Contracts Awarded to Honduras Drug Clan Illustrate Cyclical Corruption

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Government contracts awarded to businesses run by a powerful drug clan during the administration of former Honduras President Porfirio Lobo, allegedly in exchange for large sums in bribe money, illustrate how public funds can be used to create a feedback loop of corruption. 

The Lobo administration (2010-2014) handed out contracts worth over 60 million lempiras (roughly $2.5 million) to businesses owned by the Cachiros drug trafficking organization, reported La Prensa. One of the leaders of the Cachiros, Devis Leonel Rivera Maradiaga, recently testified in a US court that he had bribed Lobo several times in exchange for government contracts and a promise that he and his associates would not be extradited. 

InSight Crime has previously noted as part of an investigation into the Cachiros* that some of these contracts were awarded by Fondo Vial, the Honduran government’s highway fund, which was overseen at the time by Hugo Ardón. Hugo is the brother of Alexander Ardón, the notorious former mayor of El Paraíso, Copán, who maintained strong connections to the Valle Valle drug trafficking clan and allegedly worked with Mexico’s Sinaloa Cartel while running city hall. 

SEE ALSO: Honduras Elites and Organized Crime: The Cachiros

In total, Fondo Vial paid Cachiros-owned companies over $4 million between 2010 and 2013 to conduct road maintenance in the departments of Colón, Olancho and Yoro. The northern department of Colón served as the Cachiros stronghold before Devis Leonel and his brother, Javier Eriberto, handed themselves in to US authorities in January 2015. 

Former President Lobo and current Security Minister Julián Pacheco, who served as an adviser in the Lobo administration and was also implicated by Rivera Maradiaga, have denied the trafficker’s claims that they received bribes. The testimony was presented as part of an investigation into Lobo’s son, Fabio, who was arrested during a 2015 anti-drug operation in Haiti and later transferred to the United States. 

Following Rivera Maradiaga’s statements, the Honduran Attorney General’s Office announced on March 8 that it was opening an investigation into both Lobo and Pacheco.

A retired general, Pacheco ran the military’s battalion in Colón during the early 2000s, a time when the Cachiros’ influence in the area was growing. Pacheco maintained a close relationship with the then-governor of Colón, Juan Gómez Meléndez. Gómez also happened to be the Cachiros’ most important political operator, intelligence sources have previously told InSight Crime, and even managed some of the group’s business ventures involving cattle and palm oil.

The ex-governor was gunned down in late January 2015 in the town of Tocoa, long considered to be the Cachiros base of operations; just days later, the Rivera Maradiaga brothers were in US custody. 

Rivera Maradiaga testified that both Gómez and the mayor of Tocoa, Adán Fúnez, provided assistance to the Cachiros in exchange for bribes, the AFP reported. 

The drug trafficker also stated that congressman Óscar Nájera attended a meeting between the Cachiros and newly elected President Lobo in 2009. Nájera responded by saying that he has met the Rivera Maradiagas but that he was never involved in any criminal activity with them. 

“I know perfect well all that family, father, mother, and brothers and that I am not going to hide, but I have absolutely nothing to be afraid of,” he said. 

This was not the first time that Nájera, a large landowner in the Bajo Aguán region and who is from Colón, has felt obliged to defend his reputation. In July 2015, Nájera denied claims that he was linked to drug trafficking. 

Rivera Maradiaga also implicated President Lobo’s brother “Moncho” and his cousin Jorge Lobo, according to the AFP. 

InSight Crime Analysis

In Honduras, government contracts are more than just a means to completing public works projects. They are often at the heart of how corruption and organized crime functions, as these contracts enable state monies to move from political elites to underworld figures in an ostensibly legal fashion. This process becomes a self-reinforcing cycle of corruption when the owners of the companies receiving the contracts send kickbacks or campaign contributions to the politicians responsible for doling them out. The Cachiros, for instance, regularly made significant donations to the campaigns of politicians from both of the country’s major political parties, the National Party and Liberal Party. 

But it’s the Ardón family that offers perhaps the best representation of how the intersection of government contracts and organized crime perverts the system and feeds corruption. Between the two of them, the Ardón brothers managed dozens of government contracts worth millions of dollars. Hugo was also in charge of current President Juan Orlando Hernández’s political campaign in western Honduras. Yet the two men are also believed to have led what the authorities refer to as the “AA Brothers Cartel,” and their links to Mexican and Honduran drug trafficking groups are well-known.

SEE ALSO: Honduras News and Profiles

The Ardóns’ unique set of credentials brought them power and influence disproportionate to their official positions as a small-town mayor and anonymous bureaucrat. According to a 2015 report (pdf) by the Center for Strategic and International Studies, Ardón ordered — and paid for — the construction of a replica of the White House to serve as the new mayor’s office, replete with a landing pad for helicopters. The inauguration of the “White House” was attended by some of the highest-level politicians and businesspeople in Honduras, the report stated. 

The Ardóns’ connections gave them more than just money and power; they bought them, at least for a time, impunity. During InSight Crime’s investigation into the Cachiros, sources suggested that the authorities were slow to act against Alexander because of Hugo’s links to the president and his administration. 

Alexander eventually fled El Paraíso once the US Drug Enforcement Administration began cracking down on the Valle Valles in 2014, and the following year there were reports indicating the brothers had turned themselves over to US authorities. However, there are no public records available in the US court system database confirming they have been officially charged, and there have been no further reports about their arrests.

*The Association for a More Just Society (Asociacion para una Sociedad mas Justa – ASJ) in Honduras helped InSight Crime procure the relevant documents for our investigation into the Cachiros.

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