THAI COURT RULINGS DELIVER FURTHER BLOWS TO SAMAK

C O N F I D E N T I A L SECTION 01 OF 03 BANGKOK 002616

SIPDIS

EAP FOR MLS, DRL FOR BUCKLEY, NSC FOR PHU

E.O. 12958: DECL: 09/03/2018
TAGS: PGOV PHUM PINR PREL TH
SUBJECT: THAI COURT RULINGS DELIVER FURTHER BLOWS TO SAMAK
AND THAKSIN

REF: BANGKOK 2091

Classified By: DCM James F. Entwistle, reasons 1.4 (b, d)


1. (C) Summary: Thailand's independent Electoral Commission
(EC) voted unanimously September 2 to seek a Constitutional
Court order to dissolve the ruling People's Power Party (PPP)
due to vote buying by red-carded former deputy party leader
Yongyuth Tiyapairat in the December 2007 election. This
triggers a process that will take months to play out. The
dissolution of the PPP, comprised primarily of Thaksin
loyalists, would signify PM Samak Sundaravej's political
demise were it to be realized; the looming threat may
influence Samak's calculations about the wisdom of dissolving
Parliament amid ongoing anti-PPP protests. Also on September
2, the Supreme Court's Criminal Division for Holders of
Political Positions agreed to proceed with a second lawsuit
against ex-PM Thaksin filed by the Office of the Attorney
General (OAG) for alleged abuse of power involving
telecommunications excise taxes Thaksin imposed while Prime
Minister that supposedly favored his own telecommunications
company AIS. Separately, the court also announced the panel
of nine judges who will consider the confiscation of
Thaksin's 76 billion baht ($2.3 billion) assets currently
frozen on October 16, if no challenge to the selection of the
judges is raised before then.


2. (C) Comment: The EC decision had previously been expected
August 19 but was delayed for internal procedural reasons
until September 2; the timing was completely coincidental to
the ongoing crisis which started August 26 with street
protests by the People's Alliance for Democracy (PAD). PPP
MPs are already anticipating that the eventual decision will
go against the PPP, have set up an alternative Puea Thai (For
Thai) Party, and have suggested to us they will move en masse
once Thaksin sends the signal. Under the Thai judicial
system, Thaksin cannot be charged in absentia, but the
decision to proceed with the telecom case until that point,
as well as consideration of confiscation of his assets frozen
in Thailand, keeps the pressure on Thaksin. The developments
continue a recent trend of the courts and independent
institutions asserting themselves in taking on prominent
political elements once considered untouchable. End Summary
and Comment.

EC votes to dissolve PPP, triggering process
--------------


3. (U) The Thai EC ruled unanimously Sept. 2 in favor of
dissolving PM Samak Sundaravej's PPP -- comprised primarily
of Thaksin loyalists -- based on evidence of electoral fraud
by former deputy party leader and temporarily House Speaker
Yongyuth Tiyapairat and on new provisions in the 2007
Constitution that hold parties liable for transgressions by
their leaders. The initial charges stem from Yongyuth's
behavior in Chiang Rai province during the campaign for the
December 23, 2007 general election, and claims Yongyuth had
bribed local village officials. Yongyuth has maintained his
innocence, but the Supreme Court on July 8 upheld the EC's
finding that Yongyuth had violated the election law,
determining that he was ineligible to hold public office.
Yongyuth's position on the PPP Executive Board at the time of
the infraction enabled the Constitutional Court to consider
dissolution of the PPP under Article 237 of the 2007
Constitution with all its executives subject to a five-year
ban on political activity (reftel).


4. (SBU) The process going forward will take months to
resolve completely. According to established procedure, the
EC's recommendation to dissolve the PPP will be submitted to
the Office of the Attorney General (OAG),which will have 30
days to review the case. If the OAG agrees with the EC's
findings, the case will be submitted to the Constitutional
Court for a final ruling. If the OAG disagrees, a joint
committee will be established to review the evidence and make
a decision within 30 days. Should the joint committee not be
able to make a decision, the final decision to submit to the
Constitutional Court reverts back to EC. Even if Samak
weathers the current political storm, he would lose all

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formal authority the moment that the Constitutional Court
delivers its verdict, if the Court ruled to dissolve PPP.
PPP MP and Party Spokesman Kuthep Saikrachang told us that
the party knew of the EC's verdict in advance of the
September 2 announcement; Kuthep stated that the party was
not concerned about the future. The dissolution process, he
noted, will take several months, giving the PPP plenty of
time to prepare for a legal battle.


5. (C) Note: A similar EC ruling which earlier resulted in
the disbandment of Thaksin's Thai Rak Thai (TRT) party
triggered a process that took around nine months. Two other
party dissolution cases are already in the pipeline based on
April 11 EC rulings against the Chat Thai and Matchima
Thippatai parties; five months later, those cases still await
the conclusion of OAG investigations and submission to the
Constitutional Court. Based on this track record, it would
be reasonable to expect a minimum of two months before the
OAG might decide to file a request with the Constitutional
Court for the PPP's dissolution. Constitutional Court
deliberations would then likely take months more, even if the
Court would find a way to accelerate its procedures in this
case. (Note: Supporters of former Prime Minister Thaksin, who
provides behind-the-scenes leadership for PPP, often allege
that the Court is ill-disposed toward Thaksin and PPP.)

Plans for new party, but no Samak
--------------


6. (C) If the court sides with the EC, all PPP MPs who are
not on the Executive Board would have the option of moving to
another party and would retain their seats; only the
Executive Board would be dissolved. Other PPP MPs as well as
former Minister Jakkraphob Penkair have told us in recent
weeks that they are active in setting up the Puea Thai party
as an alternative for pro-Thaksin MPs; "all it will take is a
signal from Thaksin in London, and we will move en masse,"
one MP said. Even a group seen as internal PPP dissidents,
the Isaan Pattana faction, told us that they would move to
Puea Thai when the time was right, rather than looking for a
different political home. A new party leader would also
emerge, since Samak would be disqualified from holding
office.

Supreme Court deals more blows to Thaksin
--------------


8. (C) In a separate development September 2, the Supreme
Court's Criminal Department for Holders of Political
Positions accepted the telecom concession lawsuit against
Thaksin for trial. Attorney-General Chaikasem Nitisiri filed
the suit according to the recommendation of the now defunct
Asset Examination Committee. The court scheduled the first
hearing on October 15, despite Thaksin's current exile status
in Britain and his near certain guarantee not to return to
Thailand for the trial. Thai law requires a defendant to be
present for the formal opening of criminal procedures; there
is no provision for initiating criminal trials in absentia.
A credible source at the Ministry of Justice told us that the
Supreme Court had accepted the lawsuit as a matter of
judicial procedure, despite the defendant being in exile, but
that Thaksin would have to appear before the court on October
15 for the trial to proceed. Presuming Thaksin remains in
the UK, the court could either suspend the case or decide to
issue a second arrest warrant against Thaksin, opined the
source.


9. (SBU) Note: The new lawsuit alleges that then-PM Thaksin
engineered a telecommunications excise tax in lieu of
concessions fees, costing Thailand 2 billion U.S. dollars in
owed taxes. A controversial 2003 Cabinet resolution approved
the suspension of concession fees paid by private companies
like Thaksin-controlled AIS in exchange for an excise tax on
all telecom companies that could be deducted from revenues.
The move at the time was criticized as giving AIS unfair
competitive advantage over state-run TOT and CAT Telecom and
leading to a loss of government revenue, to AIS/Thaksin's
benefit.


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10. (U) The Supreme Court's Criminal Department for Holders
of Political Positions also announced Sept. 2 the proposed
composition of the nine judge panel which will hear arguments
regarding the confiscation of Thaksin's 76 billion baht
assets ($2.3 billion) currently frozen. If neither side
protests the composition of the panel, the panel will rule on
the asset seizure petition filed by the Attorney General on
October 16. Media note that four of the nine judges already
sit on other panels considering cases of corruption involving
Thaksin and members of his former administration (the
Ratchadaphisek land case, the telecom concessions case; a
rubber saplings corruption case; the ExIm Bank loan to Burma
case; and the two- and three-digit lottery case).
JOHN