thaicables – It's Your Right to know the Truth!

06BANGKOK636 CORRUPTION ISSUES IN THE HEADLINES

leave a comment »

“51511”,”2/2/2006 10:41″,”06BANGKOK636″,

 

“Embassy Bangkok”,”CONFIDENTIAL”,

“05BANGKOK7305|06BANGKOK538”,

“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 02 BANGKOK 000636

 

SIPDIS

 

SIPDIS

 

E.O. 12958: DECL: 02/01/2016

TAGS: PGOV, ECON, TH, Corruption

SUBJECT: CORRUPTION ISSUES IN THE HEADLINES

 

REF: A. BANGKOK 00538

B. 05 BANGKOK 7305

C. 05 BNAGKOK 7197

 

Classified By: Deputy Chief of Mission Alex A. Arvizu, reason 1.4 (b) (

d)

 

1.(C) SUMMARY: Corruption issues are dominating the media

again. There is good news and bad news. One piece of good

news is the reinstatement of Khunying Jaruvan as the

Auditor-General, after over a year of bureaucratic infighting

that drew in even the Palace (ref B). For the Prime

Minister, there is good news in the reports of corruption

scandals now plaguing the main opposition party. The bad

news is that the palace has rejected the Senate\’s proposed

new members of the National Counter-Corruption Commission, an

embarrassing development for the Senate (allegedly

non-partisan, but openly dominated by Thai Rak Thai

sympathizers). Finally, there is the PM\’s sale of his shares

in his publicly listed, family owned holding company,

Shincorp, to Singapore (ref A). Opposition newspapers and

many pundits are highly critical of the PM and his deal, but

it\’s not clear that the general public is catching up to the

apoplectic reactions of the opposition. Nonetheless,

questionable elements of the deal leave Thaksin vulnerable to

legal repercussions. END SUMMARY

 

2. (C) Corruption issues are in the headlines and leading

the newscasts again. In the Senate, it was one step forward,

one step back. The long-running soap opera starring

Auditor-General Khunying Jaruvan took a surprising plot

twist. After over a year of bureaucratic wrangling over the

legality of her appointment, the Senate decided that she

could resume her responsibilities as one of the chief

counter-corruption watchdogs in the government. Jaruvan was

sidelined on a technicality; it was widely believed

authorities wanted to remove her from the job because she was

too committed to fighting corruption. The role of the King,

who refused to sign off on a replacement proposed by the

Senate, was key, and was one of the recent signs of conflict

between the PM and the King. (Ref C).

 

Second verse, same as the first?

——————————–

 

3. (C) A feeling of deja vu has descended on the Senate, as

the Palace last week refused to endorse the list of nine

National Counter-Corruption Commission members forwarded for

the King\’s signature. The nominees had been criticized on

technical grounds (the Senate is supposed to choose nine out

of 18 nominees, but there were only 17 nominees on the list

when the vote was taken.) More importantly, some of the nine

had been criticized for being too close to the ruling Thai

Rak Thai (TRT) party. That complaint has no legal standing,

but the King\’s rejection of the list will likely be read as

criticism of the quality of the Commission members, rather

than concerns about the minutiae of the selection process,

especially in the wake of the high-profile Auditor-General

case. The Senate committee will meet again next week to try

to resolve the situation.

 

Politicians are all the same

—————————-

 

4. (C) The split in the Thai media, between the

government-controlled broadcast media and the anti-Thaksin

print media, is clearly seen in the coverage of the two

scandals dominating the news. The broadcast media is giving

lots of play to the bid-rigging scandal in the Bangkok

Metropolitan Authority. Although the Bangkok Governor, a

leading member of the Democrat party, has not been directly

accused of misbehavior, his deputy has been implicated. The

Democrats are attempting to burnish their image by

establishing an inquiry commission, but the TV viewing public

will mainly take away the message that the Democrats are also

tainted.

 

The big story

————-

 

5. (C) The print media, especially the anti-Thaksin

English-language press, is dominated by continuing outrage

over Thaksin\’s 1.8 billion dollar sale of his family\’s stake

in Shin Corp (ref A), While there is some criticism over

selling such an important asset to a foreign entity

(Singapore\’s Temasek Holdings), most of the hullabaloo is

about questionable legal aspects of the deal and the tax-free

status of the profits. Securities regulators will reportedly

be looking into questions about the transfer of shares from

Thaksin to a company he set up and registered in the British

Virgin Islands, Ample Rich, and subsequent transfers of Ample

Rich holdings to Thaksin\’s son and daughter, especially those

made right in advance of the Shin Corp sale. The head of the

Thai Law Society has joined a chorus line of other academics

and experts who are already declaring various aspects of the

deal illegal. We expect the investigation and the

accompanying denunciations to drag on for long time, a

further burden the PM will have to carry.

 

Comment

——-

 

6. (C) Despite the outcry in the elite press, it is hard to

judge how much resonance this issue has with the average

voter. The broadcast media are reporting the basic facts,

but commentators tend to make comments like, \”it\’s the PM\’s

property, and he has a right to sell it.\” The arguments

about the legality of the deal itself, and the tax exemption,

are just too complicated for most people to follow. However,

the opposition is hammering on these points and spreading the

word. Many Thai voters admire Thaksin precisely for his

business acumen and his wealth, but 1.8 billion dollars is a

lot of money to get without paying any tax. If the deal

skirted the law in any way, it will almost certainly come

out, given the high level of interest. And it\’s part of a

long litany of corruption issues that have dogged Thaksin

since before he even took office.

 

7. (C) It will take a while before we see what real impact

public reaction to the sale will have. Thaksin may have been

too clever by half; there are probably some aspects to the

Ample Rich deal that may not hold up well under the close

scrutiny that is coming. In the end, though, the issue will

probably stoke up further opposition to Thaksin among those

who already despise him — the educated, Bangkok elite and

growing segments of the middle class — without affecting the

views of most of his supporters in rural areas.

 

BOYCE

Advertisements

Written by thaicables

July 10, 2011 at 3:58 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: