Friday, July 17, 2009

Zelaya's Immanent Return Predicted

I have to admit, because of my 30-year experience with Cuba and because of friends struggling and threatened now as human rights advocates and journalists in Venezuela, I do hate to see Honduras enter that orbit, however much Zelaya may be the rightful president. People are so easy to manipulate (look at how many Americans voted twice for GW Bush) and poor, educated people—no disrespect intended—all the more so. Once those guys get in and consolidate power, become presidents-for-life and totalitarian despots, it's too late to backtrack. Of course, it can also happen on the right--as with Pinochet and the generals in Argentina and Franco in Spain.

But whoever becomes the next Honduran president--or whoever "wins" the current battle--is going to have to confront the vastly unequal income distribution and the plight of the poor. I don't know that Michelleti and Co. have much cred on that score. Here in the US, we face some redistribution of income (sorry guys in the top 1% or even top 5 or 10%) and some limitation on health care services (rationing? otherwise health care expenditures are potentially infinite, as I’ve been arguing for some time) because the direction we’ve been going is unsustainable—maybe I’m getting too far a field here and raising unnecessary arguments. So, going back to Honduras, the population there is going to have to bite the bullet on redistribution or else the Chavez types are going to win over poor people, who are the majority.
The current dispute about the constitution is too legalistic for poor people.

The question is whether the new president will actually be able to deliver later on. Of course, Honduras, unlike the US, has mostly poor people, a small but growing middle class, and a very tiny, but very rich, upper class. The middle and upper classes, even if they were to make huge sacrifices, cannot sustain the lower class. There will have to be some outside help, such as more aid and development funds to replace cheap oil from Venezuela. Even with the oil, poor people were still hurting. Of course, if you wipe out the middle and upper classes and jettison their entrepreneurial expertise, then you will just have a nation of 100% poor people. So it's a big dilemma. Poor people have been aroused by the rhetoric of Zelaya, but like Chavez in Venezuela, Zelaya can make big promises, but not deliver totally on his promises. However, whoever succeeds Zelaya has to address the needs of the poor, at least to show some credible progress on that front.

Honduras is prominent in today’s local Spanish-language press. Jorge Ramos, TV anchor and New York Times Syndicate columnist, points out the irony that Raul Castro is allowed to freely chide the Honduran interim government for being unelected. And Hugo Chavez kicked out the mayor of Caracas, who had won 52% of the vote, and replaced him with his own loyalist. Yet the Latin American leaders who excoriate the Honduran interim government say nothing about that breach of democracy. More disturbing are reports, mentioned yesterday, that Zelaya is calling for an overthrow of the interim government. His spokespersons also say he is returning to Honduras—of course, not divulging when or how (by land? by sea?). It seems impossible that interim government can guard all the borders and coastline—or prevent his dropping down from a helicopter. Of course, he would need to be accompanied and guarded to be protected from harm and arrest. If he were harmed, the his followers surely would riot.

One of my correspondents says: The poor Hondurans who benefited from the rise in minimum wage and the school thing are entirely contented to reap these benefits at the expense of the rest of the economy, and they'll go to the barricades for their Mel. The educated people, who are able to get jobs that pay enough to make it worthwhile for the president of the country (Zelaya, Chavez, whoever) to tax heavily, are looking to protect themselves. The problem is that in Honduras right now, almost no one pays taxes, except for sales taxes levied in cities and American firms. There will have to be restructuring of the tax code and real collection enforcement.

Below is an unedited message from Irma, director of the adult blind center (as per my book), exactly as it came in, with no corrections of spelling or grammar and only a personal mention removed. It’s one long run-on sentence. She expresses a lot of frustration, concern for the poor who have nothing to eat, and upset over the curfew and also because she and her staff apparently have not been paid. She refers to massacres, assaults, demonstrations, electric outages (not really so unusual), censorship, and many people afraid to vote, so only faith in God can resolve the situation, she says.

Hola Barbara espero estes bien fijate que….aca si uno no esta metido en politica no hay problemas pero la situacion es delicada pues las opiniones esta polarizadass en bandos los a favor del los golpistas y los a favor de el presidente depuesto fue una barbaridad lo que han hecho pues tu sabes que el que mas sufre es el pueblo pueblo los pobres no tiene ni que comer pero eso no importa al gobierno para no hacerte mas largo el tema imagina que a nosotros no se nos ha pagado el salario desde junio ni eldecimo cauarto mes y tu sabes que uno pasa del sueldo con compromisos que hay que pagar tambien hay asesinatos en masacres asaltos y cosas feas que se amparan en que andan en manifestaciones y luego tenemos toque de queda asi que hay que estar temprano de la noche en casa pero a vista todo se ve normal las actividades estan unos diastrabajando y otros en casa cortan la luz y las emisoras para que uno no se de cuenta de lo que esta pasando esperemos que todo se resuelva por la paz las cosas parecen que empeoran en este fin de semana pues ninguno de os dos presidentes quieren seder y para colomo tenemos elecciones en noviembre y ahora muchas personas no quieren salir a votar solo Dios que nos cuide creoque con mucha fe en el saldremos adelante cuidate Irma

A couple of articles follow. The one below supports Zelaya. After that is an article that appeared earlier this week in the Washington Post about the American who bankrolled Zelaya’s narrow presidential win, then became disillusioned with him, former Peace Corps volunteer turned millionaire, Allen Andersson, who also funded the Riecken Foundation named for his wife. Riecken was the organization we were trying to get to finance the library in El Triunfo, but the mayors would not cooperate. Now it will be too late, because Andersson has gone broke. In Feb., when I was last in Honduras, his operation there was liquidating its assets and shutting down. The rumor was that he had invested heavily in Madoff.

No justification for coup; HONDURAS
Bertha Oliva
Miami Herald
July 15, 2009

As a Honduran human-rights activist, it has been disturbing to hear the
drumbeat of voices in the U.S. media justifying what is taking place in my country. While the Organization of American States, the United Nations and heads of state from countries across the political spectrum worldwide have condemned the coup, commentators in The New York Times, Washington Post and The Wall Street Journal have called it a ''democratic'' coup, while others have blamed exiled President Manuel Zelaya for it happening in the first place.

U.S. Rep. Connie Mack, R-Fl., has joined the chorus as well, introducing a resolution in support of the de facto regime in the name of “the Honduran people,” just days after the coup leaders murdered peaceful citizens on the streets of Tegucigalpa.

The events that have unfolded in Honduras are a forceful and illegal
overthrow of a democratically elected government. To justify this act by adding the adjective “democratic” to the coup is not only an oxymoron, but a blatant inaccuracy.

Many in the United States have declared that the proposal by President
Zelaya to hold a national consultation on constitutional issues was so
dangerous that he somehow brought the coup on himself. To set the record straight, what was scheduled to take place on Sunday, June 28 was not a vote on Zelaya's ability to continue in office, but a nonbinding survey on the possibility of holding a constitutional assembly.

To purposefully misconstrue this as an aggressive, “anti-democratic” act is to stretch the truth to its breaking point, in the service of a
pre-determined position against the Zelaya government's policies or

When our fragile democracy and millions of lives are at stake, what is
truly dangerous is for influential opinion leaders in the United States to imply that certain kinds of democratically elected governments “deserve” overthrow. In a society based on Rule of Law, there are various mechanisms available for an opposition to make claims against a sitting administration. Kidnapping a president at gunpoint and spiriting him over the border is not one of them and declaring marital law is not one of them. Even the top legal military advisors to the de facto regime in Honduras admitted that their actions were -- and are -- illegal.

My experience as the director of a human-rights organization that has
represented the families of Hondurans “disappeared” for more than 20
years inform my fears of a return to the horrors we lived in the last
century. Unfortunately, these fears have proven justified.

The last few days have been an uncanny repeat of atrocities that we thought were left behind in the 1980s: forced detentions, murder and violent repression of peaceful protesters, media censorship and suspension of constitutional rights. The situation has garnered swift reproach from Human Rights Watch, Amnesty International and other prominent watchdog groups, but the stifling of dissent has only intensified inside the country.

President Barack Obama and Secretary of State Hillary Clinton have spoken up for democracy and human rights in condemning the actions of the coup leaders. Now the United States must put its money where its mouth is by formally recognizing what happened as a coup d'etat and suspending all aidto and trade with Honduras until the legitimate president is restored to power.

Honduras is deeply dependent on the United States, which is the market for roughly 70 percent of its exports. U.S. trade and aid are the backbone of our economy. If the U.S. does not cut ties with Honduras, it is sending a clear signal of tacit support for those who took power illegally as well as the abuses of power we have seen in the week the regime has been in place.

Actions speak louder than words. The U.S. government is uniquely positioned to play the deciding role in whether or not Honduras is returned to democracy or plunged into dictatorship. Along with my fellow citizens, I pray that this is a moral and political responsibility that the Obama administration will not ignore.

Rich Man, Poor Plan
Allen Andersson Made a Bundle, Then Made Things Happen -- for a While -- in Honduras
By Manuel Roig-Franzia
Washington Post Staff Writer
Tuesday, July 14, 2009

Allen Andersson made a fortune. Three times. Richer each time, and ever less interested in being rich.

It's almost all evaporated now, more than $300 million, but Andersson still sits smiling in the sunny living room of the Kalorama manse he can no longer afford. He blew his dough on things that make him happy and that he thought would make the world a better place, not on ephemeral luxuries -- look no further than the weary, 15-year-old black Honda Accord with the coat hanger for an antenna that he drives, when it's cooperating.

Instead, this "serial entrepreneur," inventor, investor, math whiz and philanthropist plopped hundreds of millions -- don't ask him exactly how many because "I don't like numbers," he confesses -- into intriguing but commercially dubious scientific research that thrilled his mind. He poured tens of millions more into building libraries for the poor in Central America, a vast charitable enterprise that he now hopes other foundations will help prop up because his business empire has been crippled by poorly performing investments and the credit crisis.

And then, there's one of his all-time favorite multimillion-dollar gambits, the time he played presidential kingmaker in Honduras . . . and won. Barely noticed outside Tegucigalpa, Andersson assumed a key -- many say decisive -- offstage role in the 2005 election of Manuel "Mel" Zelaya, the recently deposed president of Honduras.
As Honduras convulsed this month over Zelaya's ouster -- in his pajamas -- in a military coup, Andersson spoke for the first time about what he proudly describes as the "shenanigans" he orchestrated in the final days of the 2005 upset. It is a saga sprinkled with heaps of cash, private detectives, sting operations, attack ads, internecine squabbles and Andersson's epic grudge against Zelaya's wealthy, dashing opponent, Porfirio "Pepe" Lobo, whose last name means "wolf" in Spanish.
In short, Andersson had a blast.

"I just had a taste of blood in my mouth," he says, suddenly balling his right hand into a fist and bringing it crashing down onto a glass coffee table. "My mission was not to avoid poverty or bankruptcy or disgrace; my mission was to beat Pepe Lobo."

Starting Small, Thinking Big
Allen Andersson is one of those Washington characters who inexplicably remain invisible in a town otherwise obsessed with power players. He stands 6-feet-2 and walks with a shambling, loose-limbed, forward-tilting gait. He speaks softly, with a slight nasal quality to his voice, and laughs at himself constantly, merrily losing his train of thought without ever seeming to mind that he has.

At 64, the native of Cape Cod, Mass., calls himself "an imperfectly socialized person" and wears his wavy gray hair longish, the aging-hippie-who-made-it look. His shirt pockets are usually jammed with pens, and he favors what Teresa Calkins -- a media consultant he once hired -- calls coarse, "butt-ugly" ties. Andersson has globe-trotted with celebrities, but is so oblivious to pop culture -- he went several decades without owning a television -- that he has no idea why they are famous. Mike Farrell of "M*A*S*H"? "He's my friend, but I'm not familiar with his work." Bianca Jagger? "I don't know exactly what she is celebrated for."
For much of the decade, Andersson has been raining money on Central America, gleefully distributing his winnings from his early-2000s investment in Amylin Pharmaceuticals, a tiny, struggling company that caught his eye because of its innovative diabetes research. (He came across Amylin while evaluating drug treatments for his own daughter, Rachel, now 24, who has diabetes.) The 65 libraries he built in Guatemala and Honduras thrived as mini-community centers. But he had even grander plans.

"I thought I had discovered a way of really multiplying value in science," says Andersson, who still believes his approach would work during better economic times. "I decided that if I could make a couple billion dollars, I could do truly revolutionary things in Central America."

Honduras was a logical starting point. Andersson had served for two years as a Peace Corps volunteer in Tegucigalpa back in the late 1960s, when he says he was "a very, very serious draft dodger," devoting "years to the study and practice of draft dodging" to avoid the Vietnam War, which he calls "a horrible, pointless and wicked exercise."

After leaving Honduras and finishing up at MIT, Andersson tried working as an engineer, but had a habit of getting himself canned. He struck it rich for the first time in the 1980s, inventing an early word-processing system. From there, he tinkered with various projects for a decade and a half, but "technological success was too often accompanied by commercial failure." Finally, he made an even bigger bundle -- about $50 million -- in the early 1990s from the stock he got for selling his software company, which had developed a system for connecting phone networks to the Internet, to Cisco.

He was finding it "funny and amusing" that he was so rich. Yearning to do philanthropy on a massive scale, he placed a call in the late 1990s to the head of the Washington-based Center for International Policy, Robert White, himself a maverick whom President Ronald Reagan had booted as U.S. ambassador to El Salvador after White tried to negotiate a peace in the civil war there.

"He said, 'I'm immensely rich, and I want to spend money bringing democracy to Central America,' " White recalled. "He kept saying, 'Think big. Spend, spend, spend.' " Big, they would eventually decide, meant the presidency of Honduras.

Getting Out the Vote
The 2005 Honduran election pitted Mel Zelaya, the leftist son of a well-heeled businessman, against Pepe Lobo, the president of the Honduran congress. Lobo, the clear front-runner, was the former head of the national forestry agency in a country plagued by illegal logging of precious hardwoods, such as mahogany. Andersson had contempt for Lobo, suspecting that he surreptitiously condoned illegal logging that had decimated indigenous communities. Bladimir Baca, a top Lobo aide, vigorously disputed those claims in a telephone interview from Honduras, saying Lobo's business interests have been primarily centered on food crops and not timber. In the months before the election, White says he met with Zelaya and extracted promises from the candidate to crack down on illegal logging and to improve human rights.

By then, Andersson was already deep into his "shenanigans." He didn't trust the Honduran media, saying it was almost completely controlled by various oligarchs. So, he took over a small newspaper, El Libertador, and encouraged tough stories about Lobo.

He hired a U.S. polling firm, Greenberg Quinlan Rosner, to conduct surveys. And he also funded private-eye forays in Honduras by the Environmental Investigation Agency, a nongovernmental organization with offices in London and Washington that had ferreted out illegal loggers in Asia.

The intrigue commenced: One EIA agent posing as a lumber buyer secretly videotaped a meeting in Miami with a Honduran congressional candidate, Gilma Noriega, and her father, lumber dealer Guillermo Noriega. On the tape, Gilma Noriega says payoffs to government officials can be made to ensure a steady flow of lumber, and brags that their business will be protected if her father's best friend, Lobo, is elected.
"Pepe Lobo will be our savior," Guillermo Noriega says on the tape.

When the news reached him, Andersson was ecstatic. This, he thought, was his smoking gun. Problem: EIA didn't want to give him the tape.

EIA's executive director, Alexander von Bismarck, says in a recent interview that he hadn't initially been aware that their work would be used in a political context related to the 2005 election. He also feared for the lives of staffers involved in the sting, as well as activists in Honduras, if the tape was made public. "We parted ways when the extent of Allen's focus on the Honduran election became clear," von Bismarck says.

Andersson fumed, accusing the agency's officials of being "cowardly" -- "Sam Spade wouldn't run away," he recalls telling them. Ultimately, the agency refused to turn over a high-quality version, which Andersson says amounted to theft.
El Libertador did get and use a low-quality copy and pounded the illegal logging story on its front pages, though its measly circulation only took the story so far. Other media were refusing to pick up the story, and television stations wouldn't run his tape because of allegiances to other candidates, according to Andersson.
But the American investor had enough money to do as he pleased. In the final weeks before the election, he booked at least $200,000 of advertising time on Honduran television networks; the very networks whose news programs shunned Andersson's sting tape still welcomed his ad money. He saturated the Honduran airwaves with the EIA tape, and even had operatives show it on screens set up in parks and other public places.

"It had a big impact; the ads came out on the most expensive stations at the most expensive times," Jeovany Castro, a top regional Lobo campaign official, says in an interview. "It was a dirty way of campaigning. It bothered [Lobo] a lot. He is a very proper person." By the time the ballots were counted, Andersson estimates he had spent $2 million trying to influence the outcome.
Zelaya, once a long-shot, squeaked into office. But, more importantly for Andersson, Lobo lost.

After the Downfall

Then came the hard part. Zelaya struggled as president, alienating his base by cultivating leftist allies, such as Hugo Chavez of Venezuela and Evo Morales of Bolivia. With Honduras ever mired in poverty and crime, Zelaya tried to circumvent the nation's supreme court and pushed for a referendum on whether the constitution should be changed to allow him to serve a second term. He was ousted on June 28.

His American sponsor offered no sympathy. "The guy who won," Andersson says of Zelaya, "has been such a lazy, ineffective and clownish jerk that I almost regret it sometimes." Zelaya's whole truncated term in office had put some distance between the two men. Andersson "would call and say, 'Is it too much to ask to have prosperity and democracy by the time I'm 72?' " recalled Matthew Colburn, who headed the investor's foundation in Honduras, until the money ran out last year.

Andersson had had a Midas touch with Amylin, making more than $200 million on a $6.2 million investment that he transferred with a handwritten personal check sent through the mail, startling the mailroom crew at the company. But his investment firm -- Paperboy Ventures, so named because he delivered newspapers while growing up poor on Hyannis Port -- foundered. Andersson had crushes on so many science-based start-ups that didn't love him back. He lost bundles over the years on lupus drugs and electric-bicycle motors, often ignoring advice from doubting friends, and spent heavily on high-profile advisers like Wesley Clark and Kathleen Kennedy Townsend.
"I'm trying to think the last time I was involved in a company that was profitable," he pondered with bemusement during a recent lunch. There was a long, long pause. None came to mind.

Later, he points out that he goes for "the big scores," investing in companies in search of future capital gains, rather than current profits. "He is in a league by himself for being tolerant of uncertainty," says his friend Joseph C. Cook, Amylin's former chief executive officer. "He does not exist for the money. He's truly interested in serving others rather than himself."

Which made the call Andersson made last year all the tougher. After donating $5 million over half a decade to fund Central American initiatives, including the first-ever public listing of who's who in the impenetrable Honduran legislature, Andersson says, he had to tell White "the party's over." There would be no meddling in this November's Honduran presidential election, even though Andersson's nemesis, Lobo, has returned as a leading candidate.

"Allen's a riverboat gambler. It's amazing how people who are supposed to be intelligent can do the stupidest things," White says. "He deserves great credit for having the imagination and the generosity to use his wealth for the benefit of this poor country. It's really a tragedy that he lost all that money."

A tragedy for Honduras, perhaps, but Andersson's wife, Susan Riecken, says she won't miss the big house and the bigger bank accounts, as the couple and their teenage daughter, Nell, make plans to repair to a New Hampshire cabin.
"We don't need it," she says, when asked about the end of their cozy D.C. life. "I don't see [losing] it as a horrible thing."

Maybe this is, as Andersson's associates suggest, just a pause until he makes his next fortune. Paperboy, though staggering, owns a stake in numerous companies -- one turns sewage into fuel, another converts fish heads and scales into amino acids -- and any one of them could suddenly soar in value. Or not.

"I absolutely don't know what the future holds," says Andersson. "I don't know what our properties are worth. I don't know what our true balance sheet looks like. We could come out of this wealthy; we could come out of it broke."

If he conjures another fortune, however, he knows one of the places he'll spend it: the Republic of Honduras.

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