A lawsuit from financiers of a ‘startup city’ could bankrupt Honduras

The wave of private contracts became part of a “kleptocratic” regime, according to a 2017 report from the Carnegie Endowment for International Peace. Almost all ISDS claims have their origins in contracts, laws or other agreements made during this period.

For the farmers and villagers who were driven from their land or had their water supplies privatized, the development rush was accompanied by a spiral of violence.

“Nowhere are you more likely to be killed if you stand up to companies that take land and pollute the environment,” wrote the international watchdog group Global Witness in 2017, “than in Honduras.”

An opponent of a project that became the subject of two ISDS claims was murdered the following year.

At the center of these new laws and contracts was Juan Orlando Hernández, who was president of Congress when the ZEDE law was passed and was later elected president of Honduras in 2013. Hernández would serve two terms as president – a move prohibited by the constitution. . The U.S. Department of Justice would later allege that Hernández used millions of dollars in drug cartel payments to bribe local officials to secure his election victories.

Ultimately, Hernández, his brother, and his national police chief would be extradited to the United States and convicted on drug trafficking and weapons charges. Hernández, U.S. Attorney General Merrick B. Garland, used his time in power to run “one of the largest and most violent drug trafficking conspiracies in the world.”

Hernández was sentenced to 45 years in prison in March this year, while the former national police chief was sentenced to 19 years. His brother is serving a life sentence. Hernández did not respond to an interview request from prison.

Brimen, the CEO of Honduras Próspera who immigrated to the United States from Venezuela, has said his goal is to provide a model that would promote prosperity and help alleviate poverty by streamlining unnecessary bureaucracies that hinder governments , especially in parts of Latin America.

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Honduras Próspera said it “has no connection with any corruption in Honduras.” The company has not been publicly accused of involvement in corruption or the passage of the ZEDE law. But some residents, activists and members of the current government criticize the company for abusing the law, given the way it was passed, and for cooperating with Hernández’s government.

“They came and did business with the darkest side of our country,” Rosa Danelia Hendrix said in Spanish. Hendrix is president of the Federation of Patronatos for Roatán and the other Bay Islands, and helped lead the fight against the ZEDEs.

Against an economic superpower

The Castro government’s battle against the ZEDEs is being waged from Tegucigalpa’s Government Civic Center, a series of gleaming buildings erected by Hernández’s government. The neat, modern square is next to the presidential palace and is home to many government buildings, but the pedestrian entrance opens onto a busy street with no exit, resulting in a chaotic scene of double-parked taxis and honking, as if the architects had failed to imagine that citizens would come to visit.

There, Fernando Garcia and a team of six young staffers collect documents and write fervent social media posts denouncing the ZEDEs. There are two others, besides Próspera, that focus on agricultural exports and mixed-use development, neither of which has filed an ISDS claim.