations into political campaigns, the ministry said.

Hernandez’ 2013 campaign, which took him to the presidency, benefited from at least 62 million lempiras ($2.6 million), the ministry added, using “ghost companies, borrowed names and fictitious contracts” to ultimately bring funds into party hands, the ministry added.

(Reporting by Gustavo Palencia; Writing by Sarah Morland; Editing by Sandra Maler)