Mayor Under Scrutiny for Diverting 3 Million Lempiras

  • October 30, 2010

In December 2009, journalists with Revistazo.com set out to track down the final destination of millions of dollars of government funds that Honduras’ members of Congress spend on pet projects each year, with little oversight or accountability. While they were not always able to determine the final destination, they did find out that a lot of funds weren’t spent on the projects they had ostensibly been provided for. Other funds were spent for the designated purposes but were only sufficient to partially complete infrastructure projects that, without further investment, are useless and will soon deteriorate. The following is a translation of this article written by Revistazo journalists Eleana Borjas and Ana Flores, based on their investigation of a $150,000 grant provided by congress to renovate a bus terminal, but that was diverted for other uses.

carlos_seguraDusty ground, old abandoned vendor stalls, and a small shack selling junk food and car parts—that’s the extent of the bus station in the municipality of El Paraíso. In order to improve it, the Honduran Congress approved a grant of 3 million lempiras ($150,000). But the mayor of El Paraiso decided to spend the money on something else—a decision that has resulted in a complaint to the General Accounting Office and an investigation into the case.

The El Paraíso bus station has functioned for over 20 years and has routes into many Honduran cities. 50 buses a day provide transportation to the 40,000 residents of El Paraíso, and a number of them assured Revistazo.com investigators that except for the candy stand upgrading from wood to brick, in 20 years the bus station hasn’t changed a bit.

A new destination for 3 million lempiras

El Paraíso residents are very aware of the grant that was supposed to improve their bus terminal. The “3 million lempira fund” is famous in the area.

In 2006, Congressional representatives Ricardo Rodríguez and Mario Segura presented a proposal to the National Congress requesting 3 million lempiras in order to build a new bus station. But here’s where the case becomes another example of the myriad problems in the management of the Congressional subsidies handed out to representatives for carrying out projects for their constituencies.

The money for the bus station was requested, processed, and disbursed by the Secretary of Finance, according to decree #195-2006 in 2006. The beneficiary and executor of the projects was the Municipality of El Paraíso. However, not a single brick was purchased with the money because the mayor, who happens to be the brother of one of the congressmen, decided not to invest the money in the bus station. He claims he spent it on improving the sewer system, but an anonymous resident of the area told Revistazo.com that Mayor Segura used the money to finance his re-election campaign.

“They even made up a paper trail to use this money for something else,” said the anonymous informant.

Congressional representatives turned a blind eye, but the residents of El Paraiso didn’t

Money from Congress is money “thrown to the wind” since neither the person soliciting the funds nor any committee takes responsibility for ensuring that it is spent on what it has been designated for. Nor does anyone inspect the amount of quality of the materials purchased with the funds.

But in El Paraíso, the population was paying attention and so, afraid that the money was going into private bank accounts, they complained to authorities about what was happening.

The complaint that the mayor was using the money for his campaign was presented to the General Accounting Office (TSC), which was obliged to investigate. Revistazo.com interviewed the accused mayor who corroborated the information given by the residents, but at the same time said that the TSC would carry out an audit to make sure the funds were spent correctly.

The mayor explained that he did not invest the 3 million on improving the bus station because he was concerned with what people would say.

“What happened is that the resources we received, weren’t enough, the study we’ve done show we need at least 14.6 million lempiras,” explained Segura. “We didn’t want to use the 3 million, because imagine if we left the project half-finished, what would people say”, was the argument the mayor proffered to justify moving the funds to another project.

Revistazo.com asked the mayor for the study on the bus station but was told he did not have access to it at that time. He added that another reason the money was not spent on the bus station was because the population of El Paraiso was growing, so within 5 or 10 years the station would be insufficient to meet the needs of the area.

“The mayor’s office has decided to buy land closer to the dry canal (a highway under construction) at a cost of 14.7 million lempiras ($700,000).” Mayor Segura told Revistazo.com that another study had determined that the bus station was in an inadequate place, (despite the fact that it has been in its location for 20 years).

When asked for the name of the company that carried out the study, the mayor explained that he didn’t remember the name but they had paid for the study and the cost of the bus station was around “17 or 14 million lempiras”. He explained that they had plans to buy 4 acres of land for a new bus station from Martha Valladares but that the price had not yet been determined. “We haven’t negotiated but an acre of land right now costs about half a million lempiras”, stated the mayor. The land would be purchased with funds from the mayor’s office, but this leads to more confusion.

14 million needed to redo the bus station.

According to the mayor, the 3 million lempiras received by the municipality for the bus station were spent instead on the installation of a sewer system, but he stressed that those funds were taken as a loan and would be repaid to the municipality. “It’s really just a loan, the municipality has to pay it back. In our budgeting for this year, we’re assigning funds for this.”

Mayor is accused of misspending funds

But the mayor’s decision to change the destination of the funds granted by Congress has caused him to be investigated by authorities as residents determined to lodge a complaint against him to the General Accounting Office for the misspent 3 million lempiras.

In December, Revistazo.com requested information regarding the investigation and audit about the case from the General Accounting Office. Journalist Bessy Flores, from the Public Relations Department, said that because of the change of administration in Honduras, this information could not be processed until the new year.

Carlos Segura Aroca also is on the list of functionaries being investigated by the District Attorney’s Anti-Corruption office for the illicit gain, during the administration of deposed President, Manuel Zelaya Rosales. But Segura Aroca defends himself. “The General Accounting Office showed with checks from our municipality and clear documentation of the projects we’ve carried out. We are just waiting for their report.”

Revistazo.com will follow up on this case and in the future will inform its readers of the results of the investigation and actions of the General Accounting Office regarding this case which demonstrates the grave problems in both the supervision of funds dispersed by Congress and the improvisation and lack of planning of local government authorities.

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