Hondurans disillusioned with leader amid scandal and end to US extradition treaty

TEGUCIGALPA, Honduras (AP) — An incriminating admission by the brother-in-law of Honduras' president just days after the country announced it would end its longstanding extradition treaty with the U.S. is feeding fears among Hondurans that the country's legacy of corruption is continuing.

President Xiomara Castro had inspired hope when she was elected the Central American nation's first female leader in 2021 on a promise to “pull Honduras out of the abyss we have been buried in by neoliberalism, a narco-dictator and corruption.”

Despite being married to former President Manuel Zelaya Rosales – ousted in a coup in 2009 – she was a breath of fresh air for many Hondurans after the presidency of Juan Orlando Hernández, who in June was sentenced to 45 years in prison by a U.S. federal court for drug trafficking.

But as gang violence has continued to roil Honduras and several scandals have plagued Castro's government, frustration has replaced that initial optimism for many Hondurans who now see her as the same brand of corrupt leader that has long ruled their country.

“We thought that corruption would end with Xiomara Castro, because they were supposed to be different from previous governments, but they have turned out to be the same or worse,” said 44-year-old Gabriel Hernández, who works in marketing in the capital, Tegucigalpa.

The latest blow came this weekend, when Castro’s brother-in-law, Carlos Zelaya, part of Libre’s leadership team in the Congress, admitted that he had met with a leader of the drug trafficking organization “Los Cachiros” in 2013.

Zelaya, brother of the former president, revealed the details to the press when he went to the Public Prosecutor’s Office on Saturday to give a statement related to an investigation into his alleged links to drug trafficking.

He said the drug trafficker offered support to Libre’s campaign that year, when Castro made a failed first bid for the presidency. Zelaya explained that at the time, he did not know that people in the meeting were linked with drug trafficking.

“Eleven years ago I was invited to participate in a meeting in which there was a group of businessmen who wanted to make a contribution to the campaign,” Zelaya said as he left the Public Prosecutor’s Office. “I am convinced that that meeting and everything that happened there was recorded. I fell into a trap, I assume my responsibility.”

His admission came just days after Castro’s foreign affairs minister announced Honduras was ending an extradition treaty with the United States following a spat with an American diplomat. The treaty had been in place for over a century and since 2014, 64 Hondurans have been extradited to the U.S., largely on drug trafficking charges. Among those was former president Hernández.

“I don’t think this is a coincidence, I don’t think it’s random ... This is an issue that could be a turning point in Castro’s presidency,” Breda said. “Unless Castro steps back and reestablishes the extradition treaty, this move will inevitably be seen as a way to protect their family.”

Those suspicions were shared by Hondurans like Hernández, the marketing worker, who said that even an “ordinary person like me" knows that it was not a coincidence.

The discontent may be a major political burden for Castro and her Liberty and Refoundation Party (Libre) in the lead up to next year's elections, said Tiziano Breda, a is a Latin America expert at the conflict analysis organization ACLED. The recent moves by the government “weaken the argument that brought Libre to power, which was basically to kick out the corrupt elite that was in cahoots with drug trafficking organizations," he said.

The frustrations among Hondurans coincide with sliding approval numbers for the president. Compounding that discontent is also unemployment, economic turmoil and failures to reduce the level of violence.

“It’s common for politicians to play these kinds of games, looking for ways to escape justice, not be accountable to the people, to hide their misdeeds and thus continue their legacy of corruption, which ultimately never ends,” marketer Hernández said.

It’s not the first time Castro has faced criticism for perceived corruption.

Last year, the director of a Honduran anti-corruption organization fled the country with her family over threats she received after publishing a report on nepotism in the Castro administration. The organization had warned of a “concentration of power” from government posts going to the children and other relatives of Castro and her husband, the former president.

Carlos Zelaya’s announcement was followed by another from his son, Honduras Defense Minister José Manuel Zelaya Rosales, who tendered his resignation in an effort to ensure no favoritism would be shown to his father.

On Sunday, Castro announced that Zelaya Rosales, her nephew, would be replaced as defense minister by presidential hopeful Rixi Moncada Godoy.

Moncada Godoy will “raise our flag high and remind us that our true value lies in dignified, strong and determined people who forge their own destinies,” Castro said.

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Janetsky reported from Mexico City.

FILE - Honduras' President Xiomara Castro waves during the swearing-in ceremony for Colombia's President Gustavo Petro in Bogota, Colombia, Aug. 7, 2022. (AP Photo/Fernando Vergara, File)

NEW YORK (AP) — Wall Street is pulling back from its records on Tuesday as the price of crude oil tumbles and technology stocks falter.

The S&P 500 was down 0.9% in afternoon trading, a day after setting an all-time high for the 46th time this year. The Dow Jones Industrial Average was down 317 points, or 0.7%, with less than an hour remaining in trading, and the Nasdaq composite was 1.3% lower.

Exxon Mobil dropped 2.5%, and energy stocks fell to some of Wall Street's sharpest losses after oil prices tumbled roughly 4%. A barrel of Brent crude, the international standard, has fallen back below $75 from more than $80 last week.

Crude prices have been weakening as China’s flagging economic growth raises concerns about demand for oil. At the same time, worries have receded about Israel possibly attacking Iranian oil facilities as part of its retaliation against Iran’s missile attack early this month. Iran is a major producer of crude, and a strike could upend its exports to China and elsewhere.

Nvidia was the heaviest weight on the S&P 500 and fell 5.1%. It's a cooldown for the chip company, whose stock is still up 164.5% for the year so far on euphoria about the profits created by the boom around artificial-intelligence technology.

Stocks for companies across the chip industry fell after Dutch supplier ASML reported its latest quarterly results. CEO Christophe Fouquet said AI continues to offer strong upside potential, but “other market segments are taking longer to recover,” and ASML's stock trading in the United States fell fell 17.7%.

Also dragging on the U.S. stock market was UnitedHealth Group. The insurer fell 7.8% despite reporting better results for the latest quarter than analysts expected. It lowered the top end of its forecasted range for profit over the full year.

Helping to keep the S&P 500 and Dow close to their records set on Monday were gains for several financial companies following better-than-expected profit reports for the summer.

Bank of America rose 1.5%, and CEO Brian Moynihan said his company benefited from higher average loans and fees for investment banking and asset management. Charles Schwab jumped 6.7% after likewise delivering better results than expected. More customers opened brokerage accounts at the company, helping to bring its total client assets to a record $9.92 trillion.

Walgreens Boots Alliance was another winner, up 13.2%, after topping analysts’ forecasts. The drugstore chain also said it will close about 1,200 locations over the next three years as it tries to turn around its struggling U.S. business.

Chipmaker Wolfspeed jumped 19.2% to trim its loss for the year to 68.8% after the Biden-Harris administration announced Tuesday that it plans to provide up to $750 million in direct funding to the company. The money will support its new silicon carbide factory in North Carolina that makes the wafers used in advanced computer chips.

In the bond market, trading of Treasurys resumed after a holiday on Monday, and yields sank following a weaker-than-expected report on manufacturing in New York state.

The yield on the 10-year Treasury fell to 4.03% from 4.10% late Friday. Manufacturing has been one of the areas of the U.S. economy hurt most by high interest rates caused by the Federal Reserve in its efforts to slow the economy enough to stamp out high inflation.

Now, though, the Fed has begun cutting interest rates as it’s widened its focus to include keeping the economy humming instead of just fighting high inflation. And it looks set to continue cutting rates through next year, easing the brakes further off the economy.

Recent reports showing the U.S. economy remains stronger than expected have also raised optimism that the Fed can pull off a perfect landing where it gets inflation down to 2% without causing a recession that many had thought would be necessary.

Because of expectations for continued growth for the U.S. economy, as well as the boost that lower rates can give to corporate profits and to prices for stocks, strategists at UBS raised their forecast for how high the S&P 500 could go this year and next.

Led by Jonathan Golub, they're calling for the S&P 500 to rise to 5,850 by the end of the year, up from their prior forecast of 5,600.

In stock markets abroad, Chinese stocks fell sharply as doubts continue about whether the government will offer enough fiscal stimulus to prop up the world’s second-largest economy.

Stocks in Shanghai fell 2.5%, and Hong Kong’s Hang Seng index dropped 3.7%.

Indexes were mixed elsewhere in Asia and in Europe.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

The Charging Bull statue in New York's Financial District is shown on Tuesday, Oct. 15, 2024. (AP Photo/Peter Morgan)

FILE - People pass the entrance for the Wall Street subway station on Sept. 2, 2024, in New York. (AP Photo/Peter Morgan, File)

FILE -A passerby moves past an electronic stock board showing Japan's Nikkei 225 index and stock prices outside a securities building Friday, Oct. 11, 2024 in Tokyo. (AP Photo/Shuji Kajiyama, File)