Centroamérica / Transparency

Who Should Regulate Free Trade Zones in Honduras?

Friday, December 4, 2020
Lizz Gabriela Mejía Raudales

This article was originally published in Spanish at Contra Corriente.

On February 11, 2014, through the official newspaper La Gaceta, the members of the ZEDE’s CAMP group were announced. The purpose of this committee is to supervise the creation and administration of these special zones, and the president of the republic elects the people assigned to it. On the initial list, there are Honduran politicians and public officials, European and American businessmen, activists, and founders of various research institutes. Most of these people identify with libertarian and conservative ideas and principles. Six years have passed, and it is not known if meetings have ever been held to discuss issues related to ZEDE or if changes have been made to the committee.

The Hondurans who are part of CAMP are Ricardo Maduro Joest, a businessman who served as President of the Republic for the Partido Nacional (National Party) in the period of 2002-2006, and Octavio Rubén Sánchez Barrientos, former staff minister of the Porfirio Lobo Sosa government. They are joined by the current head of the presidential cabinet, Leonel Cardona López, and Ebal Díaz Lupian, who serves as secretary to the presidency. When we tried to contact Díaz to inquire about CAMP's duty and position regarding what happened in recent days in Roatán concerning the ZEDE project, Prospera, we received no response.

Another member of CAMP is Mark Klugmann, who, despite not being Honduran, has influenced national politics, serving as an advisor in the governments of nationalist presidents Juan Orlando Hernández and Porfirio Lobo Sosa. Klugmann has also served as an advisor to former U.S. presidents George H.W. Bush and Ronald Reagan. In an interview for the digital medium Libre Mercado, Klugmann assured that the ZEDE are “demarcations in which facilities are offered to companies and investors. There are numerous reasons for developing new special economic zones. They allow an entire country to witness the effect that a more favorable treatment of the private sector can have”. Klugmann is not the only American on the committee. He is joined by 8 other public and political figures.

Faith Whittlesey, one of 4 women selected to serve on the ZEDE regulatory committee, was the highest-ranking woman on the White House staff during the Ronald Reagan administration. One of her greatest accomplishments during that administration was laying the foundation for the religious right's enduring loyalty to the Republican Party. Whittlesey enlisted the support of evangelical groups and other religious conservatives, unhappy Democratic laborers, and the National Rifle Association.

She also organized the White House’s Central American Outreach Group, whose objective was to document the Marxist orientation of the Sandinista guerrillas in Nicaragua. Later, she denied any connection to the scandal that emerged when the administration sold weapons to Iran and used the proceeds to finance rebels seeking to overthrow the revolutionary Sandinista government. She died at the age of 79 on May 21, 2020, due to liver cancer.

Grover Norquist is a political activist and strategist for conservative and libertarian causes. He is currently the president of the lobbying organization Americans for Tax Reform. According to data published by various US media outlets, the libertarian activist recently borrowed aid funds from the federal government that were intended for the relief of small businesses that were affected by the pandemic. 'He took a loan in between $150,000 and $350,000 from the Paycheck Protection Program, according to data released by the Small Businesses Administration,' Bloomberg reported on July 6 of this year.

Mark Skousen is an American economist with libertarian principles and, as published in La Gaceta, is a member of CAMP. Between 2001 and 2002, Skousen directed the Foundation for Economic Education, a non-profit organization that promotes the free market. During his presidency, the economist organized a non-partisan libertarian conference with the goal of bringing together all organizations and individuals who care about personal liberty, civil rights, free market principles, and economic freedom.

Michael Reagan, adopted son of former U.S. President Ronald Reagan, is an actor, radio host, political strategist and member of the Republican Party. Throughout his life, he has been involved in different legal troubles. In 1981 he was accused of violating the security laws of the State of California. Los Angeles County authorities alleged that Reagan worked with some investors who carried out stock arrangements and sale of illegal goods.

Alex Cranberg is an oil industry businessman and recognized Republican Party donor who found himself in the middle of a scandal in 2019, when he and one of his partners submitted a bid to search for oil and gas at a site controlled by the Ukrainian government.

The American, via Ukrainian Energy, a newly created company, competed for drilling rights and offered millions of dollars less than its only competitor. But his company received the 50-year contract only after being recommended by US public officials.

Morton Blackwell is a conservative activist and member of the Republican Party. In 1979, he founded the Leadership Institute, a non-profit educational foundation dedicated to teaching the use of political technology to conservative activists. He currently serves as a member of the Virginia National Committee on the Republican National Committee. Blackwell is considered a specialist in matters related to the rules of the political institution to which he belongs in.

United States Court of Federal Claims’ judge Loren A. Smith, who proclaimed himself a libertarian, is also part of CAMP. Smith was appointed judge in 1985, in the Reagan administration after having been involved in the electoral campaign of the then president of the United States. Throughout his career he has been known for being one of the most conservative judges in the country and for having been an advisor on the drafting of Thailand's constitution in 2007.

Protest in Roatan against the ZEDE project “Honduras Prospera”. Citizen photography.
Protest in Roatan against the ZEDE project “Honduras Prospera”. Citizen photography.

Richard W. Rahn is president of the Institute for Global Economic Growth and is a member of the editorial board of the Cayman Financial Review. From 2002 to 2008, Rahn served as the first foreign member of the Board of Directors of the Cayman Islands’ Monetary Authority, which regulates the world's largest offshore financial center.

La Gaceta also mentions Georgian Kakha Bendukidze, who became known as one of Russia's leading libertarians after the fall of the Soviet Union. During his career, he led a group on taxes and currency within the Russian Union of Industrialists and Entrepreneurs, and lobbied for changes in fiscal policy. When the Soviet Union began to privatize state-owned companies, the Georgian libertarian obtained Uralmash, the country's signature heavy machinery factory, and many other companies in the machine-building, energy and chemical industries, under the umbrella of a holding company called OMZ. Bendukidze passed away within months of becoming a member of CAMP, on November 13, 2014 after undergoing cardiac stent surgery.

Another European businessman who forms part of the ZEDE regulatory committee is banker and founder of Saxo Bank, Lars Seier Christensen. The Danish is a follower of Donald Trump and his economic and fiscal policies. In an interview given to the Berlingske newspaper, he assures that Trump is better than the average American president.' To this, he added that the president's economic policy benefits everyone and his management of the pandemic has been the subject of unfair criticism.

Barbara Kolm, vice president of the Austrian National Bank and director of the Hayek Institute, is perhaps the most controversial person involved in the committee. According to information from the Organización Fraternal Negra Hondureña (Honduran Black Fraternal Organization) (Ofraneh), Kolm is the president of the CAMP Committee of the ZEDE. She was recently accused of illegally financing various far-right populist movements. The Austrian has, repeatedly, denied the existence of climate change. When she served as director of the Austrian Economic Center, she attended one of Tilo Sarrazin’s conferences, a German politician who rejects non-white migration to Europe.

Gabriela von Habsburg, also known as Archduchess Gabriela of Austria, was Georgia's Ambassador in Germany from 2009 to 2013. She is the granddaughter of Charles I, the last Emperor of Austria. Gabriela assures that Georgia's history served as a melting pot for European culture and maintains that President Mikheil Saakashvili's liberalizing reforms have stimulated Georgia's economy and have been well received by the population, which has led Georgia to become a member of the European market.

Salem Ben Nasser Al-Ismaily is the only Arab who holds a position in CAMP. He is currently an advisor at the Ministry of Foreign Affairs of Oman. He also served as President and CEO of the Public Authority for Investment Promotion and Export Development of the Sultanate of Oman. Al-Ismaily is the founder and president of the International Research Foundation, a non-profit institution that has pioneered economic freedom research in the Arab League. This foundation seeks to measure the extent to which citizens of Arab nations can make their own economic decisions, without limitations imposed by the government or the elites.

Of the 21 CAMP members, 3 are Latin American businessmen. One of them is the Panamanian Surse Pierpoint, creator of the Fundación Libertad Panamá (Freedom Panama Foundation) that seeks to promote free market reforms. Since 1989 he has been the manager of Colón Import & Export and is part of the board of the Asociación de Usuarios de la Zona Libre (Association of Users of the Free Zone) in Colon, Panama,  where he was president from 2014 to 2017.  There is also Alejandro Chafuen of the Atlas Economic Research Foundation, who also forms part of several think tanks focused on researching issues related to free trade issues, and the Peruvian lawyer Enrique Ghersi, litigant in courts and arbitrations, specialist in Economic Criminal Law and Economic Analysis of Law. He entered politics in 1990, was elected as a deputy for the Democratic Front party and participated in the Bicameral Budget Commission. 

Some of the CAMP members have died in the last 6 years and it is still unknown if there are changes, resignations or new members. Meanwhile, the promoters of ZEDE are trying to materialize their projects and ideas without having the supervision of the body intended to comply with that function.

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