US embassy cable - 05BANGKOK7305

C O N F I D E N T I A L SECTION 01 OF 03 BANGKOK 007305 
 
SIPDIS 
 
E.O. 12958: DECL: 11/18/2015 
TAGS: PGOV, PHUM, PREL, TH, Corruption 
SUBJECT: BESIEGED AUDITOR-GENERAL TALKS TO EMBASSY ABOUT 
CORRUPTION AND AIRPORT PROCUREMENT SCANDAL (GE INVISION) 
 
REF: A. BANGKOK 7253 
     B. BANGKOK 7100 
     C. BANGKOK 6240 
     D. BANGKOK 5917 
 
Classified By: Political Counselor Susan M. Sutton.  REASON: 1.4 (D) 
 
1.    (C)   Summary.  Poloff spoke with Khunying Jaruwan 
Maintaka, the besieged Auditor-General of Thailand, on 
November 14th concerning her controversial situation and 
about corruption in Thailand.  Although Jaruwan has avoided 
speaking to the press and stays out of the public eye, she 
gave Poloff an unusually candid and detailed account of the 
multitude of scandals in the Thaksin administration and of 
the Thai Rak Thai's consolidation of political power. 
Jaruwan also made a request for information concerning the 
CTX GEInVision scandal, and provided documentation to pass to 
the DoJ legal attach.  End Summary. 
 
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JARUWAN LAYS OUT THE BASICS 
--------------------------- 
 
2.    (C)   Poloff met Khunying Jaruwan Maintaka on November 
14 in a private meeting room in the Thai Senate. She was 
accompanied by her lawyer, who was as brash and 
self-promoting as Jaruwan is quiet and self-effacing. 
Jaruwan has kept a low profile personally for the past 18 
months as the controversy about attempts to replace her as 
Auditor-General has grown.   Jaruwan explained that the Asian 
way of dealing with issues to resolve them peacefully, and 
that everyone benefits by saving face and not increasing 
tensions in an over-politicized issue.  She added that she 
wants the legal and constitutional mechanisms to work.  But 
most importantly, Jaruwan firmly believes that the quiet 
support from King Bhumibol sends the strongest message of 
all, and that nothing she says or does can top that. 
 
3.    (C)   But despite her belief that she holds the moral 
high ground, Jaruwan has been neutralized for over 18 months 
and stands a good chance of remaining neutralized for good. 
Jaruwan is up against some very powerful political foes, most 
notably Prime Minister Thaksin Shinawatra.  Jaruwan said 
candidly that the Prime Minister is very aware of the 
corruption that takes place within his government, and that 
his administration would fall apart if she were allowed to 
fully pursue these numerous incidents of graft and bring them 
to light.  Jaruwan noted that Thaksin allies (and in one 
instance, Thaksin's sister) repeatedly tried to bribe her. 
Her continued refusals to be suborned amid her deeper probes 
into the CTX GEInVision equipment graft, however, was the 
issue that led to the effort to remove her from office. 
 
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CTX REVISITED AND OTHER SCANDALS 
------------------------------- 
 
4.    (C)   Jaruwan is no stranger to Bangkok's nearly 
complete Suvarnabhumi airport, as she has been auditing its 
USD $3.7 billion expenditures since she went to work for the 
Office of the Auditor General in 1997.  The CTX scandal, she 
claims, has been heavily publicized due to the amount of 
money involved and because it involves a US company.  It is, 
however, just one of many cases of corruption at the airport. 
 Jaruwan mentioned a one billion baht ($25 million USD) loan 
involving the Siemens company of Germany, and numerous 
buildings in and around the airport where the government had 
been overcharged.  Jaruwan was prepared to hold Thaksin 
directly accountable for these grafts, as she showed Poloff a 
copy of a document where he gave significant powers to one of 
the airport committees by allowing them to appoint contracts 
without bidding. 
 
5.    (C)   Jaruwan provided three memoranda to Poloff to 
forward to the U.S. Department of Justice.  The first two 
documents were summaries of the U.S. and the Thai laws that 
were broken from the CTX scandal.  The third document was a 
three-page summary of the evidence to support the allegations 
in the first two documents.  Jaruwan also formally requested 
that the Poloff provide, at a later date, the names of eight 
Thais mentioned in Appendix B of the US DOJ report on the 
InVision scandal.  (Comment: all three memorandums were 
passed to Embassy Bangkok LEGATT on the same day as the 
meeting.  We will inform Jaruwan, as we have others 
inquiring, that we have an MLAT with Thailand and that this 
is the mechanism we must rely on for cooperation on this 
subject.  End Comment.)  Jaruwan commented that she thought 
it was a mistake that the scandal had been put to bed so 
quickly by the US DOJ, and wished GE had sent officials to 
Thailand to meet with her (which, according to her, they 
couldn't do in accordance of the conditions in the US DOJ 
settlement agreement). 
 
6.    (C)   Jaruwan mentioned other cases involving people at 
the very top of Thai politics.  One such case involved a 
building renovation contract coordinated by House Speaker 
Uthai Pimchaichon.  Jaruwan estimated that the cost of 
renovation should have been 20 million baht ($500,000 USD), 
but the total bill came to over 100 million baht ($2.5 
million USD).  Jaruwan claims that Uthai tried to bribe her 
on six separate occasions to persuade her to stop the audit, 
each time offering significantly more money (and, according 
to Jaruwan, at one time offering a six bedroom house). 
Jaruwan said that the initiatives to nullify her stature as 
Auditor-General began with Uthai, and that they only began 
after she refused the final bribe.  In another case, 
Transport Minister Suriya Jungrungreankit personally asked 
Jaruwan to withdraw from a case involving extremely rare 
government loans to private sector businesses to finance a 
new southern ring road near Bangkok.  The most recent case 
potentially reaches to Thaksin himself.  Thaksin recently 
traveled to France and may have been involved with securing 
the purchase of four satellites by Shin Satellite--the 
company founded by Thaksin and currently owned by members of 
his family--from a French company at a cost of $68 million 
each.  The price tag of a failed bid to purchase similar 
satellites from a U.S. company last year was only $28 million 
each. 
 
7.    (C)   Jaruwan also spent a significant portion of time 
mentioning a slew of other cases involving government 
corruption.  Because of the restraints slapped on her until 
her status is sorted out, no official investigations have 
begun since 2003 and many of these cases received no mention 
in the press and media.  Among the incidents Jaruwan 
mentioned were graft involving the 30 Baht health care 
scheme; several road construction projects; a waste-water 
plant in Songkhla worth 300 million baht but built at a cost 
of 600 million baht; a scandal involving rubber trees in 
Southern Thailand; and a pharmaceutical scandal involving a 
600 million baht overcharge on 300 million baht worth of 
drugs. 
 
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WHO'S (NOT) INVOLVED WITH CORRUPTION? 
------------------------------------- 
 
8.    (C)   Jaruwan tends to believe that Thaksin is corrupt 
primarily for the purpose of gaining power, not money. 
Jaruwan appeared hesitant to outright insult the Prime 
Minister, but her lawyer wasn't shy and said that Thaksin is 
obsessive about power, has a huge ego, and wants to have 
total control over the country.  Jaruwan believes that 
Thaksin is aware of corrupt practices from members of his own 
party, and he tolerates them because of their loyalty in 
supporting his political and personal agenda.  Jaruwan said 
that the reason Thaksin wants her neutralized is because her 
actions would expose the depth of the Thai Rak Thai's 
corruption. Jaruwan insisted that there will be no progress 
in fighting corruption as long as Thaksin remains in power: 
Thaksin was "beyond hope for washing his hands of 
corruption." 
 
9.    (C)   Many Ministers, the House Speaker, and a plethora 
of MPs are implicated in corruption, but Jaruwan is perhaps 
most concerned about the influence Thaksin has over the 
Senate, which is by design supposed to be a non-partisan 
legislative body that ultimately keeps powerful political 
parties and government agencies in check. Jaruwan believes 
that a majority of the 200-member body is under the influence 
of Thai Rak Thai, although there are also a fair number of 
Senators that are 'untouchable' and have put up a stiff fight 
for her.  Jaruwan has witnessed her own support in the Senate 
fade despite her track record of hard work and honesty, and 
believes that it is completely due to TRT influences. 
Jaruwan believes that the number of Senators under TRT 
influence has grown over time, with some being bought off 
directly while others were blackmailed by TRT officials for 
exposing skeletons in their closet.  (Comment: the TRT has 
been known to go back years into a political opponents career 
and air the dirty laundry long after tolerating it at the 
time of the issue.  End Comment.)  She also believes that 
some Senators are jockeying for positions after their term in 
the Senate expires in March 2006 and leaves them unemployed, 
and who better to impress than the most powerful Prime 
Minister in recent times? 
 
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"MUCH MORE SERIOUS THAN YOU THOUGHT" 
------------------------------------ 
 
10.   (C)   Jaruwan is concerned that Thailand's separation 
of powers is shrinking to the point where the branches of 
government are inseparable, and that Thaksin will become an 
authoritarian ruler.  Jaruwan's attorney didn't hesitate to 
chime in that he thought an "unplanned change" of Thailand's 
leadership is inevitable--perhaps within the next two 
months--if Thaksin's authoritarian practices didn't stop. 
Although Jaruwan didn't state anything that went as far as 
her attorney's outspoken agenda, she does believe that the 
curtailing of her powers and that of other agencies to check 
corrupt people in government is part of a larger issue facing 
Thailand. Commented Jaruwan: "the situation is much more 
serious than you thought." 
 
11.   (C)   Yet despite the generally grim comments from 
Jaruwan and her attorney, Jaruwan hasn't given up the fight, 
and believes that Thaksin's powers can be checked without 
resort to the popular uprising predicted by her attorney. 
Jaruwan still has many friends in the Senate and in the State 
Audit Commission -- even if they are a minority.  Her Senate 
supporters always ensure that a strong fight goes on the 
record, and the Audit Commission narrowly voted against 
reinstating Jaruwan by a 5-4 vote.  Jaruwan also has the 
clear support of the few remaining 'free' media outlets in 
Thailand, as well as popular support, at least among the 
newspaper-reading classes. 
 
12.   (C)   But most importantly, Jaruwan truly believes she 
has the support of the King, and that if the Senate 
eventually does forward another nominee,  he will withhold 
his endorsement, as he did with previous nominee Wisut 
(reftels C and D).  There is no greater ally to have in 
Thailand than the King, whose moral authority are 
unquestioned here.  Jaruwan is convinced she has the King's 
support for many reasons.  First, at the time she was 
appointed to be Auditor-General in 2001, she claims the King 
firmly gripped her hand as he gave her a pin signifying her 
position, an act which many Thai would view as unusual and 
very significant.  Second, Jaruwan says she has already 
provided the King with summaries of the incidents of  graft, 
and that he expressed his gratitude for her efforts.  Lastly, 
Jaruwan claims that she has quietly received an offer from 
the Palace to receive her salary for her entire five-year 
term, regardless of whether she returns to her post or not. 
(Comment: The King's refusal to endorse the replacement for 
Jaruwan sent up by the Senate was a slap in the face for TRT, 
and we agree that he will most likely hold the line if 
another nominee is forwarded to him.  However, it is unclear 
what more the King might be able to do to show support for 
Jaruwan, given constitutional limitations on his role.) 
 
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WHAT'S NEXT 
----------- 
 
13.   (C)   Jaruwan dismissed the rumors that she would run 
for Senate next year, because that would force her to abandon 
the fight for Auditor-General, which she believes is far more 
important. Although Jaruwan has been very quiet publicly, she 
has clearly been working behind the scenes on exposing 
Thailand's corruption.  In addition to her unofficial 
investigating into government graft, she has been working 
with Thai communities and students in the U.S. and Australia 
to publish books about Thailand's corruption.  Jaruwan's 
attorney said he was planning to file a complaint with the UN 
High Commission on Human Rights, and to file a claim in a 
U.S. Federal District Court under Title 28, Section 1350, 
part IV, Chapter 8--Alien Action for Tort. 
 
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COMMENT 
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14.   (C)     The Thai public has a relatively high tolerance 
for a certain level of corruption.  By regional standards, 
Thailand is not a big offender, and corruption is probably no 
worse overall than it has been during many periods in the 
past.  However, Thaksin opponents are gaining some attention 
from the public with these corruption accusations (also a 
staple of rabble-rouser Sondhi's attacks on the PM - reftel 
A).  While we don't see this political issue forcing Thaksin 
and the Thai Rak Thai from power, as Jaruwan seems to hope, 
it will certainly be a headache for Thaksin, who doesn't need 
any more problems right now.  End Comment. 
BOYCE