Yee Hoi One Twenty

An incident that occurred almost ten years ago, combined with the image of one politician minister, made the nickname of ìYee Hoi one twentyî a stigma that proved difficult to lose in the minds of the public.

This incident occurred just 3 days before the July 2, 2538 general election and was clearly recorded in the Supreme Court verdict (number 7562/2540. The presiding judges were Surind Nakhwichien, Preecha Chalernwanich, and Pimol Samanid).

Early in the morning of June 29, 2538, police officers from the Center for the Prevention and Suppression of Influential Persons charged into house number 195/10, Naimuang sub-district, Muang district, Buriram province. The house belonged to Naruepol Siripanich (brother-in- law of Prasith Tangsrikiatkul, Buriram district 1’s candidate for member of the House of Representatives, Chart Thai party, candidate number 5. Prasith was on the same team as Newin Chidchob, candidate number 4, 94 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

and Songsak Tongsri, candidate number 6) and his wife. Police acted on information received from a secret informant that a certain number of banknotes had been prepared for use in vote buying for Buriram representative, candidate numbers 4, 5, and 6 from the Chart Thai party.

The search resulted in the confiscation of 11.4 Million Baht cash in 100 and 20 Baht notes that had a yantra 5-shape rubber stamped around the area of the notes’ watermarks near the king’s portrait. The notes had been stapled together into sets of 120 Baht, bound together into bundles of 100 sets, placed in plastic bags, and packed in paper boxes and duffel bags, ready to be distributed or given to eligible voters according to the list of voters in the district that fell into election districts 1 and 2, Buriram province.

Apart from the confiscation of over 10 Million Baht in cash, other evidence also discovered packed in paper boxes. They include staplers, staples, papers used to bind banknotes together into bundles, rubber stamps with the yantra-shape, inkpads, and 17 rolls of video recordings of the campaign speeches of Chai Chidchob and his son Newin Chidchob (position at the time of writing was that of Minister of the Office of the Prime Minister), candidates of election districts 2 and 1 respectively. Over 2,030 printed cards advertising candidates numbers 4,5, and 6 of Chart Thai party were also found along with lists of names of people in various sub-districts, names of election canvassers in each village, names of leaders, and names of those in charge in each sub-district.

However, in their courtroom testimonies, both defendants claimed to have no knowledge of how the confiscated evidence (the 11.4 Million Baht in cash, etc.) came to be concealed in front of the defendants’ bedroom.

They also claimed that the 11.4 Million Baht in notes came from the defendants’ debtors in order to settle their loans and from the defen-

5 Amulet 95 T h e dants’ friends and relatives in order to purchase land from Mr. Preecha W Tangsrikiatkul, uncle of the second defendant (wife). Both defendants had o r received the money in bags without checking to see their contents until the k bags were found by the police. The court believed that these claims were i n unsound. That a creditor or those who received large sums of money g would fail to look into the bags or to ascertain the amount of money they o were receiving was contrary to normal behavior. f

C o In addition to this, it was difficult to believe that banknotes of 100 r and 20 Baht given to the defendants by their’ debtors, friends, and rela- r u tives all came in the same form, i.e., with 100 and 20 Baht notes stapled p t together into sets of 120 Baht, and with a yantra-shape stamped onto each i note’s watermark. Thus, the defendants’ claims did not carry weight. o n

i The court saw that the defendants were arrested three days prior to n the general election, a time very close to the election date. The nature of T the banknotes confiscated was in such a way as they were ready to be h a distributed to eligible voters for the said election. i l a These things indicated that both the defendants intended to give n capital to entice voters to vote for their candidates. Both defendants had d prepared capital ñ the 100 and 20 Baht notes ñ as well as other things, stapled together and bound into bundles of 100 sets and packaged in paper boxes and duffel bags, ready to be distributed to those related to the election.

These actions of the defendants were considered to be in the final stages of the process of distributing the notes to eligible voters in order to entice them to vote for the candidates who both defendants support. Such actions were very close to the final wrongdoing that would have occurred.

These actions of the two defendants passed the preparation stages and were well into the implementation stage of the wrongful acts. But the acts were prevented from being carried out by police interception. Other- 96 The Workings of Corruption in Thailand

wise, the defendants would have brought the scheme to fruition. Both defendants were guilty of attempting to give capital to eligible voters to entice them to vote for the candidates the defendants support.

Such actions were illegal according to the Member of Parliament Election Act of 2522 Article 35(1), once the royal decree to hold elections for members of parliament had been invoked in any election area, no candidate nor any other person are permitted to engage in action(s) that might provide incentives to voters to vote for themselves or others, or to refrain from voting for any candidate. These actions include (1) arranging, proposing, or promising capital or other benefits that had monetary values to anyoneÖ

Each defendant was sentenced to 1 year in prison (with immediate effect), the evidences were confiscated, and the defendants’ rights to vote were withheld for 10 years.

At that time, this piece of news echoed through political circles and severely shook the future of young politicians like Newin Chidchob.

But, in the end, the governments of Banharn Silpa-archa, Chuan Leekpai, and Pol.Lt.Col.Thaksin Shinawatra all warmly embraced Newin Chidchob.

THE OF

IN Prelude to ITV’s “Stupidity Fees”

We still do not know how long it will be before the Administrative Court will rule on the petition filed by the Prime Minister Office’s Office of the Permanent Secretary to revoke the Arbitrator’s ruling that ordered the Office of the Permanent Secretary to reduce concession fees by more than 17,000 million Baht from 25,250 million Baht which ITV Company has to pay to the government, and ordered ITV to adjust its share of substantive shows from 70 percent to 50 percent.

In ITV’s fight to reduce its concession fees, one reason invoked was that the concession fees they had to pay the government was so high it made them unable to compete with competitors such as Krungthep Television and Radio company, that paid concession fees for Channel 7 to the Army at very low rates.

More importantly, the concession contract between Krungthep 100 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

Television and the Army was (secretly?) remade in May 2541 after the Office of the Permanent Secretary made concession contracts with ITV in 2538. This is a violation of the contract between the Office and ITV.

The new concession contract between Krungthep Television and the army were discreetly made. However, in mid-2541 news that the army had renewed Channel 7’s concession contract with the Krungthep Televi- sion Company spread throughout the television circle. The new contract granted concession to the company for 25 years, and the renewal was made even though the previous contract had many years remaining before its expiration.

On July 17, 2541, journalists evoked the newly enacted Official Information Act of 2540 and submitted a petition to the army secretary, requesting the disclosure of all contracts between the army and Krungthep Television, from the first to the present.

The petition asking the army to disclose its concession contracts could be considered the first full-scale test of the Official Information Act.

As expected, the reply from the army was that the contracts ìcould not be disclosedî, citing that Krungthep Television, the concessionaire, might be adversely affected from the contract disclosures, and that the army had not yet issued rules determining the steps for the disclosure of contracts!!

Reporters then petitioned the Official Information Commission (OIC), arguing that concession contracts are information that government agencies must reveal and present for public scrutiny.

It took several months before the army finally revealed all the concession contracts.

A lieutenant colonel whose duty it was to hand copies of the 101 T h e concession contracts to journalists quietly whispered that professional W soldiers like him did not quite agree with the lack of transparency in o r several matters handled by the army ìhigher-upsî, especially matters k related to the benefits from radio and television frequencies that the army i n own. g

o Examination of the concession contracts revealed that the rumors f were indeed true!! C o r That is, the former contract between the army and Krungthep r u Television was due to expire in 2549, but the new contract had already p t been signed since May 15, 2541. The contract was renewed 8 years before i the expiration of the old contract, with the new contract valid for as long o n as 25 years. i n This meant that Krungthep Television received the concession to T profit from Channel 7 until 2566. h a i If we begin counting from the time Krungthep Television first came l a to operate Channel 7 in 2511, we find that this company will take hold of n Channel 7 for as long as 55 years. d

It turned out that the signatory from the army was Gen. Chettha Thanajaro, Commander-in-Chief of the army at that time. The contract was signed just four and a-half months before Gen.Chettha was due to retire on September 30, 2541.

Afterwards, this General was appointed Minister of Defense at the end of the Thaksin 1 administration.

However, a more interesting issue was the unbelievably ëlow’ compensation paid by Krungthep Television to the army in the 25 years’ time. 102 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

That is, the annual fees for years 1 - 3 that Krungthep Television had to pay was 150 million Baht; for years 4 to 6 the fees were 160 million Baht; for years 7 to 9 ñ 170 million Baht; for years 10 to 12 ñ 180 mlion Baht; for years 13 to 15 ñ 190 million Baht; for years 16 to 18 ñ 200 million Baht; for years 19 to 21 ñ 210 million Baht; and for years 22 to 25 ñ 230 million Baht.

The total fees Krungthep Television had to pay for the 25-year length of the concession contract was merely 4,670 million Baht.

Meanwhile, figures from advertising circles indicated that advertising fees that flow through Channel 7 was more than 10,000 million Baht per year.

Examinations of the budget revealed that Krungthep Television’s income from advertising and other sources was 2,728 million Baht in 2540, 3,212 million Baht in 2539, 3,142 million Baht in 2538, and 2,714 million Baht in 2537.

In addition to this, it was discovered that the company’s accumu- lated profits was as high as 6,800 million Baht. The haste in renewing the said concession contract led to discus- sions of whether or not it was done with the intention of evading Article 40 of the Constitution that intended the National Broadcasting Commis- sion (NBC) to be in charge of allocating frequencies.

The above news led the Chuan Leekpai cabinet to pass a resolution forbidding government agencies with radio and television frequencies in their hands from renewing contracts with private agencies for more than 2 years until the establishment of the NBC was complete.

The case of Gen.Chettha, as then Commander-in-Chief of the army, allowing Krungthep Television to renew its contract with concession fees of merely 4,670 million Baht was brought up five years later when Shin 103 T h e Corp’s ITV Company cited the case as justification to amend its contract W with the Office of the Permanent Secretary of the Prime Minister’s Office. o r In its contract, ITV had to pay 25,200 million Baht over the contract k period of 30 years. i n g

Thus, it could be said that Gen.Chettha’s Channel 7 contract o was the prelude to ITV’s “stupidity fees”. f

C o r r u p t i o n

i n

T h a i l a n d THE OF

IN Politicians and Taxes

Being a politician is a special occupation. Even though the salaries or incomes from holding positions are not high, all politicians are wading in riches and fineries. So the common person feels that political power can magically make streams of money and gold come flowing in.

Because of unexplained wealth, in each coup d’Ètat, the coup leaders would claim corruption as the main reason behind their overthrow- ing of the government.

In seizing power from General Chartchai Choonhawan on February 23, 2534, the National Peace Keeping Council (NPKC) also cited the “buffet cabinet” as the main reason for the coup although the political reasons behind the coup were much more complicated.

After coming into power, the NPKC proclaimed they were seizing assets from 25 politicians in General Chartchai Choonhawan administra- 106 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

tion. At the same time, the NPKC also appointed an Assets Examination Committee (AEC) to investigate the assets of these politicians to deter- mine whether or not they were unusually rich.

It was discovered that each politician had assets worth thousands and thousands of million Baht, much to the amazement of general public.

Connections were fervently sought so as to prevent their assets from being confiscated by the AEC. Several big politicians who were able to get in touch with the ìhigher-upsî in the NPKC were spared, but many others had their assets confiscated.

In the end, the Supreme Court ruled (red case number 912/2536) that the AEC’s verdicts were unenforceable. The AEC’s rulings resulted in the confiscation of assets that the AEC ruled were ill-gotten. Such punishments were considered criminal punishments, and were handed out without granting the accused or others that were the real owners of the assets the rights to appeal otherwise.

The AEC’s powers were absolute and were powers to consider legal cases which, according to the Thai customs of democratic government, are powers that belong to courts of law. Thus, the establishment of a body of persons that were not courts to have powers to review and rule on legal cases as courts was a clear violation of the Thai tradition of government.

In addition to this, the assets that were seized as a result of the AEC’s rulings were assets that the offenders (politicians) received or gained before the NPKC proclamation number 26 Article 6 was enforced. Thus, this was effectively enacting and applying a criminal law ex post facto , something forbidden in all the Thai constitutions in order to protect the rights and liberties of the people. Thus, the NPKC’s proclamation could not be enforced and, as a result, the rulings of the AEC could also not be enforced. 107 T h e

W However, the murky origins of the incomes led to further investiga- o r tions of these politicians’ income taxes by the Revenue Department (RD). k i n Politicians whose backward taxes had been assessed and took their g cases to court include Mr. Sanoh Thienthong whose backward taxes due o was 98.5 million Baht, Pol.Cpt. Chalerm Yoobumrung - 12.26 million f

Baht, Pol. General Pramarn Adireksarn - 67.82 million Baht, Mr. Pinya C o Chuayplod - 68.55 million Baht, Mr. Montri Pongpanich - 52.33 million r Baht, and Mr. Subin Pinkayun - 328.6 million Baht. r u p t It turned out that the Revenue Department lost several cases due to i improper tax assessment methods, including the cases of Sanoh, Pol.Cpt. o n Chalerm, and Montri. i n However, instead of instructing public prosecutor to appeal to the T Supreme Court as in the cases of other politicians, the Revenue Depart- h a ment took no action, claiming that they would lose anyway. This generated i severe criticisms that those with political power had interfered with the l a case since some politicians were powerful in the government. n d The above incident occurred during the Banharn Silpa-archa administration with Mr. Surakiat Sathirathai as Minister of Commerce and Cpt. Suchart Chaovisith as Director General of the Revenue Department.

However, several other politicians lost their cases in the Supreme Court. For example, Subin had to pay 328.6 million Baht in back taxes. Pol.Gen. Pramarn had to pay taxes on 46 gift checks and on money from construction contractors at 93 million Baht.

In addition to this, several politicians were asked to pay taxes retrospectively in the same manner but did not take their cases to court for fear of defamation and they wanted their stories to slowly be forgotten. So they can continue to cheat the public that they are clean politicians. THE OF

IN Gift Checks

Even though the National Peace Keeping Council (NPKC) used illicit powers to topple Gen. Chartchai Choonhawan’s government on February 23, 2534, the coup d’Ètat did help the public realize the truth (which were previously told in political circles) that politicians and businessmen had quid pro quo benefits, and that this was a common practice and done without fear of investigations.

Benefits transferred were usually in the form of “gift checks” that were, altogether, worth hundreds and thousands of million Baht, and became evidence that the Assets Examination Committee (AEC), under the leadership of Gen. Sitti Jiraroj, used in confiscating assets from 10 big politicians out of the 25 that NPKC had charged with being unusually rich.

Even though the Supreme Court later reversed the NPKC’s proclamation appointing the AEC, declaring it unenforceable and unconstitu- tional, and against the common practice of democratic government, the 110 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

reality of multi-million Baht “gift checks” businessmen gave to politicians was undeniable.

Foremost among those who received checks was none other than Gen. Chartchai Choonhawan, leader of the Chart Thai party and the then Prime Minister. He received gift checks from various companies with the total value of 284 million Baht. Gen. Chartchai testified in court that those who gave gift checks had various reasons such as close personal relation- ships with him, faith in his political path, etc.

This 284 million Baht included gift checks of 62 million Baht which the AEC claimed had come from Suthathip group of companies, and which were tied to the extension of the Bangyeekhan Distillery contract in 2532.

Gen. Chartchai, however, denied the claim saying that the lessees of the distillery was Sura Maharad Company, not Suthathip and that the checks were purchased with the giver’s personal funds, not Suthathip company’s funds.

Second was Mr. Pramual Sapavasu, then Minister of Finance. The AEC claimed that the Suthathip group and Sura Maharad had given him 84 gift checks of 1 million Baht each through his adviser. Mr. Pramual claimed that the checks were money that Mr. Virat Donsrichai had borrowed from him and had now paid him back with.

However, it was well-known within the distillery circles that Mr. Virat was a board member of the Pattaraprasit family companies, important partners of Mr. Charoen Siriwattanapakdi, the real alcohol “tycoon”.

As for Gen. Pramarn Adireksarn who was sentenced to pay 93 million Baht in back taxes by the Supreme Court, the AEC claimed that there were 14 promissory notes from Sura Maharaj and over 10 alcohol trading companies, with a total value of 81.3 million Baht. 111 T h e However, facts presented in the Supreme Court verdict (10135/ W 2539) on the case that Pol.Gen. Pramarn sued the Revenue Department o r indicated that Pol.Gen. Pramarn had received 46 gift checks in 2533 with k the total value of 83,102,500 Baht. Pol.Gen. Pramarn testified that i n Sahamitr Management Company had given him those checks as payment g for the purchase of land, and that the company had received checks from o its customer company. f

C o The Supreme Court considered the issue and ruled that even though r the company had bought land from Pol.Gen. Pramarn for 85 Million Baht r u as Pol.Gen.Pramarn had claimed, there were no reasons why the company p t had to pay for that property in multiple checks, especially when the checks i in question were gift checks, not the company’s checks nor were they o n cashier’s checks which would have made better evidence of payment. i n Witness testimony and evidence were flawed and failed to carry T weight. h a i Thus, that the evaluation officers and the committee considering the l a Revenue Department’s appeal considered money from these checks as n taxable income was just. d

Careful consideration revealed many similarities between the giving and receiving of gift checks associated with Pol.Gen. Pramarn and Mr. Pramual.

A former high-ranking executive of the National Anti-Corruption Commission who worked as the secretary to the AEC said that examinations revealed that in 2532-2533, which were the period of extending distillery concessions, gift checks from alcohol companies and their affiliated companies ìflewî to ministers and high-ranking civil servants, policemen, and soldiers, totaling roughly to 2,000 million Baht.

However, in the era of comprehensive corruption, chances of THE OF

IN The Bank of Thailand’s Property Mystery

seeing these types of gift checks are rare since they are too obvious. The previous chapter mentioned that several big politicians had their assets confiscated by the National Peace Keeping Council (NPKC), incidents which resulted in the Revenue Department’s examinations of these politicians’ taxes.

However, an interesting case is the Bank of Thailand (BOT)’s purchase of over 75 rais of land in the Nakorn Chaisri district, Nakhon Pathom province, in order to build a royal mint in May 2537 (however, at the time of writing, the mint had still not been built even though over 10 years have passed).

The property was purchased by the BOT under the governorship of Vichit Supinich from the ìSilapa-archaî family at the price of 467 million Baht. The ceremony to lay the mint’s foundation stone was also attended by Khun Ying Chamsai Silapa-archa, wife of Banharn Silapa-archa.

Nothing would have happened had there not been the Bangkok 114 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

Bank of Commerce (BBC) swindle, which resulted in over 80,000 million Baht in losses, and which was one of the factor that led Banharn Silapa- archa, then Prime Minister (2538-2539), to dismiss Surakiat Sathirathai from the post of Finance Minister.

This led Matichon newspaper to question why Banharn did not also dismiss Vichit Supinich from his post as Governor of the Bank of Thailand since Vichit’s post made him directly in charge of overseeing commercial banks.

Does this have any connection to the case where the BOT purchased land from the Silapa-archa family?

An issue raised was that the Silapa-archa family (Khun Ying Chamsai?) made large profits from selling the said property to the BOT.

After this news was released, one middle-aged woman by name of Kanokporn Siripunnapirath who claimed to be a confidante and partner of Khun Ying Chamsai explained that the sale of the said land to the BOT was not as profitable as everyone believed.

This was because the land was purchased before 2534 using over 200 million Baht in funds borrowed from Mahanakorn Bank, but, not long after the purchase, the Gulf War broke out at the end of Gen. Chartchai Choonhawan’s premiership, resulting in an economic recession. The land could not be sold, while interests were skyrocketing.

When the capital was combined with the interest, the profits from the sale of the land to the BOT were not much.

Because of the scandal, the opposition parties dug into information from the Department of Land’s office in Nakhon Pathom province, Nakorn Chaisri branch, and discovered that the property in question was purchased by Kunchana Silapa-archa, daughter of Banharn and Khun Ying Chamsai 115 T h e from Sutthiporn Techasathitkul and company in August 2533 at the price W of only 29.4 million Baht. However, the land was sold to the BOT for as o r high as 467 million Baht. The sale made 15 times the original price in k profits, or more than 430 million Baht. i n g

This was an incredible buy-cheap-sell-high scenario. o f

After that, this land deal was highly attacked and attempts were C o made to link the scandal to Banharn the Prime Minister. r r u While the attacks were directed at the abnormally high price in the p t sale of the land, someone pointed out that during the period the transaction i was made in August 2533, taxes must be paid based on the real sale price, o n and not on the assessed price. (The law had been changed in September i 2533). n

T Thus, the land purchased by Kunchana at over 200 million Baht (as h a stated by Khun Ying Chamsai’s confidante) but with the recorded purchase i price of only 29.4 million Baht meant that there was tax evasion on a scale l a of several tens of millions of Baht in taxes. n d Even though the seller of the property normally pays taxes, the Revenue Code specified that the purchaser must be the one to take this money from the seller to give to the state. If the purchaser does not take this sum of money from the seller, the purchaser must be responsible for the payment of the sum of money himself.

The attacks led Kunchana, who had said in interviews that she had bought and sold the land for Khun Ying Chamsai, to say that she had been the one who bought and sold the said land herself. This is in order to prevent ripple effects to the position of Prime Minister. However, no details or explanations were given.

It was not until the opposition submitted a motion to hold a general 116 The Workings of Corruption in Thailand

debate for no-confidence vote of the Banharn government on September 18-20, 2539 that the above story was raised and heavily attacked in the National Assembly (parliament).

In the end, Kunchana admitted in a parliamentary session that she had bought the land at a little over 226 million Baht, but had registered with the Department of Land’s office that she had bought it for only 29 million Baht.

This admission by Kunchana was equivalent to admitting to tax evasion.

There were news reports which said that, before admitting to the National Assembly, Kunchana had called in the ìelitesî in the Revenue Department to discuss the matter, but they failed to come up with a solution.

In the end, people from the Silapa-archa family decided to pay the 53 million Baht in taxes in order to end the scandal.

So that the scandal would not affect the Prime Minister position held by the head of the family!!

THE OF

IN Puppets

The use of ìpuppetsî to act instead of themselves in business transactions or other activities has almost become a formula adopted by businessmen or politicians who want to cover their tracks.

In addition to using servants, security guards, and drivers to hold millions of Baht worth of stocks, there are also other types of “pup- peteering”. One classic example is the case of the big politician Mr. Sukhavich Rangsitpol, party list representative from Thai Rak Thai party, former Deputy Prime Minister, and former Minister of Education. This case was concealed for more than ten years.

However, the cover up was exposed because seventy-year-old man Praneat Chaijinda who filed charges against Sukhavich and his wife, Pewpong Rangsitpol, as defendants, at Southern Bangkok’s Civil Court on August 13, 2546, asking both defendants to pay brokerage fees for a land purchase deal for the defendants. The fees asked for was one third of the 900 million Baht profits made in the deal or 300 million Baht. When compounded with interest over the eight years and other fees, the total amount was roughly 530 million Baht. 120 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

In this case, the plaintiff claimed that around the years 2535-2536, Sukhavich (and wife) asked him to act as broker in the purchase of around 1,500 rai of land in the Map Tha Phut sub-district, Rayong province area by Caltex Company (where Sukhavich had decision-making power) in order to set up an oil refinery.

The plaintiff’s role was to purchase land from villagers, making sure that the average price per rai was no more than 900,000 Baht. However, Sukhavich told the plaintiff to charge Caltex Company 1.5 million Baht per rai in order to make a profit of no less than 600,000 Baht per rai or no less than 900 million Baht in total.

On the day the brokerage contract between the plaintiff and Caltex Company was made, Sukhavich told the plaintiff that profits made from the land sale would be shared. This includes sharing profits with Anand Anandtakul (then Permanent Secretary of the Interior Ministry) who advised Sukhavich to appoint the plaintiff as his representative in gather- ing the land together.

For the purchase of the land gathered from the villagers, the second defendant (Pewpong) would be responsible for all payments before the sale of the land to Caltex. The defendant instructed the plaintiff to open a current account at Nakorn Luang Thai Bank, Asoke branch, with the condition that withdrawals from this account can only be made using joint signatures of the plaintiff and Pewpong Rangsitpol. The defendant also had the plaintiff sign various checks in advance.

Once the plaintiff received money from the land sale from Caltex Company, the plaintiff had to immediately transfer the said money into the Nakorn Luang bank account so that the two defendants can transfer money from this account into their own personal accounts and into a hidden account set up in the name of Chuanchuen Tang-ngeechai. 121 T h e The methods employed by Sukhavich and his wife were meant to W ensure that not one Baht of the money received from the sale of the land to o r Caltex Company would be lost. k i n More importantly, nobody knew Sukhavich received several million g

Baht in benefits from the sale of the said land to Caltex Company where he o served as an executive because the check issued by Caltex to pay for the f land was issued to Praneat Chaijinda. C o r However, once the thousands of million Baht transaction was made, r u there were no talks of rewards or even the profit shares that were supposed p t to be given to Anand Anandtakul. i o n While Praneet Chaijinda was hounded by the Revenue Department i for payment of 11 million Baht in business tax from the sale of the land n until his assets were seized. T h a Of course, Sukhavich and Pewpong denied the allegations and i claimed that the brokerage contract between Praneat and Caltex was l a signed by Praneat on his own behalf, not on the behalf of Sukhavich and n his wife. d

Regarding the fact that Pewpong paid for the purchase of the land gathered from the villagers, Pewpong claimed that it was a loan made to Caltex. No contract was made for this loan because she had confidence in her husband, Sukhavich, as the highest-ranking executive in the company.

As it turned out, the claims made by the defendants were rejected by the court.

“That the second defendant (Pewpong) loaned hundreds of millions of Baht to Caltex Company without asking the company’s executive committee to make any records of it and, more importantly, the fact that the transfer was made directly to the plaintiff and the fact that there was 122 The Workings of Corruption in Thailand

no evidence suggesting Caltex Company knew of the loan that was transferred, these actions are inconsistent with a person who has knowledge of accounting and who serves as executives of various companies such as the second defendant.” This passage was one part of the verdict passed on the case.

Once the court considered all the witness testimonies and evidence, the verdict passed was that both defendants’ claims could not contradict the plaintiff’s witness. Thus, it was concluded that the plaintiff was indeed a representative of the two defendants, appointed to gather land for sale to Caltex Company.

However, there was not enough evidence to say that there were agreements to give one third of the profits as compensation. Thus, the court ruled that the two defendants had to pay 10 million Baht in fees to the plaintiff with 7.5 percent interest. This sum combined with the business tax already paid amounted to a little over 21 Million Baht.

However, this puppet case is still being fought in the Supreme Court.

THE OF

IN An Honorable Broker

The position of senator is an honorable one but it is also one that, if in the hands of the dishon- est, can be used as a tool to aid in profiteering, legal or otherwise.

Thus, at the time when senators were appointed, many people sought ìconnectionsî in order to be nominated.

Many of these people were nominated as senators in almost every government. They became known as “professional senators”. These people include Admiral Kaoluk Charoenrukh, Pachara Yuthithamdumrong, and Khun Ying Nuntaka Suprapatanont.

At the time when senators were elected (according to the 2540 Constitution), various politicians and those who wanted to be politicians fight for this position so that they can use it as a stepping stone to higher positions, or in order to achieve higher powers, or to get close to the powerful. 126 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

The following are one of the actions of senators in the era of “ appointed senators.” This senator acted as “broker” in the purchase of land worth several hundreds of millions Baht.

Around 2539, the Telephone Organization of Thailand (TOT ñ this has become TOT Corporation at present) wanted to purchase a large plot of land to build a central inventory warehouse. Thus, the TOT called private companies in to bid on the project and it was eventually decided that around 266 rais of land in the Lumlukka district, Patumthani province, would be purchased at more than 400 million Baht from one private party.

No problems would have occurred had Poonsuk Wannapong, then senator, not filed a lawsuit against Vachara Boonchooseth, then Director of the Organization for Farmers Market (OFM).

The plaintiff claimed that on February 20, 2539, the defendant issued a document assigning the plaintiff to act as coordinator in putting the land the defendant gathered from others totaling 4 deeds up for sale to the TOT. The defendant agreed to pay the plaintiff 5 million Baht for this.

Later, on February 25, 2539, the defendant made another memo and gave it to the plaintiff. The memo offered a raise to the plaintiff from 5 million Baht to 8 million Baht.

After that, the plaintiff had coordinated the process until he was able to sell all 4 plots of land to the TOT and the titles were transferred on July 19, 2539. However, the defendant did not pay the 8 million Baht as promised so there was a letter requesting payment. The defendant paid 5 million Baht, but left 3 million Baht unpaid.

The defendant testified that the defendant was appointed by Ms. Jirada Lertsin, owner of the land, to submit a bid to sell the said land. 127 T h e While the land purchasing committee was still considering the W matter, the plaintiff and Mr.Sakchai Kingthong contacted the defendant o r claiming that he could use his influence in contacting and giving money to k the land purchasing committee and the higher-ups in the TOT so that the i n TOT would buy land from the defendant. The plaintiff asked for 5 Million g

Baht in return for his coordination efforts. o f

The defendant and the land title holder believed this and gave a C o document to the plaintiff as evidence. r r u Later, the plaintiff asked for 3 million Baht more but the defendant p t had to obtain permission from the land title holder first so the plaintiff got i the defendant to write on his business card saying that the defendant o n would be paid an additional 3 million Baht. If the landowner did not okay i the raise, the defendant would cancel the raise and return the said business n card. T h a However, the defendant used the business card as evidence in filing i a lawsuit, an abuse of rights. In addition to this, the plaintiff also tricked l a the defendant and made him pay 5 million Baht to the plaintiff because of n the misunderstanding. d

The agreement to have the plaintiff contact and bribe the land purchasing committee as well as high-ranking officials in the TOT is an illegal contract that is explicitly forbidden by the law, is contrary to keeping peace, and is harmful to the morality of the people.

The Supreme Court (judges presiding were Mr. Wicha Mahakun, Mr. Poonsak Jongkonlanee, and Mr. Punya Sutthibodi) ruled (verdict number 6211/2544) that this case was not a normal case of business agreement because the plaintiff was asked to mediate the sale of land to the TOT, which was a government agency. The purchase of the land had to be done according to the steps prescribed by the Telephone Organization of Thailand Act of 2497 and the regulation mandating submission of price bids to the committee. 128 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

Because of these reasons, the actions of the defendant who, as Director of the Organization for Farmers Market, was in an executive position in a state enterprise which had better chances of offering the sale of the land to a fellow state enterprise than other private agencies, agreed to let the plaintiff act as coordinator in offering the land for sale to the TOT meant more than a simple person-to-person business relationship.

This could be seen from the testimony of the plaintiff who was senator at that time. The plaintiff testified that he personally knew Gen. Sirind Thoopklum, the president of the TOT, because Gen.Sirind was also a senator who served on the same management and justice commission as the plaintiff.

More than that, Gen. Sirind also testified as witness for the plaintiff, admitting that he selected the plaintiff as his legal advisor, appointing him secretary to the TOT president.

“Thus, the relationship between the plaintiff and the President of TOT is deeper than normal acquaintances. As a result of this, the defendant’s appointment of the plaintiff as his coordinator in selling the land to the TOT could result in conflicts of interest between private parties and the state.”

“The plaintiff used his close relationship and position at work to gain benefits for the defendant, thinking of the profits he stood to gain from the defendant. This is evident from Gen. Sirind’s testimony which said that the plaintiff arranged an appointment for the defendant to meet Gen. Sirind at a restaurant

in the Dusit Thani Hotel.”

“In addition to this, when Gen. Sirind learned that the defendant did not pay the plaintiff the additional 3 Million Baht, he called the 129 T h e plaintiff and the defendant for a meeting with the Director of the National W Defence College who acted as mediator.” o r k Although the plaintiff might have acted out of kindness in wanting i n to help the defendant receive justice as the plaintiff claimed, the plaintiff’s g actions could disadvantage other private parties who did not hire the o plaintiff to mediate and help them in the same way the plaintiff helped the f defendant. C o r In addition to this, the plaintiff’s actions could affect the interests of r u the state which had to use taxpayers’ money to pay for the land at a non- p t competitive price. i o n Thus, this could be considered an agreement that took advantage i of, and implied intervention with the management of a government n agency. T h a Thus, it could be concluded that the agreement’s objective was i contrary to normal peaceful existence or to the morality of the people. The l a agreement was considered void according to Article 150 of the Civil and n Commercial Law. d

All of this was the role of the honorable broker. THE OF

IN Secret Memos

In the pharmaceutical and medical supply corruption case, an important piece of evidence was the 5 million Baht cashier’s check paid by the pharmaceutical company to Mr. Jirayu Charasatien who then passed it on to Mr. Rakkiat Sukthana, former Minister of Public Health. Based on this evidence, the Supreme Court’s Criminal Division for Person Holding Political Positions convicted Mr. Rakkiat Sukthana and sentenced him to 15 years in prison.

In addition to this, the ìsecret memosî which came in the form of balance sheets Mr. Jirayu made were also important evidence. These memos were named ìreminder notesî by the Supreme Court.

The Supreme Court’s verdict discussed these reminder notes as follows: “After being imprisoned, Mr. Jirayu sent a letter to the National Anti-Corruption Council (NACC) providing additional information and 132 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

presented evidence which were reminder notes that the NACC had not known of nor seen before.”

“Even though certain texts in the reminder notes were deleted, the court still saw that details in the notes were consistent and systematically laid out. The handwriting on the notes was also consistently that of one person. The defendant (Mr. Rakkiat) also admitted that after asking Mr. Jirayu to deposit the money (which were obtained from various sources), the reminder notes were reviewed and signed.”

The secret memos also included a list of people who paid and received money from Mr. Rakkiat since November 26, 2540 to August 14, 2541.

Jirayu testified in front of the NACC’s investigation sub-committee explaining that the reminder notes were details of income and expenditures from Mr. Rakkiat’s bank account that was opened under Mr. Jirayu’s name. In the reminder notes were names of various people. The important ones were:

The entry for August 14, 2541 said “received from Secretary Udorn and Department of Medical Services 1,700,000 Baht.” Jirayu explained that “Secretary” referred to Mr. Preecha Rengsomboon (a representative from Loei, Thai Rak Thai party and then Secretary to the Minister of Health) who collected money from those involved in the corruption and from the Bureau of Medicine in Udorn Thani. Pharmaceuticals were purchased through the Government Pharmaceutical Organization (GPO). Money was skimmed off at a certain percentage of this transaction and Mr. Preecha was given this money to pass on to Mr. Jirayu who then passed it on to the defendant (Mr. Rakkiat).

(An interesting issue is that in fiscal year 2541, agencies within the Ministry of Health made over 70,000 orders for pharmaceuticals and medical supplies to other manufacturers via the GPO. The total value was 133 T h e a little over 826 million Baht. Of this amount, 551.39 million Baht came W from the Ministry’s Office of the Permanent Secretary - information from o r Vichai Chokewat, MD’s investigation committee ñ but there are no clear k numbers of the amount of orders the Department of Medical Services i n placed through the GPO. This should be investigated.) g

o Another entry on the same date said “received from Suwit’s f

Secretary 500,000 Baht.” Mr. Jirayu explained that this meant “the C o secretary of Suwit who was on the board of directors at Bangkok Drug r Company.” r u p t (Further investigations at the Department of Business Development i revealed that Bangkok Drug Company registered as a company on o n December 27, 2532. The company’s registered capital was 10 million i Baht, and the company was one of the many that sold drugs and medical n supplies to agencies under the Ministry of Health’s supervision. The T company’s board of directors consisted of Mr. Suwit Ngarmphuphan, Mr. h a Somchai Phitphahutharn, and Mr. Supachai Saibua.) i l a Another part of the memo contained the following “received from n Minister Pinich 1,000,000 Baht.” Jirayu explained that “Minister Pinich d meant Mr. Pinich Jarusombat (currently Minister of Health). This referred to the case when the defendant (Mr. Rakkiat) borrowed 1,000,000 Baht from Mr. Pinich and Mr. Pinich ordered Mr. Jirayu to pay for gambling debts using the borrowed money.”

(Before this, Mr. Rakkiat testified in a previous case (charged with being unusually rich) that the 21 million Baht the NACC claimed not to have a probable source was political support money from Mr. Pinich. However, Mr. Pinich refused to appear as witness before the Supreme Court.)

Another part of the memo said “paid Bem (cash 1 million, transfer 4 million) 5,000,000 Baht.” Mr. Jirayu explained that this was the case 134 The Workings of Corruption in Thailand

where Pol.Lt.Col. Pakorn Sermsuwan (owner of a tour company) wanted 1 million Baht in cash first so 1 million Baht was handed over to Pol.Lt.Col. Pakorn, and 4 million Baht was transferred into Pol.Lt.Col.Pakorn and his wife’s account.

An entry on August 13, 2541 wrote “Kai 2,100,000 Baht.” Mr. Jirayu explained that this was payment given to Mrs. Surakunya Sukthana, Rakkiat’s wife. However, Mr. Jirayu could not remember whether this was paid in cash or was it an account transfer.

If the secret memos were examined in detail, it would reveal names of various representatives, high-ranking doctors, and other people who received and paid millions of Baht to Mr. Rakkiat.

It was a pity that the Thai Rak Thai government and the Ministry of Public Health lacked enthusiasm in further investigating to see how these people were connected to Mr. Rakkiat such that several millions of Baht changed hands between them.

The secret memos which were important evidence in the pharmaceutical and medical supply case were entirely meaningless.

THE OF

IN Artificial Debt Process

Mr. Jirayu Charasatien, former advisor to the Deputy Public Health Minister and a former close friend to Mr. Rakkiat Sukthana, the Public Health Minister (November 15, 2540 to September 15, 2541) was released from Klong Prem prison in March 2548 after being locked behind bars for 3 years.

Mr. Jirayu was sentenced to serve 6 years of prison time by the Supreme Court’s Criminal Division for Person Holding Political Positions on April 24, 2545 for abusing his authority by convincing and coercing the procurement officials to buy overpriced medicine and medical supplies. His jail time was reduced at various special State occasions when detain- ees can request pardons.

Mr. Jirayu, once a caretaker of Mr. Rakkiat’s personal bank accounts, was for a certain period, considered someone whom Mr. Sukthana unreservedly trusted.

But Mr. Jirayu was the “key witness” who turned the table around 138 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

and gave the Supreme Court what it took to order Mr. Rakkiat to serve 15 years of jail time on October 28, 2546 for abusing his authority by accepting money or other benefits (bribe) for himself or for others.

The bribe was the 5 million Baht Mr. Rakkiat earlier received from a pharmaceutical company through Mr. Jirayu as a token for calling off the standard price for pharmaceutical drugs. This five million Baht was a dead-spot that brought Mr. Rakkiat to an end.

The Supreme Court verdict indicated that the 5 million Baht bribe was in a form of cashier’s check that Mr. Supachai Veeraphuchong, Vice President of Thai Nakorn Pattana Company bought from Kasikorn Thai Bank, Nonthaburi branch on August 10, 2541, with Mr. Vinai Veeraphuchong, his father, as payer from a Kasikorn Thai Bank account of the same branch.

According to Mr. Vinai’s testimony in Court, he claimed that the bank account was to make paying and clearing company’s clients’ bill more convenient.

However, Mr. Supachai claimed that the 5 million Baht was the account clearance between him and Jirayu to pay the latter’s gambling debt. The Court saw this claim as a personal act which directly contra- dicted the purpose of having this bank account according to the statement given by Mr. Vinai which said the account belongs to a pharmaceutical company.

Jirayu testified that Mr. Supachai gave Mr. Rakkiat the money as a token of gratitude when Mr. Rakkiat called off the standard price for pharmaceutical drugs. But as the money was in the form of a crossed check, had to ask Mr. Jirayu to deposit it at Siam Commercial Bank, Ngarm Wong Warn branch on August 11, 2541.

Given the available evidence and testimonies, the court believed 139 T h e that the money is a bribe as affirmed by Mr. Jirayu, and not a personal loan W between Mr. Jirayu and Mr. Supachai. o r k Nevertheless, there was one interesting point. It appeared that the i n process of creating an ìartificial debtî using the Court’s ruling as a tool, g had plenty of suspicions that made the National Anti-Corruption Commis- o sion (NACC) suspicious and traced back the witnesses to prove that the f debt was in fact a cover-up scheme. C o r During the trial, Mr. Rakkiat and his friends stated to the NACC r u that it was Mr. Jirayu who borrowed the money from Mr. Supachai. There p t was a loan contract with title deed as collateral. i o n When the repayment was due, Mr. Jirayu failed to repay the money. i Mr. Supachai therefore asked his lawyer to send a letter demanding n explanation and filed a petition to the court asking for repayment as T promised in the contract. The first battle ended with a settlement and the h a court ordered Mr. Jirayu to sell his assets to repay Mr. Supachai. i l a However, the NACC discovered the following: n d 1. The loan contract looked suspicious. Mr. Varodom Veeraphuchong who was one of the witnesses to the contract signing was actually abroad at the time the contract was signed. Moreover, while Mr. Supachai Veeraphuchong claimed that Mr. Nunthawat Klaisem, his attorney, was the one who drafted the contract, he did not ask Mr. Nunthawat to testify in Court. Besides, Mr. Nunthawat did not sign his name in the contract as witness;

2. The value of the land being put forth as collateral was worth only 1.7 million Baht, much below the actual money being loaned in the contract. Moreover, there was no registration for the mortgage;

3. The charge over the breach of contract was filed on March 26, 140 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

2542, amid the news on intensive investigation on pharmaceutical drug corruption;

4. The prosecution over the contract was settled without much difficulty and faster than usual. The Civil Court which accepted the case ordered that a court order be sent to Mr. Jirayu within 5 days. If the order could not be delivered, the plaintiff (Mr. Supachai), must come to testify in front of the judges to continue with the prosecution within 15 days. Interrogation of plaintiff’s witnesses was set on June 8, 2542. As it turned out, after the 5-day deadline, with no evidence that the copy of the court order being delivered to Mr. Jirayu, he came to the court and informed that he would like to make a settlement, which the court, on the same day, granted the settlement;

5. After the case had been settled, when Mr. Jirayu did not make the repayment as promised, it did not appear on the record that Mr. Supachai asked the court to prosecute the defendant. Instead, there was a record of him submitting a petition to the NACC asking the Commission to investigate Mr. Rakkiat for being unusually rich. The Commission decided to set up a subcommittee to investigate Mr. Rakkiat and informed him of that decision in February 2000.

Mr. Supachai Veeraphuchong thus requested that the Civil Court issued a court order on March 8, 2543, almost 1 year after the contract was breached which indicates the intention to prosecute the case like any other creditors;

6. When the subcommittee accused Mr. Rakkiat of being unusually rich on April 24, 2544, Mr. Supachai began to seize Mr. Jirayu’s assets by assigning his authority to his attorney on May 28, 2544 after the Civil Court issued the court order on March 8, 2543. 14 months apart.

From the above information, it is evident that there has been an attempt to manipulate the court process to create artificial debts because 141 T h e they knew very well that the Court must investigate the case according to W the Civil Code for Investigation which indicates that the court would only o r inquire whether the case settlement goes against the petition filed or k whether it poses a threat to a peaceful society. i n g

But the verdict did not confirm whether there was in fact a loan o made between the defendant and the plaintiff. f

C o And this is the end for a politician at ministerial level. r r u p t i o n

i n

T h a i l a n d THE OF

IN Power of King Rama V Coins

Who would have thought that in one high- ranking government official’s life, there could be so many ups and downs so much so that people said that it is as if he had died and came back to life?

Was it because of his political power, the patronage system, or solely because of his own good virtue?

Among the high-ranking government officials, the name of Mr. Nipat Pukkanasut, former Deputy Permanent Secretary of Finance, is very well heard of. He is smart, cunning, and no one dares to pick a fight with him.

His political career path was so promising that the Permanent Secretary office was speculated to be his in no time.

But everything started to crumble when he was discharged from the government for corruption after he accepted a bribe of 30 million Baht to 144 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

help push one private company to win a bid for the Crown Property development project worth 17,000 million Baht (the current skytrain parking space).

Before he became tangled in this mess, he had been associated with Mr. Rakesh Saxena, a notoriously known fugitive from the Bangkok Bank of Commerce (BBC) embezzlement case who has been seeking asylum in Canada for almost 10 years.

The story started when Matichon Newspaper published early in 2541 that one government official of ìdirector-generalî level in the Ministry of Finance had received 4 checks from Bangkok Bank of Commerce dated December 14-15, 2538, with a grand total of 16 million Baht from Miss Yaowaluck Nitteeranont, an employee of the BBC who was Mr. Saxena’s subordinate.

The news coverage began with the evidence that prior to Yaowaluck’s check to the Director-General, Mr. Saxena had transferred the exact same amount of money into Yaowaluck’s bank account.

The question was, where did the 16 million Baht check come from?

According to the preliminary investigation, during the month of July 2538, 5 months before the issuance of the 16 million Baht check, the Director-General, then Chairman to the Government Savings Bank Board, approved the plan to buy shares from the distraught Bangkok Bank of Commerce, worth 375 million Baht without approval from the Minister of Finance.

After the news came out, Nipat gave an interview claiming that he had just sold his amulets for 20 million Baht (not 16 million Baht) and refused to give further details of who the new owner of the amulet was. He only stated that he asked a friend to cash the check but was still uncertain whether he would actually see the money. 145 T h e

W And he did not realize that there had been a check trade with o r Rakesh Saxena. k i n The point to consider here is who were actually the seller and buyer g of the amulets as claimed by Nipat. And if the money was from the o amulet purchase, why bother trading the checks to complicate the matter? f

C o After investigating the evidence, it was found that five cashier’s r checks had been issued by Bangkok Bank, Rama IV branch dated Novem- r u ber 28-29, 2538 from an account of one Tantawan Turakij Company’s p t employee, with a grand total of 20 million Baht. i o n And it turned out that one of the five cashier’s checks was cashed i into Nipat’s Krung Thai bank account, Ministry of Finance branch on n December 12, 2538. T h a The remaining four cashier’s checks, a total of 16 million Baht, i were deposited into Rakesh Saxena’s savings account at BBC on Decem- l a ber 15, 2538. The money has been transferred twice to Yaowaluck’s n savings account and then current account before she wrote four checks to d Nipat, worth 16 million Baht which were later deposited into Nipat’s Krung Thai’s account.

From the evidence, the checks issued by Tantawan Turakij, further investigation on relationship between Nipat and the Tantawan Turakij Company’s employee was made.

During the year 2538, Nipat was Director of the Treasury Depart- ment, Ministry of Finance, and was responsible for a bid for a Crown Property development project at Morchit Market, worth 17,000 million Baht. As it turned out, Sun Estate Company, the company that won the bid, was a subsidiary of Tantawan Turakij Company. 146 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

More importantly, the day that the Cabinet approved (acknowl- edged?) the winning bidder was November 28, 2538.

It was exactly the same day as the Tantawan Turakij employee wrote five checks worth 20 million Baht which Nipat deposited into his bank account and traded with Rekesh Saxena.

Later on, “Sia 6 Nam Mahathitirat” came out to admit that he was the payer of the 30 million Baht check but claimed that it was for the purchase of several King Rama V coins and other gold coins.

At the same time, the Ministry of Finance passed the case to the National Anti-Corruption Commission (NACC). The NACC concluded that Nipat violated government’s regulations and committed a serious crime for corruption on official duty.

The case was then transferred back to the Ministry of Finance which later left the prosecution in the hand of the Royal Thai Police.

The decision of the Office of Civil Service Commission (OCSC)’s subcommittee, Ministry of Finance, came out on May 2, 2543, was to dismiss Nipat from government official status.

However, investigation officials did not prosecute Nipat in late 2544, arguing that Nipat was able to locate witnesses to testify for him about the purchase of King Rama V coins worth 30 million Baht.

Nipat appealed to the Office of the Civil Service Commission (OCSC), asking for permission to re-enter the government service. But the subcommittee for petition and complaint at the OCSC ruled that the petition be overruled which, according to the OCSC’s procedure, the case could no longer be reviewed unless there was an order from Prime Minister.

6 A title for Chinese wealthy man 147 T h e While Nipat was suffering from his own doing, the government in W power was under the leadership of Pol.Lt.Col.Thaksin Shinawatra. Nipat o r was asked to be one of Thaksin’s economic advisors. Consequently, a k close relationship between him and Doctor Prommin Lertsuriyadet, i n Thaksin’s Secretary-General, developed. g

o It appeared that there was an order from the Secretariat of the Prime f

Minister referring to Thaksin’s order to the OCSC to review the verdict. C o r Eventually, the OCSC voted in January 2546 with 6:3 (from a total r u of 14 committee members, 5 were not present) that Nipat did not commit a p t serious crime and that he did not deserve to be dismissed from government i service. Instead, the new verdict was to decrease his salary as a punish- o n ment. i n Finally, Nipat was resurrected and went back to the Ministry of T Finance as an Advisor to the Minister. He retired in September 2546. h a i He was considered a highly influential figure in Thaksin’s l a economic team. n d THE OF

IN Bank for Agriculture and Agricultural Cooperatives (BAAC)’s 900 million Baht Land Mystery

The annual report from the Office of the Auditor General of Thailand (OAG) for fiscal year 2546 was passed to the Parliament for review. The report showed that that year’s governmental activities believed to be corrupt came out to around 3,939.46 million Baht.

The report uncovered that part of this allegedly corrupt money was from the land purchase by the Bank for Agriculture and Agricultural Cooperatives (BAAC) to build a new headquarters near Kasetsart Univer- sity, a grand total of 16 rai and 93 square wah, and 332 million Baht more expensive than the going expropriation price.

The report stated that the BAAC purchased that piece of land for 894.80 million Baht (approximately 137,994.76 Baht per square wah) according to the contract to buy dated October 31, 2538. The announce- ment of intent to purchase was done via advertisement, and the purchase was carried out through a broker, not with the actual owner of the land. 150 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

Moreover, it was found that the BAAC paid 332.04 million Baht to eight persons unrelated to the matter. Each of them claimed that the money received was from a broker as a repayment for loans that were not put into contracts. Also, at the time of the selling and purchasing, the property was still on mortgage, which was against the regulation.

This 332.04 million Baht was the same amount of money that the OAG suggested to be the excess for the BAAC’s land purchase. The OAG calculated that property expropriated by the Highway Department in the same area in that same year was purchased at around 70,000 Baht per square wah.

The piece of land that the BAAC purchased was around 6,493 square wah (70,000 x 6,493), so the proper price should be around 454.51 million Baht. And since the BAAC paid 894.80 million Baht, they must have overpaid at least 332.04 million Baht.

The report stated that the actions of those who were responsible for the purchase (including the Price Negotiation Committee, the BAAC board with Mr. Prapat Potasuton, House Representative from Chart Thai Party and Deputy Finance Minister as chair, the person who approved the purchase, the BAAC manager as project proposer who also participated in the approval) could be believed to be officers who intentionally committed a deceitful act. The OAG thus passed the case to the Civil Court for further legal prosecution.

For the criminal aspect, the Royal Thai Police passed the case to the National Anti-Corruption Commission (NACC).

For the civil aspect, the Ministry of Finance set up an investigation committee to investigate the misconduct of civil servants.

For the discipline aspect, the BAAC was in the process of interro- gating bank employees involved in the land purchase. 151 T h e

W The accusation made by the OAG at first glance did not show any o r complication. After all, it was just another sham. However, there lay k more details and mysteries behind the court scene. i n g

First of all, the brokerage firm involved was Suaysompol Corpora- o tion (the company bought the land from Sahapap Kor Sang Company on f

August 25, 2532 for only 50 million Baht. Six years later, that same plot C o of land was sold at 894.80 million Baht.) to which the BAAC paid for the r land with three cashier’s checks on three different dates. r u p t The first check of 88.585 million Baht was made on the day of the i purchase on October 31, 2538. o n

i The second check of 461.154 million Baht was issued on December n 1, 2538. It was used to repay the mortgage from Aek Thanakij Finance T and Securities Company. This shows that the BAAC was willing to pay h a the down payment on the day of the contract signing without any guaran- i tee that the plot of land could actually be purchased, and that the land title l a could actually be transferred to the BAAC since it was still on mortgage. n d The third check of 336.111 million Baht was made on December 8, 2538.

After deducting the 461.154 million Baht spent to repay the mortgage from the total money the BAAC spent to purchase the property, 424.69 million Baht remained. As it turned out, Mr. Pisat Kittinan, Managing Director of the Suaysompol Corporation used the 332.04 million Baht to pay nine people, most of them shareholders of Suaysompol Corporation or business associates. They were:

1. Mr. Nopporn Kaikaew, husband of Mrs. Suporn Kaikaew, the broker that contacted the BAAC, 20.2 million Baht; 2. Mrs. Nuchnart Chiaravaranond, 3.193 million Baht; 152 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

3. Mr. Yongyuth Pintusopon, 47.6 million Baht; 4. Mr. Suchao Kirdpanich, 53.868 million Baht; 5. Mrs. Siriluck Suaysompol, 1.318 million Baht; 6. Mrs. Sunee Rojchanaworakul, 32.215 million Baht; 7. Mr. Prachak Tungkarawakul, the owner of TOA Pait company, 30.03 million Baht; 8. Mrs. Suvimol Suaysompol, 83.69 million Baht.

As for the ninth person, the OAG could not trace his/her identity because the Siam Commercial Bank would not disclose the information, claiming that the Bank had lost the bank transfer data.

Nonetheless, a person familiar with the case reported that there was a large cash withdrawal and the money was given to a politician. It would be interesting to know whether or not this politician is of ministerial level.

After the land had been sold, Suaysompol Corportation re-registered the company and changed its name to P.K. Topcon on May 30, 2539. The Sauysompols, the major shareholders, then resold their shares to Mr. Pisat Kittinan. And on March 20, 2545, the company was declared insolvent.

Second of all, there was a clear connection between the BAAC board at the time and Chart Thai Party which monitored the BAAC. Mr. Manas Jaimun, Directing Manager of the BAAC and Mr. Surachai Lesavanich, a contractor and land developer of Supanburi since year 2534, co-founded Korat Network Company (a hotel business).

The Lesavanich family has quite a few siblings. One of them is Miss Daranee Lesavanich who has 10 contract construction companies and has Ms. Ampaiwan Polsen and others in the Polsen family as partners.

As it turned out, before the general election would be held on January 6, 2544, Miss Daranee Lesavanich and Miss Ampaiwan Polsen each donated 10 million Baht to Chart Thai Party!! 153 T h e

W Whether or not this was due to pure faith they both have in this o r political party, or was it just the path that the BAAC money flew... k i n It remains a puzzle until today. g

o f

C o r r u p t i o n

i n

T h a i l a n d THE OF

IN Treasures of the Three Field Marshalls

Field Marshal Plaek Pibulsongkram was Prime Minister for 15 years, from December 16, 2481 to August 1, 2487 and from April 8, 2491 to September 16, 2500, longer than any prime minister in the Thai history.

During the second term, his government enjoyed total dictatorship backed by the police and the armed forces.

But the power rapidly declined after the scandalous election of February 26, 2500. In protest, university students raised the flag half-staff at Chulalongkorn University as mourning for the lost democracy.

Chulalongkorn University students’ meeting to plan a demonstration against the government prompted Field Marshal Plaek to declare state of emergency.

The situation led the Commander-in-Chief, FM Sarit Thanarat, to challenge Field Marshal Plaek’s power. 156 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

In “Thailand: The Politics of Despotic Paternalism,” the author, Thak Chaloemtiarana, Director of Asian Studies at Cornell University, wrote that during that period, four key incidents took place that more or less extirpated Field Marshal Plaek’s administration.

First, it was the government’s inefficiency in dealing with the severe drought problem in the northeastern region. The government had resorted to public propaganda to cover up the facts.

Second, some prominent officials had abused the power, seeking personal gains at the expense of the country.

Third, in the National Assembly’s general debate against the government, Police General Pao Sriyanond, Field Marshal Plaek’s chief assistant faced strong accusation for his actions concerning the Royal Family.

Fourth, Field Marshal Sarit had split with Field Marshal Plaek by resigning from the post of Minister of Defence in protest against the government’s incompetence.

The second incident will be discussed in details to point out that about 50 years ago, corruption was relatively plain, compared to the highly sophisticated ones committed during the Thaksin era.

The book “Thailand: The Politics of Despotic Paternalism” stated that the case started with the government’s plan to construct Bhumibol Dam in Tak Province for which the World Bank granted a 66 million US dollars loan on September 20, 2500 (around 1,353 million Baht based on the exchange rate of 20.5 Baht per dollar). The repayment period was 25 years with the first repayment starting 6 years after the contract signing date. 157 T h e The dam construction provided an opportunity for corruption of W lumber laid underneath the water on a grand scale. o r k The Bhumibol Dam construction project came out right after the i n major disaster in the north-east, causing many members of the House g

Representatives to be disgruntled over the loan. They objected the fact that o the loan’s interest rate was as high as 5.75% amounting to about 72 f million Baht annually. C o r The opposition party used the slogan, “One million Baht in three r u days” to stress their case. Because of their respect for the King, however, p t the representatives did not furiously fight against the dam construction i project although a number of them walked out in protest. o n

i But the problem did not end. Mr. Tiam Komkrit, Head of the n Department of Forestry, was forced to resign immediately on the ground of T administrative incompetence. Such incident would have gone unnoticed h a had Mr. Tiam not decided to fight for his name. Mr. Tiam thought that he i could make the case known to the public by giving an interview stating his l a complaint about his removal from position. n d Mr. Tiam’s outspoken actions could be explained by the fact that his subordinates had sought the help of Field Marshal Sarit who had already gained popularity among the people and was becoming more and more powerful.

Mr. Tiam revealed the unfortunate story behind his removal that certain powerful persons within the government would like to set up a Thailand Forestation Company which would unify all the private companies and eventually monopolize lumber and teak wood industry.

Mr. Tiam said that Field Marshal Pin Chunhawan, the Minister of Agriculture and Co-operatives, was behind this project. It turned out that the other lumber companies refused to cooperate. Field Marshal Pin then 158 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

wanted to withhold all the forestation permissions. But Mr. Tiam who was directly responsible refused to comply with the Field Marshal’s wish.

Thailand Forestation Company was also involved in the Bhumibol Dam Project because someone wanted to monopolize the logging in the areas above the dam which, as stated by Mr.Tiam, contained some of the best trees in the country; whoever got the permission to log these trees could get at least 1,000 million Baht which would be as much as 20,000 million Baht today.

Mr. Tiam revealed that the first submitted application for permission to log trees above the dam came from Mr. Rasami Chantrawiroj who worked with Field Marshal Plaek’s Manungkasila Party. The application had been personally endorsed by Field Marshal Pin who also wrote a recommendation advising that the permission be granted without any delay. Again, Mr. Tiam refused to comply; another reason for his removal.

When this scandalous event was exposed, together with increasing supportive gesture Mr. Tiam received from Field Marshal Sarit, the government was under pressure to withdraw from the Thailand Forestation Company project. The evidence the government had against Mr. Tiam was mysteriously kept secret and the case against him was also lifted.

However, Field Marshal Sarit, through a newspaper interview, accused the government and Manaungkasila Party of deliberate corruption.

“... All of us, the coup members, members of Manaungkasila Party, or the government alike, will never be able to look people in the eyes unless we solve this logging scandal.”

In addition, the matter was brought to the House of Representatives to reprimand Field Marshal Pin on his incapability and improper exercise of his authority concerning the deposition of government officials. 159 T h e In the end, when the situation was ripe, Field Marshal Sarit staged a W coup removing Field Marshal Plaek from power on September 16, 2500. o r k No one realized at the time that the knight on the white horse, i n the people’s hero, would soon turn into a dictator in less than a year. g

o Lessons from the Dictatorship Era f

C o It has often been told how dictators in the past sought personal r gains. r u p t The case often cited as a lesson to be learned is that of former i Minister of Agriculture and Co-operatives in Field Marshal Sarit Thanarat’ o n s administration (2501-2506) who died in prison because he had accepted i diamond rings as a bribe from a merchant in return for logging permis- n sions in the south. When he could not deliver his promise, the merchant T blew the whistle and a lawsuit was filed against the minister. h a i At the same time, there was a story about Field Marshal Sarit’s l a confidant who received different forms of personal gains under the power n of the Prime Minister and the Army Commander-in-Chief. d

Besides using the budget money and the money offered by mer- chants, Field Marshal Sarit also used the revenue of the Government Lottery Office, the Board Committee he chaired, as he pleased. Therefore, the appointed director must be someone he could highly trust as he was to be the key purser. The man entrusted with the job at the time was Mr. Sanguan Chantarasaka, his half-brother.

Meanwhile, Field Marshal Sarit who chaired the Government Lottery Board had the authority to approve the use of the revenue from lottery sales anyway he pleased including buying a helicopter for his own use. 160 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

It is interesting to note that the way Pol.Lt.Col. Thaksin Shinawatra took more than 10,000 million Baht of profit revenue from 2- and 3- digit lottery to spend in his various projects allegedly for his own political aims. Also, the appointment of Pol. Maj. Gen. Surasit Sungkapong, former Head of the Crime Suppression Division and his classmate from the Police Academy, as director of the Government Lottery Office, was very much similar to what had been done during Field Marshal Sarit’s time.

Since Mr. Sanguan was close to the most powerful man in the country, wealth soon came his way.

But at the end of Field Marshal Sarit’s power, Mr. Sanguan was in deep trouble. He was investigated and, like Than Poo Ying Vichitra Thanarat, Field Marshal Sarit’s wife, his wealth was confiscated and was subjected to taxation. The Revenue Department headed at the time by Mr. Hiran Sootabutr, proceeded to collect the tax. The case was fought in three courts (Red case number 1793/2518, the judge panel included Mr. Wikrom Maolanond, Mr. Suthi Chobtham and Mr. Sumit Fugtongpun).

After the Revenue Department had collected the tax, Mr. Sanguan filed a lawsuit demanding the tax money back plus a compensation of 15% annual interest rate of the 4,739,297 Baht collected starting from the day of the filing which amounted to 59,241 Baht a month.

Mr. Sanguan won the case in the Court of First Instance, but the verdict was overturned in the Supreme Court which ruled that his income amounting to 6,454,667 Baht could not be exempted from taxation.

Imagine how much 6 million Baht 40 years ago must be worth today considering that the gold price has increased from 400 Baht to 10,000 Baht per Baht (11 grams) over the 40-year period. And this did not even include his other assets ruled by the court as not liable to taxation.

Among the assets which the Supreme Court ruled as taxable were: 161 T h e 1. 295,500 Baht cash which Mr. Sanguan claimed to be transporta- W tion expenses. The Supreme Court, however, ruled that because of the o r amount of money, the payment method and the actual conduct, it could not k be considered as transportation expenses that would be honestly spent in i n necessary mission in line of duty; g

o 2. 341,250 Baht worth of free stocks Mr. Sanguan received from f

Dhipaya Insurance Company, Burapa Settakit Mining Company and C o Thailand Smelting Company. Mr. Sanguan testified that he had worked r for Field Marshal Sarit who gave him the stocks. The stocks should then r u be considered as a payment for the service rendered, not for moral ethic p t support. (For more detail on moral ethic patronage, see “Hidden Legal i Acts”.); o n

i 3. The Bank of Asia check dated August 13, 2502 worth 150,000 n Baht from Saha Match Company; T h a 4. Nine checks with a grand total of 986,098 Baht which Mr. i Sanguan had to produce as an argument why they should be exempted l a from taxation. And this, he failed; n d 5. Account-payee-only checks totaling 4,563,711 Baht which Mr. Sagnauan could not explain why they should be tax exempted.

Assets ruled by the Supreme Court that can be exempted from taxation included: 1. The 71,859 Baht interest the plaintiff received from Bank of Asia;

2. The 909,110 Baht cash in bank deposit that was not yet considered as taxable income;

3. Four checks from Siam Motors Company signed by Usa Pornprapa wife of Tavorn Pornprapa, dated from 2504-2506 totaling 162 The Workings of Corruption in Thailand

70,000 Baht, which Mr. Sanguan claimed to be New Year gifts which Taworn Pornprapa, Manager of Siam Motors Company used to give him every year. The Revenue Department on the other hand, argued that the gift of such a large amount of money even for a very special occasion cannot be considered as traditional gift.

The Supreme Court saw that it was difficult to set a specific rule for this matter. Whether or not it is a gift was up to how gift givers and gift taker perceived the gift in question. Thus, the Court ruled that the 70,000 Baht payment was income tax exempted;

4. Sixty-four ìaccount-payee-onlyî checks from Bangkok Thai Silk Company Limited were ruled by the Supreme Court as refunded petty cash from Mr. Sanguan’s own account, and therefore were not taxable income.

The story provided here only illustrates how time and time again, since the beginning of time, power serves as a source of wealth... regard- less of how wealth is attained.

Now, just a quick glance at this year’s list of Thai stock- millionaires that shows the Shinawatra-Damapong families together hold approximately 50,000 million Baht worth of shares in the stock exchange market.

THE OF

IN From Old Minion to the Beloved Wife

As one of the most trusted men of the most powerful man in the country, Sanguan Chantarasaka was handed the prestigious task of Director of the Government Lottery Office during Field Marshal Sarit Thanarat’s administration. Money was pouring in.

But when Sarit passed, old faithful minion like Sanguan was left unprotected. Hence, he was hunted down by the Revenue Department for taxes of more than 6 million Baht from the income he earned during his prosperous days, considered a large fortune 40 years back.

At the same time, other minions who had been leading peaceful lives while the Field Marshal was still around, now turned their backs against each other, and started fighting for the inheritance, which consequently led to a major asset confiscation.

Only two months after Field Marshal Sarit’s death (December 9, 2506), the scramble for his legacy and inheritance began on February 14, 166 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

2507 when Chawee Thanarat (former last name Milintajinda), his lawful wife, registered in 2473, together with their sons, Maj. Settha and First Lt. Somchai Thanarat, filed a petition asking the court to name them trustees of approximately 3 million Baht unaccounted for in the will.

However, on March 17, the cremation day at Sirintrawas Temple, Than Poo Ying Vichitra Thanarat, who married Field Marshal Sarit, registered a marriage certificate in year 2491 and had lived together since, filed an opposition and requested that the court name her to be the sole trustee of Field Marshal Sarit’s will.

Earlier, Than Poo Ying Vichitra had asked the court to seize 26 title deeds that Field Marshal Sarit had bought and put under the name of Second Lt. Pao Waikuna, also known as Bao Samerjai, Sarit’s confidant (the ownership of the title deeds changed hands several times after that), whose responsibility back then was locating and purchasing land and houses for Field Marshal Sarit’s many mistresses.

Nonetheless, Than Poo Ying Vichitra’s wish to take over the sole rights to manage Field Marshal Sarit’s assets was not an easy task. There were a few other opposers. One person claimed that he was a father of one of Field Marshal Sarit’s mistresses. Others claimed that they were his mistresses themselves.

The battle was fierce. Until one day Maj. Settha along with other seven lawful heirs sued Than Poo Ying Vichitra and demanded their 2,874 million Baht share.

(Imagine the present value of 2,874 million Baht 40 years ago. If we use the gold price converter, the present value may be as much as 40,000 million Baht.)

This scandalous case made people question the origin of Field Marshal Sarit’s (the red loincloth Field Marshal) colossal asset. Amidst 167 T h e growing criticism, Field Marshal Thanom Kittikachorn, Sarit’s former W junior, and successor as Prime Minister, decided to set up an investigation o r committee for Sarit’s asset (with Phra Manuvetvimolnat as the chairman) k under Article 17 in the Constitution which was drafted during the reign of i n a dictator. g

o Field Marshal Sarit used the same Article in the past for his own f benefit and to get rid of his political enemies. Little did he know that the C o same Article would come back to haunt his own inheritance. r r u On June 26, 2507, the investigation committee ordered Than Poo p t Ying Vichitra’s asset in all commercial banks seized and demanded that i she declare all her financial transactions since the first day of her marriage o n until the day her husband died. The Committee also seized all land i properties bearing Field Marshal Sarit’s as well as his mistresses’ names. n

T Finally, Field Marshal Thanom exercised the power under Article h a 17 to confiscate more than 600 million Baht worth of assets and turned i them into national property. l a n Than Poo Ying Vichitra fought with all her might. She filed d charges against Field Marshal Thanom and the investigation committee. They fought through the Supreme Court. But she lost in all three courts.

From the verdict of the Supreme Court, a few interesting facts can be spotted.

Than Poo Ying Vichitra claimed that the investigation committee conspired against Field Marshal Sarit by committing corrupt and unlawful acts and using more power than they were legally bestowed upon. She claimed that the Committee selected to investigate only witnesses who would testify against Field Marshal Sarit for embezzlement of national property. They therefore misled the Cabinet to misunderstand the circumstance. Since the Cabinet did not know the whole story, they mistakenly 168 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

allowed Field Marshal Thanom to order the decree under Article 17 which stated that Field Marshal Sarit was a threat to national security. The Committee then would have the right to call upon any witnesses, documents, and to seize Field Marshal Sarit’s assets, half of which, claimed by Than Poo Ying Vichitra, belonged to her, and to cause her damages.

Than Poo Ying Vichitra claimed that the way her husband spending money was legitimate, and that he never violated any regulations. She was not a part of any withdrawal, for half of her husband’s assets belonged to her. She has never been a part of the threat.

The order that the plaintiff had been benefiting from Field Marshal Sarit’s assets was against Article 17 and she asked the court to nullify that court order and return the confiscated assets plus damages.

Nevertheless, at a meeting of the Supreme Court judges, the court ruled that given the political circumstance, it was appropriate that the Constitution in use granted the Prime Minister the right and power to order or act in the interest of the country within a specified boundary. The court also stated that the order or the act by the Prime Minister under Article 17 was lawful and cannot be questioned or brought charges against. The court would not accept such case or if it did, it does not mean that the court could not alter the verdict later.

The plaintiff stated that the use of Article 17 in this case was illegitimate because the intention was corrupt, careless, and spiteful. The committee investigated only those who would testify against Field Marshal Sarit, that he embezzled national property while there was no single evidence that would suggest it to be the case. The plaintiff contin- ued that the Field Marshal Thanom then informed the cabinet that he would exercise his power under Article 17 was without reason.

At a meeting of the Supreme Court judges, it was decided that Article 17 granted the Prime Minister the right and power, with the 169 T h e consent of the cabinet, to order or act in the interest of the country, W including preventing or suppressing any act considered to be dangerous to o r the security of the Kingdom. Therefore, the Prime Minister, with the k approval of the cabinet, had the power to make a final decision whether or i n not to exercise his power under this Article. g

o Not only did she lose more than 600 million Baht worth of assets, f

Than Poo Ying Vichitra was also tried by the Ministry of Finance and the C o Revenue Department. Some of the more interesting cases are as follows. r r u The Revenue Department imposed more than 9 million Baht of p t unpaid taxes. On this, the Supreme Court ruled that the excuse the plaintiff i brought to Court that she had been in distress as a result of her recent loss, o n that she was suffering both from being sued by her husband’s relatives, i and from losing all her remaining assets from the confiscation, certainly n deserved some sympathy. However, such circumstance could not be T treated as a legal excuse for the plaintiff to be exempted from tax collec- h a tion. i l a The Ministry of Finance asked for a payment of the 5 million Baht n loan Than Poo Ying Vichitra took from Bangkok Krasop Company. But d Field Marshal Sarit had Sanguan Chantarasaka, Director of the Govern- ment Lottery Office, borrowed the money on the Field Marshal’s behalf in order to cover his tracks.

What happened to Field Marshal Sarit’s beloved wife told a good story about karma! 7

7 Deed, fate or destiny THE OF

IN What Goes Around Comes Around

Nobody would imagine that ten years after Field Marshal Thanom Kittikachorn utilized Article 17 of the Constitution to seize and confiscate the assets of his former superior in late November of 2507, he himself would ironically suffer the same fate, courtesy of the very same legal statute.

Ten years later, the collapse of the ìThanom-Prapas-Narongî regime came after the October 14, 2516 student uprising that demanded true democracy for the country. The demonstration forced the ruling triumvi- rate - consisting of Field Marshal Thanom Kittikachorn, Field Marshal Prapas Charusathira, and Colonel Narong Kittikachorn - to relinquish power. Field Marshal Thanom was then in the same position as his old superior. The succeeding government under the leadership of Sanya Dharmasakti wielded the same Article 17 to confiscate the numerous assets ñ including houses, land, cars and sizeable stock holdings ñ of the three powerful men and their families. 172 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

The assets of Field Marshal Thanom and his wife Than Poo Ying Chongkol alone were estimated to be worth around 84,905,498 Baht.

You can call this ìwhat goes around comes aroundî or karma.

Field Marshal Thanom used to be one of the most trusted proteges of Field Marshal Sarit. He was appointed a relieving Prime Minister after Mr. Poj Sarasin when Field Marshal Sarit seized power from Field Marshal Plaek Pibulsongkram.

However, as the controversies surrounding the battle for Sarit’s 2,874 million Baht assets heated up, the political pressure on Field Marshal Thanom built up as well. In the end, Field Marshal Thanom was forced to exercise his power and order a seizure of his ex mentor’s assets.

Than Poo Ying Vichitra Thanarat, the lawful wife of Field Marshal Sarit, and his sole heir, fought off this seizure with great fervor. Ten years later, it came to be the turn of Field Marshal Thanom and his wife, who would stage a similarly spirited defense of their assets.

The couple submitted as many as 32 petitions, claiming that the assets confiscated by Mr. Sanya’s government had in fact been rightfully earned. They asserted that there had been no abuse of authority, whether theirs or others, to coerce or persuade in the course of procuring the said assets.

As it turned out, the committee set up to rule on the petitions chaired by Pol. Maj. Gen. Attasit Sittisunthorn, then Interior Minister, decided that only five of a few hundred items on the list of confiscated assets could be returned. The five assets included a piece of land of a little more than 2 rais in Dusit district, another 13 rais in Ayudhaya, one Mercedes Benz, 137,819 Baht in a bank account, and 120,000 Baht allowance for the Government Lottery Office committee. 173 T h e When their appeal was rejected by the courts, Field Marshal W Thanom along with 16 others filed a lawsuit against Sanya and ten others o r to the Civil Court on June 26, 2518. k i n The Civil Court called them in for a hearing 8 days later (July 4, g

2518), and told them that the court would not accept the case because there o was no need for further investigation as there was already the verdict from f the Supreme Court as a precedent when Field Marshal Thanom ordered C o Field Marshal Sarit’s assets confiscated and was later sued by Than Poo r Ying Vichitra. r u p t The Civil Court order carried some interesting facts as follows. i o n According to Article 17 of the Constitution of the Kingdom, B.E. i 2515, the Prime Minister has the right and power to order or act in the n interest of the country, including preventing or suppressing any act T considered to be dangerous to the security of the Kingdom, the Throne, or h a the economy, among others. i l a The evidence established that Field Marshal Thanom and his wife n came to own an abnormally large amount of assets ñ much more than any d honest person of similar profession would reasonably own. The resulting verdict was that the couple’s assets would be seized and confiscated by the state. It is also worth noting that this was a suitable procedure and decision given the political situation at the time.

The fact that the collective assets of Field Marshal Thanom and his wife exceeded 84 million Baht could not be argued to be a case for ordinary people. Field Marshal Thanom had only served as a government official throughout his professional life, never once dabbled into any business venture. Neither was he an owner of such considerable amount of assets before he assumed prominent public offices.

Even though Field Marshal Thanom had long served in the government with diligence, he should not, reasonably, have had this much asset. 174 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

The order to seize and confiscate Field Marshal Thanom and his wife’s asset was therefore lawful. The power wielded by the Prime Minister, even at his own discretion, was therefore not purely out of spite.

Field Marshal Thanom and his wife appealed to the Court of Appeals and the Supreme Court. The end result was the same as the verdict of the Court of First Instance.

In order to present both sides of the picture, the verdict from the Supreme Court is summarized here.

Field Marshal Thanom was the plaintiff of the case. He stated that he was the Commander-in-Chief and the Prime Minister during the time of the pro-democracy uprising on October 13-14, 2516.

To restore peace, Field Marshal Thanom, the plaintiff, resigned from office. Sanya, the first defendant, who succeeded Thanom as the new Prime Minister exercised his new power under Article 17 and ordered Field Marshal Thanom’s assets to be seized and confiscated. The plaintiff felt that the first defendant was acting against him out of spite. Therefore, the first defendant’s order to seize his assets did not conform to Article 17’ s intention.

Moreover, the first defendant acted against the law. Thus, the order should be void.

In addition, the investigation committee that the first defendant, the Prime Minister, set up had the intention of inflicting damages to the plaintiff. The Committee did not allow certain witnesses to testify. It rushed through the decision-making process, and in the end gave out order that was neither just nor legal. The amount of assets that were finally returned was miniscule compared to the total assets confiscated initially. 175 T h e The Supreme Court ruled that the Article 17 under the Constitution W of the Kingdom, B.E.2515, granted the right and power to the Prime o r Minister to order and act, with the cabinet’s consent, in the interest of the k country, to prevent or suppress any act considered to be dangerous to the i n Kingdom, the Throne, the economy, or the government. It further includes g the right to stem any act considered to be jeopardizing peace or morale of o the people and society. f

C o Moreover, Article 17 granted the Prime Minister a lawful power to r exercise any actions at this discretion. r u p t Therefore, the order to seize Field Marshal Thanom’s assets was i not beyond the Prime Minister’s power. Moreover, it was within the o n objective of Article 17. i n At the same time, there was an order from the Prime Minister to T pursue the case with great speed. h a i The investigation committee’s decision not to bring in certain l a witnesses to supplement the witnesses and documents already under n investigation was solely up to the discretion of the committee. d

And this decision as well as the decision to pursue the case with haste could not be concluded as an act out of spite against the plaintiff.

The lesson from the two Great Field Marshal eras that were in power for 16 years had immensely taught the Thai society that those who pursue less-than-righteous power would, in due course, face tragic endings.

However, it seems that none of today’s politicians have learned 176 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

that lesson. Post Script

On November 25, 2009, The Nation, a leading English-language daily newspaper, published the following report.

‘Paper’ companies set up to conceal assets : DSI chief

Exim Bank and TAC chiefs also tell court about controversial state deals while Thaksin was prime minister

Ousted premier Thaksin Shinawatra and his ex-wife set up layers of ìpaperî companies to hide the true ownership of their assets, Sunai Manomai-udom, the former head of the Department of Special Investiga- tion (DSI) told the Supreme Court yesterday.

Sunai was one of the prosecution witnesses in the Bt76-billion asset seizure case in which Thaksin is accused of hiding his assets while in office and abusing his authority to boost the value of those assets.

After SC Assets Plc was founded in Thaksin and wife Pojaman set up a several ìpaperî companies such as Win Mark Co, Blue Diamond Co, and Sinatra Co to conceal their holdings in SC Assets.

Sunai said there were certified documents from Singapore, Hong Kong and Malaysia to support the conclusion that all these firms were nominees of Thaksin and Pojaman while the former held public office from 2001 to 2006.

Meanwhile, Wibul Sithaporn, a former assistant president of the state-owned Export-Import Bank, told the court the bank provided a Bt4- billion loan to the government of Myanmar during the tenure of Thaksin’s government. 177 T h e The low-interest loan included a Bt670-million Thai government W subsidy on the interest charge. o r k However, about Bt1 billion of the Exim Bank loan was used by i n Myanmar to buy satellite services from Shin Satellite, a unit of Shin Corp, g then controlled by Thaksin and Pojaman. o f

In addition, Netima Euthammapimuk, a former director of Total C o Access Communications (TAC), and Thana Thien-achariya, another senior r TAC executive, testified before the court that AIS, a unit of Shin Corp, r u held an advantage over TAC because the former did not have to pay the p t access charge of Bt200 per number for its post-paid service. i o n This resulted in unfair competition in the highly-lucrative mobile i phone business. n

T Prosecutors said Thaksin abused his authority as the concession h a contract between AIS and the state-owned TOT was amended to benefit i AIS while he was prime minister. l a n Besides the access charge issue, the concession fee was reduced d from 25 per cent to 20 per cent, resulting in a major revenue loss for state- owned TOT, prosecutors said.

The Supreme Court is due to hear more prosecution witnesses until the middle of next month, after which it will give a ruling on whether Thaksin and his former wife’s Bt76 billion in assets will be seized.

About the Author : Prasong Lertratanawisute From Businees Week , July 2, 2001

Bespectacled and soft-spoken, Prasong Lertratanawisute doesn’t come across as a hard-boiled investigative journalist. But as managing editor of the Bangkok newspaper Prachachat Thurakij , Prasong has come up with a series of coups, the most recent of which helped topple Thailand’s former Deputy Prime Minister, Sanan Kachornprasart, last year on charges of falsely declaring his assets.

Current Premier Thaksin Shinawatra could be Prasong’s next casualty. Last September, Prachachat broke the story that Thaksin had transferred more than $50 million worth of shares from his holding company, Shin Corp., to his maid, driver, and security guard—allegedly to hide part of his wealth. That prompted his indictment last December by the National Counter Corruption Commission. If Thaksin is found guilty, the Premier could be stripped of his post and banned from politics for five 180 T h e W o r k i n g s o f C o r r u p t i o n i n T h a i l a n d

years. In the unlikely event that happens, Thaksin has vowed to run the government from the sidelines through the majority Thai Rak Thai Party. SCAMMING MONKS . Prasong, 40, has been poking around the corridors of power from the start. After studying journalism at Bangkok’s prestigious Chulalongkorn University, Prasong got his first taste of investigative reporting 17 years ago when, at age 23, he uncovered fraud inside the Education Ministry. Since then, he has produced a steady stream of stories exposing everything from tax evasion by a former Prime Minister’s daughter to monks who were selling fake receipts for donations to senior government officials.

Most of these stories were leaked by anonymous sources, says Prasong. It wasn’t until the collapse of Bangkok Bank of Commerce PLC, in 1996, that he honed the skills of the paper chase that have served him so well since. While most other newspapers treated the bank’s demise as a routine business failure, Prasong smelled corruption and started digging. After burrowing through loan documents and stock market records for three months, he and his team of reporters stumbled on a loan scandal and graft involving senior officials and powerful businessmen. “That story made me realize how essential the paper trail and research are for investigative journalism,” he says. “It’s like a jigsaw puzzle.” More recently, says Prasong, technological advances and the passing of the Official Information Act in 1997 have made the job easier. Instead of “waiting for somebody in a dark corner” to slip him information, Prasong says he stays in his office and surfs the Internet. In 1999, by piecing together information gleaned from a Commerce Ministry Web site containing public records on company ownership, Prasong was able to blow the whistle on Deputy Prime Minister Sanan.

Thanks to the Official Information Act and a new constitution, also passed in 1997, Thai journalists now enjoy one of the most unfettered working environments in Asia, Prasong maintains. But he frets about the growing influence of big business over the media. For example, several journalists at television channel iTV were sacked by its owner, the very 181 T h e Shin Corp. controlled by Thaksin, after refusing to cut off coverage of the W politician’s indictment during the runup to January’s national elections. o r Prasong says he has never received direct threats, despite years of writing k hard-hitting stories. But he has felt pressure: When the Thaksin story i n broke, a couple of key players from Thai Rak Thai visited Prasong’s office g to lobby on the Premier’s behalf. “They asked for my sympathy,” he o recalls. “I said, ùLet Thaksin tell the truth to the public.”’ f

C o A teetotaler and nonsmoker, Prasong likes to unwind after a hard r day at the office by going home and playing with his two kids or watching r u TV. He has a long list of awards from the Thailand Journalists Assn. and is p t often compared with Robert Woodward and Carl Bernstein, the reporters i for The Washington Post who helped bring down President Richard M. o n Nixon. If Thaksin is found guilty, Prasong has no plans to celebrate. “I’m i not his rival,” he says. “The only thing that will make me glad is that I am n

T h a i l a n d able to complete my job as a journalist.” In Asia, that’s quite an achieve- ment. Footnotes: Page 1 (Arahatta) - Buddhist sainthood 5

2 Translator’s note: Years referred in this book are in Buddhist Era (B.E.) 7

3 (Khun Ying) - A title comparable to the British Lady 9

4 (Nai Yai ñ Nai Ying Yai) ñ Names referred to Pol.Lt.Col. 15 Thaksin Shinawatra and his wife Khun Ying Pojaman. They mean ìThe Big Master and The Big Mistressî.

5 (Yantra) - A blessed sign used to ward off spirit or evil 48

6 (Sia) - A title for Chinese wealthy man 78

7 (Than PooYing) - A title for Lady, higher than Khun Ying 88

8 (Karma) - Deed, fate, or destiny 93