“The Scent of Fraud:” The Door Opens for a New Corporate Assault on Honduras

While the Trump administration is bombing boats and murdering civilians in the Caribbean and Pacific Ocean — and has now illegally invaded Venezuela and kidnapped its president and first lady over unsubstantiated allegations of narcoterrorism — its interference in the recent Honduran elections is inciting a return to narcopolitics.

In the few days prior to the elections, President Trump publicly backed the right-wing National Party candidate, Nasry “Tito” Asfura, for President. And the day after the elections, Trump pardoned a major narcotrafficker and onetime-ally of the United States, Honduran ex-president Juan Orlando Hernández.

Three weeks later, on Christmas Eve, Honduras’s National Electoral Council (CNE by its initials in Spanish) declared Asfura president-elect.

Until Trump threw his support behind Asfura, he was not believed to be a serious contender. Furthermore, given a technical tie of a less than 30,000 vote difference between Asfury and the Liberal Party candidate, the CNE’s declaration is highly questionable — coming before the results could be fully verified, several inconsistencies reviewed, and technological failures of the electoral transmission software investigated.

As a result, social movement leaders and independent electoral observers view the results as illegal and a foreign imposition that completely undermines electoral democracy and represents a pact between the wealthy Honduran elite and business class, the United States government, and foreign corporate interests. The Liberal Party presidential candidate, Salvador Nasralla, like the LIBRE party, has filed a formal appeal to challenge the results.

Forcing the National Party back to power will no doubt result in the reinstallation of a narco-state and an investment model that once again favors mafia-style investments — a corporate agenda detrimental to affected people and the public purse that is rife with corruption and irregularities, intertwined with organized crime and repression.

We detailed these practices extensively as coauthors of the October 2024 report The Corporate Assault on Honduras. 

In the report, the IPS Global Economy Program, the Honduras Solidarity Network, the Transnational Institute, and TerraJusta outline how harmful policies and projects imposed during the narcodictatorship led by the now-pardoned Hernández and the National Party continue to cast a devastating shadow over Honduras’ attempts to restore economic stability.

For a brief four years under President Xiomara Castro (2022-2026), efforts were made to roll back some of the most egregious policies, such as the widely unpopular creation of charter cities known as ZEDE, deepening privatization in the energy sector, and private-public infrastructure contracts highly unfavorable to the public interest. In response, Honduras faced an onslaught of Investor State Dispute Settlement (ISDS) claims currently totaling around $10 billion.

While the fate of these claims remains to be seen, similar corporate investments and interests imposed under the narcodictatorship (the period 2009-2022) are sure to proceed with fewer barriers under the 2026-2030 Honduran government.

Trump’s Direct Interference

Seventy-two hours before the November 30th general elections, Trump issued a message on his Truth Social platform expressing his support for Asfura. In the same message, he promised to pardon Hernández, who was sentenced in the U.S. to 45 years in prison in June 2024 for conspiring to traffic hundreds of tons of cocaine to the U.S. and for arms-related charges.

While Hernández was president of Congress from 2010 to 2014 and then president of Honduras from 2014 to 2022, he not only sought to shove drugs (as he put it) “right up the noses of the gringos,” he used his presidential powers to favor certain drug cartels and block investigations into their activities. He also used Honduras’s ports and airspace to move drugs north and provided state contracts to his narcotics associates to facilitate money laundering.

Hernández also oversaw a regime that repressed the Honduran people in order to impose policies and projects that favored corrupt networks of associates, as well as national and transnational corporations looking to benefit.

After Trump signed his pardon on December 1, Hernández was immediately freed from prison. Trump then issued successive social media messages to favor Asfura and to threaten Hondurans that the U.S. would cut off foreign assistance from the Central American country if the National Party candidate was not declared the winner of the Honduran presidential election. Honduras is highly dependent on international aid and loans.

The Corporate Lobby Behind U.S. Interference 

Mother Jones reports that “Trump’s longtime adviser Roger Stone — the convicted and now pardoned felon and political strategist” —  lobbied for Hernández’s pardon in order to ensure that the next Honduran government would be more favourable to U.S. corporate interests. The same article cites a January 2025 blog in which Stone says pardoning Hernández would be useful to save “the Próspera experiment,” a foreign Zone for Employment and Economic Development (ZEDE) which enjoys investment from Trump-aligned tech oligarchs Peter Thiel (of PayPal and Palantir) and venture capitalist Marc Andreessen. The ZEDE is a form of privatized city state pursued in particular by libertarian tech elites who want to live outside of the rule of government.

The New York Times has also pointed out that Trump’s former 2020 campaign manager, Brad Parscale, “worked with consultants who helped run Nasry Asfura’s presidential campaign.”

The U.S.-based Próspera Group is one of numerous investors who benefited from the narcodictatorship and whose persistent efforts pushed through a legal framework for ZEDE, with support from Juan Orlando Hernández, that was highly controversial across the political spectrum in Honduras. That framework was repealed by the administration of Xiomara Castro and declared unconstitutional by the Supreme Court of Honduras in September 2024. In response to the Castro administration’s opposition and the long-standing community-led resistance, in 2022 the Próspera Group filed a $10.8 billion claim against the Honduran state. (The case is pending and now valued at $1.6 billion.)

The Corporate Assault on Honduras examined Próspera and over a dozen other transnational corporations that have brought billions of dollars in claims against Honduras, made possible by exclusive privileges incorporated into free trade agreements, bilateral investment treaties, a national investment law passed after the coup, and contracts. Such unpayable claims for a country like Honduras are another way that corporations try to blackmail governments into negotiations under duress or to otherwise make decisions in their interests.

Massimo Mazzone, who recently brought a million-dollar claim against Honduras for his investment in the ZEDE project known as Ciudad Morazán, confirms in an interview with the Free Cities Podcast that the ZEDE sector was hoping for the Castro government’s loss. Even then, however, he states that “the well is poisoned” against model cities in Honduras, especially given the 2024 Supreme Court ruling against ZEDE. He anticipates that Próspera will continue to pursue its arbitration and use its unpayable claim as leverage to seek a negotiated agreement with the government in order to move forward with its project.

The Corporate Assault Ramping Up

The difficult and still unfolding election crises augurs an even more difficult scenario during 2026 for the Honduran people, social movements, and communities affected by megaprojects that threaten their territories, land, water and wellbeing.

As the electoral observer team organized by Global Exchange, the Honduras Solidarity Network, and CESPAD finds in a report published prior to the declaration of the presidential winner, “regardless of whether the ultimate victor is the National Party or the Liberal Party, [it will represent] a tangible and dangerous setback for the rights and well-being of the Honduran population. This scenario, grounded in historical precedent, threatens to deepen patterns of dispossession, entrench impunity, and reverse even the most limited gains in human rights.”

Furthermore, the pardon for Juan Orlando Hernández, which Honduran social movement organizations are quick to point out does not equate to innocence, “opens the door to a restoration of the networks of power that came together around narcotrafficking, corruption, and state capture” during Hernández’s dictatorship, as Criterio reports.

Miroslava Cerpas, president of the National 911 Emergency System in Honduras, has warned,”In this election, we observed that, since November 28, when the pardon of drug trafficker Juan Orlando Hernández was announced, there has been an uprising by criminal groups, maras, and gangs — which were the armed wing of the Hernández cartel — to intimidate people so they would not exercise their right to vote, so they would not vote for the Libre Party (or so they would vote specifically for the National Party).”

The Intercept further documented that members of the MS-13 gang, designated a foreign terrorist organization by the Trump administration, intimidated and threatened potential voters to persuade them to vote for Asfura instead of Libre.

Despite these grave indicators of worsening systemic violence, the Organization of American States omitted any reference topotential U.S. interference in the Honduran presidential election in its recent statement. This only intensifies the “scent of fraud,”harkening back to the days following the 2009 military-backed coup against then-president Manuel Zelaya and the spiral of violence and repression that followed.

Despite this context of uncertainty and fear, networks of mutual support, community resistance, and social movements led by ordinary Hondurans are remobilizing against the legacy of corruption, abuse, and violence under the narcodictatorship of Juan Orlando Hernández.

This moment similarly calls for greater international solidarity and condemnation of the continuing corporate assault on Honduras and U.S. aggression throughout the region in the name of combating drugs and terrorism — and as part of an open attempt to assert U.S. dominance in the hemisphere through the Monroe Doctrine, with the complicity of other Global North governments whose corporations are also positioned to benefit from continued destabilization in Honduras.

This first appeared on Foreign Policy in Focus. 

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