State Department Steps Against Honduran Coup Don't Go Far Enough

Center For Economic Policy & Research, Press Release, Sept. 3, 2009

Washington, D.C.- The U.S. State Department issued a release today announcing "the termination of a broad range of assistance to the government of Honduras as a result of the coup d'etat that took place on June 28."

“The State Department is responding to pressure, but it’s still not clear if the Obama administration is serious about dislodging the coup regime that it continues to support with military and economic aid,” said Mark Weisbrot, Co-Director of CEPR.

State Department spokesman Fred Lash told CEPR that total U.S. assistance to Honduras was $100 million and today’s decision affected $30 million: this included $8.96 million from the State Department, $9.4 million from USAID, and $11 million from the Millenium Challenge Corporation (MCC) (which will not be officially cancelled until its Board meets next week).

“There is still quite a bit of money that is not food assistance or anything that poor people need that continues to flow to the dictatorship,” said Weisbrot.

“Also, the State Department still hasn’t officially determined that a military coup took place in Honduras,” he added.

Weisbrot also noted that the International Monetary Fund decided just a few days ago to give Honduras more than $160 million. Since the United States has a veto over IMF decisions, this will be seen by the coup regime as a decision of the U.S. government.

“The IMF money, which is a huge amount of money for Honduras, will more than compensate for any cuts in U.S. official aid.”

The World Bank paused lending to Honduras two days after the coup, and the Inter-American Development Bank did the same the next day. More recently the Central American Bank of Economic Integration suspended credit to Honduras. The European Union has suspended over $90 million in aid as well, and is considering further sanctions.

According to the release, "The Department of State further announces that we have identified individual members and supporters of the de facto regime whose visas are in the process of being revoked."

The State Department would not release the names of those whose visas may be revoked.

The release also states: "we would not be able to support the outcome of the scheduled elections [in Honduras]. A positive conclusion of the Arias process would provide a sound basis for legitimate elections to proceed."

This decision on elections brings the United States closer to other countries in the hemisphere, who have stated that they will not recognize elections conducted under the coup government.

However, Weisbrot noted that the 3-month election campaign period has already started, and it is taking place under conditions of political repression and media censorship.

“Each day that goes by with the coup government in power makes it less likely that these elections could be considered legitimate,” said Weisbrot. “Certainly the idea of moving the election up one month to October, which is part of the Arias accord, has to be abandoned.”

House overwhelmingly rejects signing statement

By Walter Alarkon, TheHill.com, July 9, 2009

The House rebuked President Obama for trying to ignore restrictions to international aid payments, voting overwhelmingly for an amendment forcing the administration to abide by its constraints.

House members approved an amendment by a 429-2 vote to have the Obama administration pressure the World Bank to strengthen labor and environmental standards and require a Treasury Department report on World Bank and International Monetary Fund (IMF) activities. The amendment to a 2010 funding bill for the State Department and foreign operations was proposed by Rep. Kay Granger (R-Texas), but it received broad bipartisan support.

The conditions on World Bank and IMF funding were part of the $106 billion war supplemental bill that was passed last month. Obama, in a statement made as he signed the bill, said that he would ignore the conditions.

They would "interfere with my constitutional authority to conduct foreign relations by directing the Executive to take certain positions in negotiations or discussions with international organizations and foreign governments, or by requiring consultation with the Congress prior to such negotiations or discussions," Obama said in the signing statement.

Senior Democrats and Republicans railed against the notion that the president could ignore a law they had passed and he had signed.

"We do this not just on behalf of this institution, but on behalf of this democracy," said Rep. Barney Frank (D-Mass.). "There's kind of a unilateralism, an undemocratic, unreachable way about these signing statements."

President George W. Bush had used signing statements to ignore a number of provisions in bills that he signed into law, frustrating Democrats in Congress. One Bush signing statement allowed the administration to ignore a provision banning the torture of terror detainees in situations threatening the nation's security.

Frank and Rep. Mark Kirk (R-Ill.) said that one way they could get presidents to stop issuing signing statements casting aside laws would be to refuse to fund their priorities. The amendment passed Thursday seeks to nullify Obama's signing statement by withholding funds from any agreement involving the Treasury Department that doesn't follow the conditions set out in the supplemental bill.

"The signal we send to the Treasury is very clear: Ignore statute at your peril," Kirk said.

The U.S. funding for the IMF, which will come in the form of a $108 billion credit line, was a sticking point in negotiations over the war supplemental bill. House Republicans opposed the legislation despite their support for military operations in Iraq and Afghanistan because they viewed the IMF funding as an unnecessary "global bailout." House and Senate leaders included constraints on the IMF and World Bank funding as a way to ensure support from lawmakers skeptical over sending more money abroad, said House Appropriations Chairman David Obey (D-Wis.).

"Sometimes, the only way the votes can be found to provide the funds the admin wants is to provide certain limitations on the money," Obey said Thursday in a floor speech criticizing Obama's signing statement.

The State Department and foreign operations appropriations bill that contained the amendment was expected to win passage late Thursday. Both Democratic and Republican appropriators spoke in support of it during the floor debate Thursday afternoon.

US's new World Bank pick, Zoellick, threatens Venezuela

Zoellick warns Venezuela is heading for trouble
By Noel Randewich, June 16, 2007

MEXICO CITY (Reuters) - Robert Zoellick, almost certain to be the next head of the World Bank, on Saturday took aim at Venezuela's leftist president, Hugo Chavez, warning that his oil-fueled socialist revolution was headed for trouble.

"It's a country where economic problems are mounting, and as we're seeing also on the political and press side it's not moving in a healthy direction," Zoellick told reporters during a visit to Mexico.

President Bush, a fervent foe of Chavez, nominated Zoellick to lead the World Bank, and the former U.S. trade representative and deputy secretary of state is expected to be confirmed before the end of the month.

Chavez has used surging oil revenues to pay for a socialist revolution in the OPEC nation and gain influence with other countries in Latin America at the expense of the United States.

He has said he wants to withdraw Venezuela, the world's No. 5 oil supplier, from the World Bank and the International Monetary Fund, blaming their decades-old economic recipes of tight budget control, privatizations and open markets for poverty across Latin America.

"If a country feels it doesn't need or want the services of the international financial institutions, that's their choice," Zoellick said. "I've found no shortage of countries interested in trying to work with the World Bank."

The World Bank would focus on rebuilding in war-torn countries like Sudan, Haiti and Afghanistan under his leadership, Zoellick said.

After last month's forced resignation of Paul Wolfowitz as World Bank president over a high-paying promotion for his companion, Zoellick was put forward as the candidate of the United States, which traditionally chooses the head of the institutional lender.

No other nominee had been made as of Friday's deadline, making Zoellick a shoe-in for the job at the World Bank.

Chavez is popular among Venezuela's poor majority for his efforts to redistribute billions of dollars in oil wealth but has often drawn international criticism for treading on the rights of opponents.

In May, he closed down an opposition television channel and threatened to take another off the air.

Heavy spending of oil revenues has heated up Venezuela's economy, pushing the inflation rate to almost 20 percent and leading the government to impose price controls on basic goods.

Venezuela put its withdrawal from the IMF on hold this month because of concerns the move could trigger a technical default on its sovereign debt.