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05BANGKOK7305 BESIEGED AUDITOR-GENERAL TALKS TO EMBASSY ABOUT CORRUPTION AND AIRPORT PROCUREMENT SCANDAL (GE INVISION)

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“46039”,”11/25/2005 5:11″,

 

“05BANGKOK7305″,”Embassy Bangkok”,”CONFIDENTIAL”,

 

“05BANGKOK5917|05BANGKOK6240|05BANGKOK7100|05BANGKOK7253”,

 

“This record is a partial extract of the original cable

 

The full text of the original cable is not available.

 

“,”C O N F I D E N T I A L SECTION 01 OF 03 BANGKOK 007305

 

SIPDIS

 

E.O. 12958: DECL: 11/18/2015

TAGS: PGOV, PHUM, PREL, TH, Corruption

SUBJECT: BESIEGED AUDITOR-GENERAL TALKS TO EMBASSY ABOUT

CORRUPTION AND AIRPORT PROCUREMENT SCANDAL (GE INVISION)

 

REF: A. BANGKOK 7253

B. BANGKOK 7100

C. BANGKOK 6240

D. BANGKOK 5917

 

Classified By: Political Counselor Susan M. Sutton. REASON: 1.4 (D)

 

1. (C) Summary. Poloff spoke with Khunying Jaruwan

Maintaka, the besieged Auditor-General of Thailand, on

November 14th concerning her controversial situation and

about corruption in Thailand. Although Jaruwan has avoided

speaking to the press and stays out of the public eye, she

gave Poloff an unusually candid and detailed account of the

multitude of scandals in the Thaksin administration and of

the Thai Rak Thai\’s consolidation of political power.

Jaruwan also made a request for information concerning the

CTX GEInVision scandal, and provided documentation to pass to

the DoJ legal attach. End Summary.

 

—————————

JARUWAN LAYS OUT THE BASICS

—————————

 

2. (C) Poloff met Khunying Jaruwan Maintaka on November

14 in a private meeting room in the Thai Senate. She was

accompanied by her lawyer, who was as brash and

self-promoting as Jaruwan is quiet and self-effacing.

Jaruwan has kept a low profile personally for the past 18

months as the controversy about attempts to replace her as

Auditor-General has grown. Jaruwan explained that the Asian

way of dealing with issues to resolve them peacefully, and

that everyone benefits by saving face and not increasing

tensions in an over-politicized issue. She added that she

wants the legal and constitutional mechanisms to work. But

most importantly, Jaruwan firmly believes that the quiet

support from King Bhumibol sends the strongest message of

all, and that nothing she says or does can top that.

 

3. (C) But despite her belief that she holds the moral

high ground, Jaruwan has been neutralized for over 18 months

and stands a good chance of remaining neutralized for good.

Jaruwan is up against some very powerful political foes, most

notably Prime Minister Thaksin Shinawatra. Jaruwan said

candidly that the Prime Minister is very aware of the

corruption that takes place within his government, and that

his administration would fall apart if she were allowed to

fully pursue these numerous incidents of graft and bring them

to light. Jaruwan noted that Thaksin allies (and in one

instance, Thaksin\’s sister) repeatedly tried to bribe her.

Her continued refusals to be suborned amid her deeper probes

into the CTX GEInVision equipment graft, however, was the

issue that led to the effort to remove her from office.

 

——————————-

CTX REVISITED AND OTHER SCANDALS

——————————-

 

4. (C) Jaruwan is no stranger to Bangkok\’s nearly

complete Suvarnabhumi airport, as she has been auditing its

USD $3.7 billion expenditures since she went to work for the

Office of the Auditor General in 1997. The CTX scandal, she

claims, has been heavily publicized due to the amount of

money involved and because it involves a US company. It is,

however, just one of many cases of corruption at the airport.

Jaruwan mentioned a one billion baht ($25 million USD) loan

involving the Siemens company of Germany, and numerous

buildings in and around the airport where the government had

been overcharged. Jaruwan was prepared to hold Thaksin

directly accountable for these grafts, as she showed Poloff a

copy of a document where he gave significant powers to one of

the airport committees by allowing them to appoint contracts

without bidding.

 

5. (C) Jaruwan provided three memoranda to Poloff to

forward to the U.S. Department of Justice. The first two

documents were summaries of the U.S. and the Thai laws that

were broken from the CTX scandal. The third document was a

three-page summary of the evidence to support the allegations

in the first two documents. Jaruwan also formally requested

that the Poloff provide, at a later date, the names of eight

Thais mentioned in Appendix B of the US DOJ report on the

InVision scandal. (Comment: all three memorandums were

passed to Embassy Bangkok LEGATT on the same day as the

meeting. We will inform Jaruwan, as we have others

inquiring, that we have an MLAT with Thailand and that this

is the mechanism we must rely on for cooperation on this

subject. End Comment.) Jaruwan commented that she thought

it was a mistake that the scandal had been put to bed so

quickly by the US DOJ, and wished GE had sent officials to

Thailand to meet with her (which, according to her, they

couldn\’t do in accordance of the conditions in the US DOJ

settlement agreement).

 

6. (C) Jaruwan mentioned other cases involving people at

the very top of Thai politics. One such case involved a

building renovation contract coordinated by House Speaker

Uthai Pimchaichon. Jaruwan estimated that the cost of

renovation should have been 20 million baht ($500,000 USD),

but the total bill came to over 100 million baht ($2.5

million USD). Jaruwan claims that Uthai tried to bribe her

on six separate occasions to persuade her to stop the audit,

each time offering significantly more money (and, according

to Jaruwan, at one time offering a six bedroom house).

Jaruwan said that the initiatives to nullify her stature as

Auditor-General began with Uthai, and that they only began

after she refused the final bribe. In another case,

Transport Minister Suriya Jungrungreankit personally asked

Jaruwan to withdraw from a case involving extremely rare

government loans to private sector businesses to finance a

new southern ring road near Bangkok. The most recent case

potentially reaches to Thaksin himself. Thaksin recently

traveled to France and may have been involved with securing

the purchase of four satellites by Shin Satellite–the

company founded by Thaksin and currently owned by members of

his family–from a French company at a cost of $68 million

each. The price tag of a failed bid to purchase similar

satellites from a U.S. company last year was only $28 million

each.

 

7. (C) Jaruwan also spent a significant portion of time

mentioning a slew of other cases involving government

corruption. Because of the restraints slapped on her until

her status is sorted out, no official investigations have

begun since 2003 and many of these cases received no mention

in the press and media. Among the incidents Jaruwan

mentioned were graft involving the 30 Baht health care

scheme; several road construction projects; a waste-water

plant in Songkhla worth 300 million baht but built at a cost

of 600 million baht; a scandal involving rubber trees in

Southern Thailand; and a pharmaceutical scandal involving a

600 million baht overcharge on 300 million baht worth of

drugs.

 

————————————-

WHO\’S (NOT) INVOLVED WITH CORRUPTION?

————————————-

 

8. (C) Jaruwan tends to believe that Thaksin is corrupt

primarily for the purpose of gaining power, not money.

Jaruwan appeared hesitant to outright insult the Prime

Minister, but her lawyer wasn\’t shy and said that Thaksin is

obsessive about power, has a huge ego, and wants to have

total control over the country. Jaruwan believes that

Thaksin is aware of corrupt practices from members of his own

party, and he tolerates them because of their loyalty in

supporting his political and personal agenda. Jaruwan said

that the reason Thaksin wants her neutralized is because her

actions would expose the depth of the Thai Rak Thai\’s

corruption. Jaruwan insisted that there will be no progress

in fighting corruption as long as Thaksin remains in power:

Thaksin was \”beyond hope for washing his hands of

corruption.\”

 

9. (C) Many Ministers, the House Speaker, and a plethora

of MPs are implicated in corruption, but Jaruwan is perhaps

most concerned about the influence Thaksin has over the

Senate, which is by design supposed to be a non-partisan

legislative body that ultimately keeps powerful political

parties and government agencies in check. Jaruwan believes

that a majority of the 200-member body is under the influence

of Thai Rak Thai, although there are also a fair number of

Senators that are \’untouchable\’ and have put up a stiff fight

for her. Jaruwan has witnessed her own support in the Senate

fade despite her track record of hard work and honesty, and

believes that it is completely due to TRT influences.

Jaruwan believes that the number of Senators under TRT

influence has grown over time, with some being bought off

directly while others were blackmailed by TRT officials for

exposing skeletons in their closet. (Comment: the TRT has

been known to go back years into a political opponents career

and air the dirty laundry long after tolerating it at the

time of the issue. End Comment.) She also believes that

some Senators are jockeying for positions after their term in

the Senate expires in March 2006 and leaves them unemployed,

and who better to impress than the most powerful Prime

Minister in recent times?

 

————————————

\”MUCH MORE SERIOUS THAN YOU THOUGHT\”

————————————

 

10. (C) Jaruwan is concerned that Thailand\’s separation

of powers is shrinking to the point where the branches of

government are inseparable, and that Thaksin will become an

authoritarian ruler. Jaruwan\’s attorney didn\’t hesitate to

chime in that he thought an \”unplanned change\” of Thailand\’s

leadership is inevitable–perhaps within the next two

months–if Thaksin\’s authoritarian practices didn\’t stop.

Although Jaruwan didn\’t state anything that went as far as

her attorney\’s outspoken agenda, she does believe that the

curtailing of her powers and that of other agencies to check

corrupt people in government is part of a larger issue facing

Thailand. Commented Jaruwan: \”the situation is much more

serious than you thought.\”

 

11. (C) Yet despite the generally grim comments from

Jaruwan and her attorney, Jaruwan hasn\’t given up the fight,

and believes that Thaksin\’s powers can be checked without

resort to the popular uprising predicted by her attorney.

Jaruwan still has many friends in the Senate and in the State

Audit Commission — even if they are a minority. Her Senate

supporters always ensure that a strong fight goes on the

record, and the Audit Commission narrowly voted against

reinstating Jaruwan by a 5-4 vote. Jaruwan also has the

clear support of the few remaining \’free\’ media outlets in

Thailand, as well as popular support, at least among the

newspaper-reading classes.

 

12. (C) But most importantly, Jaruwan truly believes she

has the support of the King, and that if the Senate

eventually does forward another nominee, he will withhold

his endorsement, as he did with previous nominee Wisut

(reftels C and D). There is no greater ally to have in

Thailand than the King, whose moral authority are

unquestioned here. Jaruwan is convinced she has the King\’s

support for many reasons. First, at the time she was

appointed to be Auditor-General in 2001, she claims the King

firmly gripped her hand as he gave her a pin signifying her

position, an act which many Thai would view as unusual and

very significant. Second, Jaruwan says she has already

provided the King with summaries of the incidents of graft,

and that he expressed his gratitude for her efforts. Lastly,

Jaruwan claims that she has quietly received an offer from

the Palace to receive her salary for her entire five-year

term, regardless of whether she returns to her post or not.

(Comment: The King\’s refusal to endorse the replacement for

Jaruwan sent up by the Senate was a slap in the face for TRT,

and we agree that he will most likely hold the line if

another nominee is forwarded to him. However, it is unclear

what more the King might be able to do to show support for

Jaruwan, given constitutional limitations on his role.)

 

———–

WHAT\’S NEXT

———–

 

13. (C) Jaruwan dismissed the rumors that she would run

for Senate next year, because that would force her to abandon

the fight for Auditor-General, which she believes is far more

important. Although Jaruwan has been very quiet publicly, she

has clearly been working behind the scenes on exposing

Thailand\’s corruption. In addition to her unofficial

investigating into government graft, she has been working

with Thai communities and students in the U.S. and Australia

to publish books about Thailand\’s corruption. Jaruwan\’s

attorney said he was planning to file a complaint with the UN

High Commission on Human Rights, and to file a claim in a

U.S. Federal District Court under Title 28, Section 1350,

part IV, Chapter 8–Alien Action for Tort.

 

——-

COMMENT

——-

 

14. (C) The Thai public has a relatively high tolerance

for a certain level of corruption. By regional standards,

Thailand is not a big offender, and corruption is probably no

worse overall than it has been during many periods in the

past. However, Thaksin opponents are gaining some attention

from the public with these corruption accusations (also a

staple of rabble-rouser Sondhi\’s attacks on the PM – reftel

A). While we don\’t see this political issue forcing Thaksin

and the Thai Rak Thai from power, as Jaruwan seems to hope,

it will certainly be a headache for Thaksin, who doesn\’t need

any more problems right now. End Comment.

BOYCE

Written by thaicables

June 24, 2011 at 2:04 pm

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