BESIEGED AUDITOR-GENERAL TALKS TO EMBASSY ABOUT

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
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.

--------------
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.

--------------
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.

--------------
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?

--------------
"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.)

--------------
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.

--------------
COMMENT
--------------


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