On the evening of February 27, 2014, Daniel Atala Midence, the young scion of one of the most powerful families in Honduras, felt like a huge weight had been lifted from his shoulders.
He had just learned that the family company where he served as chief financial officer had secured a crucial tranche of funding for a hydroelectric dam it was building in the sprawling green highlands of western Honduras.
The project, called Agua Zarca, had been delayed by the protests of local indigenous groups, who said the dam would destroy a sacred river and decimate the fish stocks they relied on for food. After a protester was shot, the dam’s financial backer and co-developer had both pulled out.
So the Atala family and their company, Desarrollos Energéticos S.A de C.V. (DESA), were counting on financing from the region’s main development bank, the Central American Bank for Economic Integration (CABEI). When 27-year-old Daniel Atala learned that CABEI had finally signed off on a long-anticipated $24.4 million loan, he breathed a sigh of relief.
“I feel 50 lb’s lighter,” he wrote on WhatsApp to his girlfriend, in one of thousands of messages collated as part of a Honduran court case and obtained by reporters. Initially, he told her, he had been worried that CABEI wouldn’t sign the loan agreement, which also involved another $20 million from Dutch and Finnish lenders administered through CABEI.
“Damn, I was freaking out.”
But not only did the loan go through — it set in motion a project that would end in tragedy.
Two years after Daniel Atala’s late-night texts to his girlfriend, Honduran environmental activist Berta Cáceres, who was leading a campaign against the construction of the dam, was shot to death in her bedroom by a murder squad led by a former Honduran special forces sniper.
The assassins had been hired by the president of DESA, Roberto David Castillo Mejía, according to a Honduran court, which sentenced him last year to 22 years in prison for his role in ordering and planning her murder, alongside seven other men. (Castillo, who still has the right to appeal his conviction, did not reply to requests for comment. Honduran prosecutors have not accused Daniel Atala of any role in the murder.)
Thousands of words have been written about Cáceres’s murder and the subsequent fallout in Honduras. Yet little has been revealed about how CABEI agreed to help finance the Agua Zarca project in the first place.
Now, an investigation by OCCRP and Columbia Journalism Investigations reveals that the bank — which claims to prioritize projects that are environmentally sustainable and reduce poverty — ignored red flags when partnering with DESA and its powerful owners, the Atala family.
OCCRP obtained confidential internal audits stating that CABEI should have “examin[ed] the financial and technical capacity of the developer to make their investment” before approving the $24.4-million loan. The auditors noted that the company was valued at only $2 million even as it was taking on a $50-million project.
More worrying still, the people behind DESA — the Atala family and Castillo — had “no experience in power generation projects” when it was approved for the loan to build Agua Zarca, the audit noted.
In the text messages he sent to his girlfriend about the loan, Atala was frank about his own inexperience. “I feel bad now. I owe $44.4 million…. I’m [going to be] working for CABEI for the next 13 years to generate this much money…. I’m freaking out bruh.”
“Dannyyyyy!!!!” she responded. “All, absolutely all, companies go into debt.”
“Not that much, man,” he responded. “How come [my uncle and dad] aren’t freaking out, trusting so much money in two children?”
The audits show CABEI disregarded multiple warnings about the project’s risks, from concerns about environmental damage to reports that DESA was fueling tensions with the local community. They do not go into detail about why this happened, but the Atala family was well connected in Honduras — and at the bank itself.
Daniel’s father, Jose Eduardo Atala Zablah, a shareholder in the company that owned DESA, had served as the development bank’s Honduran director for two years in the early 2000s. His uncle, Jacobo Atala Zablah, is a prominent Honduran businessman who once headed Banco BAC, one of the largest lenders in the country. In 2021, OCCRP partner Contracorriente revealed that Jacobo Atala had helped set up several offshore companies for Porfirio Lobo, the president of Honduras from 2010 to 2014.
Neither Jose Eduardo Atala Zabala or Jacobo Atala Zablah replied to requests for comment.
In his text messages to his girlfriend, Daniel Atala said CABEI had taken a long time to sign off on the loan. “I had to use my Frank Underwood backchannels,” he said — a reference to the conniving main character in the Netflix series “House of Cards.”
“Jacko,” he added in the following message, using a nickname for his uncle Jacobo.
Atala claimed in a written response to questions from OCCRP that he had simply been boasting to sound more impressive.
“No back channels whatsoever were used to be able to approve this financing and if there was a text to a girlfriend saying something that was contrary to that it was only in the intention of courtship, trying to seem more interesting or in the pursuit of further conversation, as young men do when they are in a courtship,” he said.
He added that “extremely extensive” due diligence had been performed before his company was loaned the money for the dam, and emphasized that his father had left his directorship at CABEI years before.
“That does not seem like a conflict of interest, but I understand this information doesn’t fit the narrative you are trying to sell,” he said.
But Wout Albers, a human rights lawyer representing Cáceres’ family in a Dutch civil case against the FMO, another bank that lent to the project, said Jose Atala’s role in DESA should have set off alarms within CABEI.
The bank “must have realized that granting a $24 million loan to its former director created the impression of conflict of interest, or at least nepotism,” he said.
CABEI’s outgoing president, Dante Mossi, told OCCRP in an interview that he could not defend the bank’s decision to lend money for the Agua Zarca dam. He said it was one of many failing loans he inherited when he assumed his post in late 2018, calling the project a “disgrace.”
“I don’t know what got into the mindset of the board of directors who accepted this project,” he said.
The serious social risks of the dam project should have been obvious to anyone familiar with the Honduran context, Mossi said — particularly the complexity of land ownership in the traditional lands of the indigenous Lenca people.
“If I were president [at the time] this project would never have been accepted because I know this is communal land, you cannot buy a plot of land in that region.”
CABEI did not respond to multiple requests for comment.
