Asset-disclosure reports not a factor in corruption cases

MR Pridiyathorn Devakula

 The issue I am writing about today is the assets disclosures of politicians and senior government officials to the National Counter Corruption Commission (NCCC).

I understand that the purpose of the NCCC is to find out if politicians and government officials have behaved improperly, and more specifically to uncover their corrupt activities. Politicians and government officials are required to report their assets on the day they assume certain positions and the day that they leave office, so that a comparison can be made. Should the comparison reveal an unusual increase in a politician's assets, further investigations are conducted.

Asset-disclosure reports filed when a politician assumed a position had formerly not been released to the public. And if a politician's assets did not increase beyond a normal level, the assets report did not have to be released. The privacy of these reports was well respected. Even though a substantial increase in assets while in power might be shown, the concerned person would be given an opportunity to explain the source of the assets. If he or she could clearly explain the source and provide enough evidence to satisfy the NCCC, the case would be closed and the report would not be made public, which helped to prevent negative interpretations of the case.

One example of this was the case of a respectable high-ranking government official whose asset reports showed an increase in assets value by tens of millions of baht while he was in office. Once evidence was produced to show that the increase was due to the sale of inherited land, the NCCC closed the case. Had the increase in assets been revealed before the person had a chance to explain himself, the media may have misinterpreted this information and his reputation would have been tarnished.

At present, politicians' assets reports are revealed to the public immediately once they are submitted, which allows other to exploit such information or cook up stories based on it. This could easily become a topic of gossip and negatively affect the reputation of the involved politicians.

The requirements for assets disclosure to the NCCC are not simple. There are many detailed requirements that could easily be misinterpreted. There is ample possibility that incomplete asset reports or errors in disclosing information could be made. The NCCC also imposes some strong prohibitions, such as the prohibition against holding more than a 5-per cent share in any corporate entity. A politician who owns more than 5 per cent of any corporate entity is required to sell the excess shares to a securities company with an agreement that the company will transfer them back in the future if the politician so desires.

Such share transfers must be properly registered back and forth and that creates an unnecessary cost for the owner of the assets. The perception that the actual transfer of the shares would allow the trustee securities company to independently exercise a shareholders' right is really naive. After having agreed to transfer the shares back once the politician's term is up, trustees normally consult the real shareowners.

It appears that this prohibition must be difficult to comprehend, as many people have made mistakes concerning this, including four to five ministers in the Surayud government and one more in the current government. People may know the number of shares they own in each company, but many of them have no idea of the percentage of shares that number represents, especially in private non-listed companies. Some persons are minor shareholders in companies that are principally held by close friends or relatives and such minor shareholdings may account for 5 or 10 per cent of overall shares. Many own shares in family holding companies and some of them are not aware that the NCCC requirement limiting shareholdings to no more than 5 per cent also applies to these holding companies, even though they do not deal with the public nor are they involved in businesses that could benefit from political connections.

The issue I would really like to raise is whether incomplete reporting or a failure to comply with this prohibition should be viewed as gross misconduct. The assets that politicians report when they take their posts already belonged to them, and if no additional assets were realised while they were in power, then what actually indicates that they abused their posts for personal gain? In fact, information on an individual's shareholdings in any company is available at the Stock Exchange of Thailand for listed companies and at the Commerce Ministry's Business Development Department for non-listed ones.

Should the NCCC want to prevent such immaterial mistakes, they could simply ask for shareholding information from these two agencies when a politician or senior official is nominated and inform them if there is any difference with what appears in their reports. Moreover, those reporting their assets should be given time to correct their reports and comply with NCCC rules.

The existence of the 5 per cent shareholding limit should also be questioned. The NCCC gives politicians the option to transfer the shares exceeding the 5-per cent limit to a trustee who would then transfer them back once the politician leaves office. With this option available, what difference will the requirement make? Why doesn't the NCCC just allow them to keep their shares? If the NCCC were to lift the restriction on shareholdings, it would help the commission prevent conflicts of interest by simply prohibiting companies in which politicians own more than a 5 per cent share from doing business with state-owned organisations in which those politicians are involved.

There is an even more interesting question: "Have the assets reports ever helped the NCCC to reveal any case of corruption and identify the wrongdoers?"

I do not know the answer to such question, but from what I've read in the news, the NCCC has never quoted an asset report as a source of information upon which it based a charge of corruption. Therefore, these reports have not been a good source of information for corruption cases. The effective identification of corruption requires information from other sources. The question is whether the NCCC has the investigative processes necessary to find available information or whether it depends solely on accusations and related evidence provided by authorities. If the latter, the NCCC would have a limited source of corruption information since there would be only a few sources independent enough to make such accusations. What's even more dreadful is that there are many cases in which these accusations are politically motivated. Such accusations are of course beneficial to the NCCC in helping it identify corruption cases, but the political opponents of the person being investigated will also gain from the easy allegations. It could turn into a dreadful situation.

I believe that the Thai public would like to see the NCCC have its own investigative capabilities. The NCCC is widely known to be an independent organisation. With more teeth, the NCCC can easily access information and become more effective in corruption eradication. This would improve the morale of people who earn their living honestly and of the public in general. If, finally, the NCCC finds that information retrieved from other sources is more instrumental in identifying corruption and wrongdoers, who knows, the NCCC itself may decide to do away with its requirement that politicians and government officials report their assets.