Weekly Insights and Analysis

In Thailand: Court Cases to Determine Future of Thai Politics

July 16, 2008

By James Klein

Even before the cabinet of Samak Sundaravej was endorsed on February 6, 2008, many analysts questioned how long his People Power Party (PPP) coalition government would last. After all, Samak was the one who described his own cabinet as “a bit ugly.” Best estimates at the time were that his government would last until October or December. In view of a litany of problems including his failure to amend the 2007 Constitution, criticism of the handling of Cambodia’s listing of Preah Vihear as a World Heritage site, and recent court decisions — not to mention others to be issued during the coming months — many believe he will not be able to last beyond September, if he makes it through August.

The central questions now are: will Samak be impeached, will he be indicted for corruption, will he dissolve the house and call snap elections, will he resign and allow another PPP or coalition party member to form a new cabinet, will he allow the opposition Democrat Party to coax away his coalition members to form a new government, or will there be another coup?

Intimately tied to these political questions is the fate of former Prime Minister Thaksin Shinawatra, who is assumed by many ” correctly or not ” to be not only the financier behind the PPP but the one with the most influence over its policies and direction. The September 19, 2006 coup leaders established the Assets Examination Committee (AEC) to investigate charges against Thaksin, members of his cabinet, and his family. After 21 months, including a six-month extension, the term of the AEC concluded on June 30, 2008.

The courts are expected to conclude the first major corruption charge brought by the AEC against Thaksin in early September in a case revolving around his wife, Khunying Pojaman Shinawatra’s, purchase of a 33 rai (13.05 acres) parcel of land on Ratchadaphisek Road near the Thailand Cultural Center in 2003 for Baht 772 million (which was worth $21.7 million on December 31, 2006) from the Financial Institutions Development Fund (FIDF), the government’s financial rescue arm.

At the time, many observers considered the purchase a scandal and illegal. First, transfer of the property allegedly had been expedited so that the title deeds to the plot were transferred to Khunying Pojaman just before the land reference price for taxation was raised by 20 percent, thus saving her an estimated Baht 154 million ($4.3 million) in taxes and fees. Coincidently, Thaksin’s cabinet issued a resolution making December 31 ” traditionally observed as the New Year’s Eve holiday ” to be a working day, and made January 2 the substitute holiday. Second, the FIDF had purchased the land in 1995 for Baht 1.4 billion from the Erawan Trust Finance and Securities to keep the company afloat after facing liquidity problems; nearly twice what Khunying Pojaman had paid at auction in 2003. Last, as the wife of Prime Minister Thaksin Shinawatra, her purchase was allegedly in violation of a 1999 law that bans state officials and their spouses from having an interest in contracts made with state agencies under their supervision as well as Article 152 of the Criminal Code for allegedly exploiting Thaksin’s position for personal gain.

Meanwhile, Samak’s administration has also been under legal pressure. On July 7 the Administrative Court found his Minister of Public Health guilty of contempt of court, and on July 9 the Constitutional Court ruled that he should be barred from politics for five years.

On July 8, the Supreme Court issued a ruling finding former Speaker of the House and People Power Party executive Yongyuth Tiyapairat guilty of election fraud in the December 23, 2007 elections, and banned him from politics for five years. This is significant because Yongyuth was a PPP executive: therefore, the Election Commission and Court must now determine if the ruling People Power Party should be dissolved.

Also on July 8, the Constitutional Court ruled that Minister of Foreign Affairs, (and previous long-time Thaksin family lawyer) Noppadon Pattama violated Article 190 of the Constitution for signing a joint communiqué with Cambodia without the prior approval of Parliament. The opposition Democrat Party sought Noppadon’s impeachment on July 11 for violating the constitution but he immediately resigned effective July 14.

On July 9, the Supreme Court was to have issued its verdict on corruption charges in the Kong Dan Wastewater Treatment Project against Vatana Asavahame, chairman of the coalition Puea Pandin Party. He failed to appear and the court issued an arrest warrant against him. He is alleged to have fled to Cambodia were he owns a casino.

Samak is feeling the pressure and announced yesterday a major reshuffle of at least 10 cabinet ministers by the end of the month.

Cases against Thaksin are also gearing up. On July 11, the Office of the Attorney General filed a suit in the Supreme Court’s Division for Political Office Holders charging Thaksin with corruption and abuse of power for converting telecommunication concessions to an excise tax, which allegedly benefited Shin Corp, the family-owned telecommunication conglomerate, with a reduction in fees while simultaneously making it more difficult for other investors to enter the lucrative mobile telephone market. And on July 28 the Supreme Court will decide whether or not to accept a case submitted by the AEC regarding the legality of Thaksin’s two- and three-digit lottery initiated in 2003. Defendants also include the current Deputy Prime Minister and Minister of Finance Surapong Suebwonglee, Labor Minister Uraiwan Thienthong, and Deputy Transportation Minister Anurak Jureemas. If the Court accepts the case, they will be required to step down from office until the court issues its final ruling.

Finally, but not least, on July 31 the Criminal Court will issue its ruling on a tax-evasion case against Khunying Pojaman and her stepbrother Bhanapot Damapong.

In the coming months, a host of other corruption cases are going to be brought that will affect the future of Thaksin Shinawatra and members of his former Thai Rak Thai Party, as well as members of the current Samak Sundaravej administration and the People Power Party. For these reasons, it is not expected that the current administration will be able to survive beyond September 2008, if it survives beyond August 2008.

James Klein is The Asia Foundation’s Country Representative in Thailand.

Related programs: Strengthen Governance



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