Lao Officials Are Returning Money They Earned Through Corruption

Lao Officials Are Returning Money They Earned Through Corruption Lao Prime Minister Thongloun Sisoulith speaking during the 2016 Association of Southeast Asian Nations (ASEAN) Summit has attempted to make the fight against corruption a signature of his administration, Sept. 7, 2016.

Lao government officials found guilty of corruption charges are ‘voluntarily’ returning the money and assets they obtained through their illegal activities to the government, an official with the State Audit Organization (SAO) told RFA’s Lao Service.

While the official, who spoke on condition of anonymity, declined to say just how much money or the extent of the assets, he told RFA that it was a significant amount.

“Oh, it is a huge amount of money, but we still cannot show the exact number as the process is underway,” he said. “After we found financial misconduct, we suggested to the corrupt officials that they return the money and assets to the government voluntarily. The majority of them follow our recommendations.”

While the official said the ill-gotten gains will be returned to the Lao treasury, the officials aren’t absolved of punishment and could still face charges.

The Lao government led by Prime Minister Thongloun Sisoulith has been attempting to reign in the rampant corruption that saps confidence in the nation. Transparency International ranks Laos as the 139th most corrupt country out of 168 nations.

Bribes, kickbacks, document forgery and fraud have become a part of life in Laos and government officials have often used their offices to enrich themselves, their families and their close associates.

The SAO has played a significant role in Thongloun’s anti-corruption crusade as agency audits have been a key tool in attempts to root out high-ranking government officials involved in corruption including a government probe into a former finance minister.

Phouphet Khamphounvong, Lao finance minister from 2012 to 2014 and formerly a governor of the Bank of the Lao PDR (People’s Democratic Republic), was arrested “at the end of December 2015 while attending a party,” a finance ministry source told RFA’s Lao Service at the time.

Taken into custody at the same time were Phouphet’s former secretary general, a director general of the ministry, a deputy director of the ministry’s budget department, and another official whose job was not specified, RFA’s source said, speaking on condition of anonymity.

Ghost projects

Phouphet was linked to so-called ‘ghost projects’ in Oudomxay province for which the ministry granted concessions to private firms to build roads in that northern province to support the country’s 10th National Sport Games in 2014.

The roads were never built, but the contracting firms later converted bonds issued in promise of future payment into cash with the help of “commissions” paid to finance ministry officials, sources told RFA.

There have been many reports in state media that credit the SAO with uncovering government waste or ghost projects that range from $10,000 to $10 million.

The SAO official told RFA that the asset declaration program instituted in 2014 had become a valuable tool in its audits. Under the program government officials have been required to declare their assets since 2014. That gave the SAO the ability to compare government officials’ assets over time. If there is a big jump, then that becomes a red flag for the auditors.

“We completed it the first round and it is over 90% now,” he said.  “We are going to start the second one, but we have to identify what we have learnt or if there is any problem or gap and if there is any impact from our work.”

While the official lauded the program, he still declined to release documentation that would show how much money and what assets government officials hold.

A Lao intellectual who attempts to track corruption in the country told RFA that any results claimed by the SAO be unreliable.

“It may work, but it seems like the results will not be reliable,” he said. “How can we have transparency or good governance without an independent body to check? The government always approves laws to defend themselves as there is no opposition party. The body who will act as an audit body must be independent or without political influence.”

Officials cited for corruption

While the SAO is keeping its numbers hidden, another government agency, the State Inspection Authority (SIA), has been more forthcoming with state media.

As of today, more than 1,900 officials and civil servants at the central level, 98,000 people under ministerial supervision, and 142,000 officials and civil servants under provincial administrations have declared their assets, the Vientiane Times reported.

According to the Vientiane Times, officials from the agriculture sector in Saravan province involved in document forgery, defrauded the state of 11.3 billion Lao kip (U.S. $1.38 million) and 8.3 million Thai baht (U.S. $ 235,461).

Meanwhile officials from the province's Department of Labor and Social Welfare embezzled more than 200 million kip, the news outlet reported.

Around 5.8 billion kip was embezzled by taxation and customs officials in Savannakhet province, while officials at the Ministry of Finance's Taxation Department were found to have embezzled 6.9 billion kip last year.

At the Ministry of Posts and Telecommunications, it was found that about 20 billion kip had been misappropriated.

SIA Vice President Sinay Mienglavanh said officials had engaged in corrupt activities such as bribery, abuse of power, sub-standard or fraudulent construction methods and document forgery, and the defrauding of state and cooperative assets.

According to the report, investigations were carried out in relation to 71 officials suspected of corrupt conduct last year, of whom nine were from the Ministry of Finance, 30 from Oudomxay province, three from the Ministry of Posts and Telecommunications, 27 from Savannakhet province, one from Saravan province, and one from the labour and social welfare sector.

Cases involving 25 officials were identified for prosecution, some of those cases have already been adjudicated.

Reported and translated by Lanxang for RFA’s Lao Service. Written in English by Brooks Boliek.


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