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Honduras hired elite D.C. law firm in failed lobbying effort to derail ‘state-sponsored drug trafficking probe’ of president’s brother

The Washington Post logo The Washington Post 4/1/2021 Spencer Hsu

Honduran President Juan Orlando Hernández’s government retained a powerhouse Washington law firm to lobby U.S. prosecutors to call off a “state-sponsored drug trafficking” probe of his brother, who was sentenced this week for smuggling 185 tons of cocaine into the United States.

Prosecutors cited the failed September 2019 influence campaign by Arnold & Porter Kaye Scholer LLP — along with the murder of four people linked to the investigation and the defendant’s own alleged repeated lies and obstruction — in urging stiff punishment for Juan Antonio “Tony” Hernández, 42, who is also a former Honduran congressman.

U.S. District Judge Kevin Castel of Manhattan sided with prosecutors, sentencing Hernández on Tuesday to life in prison plus 30 years and a $158 million fine.

“Here, the trafficking was indeed state-sponsored,” Castel said, adding that the defendant stamped his initials “T.H.” on the cocaine he smuggled into the United States.

As noted by prosecutors in sentencing papers, Honduras in September 2019 retained a U.S. law firm to lobby the prosecution team. Prosecutors did not name the firm, but Arnold & Porter separately disclosed the relationship in Justice Department foreign lobbying disclosure forms.

One of the most elite and prominent white-shoe firms in Washington, Arnold & Porter counts as alumni former Supreme Court nominee and current U.S. Attorney General Merrick Garland and former CIA general counsel Jeffrey H. Smith. Its present partners include John B. Bellinger III, a former State Department legal adviser in the George W. Bush administration.

In a call within days of registering as foreign lobbyists that September, lawyers with the firm told prosecutors they did not represent the defendant but were reaching out as “due diligence” for an unspecified “transaction,” prosecutors said in court filings. The firm’s attorneys also warned of “collateral consequences” from the case, including potential closures of U.S. military bases in Honduras and “unrelated immigration issues,” prosecutors said.

[Honduras is poor, violent and unstable. The Trump administration wants it to accept more asylum seekers.]

The Arnold & Porter attorneys called an expert government witness biased and some evidence too old to be meaningful “relative to the negative collateral consequences” in U.S.-Honduras relations, and said they planned to lobby other parts of the U.S. government after referring to contacts with the U.S. National Security Council, prosecutors said.

Assistant U.S. Attorneys Amanda L. Houle, Matthew Laroche and Jason A. Richman said they gave out no information and did not alter their trial presentation because of the firm’s campaign.

Prosecutors did not criticize the law firm but cited the outreach in condemning both Hernandez brothers’ “leadership role in a violent, state sponsored drug trafficking conspiracy.” For more than 15 years, U.S. authorities said, the pair corrupted Honduras’s democratic institutions, commandeered members of its military and national police, sold machine guns and ammunition to drug traffickers, and bribed top officials. Among those offered bribes, U.S. authorities said, were President Juan Orlando Hernández, former president Porfirio Lobo Sosa and other politicians associated with Honduras’s National Party.

Prosecutors also cited the lobbying campaign among alleged obstruction efforts, including the murders of a suspected U.S. informant in a Honduran maximum security prison, the prisoner’s lawyer, the prison warden and an alleged co-conspirator formerly with the national police.

In a sentencing filing, prosecutors wrote that Juan Antonio Hernández reaped “blood money” and trafficked drugs “on a monumental scale” in his violence-ravaged country and funneled millions of dollars in bribes over three presidential elections to politicians, including $1 million to his brother from Sinaloa Cartel kingpin Joaquín “El Chapo” Guzmán.

“The defendant’s conduct was, and continues to be, extraordinary,” they said.

Spokesmen for the Justice Department and for U.S. Attorney Audrey Strauss of Manhattan declined to comment beyond court filings.

[Another U.S. court filing ties the Honduran president, a Trump ally, to narco-trafficking]

Hernández’s lawyer, Peter Brill, argued for leniency, citing the U.S. public’s unending appetite for drugs. He said he would appeal.

In a statement to the court, Hernández argued he had been denied a fair trial by an inadequate defense, saying through an interpreter, “I feel I have been lied to.”

Honduran President Hernández has denied any ties to drug traffickers, charging that the prosecution was part of a political plot against him by traffickers. His brother’s sentencing “is hard on the family, hard on me personally,” he said in an audio recording Tuesday to his staff, which the Associated Press obtained.

“I find it outrageous. I find it unbelievable that the false testimony by self-confessed killers could have been heard and given weight in this way.”

A spokeswoman said Arnold & Porter and its attorneys declined to comment on the Honduras matter or its Foreign Agent Registration Act filings.

In those filings, the firm on Sept. 23, 2019, disclosed an agreement letter signed Aug. 27 by Honduras’s finance minister at the time, Rocío Tábora, agreeing to pay the firm $475,000 through Nov. 30 and hourly afterward, plus expenses, to provide legal services “in an international capital markets transaction.”

The firm also disclosed it had agreed to provide related advice and due diligence to Honduras, one of the poorest and most violent countries in the Western Hemisphere, and to engage in political activities on its behalf on “matters affecting U.S.-Honduran relations.”

[Honduran president, a Trump ally implicated in drug trafficking, tries to win over Biden]

The agreement was signed by firm partner Eli Whitney Debevoise II, who was President George W. Bush’s Senate-confirmed U.S. representative to the World Bank from 2007 to 2011.

Debevoise represented Honduras before the agreement ended Dec. 31, 2019, along with attorneys Samuel Witten and Arturo Caraballos, the firm reported the following January.

The firm did not disclose any other contacts with U.S. officials, but the filing confirmed that its attorneys communicated by email with an assistant U.S. attorney and the co-chief of the terrorism and international narcotics unit of the U.S. attorney’s office. The firm also communicated by phone with Richman and another prosecutor and with long-serving Deputy Assistant Attorney General Bruce Swartz.

Arnold & Porter announced in June that Debevoise and Caraballos were part of a corporate and finance team that advised Honduras on its issuance of $600 million in 10-year sovereign bonds to refinance obligations of the Honduran electricity company ENEE.

The firm’s disclosure followed a U.S. push to enforce a law requiring foreign agents to report to the Justice Department, and it came weeks after former Democratic White House counsel Gregory B. Craig was acquitted by a federal jury in Washington of concealing aspects of his work for the government of Ukraine.

The act exempts ordinary legal services from disclosure requirements. But the Justice Department ruled in December 2017 that a U.S. law firm was required to register for political activities taken on behalf of the government of Turkey. That case involved persuading the U.S. government to join Turkish law enforcement entities to thwart Iranian efforts to evade sanctions and to free a Turkish-Iranian gold dealer facing money-laundering and fraud charges in New York City. The gold dealer went on to claim that his scheme to move billions in Iranian oil profits was approved by Turkish President Recep Tayyip Erdogan.

spencer.hsu@washpost.com

The Associated Press contributed to this report.

Read more: Gold dealer implicates Turkey’s president in corruption scheme President Recep Tayyip Erdogan demands American prosecutors free a Turkish-Iranian gold dealer Honduras president seeks aid, warns of increased migration after hurricanes a group of people riding on the back of a person wearing a helmet: Guatemalan soldiers in riot gear guard the integrated border crossing point of Corinto on the border with Honduras. © Delmer Martinez/AP Guatemalan soldiers in riot gear guard the integrated border crossing point of Corinto on the border with Honduras. Juan Orlando Hernandez wearing glasses and smiling at the camera: Honduran President Juan Orlando Hernandez delivers a message after his brother Juan Antonio "Tony" Hernandez was found guilty of U.S. drug trafficking in 2019. © Jorge Cabrera/Reuters Honduran President Juan Orlando Hernandez delivers a message after his brother Juan Antonio "Tony" Hernandez was found guilty of U.S. drug trafficking in 2019.
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