Honduras Now

Day Two: Three Witnesses Testified

Pin
Karen Spring Filed Under: U.S. Bribery Trial Summaries

NOTE: Apologies for the typos and small errors. This is a working document.

Picture: Courtesy of Pro-Honduras Network

What happened today

  • Loren Simpson, government witness and former President of U.S. company Tactical Products Group (TPG) finished on the stand
  • Gabriela Salgado, government witness and former Honduran official involved in Security Tax committee testified
  • Bryan Berkman, TPG began to testified for the prosecution.

What to expect tomorrow

  • Bryan Berkman will continue on the stand
  • Aldo Marchena, a Florida wealth advisor will testify followed by an American Airlines representative
  • The trial will start and end early tomorrow and then will be suspended until Monday.

Key details that surfaced today

Witness testimonies

Loren Simpson, former President of U.S. company, Tactical Products Group (TPG)

  • Simpson is the former President of Tactical Products Group (TPG), a U.S. company that worked closely with Atlanco (whose former CEO Carl Zaglin and majority shareholder is on trial). TPG helped facilitate Atlanco’s interactions with Honduran government officials tied to the Honduran National Police and the Security Tax (TASA) Committee in order to obtain the contracts in question in this case.
  • Simpson’s role in the trial has been to introduce the actors working with both U.S. companies involved in obtaining contracts and then paying bribes. He focused on individuals working with Atlanco and TPG, establishing how the chains of command in both companies worked and the way they did business.
  • Simpson was shown many emails that he either wrote, received or was copied on. He was also shown spreadsheets he either wrote or contributed with the purpose of demonstrating how the contracts with TASA were obtained and how the bribes (known as “waterfall” in the language used in the emails between the two companies) were discussed. Simpson is only knowledgeable about the first bribe ($750,000) that Atlanco participated in because he left TPG in September 2015.
  • Simpson established that Aldo Marchena, a co-defendant that has since pleaded guilty, was not a broker as is suggested by Zaglin in his defense, that helped make the deal with Honduran authorities, but instead, played a key role in “moving money” (or bribes) to Honduran officials because Atlanco and Zaglin specifically, hoped to conceal their role in the scheme. Marchena had a company called Achieve GEA (Global Environmental Alliance) which was a front company used to pay bribes to Honduran officials.
  • Simpson had less knowledge about officials in Honduras that Atlanco and TPS were associated with, but was shown emails and pictures documenting a trip he, Dehart (former President of Altanco), and Bryan Berkman, TPG, made to Honduras to meet with Honduran government officials. The pictures showed Simpson and team meeting with the former Minister of Security, Julian Pacheco, a former Honduran representative to PARLACEN, Jaime Nativí, and Honduran National Police officer, Hector Ivan Mejía.

Gabriela Salgado, former alternative Director of TASA

  • Salgado is a Honduran national who was appointed by President Juan Orlando Hernández as the Alternate Director of the Technical Committee of the Security Tax (TASA) from 2012 to 2014. She has also worked with USAID in the democracy and government office or project, and at the Bureau of International Narcotics and Law Enforcement (INL) office in Tegucigalpa.
  • Salgado had never met Zaglin in her role at TASA nor was she at TASA when the uniform contract was obtained by Atlanco and TPG or when the bribes were paid. It seemed like her role on the stand was to introduce the idea of TASA and its structure, including how officials or employees are appointed or hired, what their role is, and talk about the role of TASA. According to Salgado, TASA was created in Honduras as a trust for for national security entities to equip and train, and assist with improving national security-related strategies. The creation of TASA was approved in a law by the Honduran National Congress in 2011. She mentioned that TASA collects money from Hondurans and companies and when she was part of TASA, the fund was bringing in approximately $250 million Lempiras or $12 to $13 million USD annually. This helped establish that a contract for $5 million (as was the value of the contract given by TASA to Atlanco) was quite large considering the annual contributions received by the fund.
  • Salgado was asked about TASA’s procurement process. She testified that TASA’s procurement process when she was involved was competitive, and only in special circumstances like natural disasters, security emergencies, and health emergencies does TASA get involved with direct procurement. This was likely asked because Atlanco did not participate in competitive bidding process when they obtained the first uniform contract. Salgado also mentioned that receiving bribes is against the law in Honduras.
  • Salgado established that Juan Ramon Molina (a co-conspirator in the case) was the Director of the Technical Committee appointed by the COHEP (the Honduran Business council) and was President of TASA’s Technical Committee. This enabled him to attend the meetings of the National Council of Security and Defense (CNDS) which approved and requested TASA to procure goods and services for security-related matters. She also testified that Francisco Cosenza (a co-conspirator in the case) was the Executive Director of TASA who oversaw staff, the operations of the office, determining what contracts are awarded and what procurement process was followed, among other duties.

Bryan Berkman, Tactical Products Group (TPG)

  • This was surprisingly, the most informative and scandalous testimony since the trial has begun.
  • Bryan Berkman is U.S. citizen that has been working for 15 years in the tactical supply industry. He’s a former employee and played a large role in the company, along with his much more experienced father, Luis Berkman. In September 2021, he and his father pleaded guilty to conspiracy to commit bribery under the Foreign Corrupt Practices Act (FCPA). The case involved bribing Bolivian government officials in order to obtain a $5.6 million dollar contract. When he pleaded, he agreed to tell the truth about other bribery schemes he was involved in. It seemed like this is how prosecutors found out about the bribery scheme involving Atlanco in Honduras.
  • During his testimony, it became clear that Berkman was a key insider in the deal and could thus speak in detail about the illegalities and violations that occured by a range of actors as Atlanco and also TPG sought contracts both related and unrelated to this case.
  • Berkman admitted to bribing Francisco Cosenza, the Honduran executive director of TASA a few times.
    • In a separate but related transaction to obtain poncho contracts with TASA, Berkman paid Cosenza bribes. Berkman outlined how after he sent the money, Cosenza returned the bribe and asked Berkman if he knew someone that could help him purchase two Cartier watches for his anniversary.
    • Through his contacts in Honduras and with Cosenza, Berkman had also obtained another contract from TASA for another company called Combined Technical Solutions to purchase teargas.
    • In another instance, the court was shown a WhatsApp conversation between Berkman and Marchena discussing how Berkman could get money to Cosenza in Honduras. Since he did not want to send the money directly, Marchena instructed Berkman to send the money to Achieve GES which later wired the money to an account controlled by Consenza in the name of another front company called DC Invest Inc.
  • Berkman also admitted to bribing Honduran official, Jaime Nativí, a former Honduran PARLACEN representative. Berkman testified that he did not remember how he first established contact with Nativí but that Nativi approached him saying that he had the contracts, including the Minister of Security and high-level Honduran police officials that could help them secure uniform contracts.
    • The quantity of the bribes to Nativí that was mentioned in various moments today differed. At one point, Berkman admitted to paying Nativí a “commission” of between $400,000 to $500,000 and mentioned that Nativí would keep some for himself and then pay off the Minister of Security [at the time it was Julian Pacheco Tinoco] and two high-level Honduran police officers. Berkman also mentioned that bribes paid to Nativí were also used to later pay off Cosenza, the TASA Executive Director.
    • Nativí was mentioned for the first time, as co-conspirator in the case.
    • Berkman mentioned that in October 2015, Atlanco paid for Nativí and three other Honduran individuals, to travel to Chicago to attend the International Association of Chiefs of Police (IACP) gathering. Paying for Nativí’s hotel was seen as part of Atlanco’s efforts to secure contracts with TASA.
    • As evidence, prosecutors posted an email exchange between Aldo Marchena (the money/bribe mover for Atlanco) and Berkman where Berkman gives instructions to Marchena to develop a fake contract or letter needed to wire money from the U.S. to Honduras. The letter was needed by Nativí in Honduras and sent to his Honduran bank (BAC Credomatic) in order to bypass money laundering verification checks. The letter made several false claims including that the money was being sent to Nativí for his security supply company (Coexpi) that sold goods inside the offices of the Security Ministry.
  • Berkman was shown Atlanco’s contract with TASA, several emails, WhatsApp and text conversations, and pictures of his co-conspirators. He was also shown pictures of himself, Simpson, and Dehart visiting Tegucigalpa in April 2015. In one picture, Berkman was at a restaurant with others eating dinner and in the picture was Honduran police officer, Hector Ivan Mejía, Jaime Nativí, DeHart and Simpson.
  • Another email and picture was shown in court which involved another individual that until today, we had not heard about. Steve Ortiz, a consultant involved in pitching an “INL project” (no other details were given) was depicted in a picture with the Minister of Security, Julian Pacheco, Berkman, Chuck Larsen (no other details were given about this person), and others. Berkman described how he was involved in helping or was knowledgeable about U.S. supply companies submitting proposals to this “INL project” including Arista (helicopters), Attero (arms), amongst others. As part of this project, a delegation of Honduran officials were taken to the U.S. to tour and meet with U.S. companies. The delegation visited Atlanco.
  • Berkman’s testimony will continue tomorrow.
Pin