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Published on October 14, 2007

Yet, a total of five Cabinet members tendered their resignation in relation to this anti-graft law last month.

Citing ethical reasons and mounting public pressure, the information and communications technology minister, the interior minister, the natural resources minister, the deputy commerce minister and the deputy foreign minister, all of whom held company shares exceeding the 5-per-cent limit mandated by law, called it quits while Prime Minister Surayud Chulanont was on an official overseas trip to the United Nations last month.

Back home, the premier was rather upset when he got a letter from the National Counter Corruption Commission (NCCC) on September 28 - days after the five Cabinet members had already resigned - saying that the ministers of his interim administration were not subject to the "blind trust" law because last year's coup d'etat had abolished the 1997 constitution.

In other words, the ministers did not have to resign, but it was too late politically and the effect was a big dent in his Cabinet.

This anti-graft law took effect in 2000 under the Chuan Leekpai government. It bars the premier and his ministers from holding more than 5 per cent of the shares in any business partnership or company. If ministers want to continue receiving benefits from their shareholdings, they're required to transfer the management of partnerships and shareholdings to a professional asset-management firm while they are in public office.

Article 5 of the law states that business partnerships and/or shareholdings must be put in the care of asset-management firms within 90 days of the NCCC receiving official declaration forms informing the commission of the ministers' assets.

Article 10 of the law states that these authorised asset-management firms must, in accordance with the securities and exchange law, report their clients' portfolios to the NCCC within 10 days after entering into a contract with clients. Afterwards, the NCCC is required to inform the general public of the details of such contracts.

Article 11 states that ministers are barred from interfering or influencing the management of these entities.

The law is aimed at preventing conflicts of interest, but unfortunately former billionaire premier Thaksin Shinawatra and his Cabinet members never turned to blind trusts.

Future holders of public office will have no excuses in this regard as this law was reinstated by the new 2007 charter, which is paving the way for the country to return to democratic elections on December 23.

This anti-graft law is in line with others used in several democratic nations, where public office is clearly separate from the private interests of office holders and their business interests are seen as best left to professional managers who cannot influence public policies.

According to Laweasy.com, a "blind trust" is usually set up to hold securities and investments that are managed without input or knowledge by the beneficiary of the trust. For example, someone in political office could place his or her securities portfolio in a trust managed by a money manager without disclosing his or her details, and that money manager would not take direction from the person running for or holding public office. The use of a blind trust would avoid any acts of inference on the part of the politician intended to enrich himself. For example, it could not be said that a politician passed legislation to boost his own stock holdings because he or she would not even know what those holdings are.

According to Article 7 of the Thai law, money-management firms looking after a minister's private assets must not employ directors or staff members who may have vested interests related to the minister in question, or the minister's spouse, creditor or debtors.

Article 9 states that management contracts must cover the following:

First, there must be details of the partnerships and/or shareholdings that shall be transferred. Second, there shall be no contractual obligations on financial returns or benefits that might allow the minister concerned to abuse his or her office.

Third, the contracts may stipulate management fees. Fourth, trust managers are subject to limited liability. Fifth, the contracts must specify the payment methods for financial returns or benefits to benefactors. Sixth, the contracts must specify how the minister's assets will be returned once the minister leaves public office.

 NOPHAKHUN LIMSAMARNPHUN (NOP1122@YAHOO.COM)