06BANGKOK5229 THE GHOST OF DEALS PAST: THAKSIN DEFENDS AGAINST PERJURY CHARGE FROM FORMER AMERICAN BUSINESS PARTNER

“76265”,”8/26/2006 3:31″,”06BANGKOK5229″,

“Embassy Bangkok”,”CONFIDENTIAL”,”06BANGKOK4525″,”VZCZCXRO1872

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TAGS: PGOV, EINV, PHUM, TH

SUBJECT: THE GHOST OF DEALS PAST: THAKSIN DEFENDS AGAINST

PERJURY CHARGE FROM FORMER AMERICAN BUSINESS PARTNER

 

REF: A. BANGKOK 4525

 

B. BANGKOK 2425

 

Classified By: Ambassador Ralph L. Boyce reason 1.4 (b) (d)

 

1. (C) SUMMARY: Prime Minister Thaksin faces charges of

perjury brought by a former American business partner, in

connection with the establishment of the first cable TV

venture in Thailand in 1989. The American has already won

cases in civil court and been exonerated of embezzlement

charges brought about by Thaksin. This seems to demonstrate

that he has a fairly strong case. Preliminary hearings start

September 11, and the court is scheduled to rule October 16

on whether to take the case to trial or not. Thaksin

opponents and sympathizers alike see this case as a serious

threat to the PM. END SUMMARY.

 

2. (SBU) Thaksin faces yet another serious challenge, as he

will go to court next month to defend against charges of

perjury stemming from an old business deal gone wrong.

Thaksin\’s latest threat comes from an American businessman

who came to Thailand in 1982 to start up a cable TV business.

As is so often the case, the American ran into difficulties

with the regulatory structure. In September 1985, according

to William Monson, a official at the Mass Communications

Organization of Thailand (MCOT) suggested that he meet

someone \”who could get his company the license:\” Thaksin

Shinawatra. Thaksin at that time was building up his

business leasing IBM computers to government offices; he had

not yet landed the highly lucrative telecommunications

concessions on which his fortune is based.

 

BUSINESS DEAL GOES BAD

———————-

 

3. (SBU) According to Monson, he formed a joint venture with

Thaksin and tried for several years to get the required

license. Monson oversaw the import of necessary equipment.

Although Thaksin at one point wanted to pull out of the

partnership, he showed renewed enthusiasm for the cable TV

venture in early 1989, when the government approved cable TV

in principle. Thaksin made Monson an offer in mid-April of

that year to remain as a consultant while Thaksin would keep

the license and operate the cable TV system. Monson made a

counter-offer to buy Thaksin out. Thaksin said he would

consider the offer. Instead, however, on April 25, 1989

\”Thaksin representatives and Police\” broke into the offices

and seized the equipment. Monson and some of his Thai staff

were accused of embezzlement; one Thai official of the

company was actually jailed for several days. Thaksin went

on to get the license for IBC, the first major cable TV

provider in the country. Later that year, he got the

concession for paging services; in 1990, he got the cell

phone concession. He was on his way to being a millionaire.

Monson, by his own account, began a very long legal process

to defend himself and gain restitution.

 

4. (SBU) Polcouns met Monson on August 18, 2006 to discuss

the progress of his case. He explained that he had pursued

his case in both US and Thai courts. A US court in

Washington state eventually determined it did not have

jurisdiction. In the Thai courts, Monson was acquitted of

the embezzlement charges in 1994. Thaksin appealed but lost.

Monson sought damages in civil court against Thaksin in

1995, claiming that Thaksin had lied in his testimony in the

embezzlement case. Monson won that case last year; Thaksin\’s

appeal is still before the Supreme Court. (According to

Monson, the Supreme Court was supposed to decide the case

last December, but has continued to delay its ruling.) On May

2, Monson filed criminal perjury charges against Thaksin.

Thaksin\’s defense tried to delay the criminal trial until the

Supreme Court had ruled on the civil case, but court rejected

the request. The court will hold hearings starting on

September 11 to determine whether to accept the case for

trial. It will announce its decision on October 16;

normally, the Court would permit some weeks or even several

months for the two sides to prepare their cases before the

trial starts.

 

5. (C) Both Thaksin opponents and those sympathetic to him

 

BANGKOK 00005229 002 OF 002

 

have come in recent weeks to see the case as a very serious

threat to the PM. The logic is pretty simple: Monson has

won each time so far that his case had come to trial. Monson

says that his legal team has tried to refine the case to its

most simple terms, to avoid allowing Thaksin\’s team to

confuse the issue. In 1989, he says, Thaksin told the court

that Monson was an employee of Thaksin\’s who took actions

with company resources that constituted embezzlement. Monson

says that will prove that he was, in fact a business partner

with significant investment in the company assets. He plans

to bring witnesses from the US who can testify to the

business relationship. He also said that, for the first

time, his Thai employees are prepared to testify.

(Previously, they had been too frightened, he said.)

 

THAKSIN\’S MONSTERS

——————

 

6. (C) Monson says that the timing of his case is

fortuitous: looking at the series of cases over the years,

that appears to be true. It could hardly come at a worse

time for the PM, however. The preliminary hearing will

provide a feast of anti-Thaksin reporting in a crucial period

in the run-up to the election. In addition to the actual

perjury charge, there may be other revelations about

Thaksin\’s business dealings in the mid-1980\’s that could be

bad press, or even open the doors to further investigation.

A few years ago, we would have predicted that the court would

find a way to duck this problem, perhaps by endlessly

stringing out each phase of the case. But it is Thaksin\’s

bad luck that the courts are newly invigorated as a result of

the King\’s charge to them (ref B). One business analyst we

spoke to, sympathetic to the PM, admitted that it doesn\’t

look good for Thaksin. A series of court decisions have

vindicated Monson; it would be hard for this court to say

that the case does not reach the level of credibility to

warrant a trial. The example of the three election

commissioners, whose swift conviction and brief imprisonment

forced them out of office, will certainly be on everyone\’s

mind (ref A). Our business analyst source says that the

actual trial might not take very long, since the evidence has

been examined by several courts already.

 

7. (C) If the court does not take the case, Thaksin\’s

reputation will take a hit anyway, with weeks of

Thaksin-basing during the pre-trial hearing. Monson is likely

to be a sympathetic protagonist: white-haired and

soft-spoken, formerly married to a Thai woman and with two

children here. He expresses no malice and tells the media

that he still considers Thaksin a friend, but \”Thaksin has

created these monsters, and they will eat him.\”

 

COMMENT

——-

 

8. (C) It\’s not the crime, it\’s the cover-up, that gets you.

We cannot assess the legal merits of Monson\’s perjury

charges, but he\’s won several times in Thai courts already,

and therefore appears to have a plausible case. Thaksin\’s

opponents, continuing to look for a way to beat a competitor

they cannot expect to out-poll, have seized on this case as

another stake to put through Thaksin\’s heart. With so many

threats against him — party dissolution, investigation into

the Shin Corp sale, factionalism within Thai Rak Thai, maybe

even assassination — it is ironic that one of his first

really big business successes from 17 years ago has come back

to haunt him at this stage, the most vulnerable point of his

political career.

BOYCE

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