TEGUCIGALPA, Honduras – The U.S. government is withholding funds to Honduran law enforcement units directly supervised by their new national police chief until the U.S. can investigate allegations that he ran a death squad a decade ago, according to a State Department report released last week.

The report says the State Department “is aware of allegations of human rights violations related to Police Chief Juan Carlos Bonilla’s service” and that the U.S. government has established a working group to investigate.

The U.S. had pledged $56 million in bilateral security and development assistance for 2012 in Honduras, where tons of drugs pass through each year on their way to the United States.

Under the new guidelines, the U.S. is limiting assistance so that it goes only to special Honduran law enforcement units, staffed by Honduran personnel “who receive training, guidance, and advice directly from U.S. law enforcement and are not under Bonilla’s direct supervision,” according to the report.

Foreign operations law requires that 20 percent of assistance to Honduras be withheld until the secretary of state certifies that Honduras is taking steps to improve human rights conditions and investigate allegations of abuses.

In an unusual twist, the report certifies the Honduran government is meeting human rights requirements, but nonetheless says the U.S. government is withholding aid to agents working under Bonilla.

State Department officials reached late Friday and Saturday could not confirm how much funding was being withheld nor how they determined the conditions were met.

Honduran President Porfirio Lobo’s spokesman Miguel Bonilla (no relation to the police chief) said Saturday that under the chief’s leadership “there has been a real improvement in the security situation.”

Honduran officials said the government “has an unconditional commitment to human rights.”