Tackling the 'policy corruption' of the Thaksin regime
The judiciary will soon be tasked with another crucial review if the Assets Examination Committee (AEC) rules that it was illegal for Khunying Pojaman Shinawatra to have entered into a contract with the state to buy a Bt772-million prime plot of land in Bangkok at an auction a few years ago while her husband was holder of the highest office in the land.
Key members of the AEC, installed by the military in the wake of the September 19 coup, have argued that the transaction was in violation of Article 100 of the National Counter Corruption Commission (NCCC) law. The article bars holders of public office and their spouses from entering into contracts with the state so as to prevent conflicts of interest.
The deal had been approved by the Financial Institutions Development Fund (FIDF) based on the legal interpretation that since the prime minister wasn't directly in charge of the state agency that sold the property, his spouse could do business with that agency. Under this interpretation, the finance minister is deemed the man in charge of the FIDF.
Such an interpretation was unopposed back then when Thaksin was still in power and widely popular. Now, it's a different story as the letter of the law is being taken seriously. Besides the NCCC law, the AEC has cited Article 11 of the Administrative Law BE 2534, which clearly states that the prime minister is ultimately the supervisor of all ministers and heads of state agencies, to back its argument that the deal wasn't above board.
The AEC will have to submit the case to the Criminal Division of the Supreme Court, which handles offences allegedly committed by holders of public office, if it officially concludes that the multimillion-baht land purchase was illegal.
The expected judicial review of this transaction should set a precedent for the way in which alleged conflicts of interest among politicians and their spouses are tackled. Hopefully, such a controversial case in the Supreme Court will help remind holders of public office that they had better make the boundary between public and private interests clear or else they could be in trouble afterwards.
According to PM's Office Minister Thirapat Serirangsan, who recently compiled a book on Thai politicians' ethics, holders of public office represent at least eight interest groups: the official and his or her family, political parties, political sponsors, affiliated businesses, relevant bureaucrats, subordinates, constituents and the general public.
Thirapat believes that instances of conflict of interest have become much more sophisticated during Thaksin's years in office from 2001 to 2006. These cases could be called "policy corruption", which means the conduct of public office to favour public office holders' interests and those of their allies. Among the notable examples is the 2003 issue of an executive decree to erect a tariff barrier (excise) against newcomers in the telecom industry in order to protect the interest of existing players ahead of the sector's liberalisation. Cellular service-provider Advanced Info Service (AIS), then owned by the Shinawatra family, was the biggest of the existing telecom companies.
Another example is the Board of Investment granting tax breaks worth a total of Bt16.4 billion to Shin Satellite Plc for its iPSTAR project in 2003. This was viewed as a waste of Thai taxpayers' funds since the tax breaks mainly benefited the company and its foreign customers and did not encourage any further investment for public benefit.
In addition, the Thaksin government was successful in cutting a deal with Chinese authorities to resolve orbital problems for the iPSTAR satellite. Both instances benefited the stock market value of Shin Sat, at that time owned by the prime minister's family.
A third example is the ruling of an arbitration committee involving the PM's Office and iTV Plc in 2003 under which the national TV network, also Shinawatra-controlled, would get a substantial reduction in concession fees paid to the government and be allowed to increase its commercial content.
A fourth is the Transport Ministry's decision in 2003 to abolish its minimum air fare of Bt3.8 per kilometre, at a time when Shin Corp was about to enter into a joint venture with low-cost airline AirAsia of Malaysia to open a subsidiary in Thailand.