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Honduran newspaper stops print edition after government freezes its finances for money laundering investigation

  • By Guest
  • October 27, 2015

Honduran newspaper Diario Tiempo announced today the termination of its print edition. The newspaper made the decision three weeks after the Honduran government froze the assets of its parent company, business conglomerate Grupo Continental, following accusations of money laundering by the U.S. Office of Foreign Asset Control (OFAC).

On Oct. 11, the Honduran National Commission of Banks and Securities (CNBS for its acronym in Spanish) announced the closure and forced liquidation of Grupo Continental’s banking branch, completely crippling Diario Tiempo’s financial operations and prohibiting all transactions such as paying employees’ salaries, reported Diario Tiempo.

German Quintanilla, editor-in-chief at Diario Tiempo, told the Knight Center for Journalism in the Americas that all 350 employees at Diario Tiempo, including executives, have been without pay since the beginning of October. Of the roughly 40 journalists at Diario Tiempo, some will continue maintaining the online site, he said, but it is unclear what will happen to those who worked on the print edition.

Quintanilla said that three or four of the newer journalists have left while the more experienced ones have stayed. The employees are trying to maintain a dialogue with the Honduran government and Ministry of Labor in the hopes of managing the company’s funds so it can pay out salaries.

“The $5 million that we had put aside to pay our employees has disappeared, or has been frozen,” Quintanilla said. “Businesses that owe us money, the people who advertised with us, can’t pay us because we don’t have a bank account anymore. We are bankrupt since OFAC intervened in our company’s affairs.”

Grupo Continental and many of its branches including its financial arm, Banco Continental, were labeled as “specially designated narcotics trafficker” by OFAC under the Kingpin Act, a law designed to prevent foreign drug traffickers from accessing the US financial system through US banks, companies and individuals.

The Honduran government acted almost immediately on OFAC’s announcement despite it not having any existing investigations of Grupo Continental or its president, Jaime Rosenthal. The Honduran government’s actions against Grupo Continental were not limited to closing its bank however, and, on Oct. 14, the government seized 19 of Grupo Continental’s businesses and properties, among various other assets.

“We are feeling the effects of a U.S. law,” Quintanilla said. “The government says this is a problem between Grupo Continental and the U.S., and in a way, it is, but they should not limit themselves to such a simple answer. I get the impression they didn’t have a plan or any idea of the effects that their actions would have.”

Shortly after the closure of Banco Continental, Diario Tiempo released a public statement on its website demanding an explanation of the government’s intentions for placing a stranglehold on the news company. While expressing respect for the authority of the U.S. and Honduran governments, it denounced the “asphyxiation” of an independent media outlet and declared the actions against Diario Tiempo as damaging to press freedoms and universal rights of expression.

“We have always been a thorn in the side of the government and other regimes,” Quintanilla said. “To survive in politics one must always look ahead and it’s possible that someone has seen an opportunity, but I really don’t know. The whole situation arouses suspicion and other journalists, politicians, and independent citizens have expressed this.”

Diario Tiempo, one of the leading Honduran dailies based in San Pedro Sula, had a circulation between 55,000 and 60,000 copies each day.​

 

*Silvia Higuera contributed to this report

Note from the editor: This story was originally published by the Knight Center’s blog Journalism in the Americas, the predecessor of LatAm Journalism Review.

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