Behind the Honduran Mutiny

TEGUCIGALPA, Honduras -- During Honduras' Independence Day celebrations last September 15, then-President Manuel Zelaya turned up for a time-honored ritual meant to promote national unity. But rather than merely making the traditional presidential cry "Long Live the Republic!" Mr. Zelaya treated political, civic and business leaders to a 15-minute diatribe against capitalism.

"The businessmen and corrupt oligarchy are responsible for our country's two centuries of poverty because they support an unjust neoliberal economic model that exploits humans and our natural resources," said Mr. Zelaya, wearing his trademark white Stetson hat, as members of the crowd began to shout "Fuera! Fuera! Fuera!" ("Out! Out! Out!").

Forced out of the country last month by the military, Mr. Zelaya returned Friday -- at least temporarily. Trailed by reporters and talking on a cell phone, Mr. Zelaya crossed the border into Honduras from his Nicaraguan exile. He walked to the rusty chain that marks the border, lifted it and walked a few feet onto his native soil.

Showdown at Honduran Border

Associated Press

A supporter of Honduras' ousted President Manuel Zelaya waved a Honduran flag in Tegucigalpa Thursday.

"We are unarmed. I come in peace," Mr. Zelaya said, shaking hands with a Honduran army officer, before retreating back into Nicaragua under threat of arrest by the provisional Honduran government. U.S. Secretary of State Hillary Clinton called the stunt "reckless."

It's the latest turn in a growing regional crisis that's far more complicated than it appears. The episode may seem like a flashback to a tragicomic era of Latin American history when presidents were regularly overthrown in coups. That's how the Obama administration has responded so far, voting with the Organization of American States to suspend Honduras and calling for Mr. Zelaya's reinstatement.

But in fact, a close look at Mr. Zelaya's time in office reveals a strongly antidemocratic streak. He placed himself in a growing cadre of elected Latin presidents who have tried to stay in power past their designated time to carry out a populist-leftist agenda. These leaders, led by Venezuela's Hugo Chávez, have used the region's historic poverty and inequality to gain support from the poor, but created deep divisions in their societies by concentrating power in their own hands and increasing government control over the economy, media and other sectors.

Mr. Zelaya, a 56-year-old former rancher and logger with a handlebar moustache, joined this group, which includes Mr. Chávez, Rafael Correa in Ecuador, Evo Morales in Bolivia, and Daniel Ortega in Nicaragua. This past week, Mr. Ortega laid out plans for a referendum to rewrite Nicaragua's Constitution and allow him to be re-elected indefinitely, something Mr. Chávez has already achieved in oil-rich Venezuela.

It was such a move that led to trouble in neighboring Honduras. For the past year, Mr. Zelaya led a drive to rewrite the constitution to abolish term limits. On the day of his ouster, he was planning a referendum to call a constitutional assembly, even though the vote had been declared illegal by the country's Supreme Court.

The crisis has put the Obama administration in a difficult spot. Mindful of past U.S. support of coups in Latin America, it condemned the ouster and has led efforts to find a negotiated solution. But its insistence Mr. Zelaya return to power has angered many middle-class Hondurans, who feel the ouster defended the country's institutions from a Chávez-style power grab.

"This is a showdown which will determine if the Chavista model triumphs or not," says Moises Starkman, who advised Mr. Zelaya on special projects and now works for the interim government in the same capacity.

Little in Mr. Zelaya's background suggested he would become an international symbol of a democratically elected leader forced from office. Mr. Zelaya is a product of Olancho, a violent, macho state in central Honduras that is dominated by pistol-packing landowners who run huge estates. His family, involved in logging and ranching, has been one of the dominant forces in Olancho for decades.

One of four children, Mr. Zelaya grew up the son of rural privilege, distinguished by little but a love for the guitar, Harley Davidsons and horses. In 1975, when Mr. Zelaya was 23 years old, his father, also named Jose Manuel, was put on trial for helping army officers torture and murder 14 rural activists, including two priests. Convicted and sentenced to 20 years in prison, Mr. Zelaya's father served little more than a year before being freed in a general amnesty.

The elder Zelaya's incarceration deeply affected his son, friends say. Mr. Zelaya dropped out of college after a spotty period studying industrial engineering and went home to Olancho to take care of the family businesses. Mr. Zelaya visited his incarcerated father often, at times even sleeping in the prison, says Victor Meza, who served as Mr. Zelaya's last interior minister. "That shaped him," says Mr. Meza.

As a young man, Mr. Zelaya didn't have strong ideological leanings. He ran his family's logging operations and eventually became a director of Honduras' top business organization. He also worked his way up the ranks of the Liberal Party, the country's oldest and most important political party, serving first as a deputy then as head of Honduras' social investment fund.

Colleagues say Mr. Zelaya is disorganized and lacks formal education but has animal-like political instincts. "His background is milking cows, and all of a sudden he's speaking before the United Nations," says Mr. Meza. Despite his lack of formal education, Mr. Zelaya is a quick study.

Soon, he was a rising star in the Liberal Party, making an unsuccessful run for the presidency in 2001. In 2005, he ran again, this time winning the presidency by a sliver. At his inaugural, Mr. Zelaya threw away his prepared speech and improvised, making numerous gaffes. "It would be a sign of the way he would run his government," says Honduran political scientist Miguel Calix.

In his first year, Mr. Zelaya didn't seem very ideological and spent a lot of time traveling. He was a big spender. On one notable trip to Washington, he took along a large group, including family members. He handed off his infant granddaughter to a startled President George W. Bush at a White House ceremony.

Two years into his term, Mr. Zelaya reshuffled his government, bringing into his cabinet a hard-line cadre of ministers dominated by Patricia Rodas, his foreign minister. The daughter of a famous right-wing Liberal party leader, Ms. Rodas has a reputation as a doctrinaire, hard-line Marxist from her university days.

Even as leftist associates increased their influence on Mr. Zelaya, the world economy also pushed him leftwards. In 2007, Honduras was hit hard by record high oil prices. The country imports all its fuel needs, and also has no refining capacity. That means four companies -- Chevron, Exxon Mobil, Royal Dutch Shell and the local Dipsa -- control the market, importing the fuel directly and distributing it through their own service stations. As oil prices climbed, Honduras, whose power plants run on fuel, was forced to hike electricity prices, and ration power.

At first, Mr. Zelaya, desperate for relief, tried to lower the cost of imports by buying oil products in bulk, but the plan failed because the government didn't have its own oil-storage facilities. So, in 2007, Mr. Zelaya decreed a cut in fuel prices. But this move led to fuel shortages as importers complained that the price cuts undermined revenues. By mid 2008, the oil companies threatened to halt all new investment in Honduras.

Neighboring Nicaragua, which had been getting cut-rate fuel from Caracas since 2005 under a program called Petrocaribe, had no such problems. A brainchild of Mr. Chávez, Petrocaribe sells Venezuelan oil at market prices but allows its 18 member countries to finance a part of the oil at very low interest rates. As of 2007, Petrocaribe had provided $1.2 billion in financing -- similar to the Washington-based Inter-American Development Bank's soft loans in that period.

As Mr. Zelaya fought with foreign oil companies, Mr. Chávez offered cheap oil. Few here opposed the country's entry into the Venezuelan oil pact when the Congress approved it in March of 2007. "I pushed hard for Petrocaribe," says Adolfo Facusse, the head of Honduras' industrialists' chamber and now an opponent of Mr. Zelaya. Since then, Petrocaribe has provided Mr. Zelaya's government some $126 million in savings, officials say.

Mr. Zelaya, who at first had kept his distance from Mr. Chávez, was quickly ensconced in the Venezuelan's tight embrace. "They get along very well, and trade jokes," says Mr. Meza. "On one trip to Caracas, Chávez joked with Zelaya, 'Mel, where did you tie up your horse?"'

Mr. Zelaya soon copied the Venezuelan's inflammatory rhetoric. In August, Mr. Zelaya joined the ALBA -- a nine-nation trade and political pact that Mr. Chávez designed to counter U.S. influence in the region. Its other members include Bolivia, Cuba, Ecuador, and Nicaragua.

On Aug. 26, Mr. Zelaya joined Mr. Chávez and Nicaragua's Mr. Ortega before an audience of some 30,000 Hondurans, most of whom the government had paid a few dollars to attend. "Today we are taking a step towards becoming a government of the center-left, and if anyone dislikes this, we'll just remove the word 'center' and keep the left," he said.

Mr. Chávez didn't go down well in deeply conservative Honduras. "Any Honduran who is against joining ALBA is either an idiot or a traitor," the Venezuelan shouted to the crowds at the ALBA event, where he gave Mr. Zelaya a new nickname: "Comandante Cowboy."

Like Mr. Chávez, Mr. Zelaya was soon battling most of Honduras' institutions. Obliged by the constitution to send a budget to Congress by September 15, Mr. Zelaya refused, alleging various reasons, including that the world's financial crisis made it impossible for him to draw up numbers.

No one was more disappointed with Mr. Zelaya than his former mentor, Honduras' Cardinal Oscar Rodriguez, a top candidate to replace the late Pope John Paul II at the time of the pontiff's death. Cardinal Rodriguez blames Mr. Zelaya for using public money to promote his referendum instead of spending it on the poor. Earlier this year, cameras at Honduras' Central Bank caught government officials withdrawing about $2 million from its vaults in a suitcase, presumably to fund Mr. Zelaya's referendum drive. Three of Mr. Zelaya's former top officials, and Mr. Zelaya himself, have been charged with misappropriating public funds in that case. The officials deny the charges and say they are politically motivated.

"We were good friends. But he changed drastically," the Cardinal concludes. "It was Chávez. It was Chávez."

Some saw other Chávez-like traits emerging in Mr. Zelaya, including megalomania. Like his Venezuelan mentor, Mr. Zelaya took often to the airwaves commandeering all of the country's television channels for long speeches. Mirroring Mr. Chávez's fascination with Venezuelan independence hero Simon Bolivar, who tried to unite much of Latin America, Mr. Zelaya asked El Salvador's president if he could borrow the remains of Central America's 19th century hero, Gen. Francisco Morazán, who is buried in El Salvador, so he could tour Central America with the bones to push regional integration.

Mr. Zelaya took much of his cabinet when he went scuba diving in a tourist development, wearing his cowboy hat until the last moment before hitting the water. Earlier this year, he skipped a meeting with donor countries to attend a private concert of Mexico's Los Tigres del Norte, who serenaded Mr. Zelaya at the presidential palace with one of their hits "Jefe de Jefes," or "Boss of Bosses."

What really set Mr. Zelaya and most of the establishment on a collision course was what many Hondurans saw as his bold drive to perpetuate himself in power by rewriting the constitution to permit re-election -- which is forbidden by Honduras's charter.

In the weeks before the referendum, the Supreme Court had ruled the vote illegal for two reasons: First, only Honduras' election agency, not the president, can call a referendum. Second, the article in Honduras' constitution that bars re-election is unchangeable -- so much so that even attempting to change it leads to automatic dismissal from public office.

When the military, following court rulings, refused to help distribute the ballots days before the referendum, the president fired the military's chief of staff, Gen. Romeo Vasquez, and accepted the resignations of the heads of the army, navy and air force and the defense minister.

"I told the president we could not act against a court order. If we did so, we would be committing a crime," says former defense minister Edmundo Orellana, a close friend of Mr. Zelaya, who refused to go along with the president and resigned over the issue.

Tensions spiked two days later when Mr. Zelaya, defying the courts, led a mob to seize the disputed ballots at an Air Force base. "That was traumatic for the armed forces," says Mr. Orellana, referring to the mob's forced entry. "At that moment everyone said 'the man is crazy. We have to get him out."'

The Supreme Court responded by ordering Mr. Zelaya stripped of his office and arrested. The military carried out the order, but feared his arrest would spark violence. So the army sent Mr. Zelaya packing, breaking another constitutional article that states a citizen can't be forcibly exiled and leading to an image -- a president in his pajamas forced into exile at gunpoint -- that led nearly everyone around the world to conclude the ouster qualified as a coup.

Mr. Orellana, who had resigned days earlier because he believed Mr. Zelaya was breaking the law, also believes the soldiers' action in exiling Mr. Zelaya constituted a coup. "It's the worse thing that could have happened," he says.

By JOSE DE CORDOBA WSJ.com

Showdown at Honduran Border

By JOSE DE CORDOBA
WSJ.com