U.S. Continues to Provide Honduran Regime with MCC Aid Money, Despite Having Cut Off Other Countries Following Coups

The U.S. continues to provide the coup regime in Honduras with tens of millions of dollars in aid money through the Millennium Challenge Corporation (MCC), despite having cut off MCC assistance to Mauritania and Madagascar following coups d’etat in those countries, the Center for Economic and Policy Research (CEPR) describes in a new issue brief.  The brief notes that while the U.S. suspended MCC money within days following coups in both Mauritania and Madagascar, MCC commitments in Honduras, worth more than $190 million, have not been put on hold after over 57 days following the coup.  The U.S. also cut MCC aid to Nicaragua this year following what the U.S. alleged were electoral irregularities in municipal elections.

“There appears to be a double standard regarding MCC assistance following coups,” CEPR Co-Director Mark Weisbrot said.  “It is unclear why the U.S. has not cut MCC funds to Honduras, considering its stated opposition to the ouster of President Zelaya and its stated intentions to pressure the coup leaders.”

There has been growing pressure on the Obama administration to enact further sanctions on the regime.  On August 7, 16 Democratic members of Congress wrote President Obama urging him to freeze the assets of coup leaders and deny them entry into the U.S.  The administration has not responded to the letter, nor has it made a legal determination as to whether a coup d’etat took place in Honduras, almost two months after Honduran military forces broke into President Manuel Zelaya’s home and rousted him from his bed at gunpoint before flying him out of the country.  A legal determination that these events did constitute a coup would trigger a suspension of aid under the Foreign Assistance Act.

“This has been a violent coup, with a wave of repression including assassinations of Zelaya supporters, beatings and physical assaults, mass detentions, and attacks on media outlets critical of the coup,” Weisbrot said.  “The U.S. government could quickly end the coup with serious economic pressure, but it hasn’t even frozen the coup leaders’ assets.”

The MCC is a U.S. government-run corporation created in 2004 and tasked with managing the Millennium Challenge Account (MCA), a fund whose mission is to provide development assistance to low-income developing countries.  A country’s eligibility to receive assistance from the MCC is based on a series of “selection indicators” related to “Ruling Justly,” “Investing in People,” and “Economic Freedom.”  Its board of directors is chaired by the U.S. Secretary of State and includes cabinet officials such as the Treasury Secretary and the U.S. Trade Representative, who oversee stewardship of the MCA.

The brief notes that the MCC froze all assistance to Nicaragua following alleged irregularities in its November 9, 2008 elections.  Secretary of State Hillary Clinton then announced in June that the MCC would terminate all but one of the Nicaragua programs, costing Nicaragua $62 million.

The full issue brief can be found here.

For more information, contact Dan Beeton of the CEPR, 202-239-1460.