"In this political year, the state resources can be used for political campaigns," Pino said. "If they haven't discussed the budget, why are they approving the financing (through bonds) of a budget that doesn't exist?"
Financial fraud isn't limited to the government. Tax evasion, for example, is widespread, with the government missing out on an estimated 43 percent of revenue due, said Mario Lopez Steiner, Honduras's tax director.
"The culture of tax evasion is incredible in Honduras," he said.
The institutional paralysis has also spread to the justice system. The Constitutional Chamber of the Supreme Court has not met for a month and a half because President Porfirio Lobo accused the magistrates of being part of a conspiracy to overthrow him.
Congress, whose majority belongs to Lobo's party, dismissed several judges without an impeachment trial. Meanwhile, the fired judges continue to enjoy the use of their offices and cars with drivers, even as other government employees go unpaid.
Because Congress hasn't replaced the dismissed judges, no one can rule on their appeal to be reinstated because the court's other justices have recused themselves from the case.
"Public power has been turned upside down in a brazen way," said Oscar Cruz, a former prosecutor in charge of defending the constitution.
The government and the ruling bloc have at least one idea to solve the fiscal crunch: They've introduced a bill that would create the country's first sales tax while eliminating tax breaks for companies that import goods.
The bill's supporters predict it will generate an additional $1.2 billion in revenue, which would double the government's yearly tax intake.
Businesses such as fast food franchises have long been exempt from taxes because they supposedly promote tourism even though many of them "are neither in tourist zones nor do they attract tourism," said Lopez Steiner.
Such tax breaks have been "approved as payments for political favors and as a result of the financing of election campaigns, which are always linked to tax favors," he said.
Legislators have so far suspended all tax exemptions for 60 days while a commission reviews whether to reinstate them.
Some families have survived the government vacuum with remittances sent by some of the 1 million Hondurans living in the United States. Their money equals 19 percent of the country's gross domestic product, according to the World Bank.
Yet it isn't enough for government workers such as teacher Daniel Espunda, who have lost paychecks to the political crisis.
"Now they owe me five months of salary. January will be the sixth I haven't been paid," Espunda said. "No one says anything about when the payday will come."
Associated Press Correspondent Martha Mendoza contributed from Santa Cruz, Calif.
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