Sunday, August 3, 2008

George Bush's Iran-Contra and Thaksin's Dodgy Export-Import Bank Loan to Burma

US twist to Thaksin court case

By Peter J Brown

Asian Times


The Thai Ex-Im Bank loan case, however, is notable for its international dimension, including a US government role in financing Shin Satellite's business activities. During Thaksin's five-year tenure, his family-owned Shin Satellite, now known as Thaicom and majority-owned by Singapore's Temasek Holdings, developed and in 2005 launched a US$350 million satellite known as iPStar, which now beams satellite broadband services throughout Southeast Asia, China and Australia.

Myanmar's government allowed the company to run trials of IPStar's ground stations in 2003, providing the company a live but closed environment to test the technology without heavy market scrutiny. A portion of the 2004 Thai Ex-Im Bank loan to Myanmar was allegedly used to purchase those same Shin Satellite iPStar satellite terminals and other services.

Although the upcoming criminal case is expected to examine the terms of the loan and how it was allegedly devised to provide maximum benefits to Thaksin's family-owned Shin Corp, the US State Department as well as the US Export-Import Bank will be nervously watching the proceedings. That's because American taxpayers effectively helped to finance iPStar's construction by a US company, Space Systems/Loral, through roughly $190 million in US Ex-Im Bank loan guarantees. (The French government, which has also recently been a strong critic of Myanmar's regime, also provided loan guarantees for the launch services for the satellite.)

At the same time the Thai Ex-Im Bank approved its controversial loan to Myanmar in 2004, the actual satellite was still sitting on the ground in the US awaiting delivery by Loral to a launch facility in South America. Because of the Myanmar government's abysmal human rights record, US companies are legally forbidden by US government trade and investment sanctions from doing with the country any business that was not established before 1997.

Here is the Iran-Contra component. I'm not going to recap what happened during the Iran-Contra scandal during the 80's, but there was one component of the scandal where Ronald Reagan and his underlings were selling/giving arms to Iran, which is and was at that time a rogue terrorist state and an enemy of the US, and there were trade and investment sanctions against Iran.

This policy contradicted Reagan's "no negotiations with terrorists" policy and it broke the law regarding trading arms with Iran.

Questionable US role

In this particular case, and for unknown reasons, the US State Department and the US Ex-Im Bank stood by silently as the controversial iPStar transaction with Myanmar unfolded. This is much more than an awkward omission: the iPStar project was a high-profile affair from the start. Among other things the head of the US Ex-Im Bank traveled to London in 2003 to accept an award related to the project, which Shin Satellite executives at the time promised would revolutionize the global satellite business through greater transmission efficiency.

The writer should have been more clear on this. Now I am going to have to look up what happened.

Powerful members of the US Congress had a heated exchange with the US Ex-IM Bank in 2002 over how the satellite project was taking shape, although not over the possibility that its mission would benefit Myanmar's junta.

Why were members upset over this? Probably has to do with money. Though it seems that Loral is a bigger contributor to the Democratic Party than the Republican Party.

As the court case against Thaksin unfolds, the US Congress and even the White House, which in recent years has been strongly critical of Myanmar's military regime, including President George W Bush's own reference to the country as an "outpost of tyranny", will be left to answer how this transaction apparently slipped under their radar screens.

He won't answer for his hypocrisy, because the US media won't call him on it.

Days before the Thai Supreme Court announced its decision to hear the case, the US House of Representatives voted to freeze certain junta members' assets and ban the importation of all Myanmar-sourced jade and rubies to the US. American gem dealers had previously avoided trade sanctions by importing Myanmar gems from second countries which processed or in other ways added value to the raw stones.

I have to point out that the Republicans controlled Congress back in 2002 and the Democrats control Congress now. So it isn't surprising that there is a tougher sanctions policy. However, like I said, Loral, the manufacture of Ipstar, supports the Democrats over the Republicans.

The new measures are the latest of a wide range of trade and investment sanctions imposed by the US government against Myanmar. In 2007, Bush extended for another year the trade sanctions that were first signed by president Bill Clinton in 1997. Add to that list the Burmese Freedom and Democracy Act of 2003, and another executive order on new investments in Myanmar signed by Bush that same year. The Bush administration's tough message to Myanmar's generals has been clear, while the gap dividing the US's and Thailand's policy towards the regime has grown ever larger.

Bush has been tough against Burma. No wonder that the junta is paranoid. However, it looks like Bush has egg on his face, just like Reagan, for financing a brutal authoritarian regime, despite the rhetoric and policy.

Indeed Shin Satellite and its iPStar satellite continue to make steady inroads into Myanmar. In early 2008, Myanmar Posts and Telecommunications announced that Thaicom had expanded its business ties through the signing of a pair of new capacity contracts. Thailand's new Thaksin-aligned government, led by prime minister Samak Sundaravej, announced earlier this year that the remaining portion of the 2004 Thai Ex-Im Bank loan would be handed over to Myanmar's generals, despite the political controversy surrounding the loan.

This is one area that Thaksin, Samak and the Thai military agree on. Keep supporting the Burmese junta with money, weapons and technology. Of course, the Thai media is weak in holding the government and military accountable for these policies.

The bottom line however is that Thaksin and his family are not the only ones feeling the legal heat. While the US State Department looked on, the US Ex-Im Bank wrote checks that effectively extended badly needed satellite services into Myanmar - and in apparent violation of the sanctions Washington has long imposed against the military regime.

This is a serious crime. This is actually more serious than the CTX and the Bangkok Film Festival scandals.

Now Myanmar's junta is likely using US-funded wireless broadband technology to perpetuate its repressive policies and harassment of pro-democracy groups. Not only does the oversight represent a shameful stain on US government accountability, it also sets back the broader cause of promoting human rights and democracy in military-run Myanmar.

I wonder if the Thai press or the US press corps traveling with Bush will ask him about this.

Of course not.

I found this case to be highly disturbing, considering Bush's strong stance against the Burmese regime. It won't be getting the attention it deserves in the mainstream US press.

Loral, the manufacturer of the Ipstar system, was actually investigated and fined for sharing its technology with China.


Concerning the US Export-Import Bank Component from a scathing article in the New York Times:

A Guardian of Jobs or a 'Reverse Robin Hood'?


Published: September 1, 2002

IT is hard to imagine why Thaksin Shinawatra, a billionaire who is Thailand's prime minister, would need a helping hand from the United States government for his family business, an Asian telecommunications giant called the Shin Corporation.

The Shin business empire, which Mr. Shinawatra founded and is still majority owned by his family, spreads from India to Indochina. It is Thailand's largest telecommunications company. But last May, to the consternation of competitors, Shin Satellite, a subsidiary, won a $160 million loan guarantee from the Export-Import Bank of the United States to buy a new telecommunications satellite and strengthen its grip in Southeast Asia.

For the bank, a Depression-era agency founded to promote exports, the rationale was simple. Loral Space and Communications, an American manufacturer run by Bernard L. Schwartz, a longtime Democratic Party donor, was Shin's supplier, and commercial banks, according to the bank, would not finance the deal without the loan guarantee.

Crying foul, Shin Satellite's competitors tried to block the deal in Congress. ''How is it that billionaires like Shinawatra and Bernie Schwartz can get the U.S. taxpayers to subsidize their deals?'' asked Franklin G. Polk, a lobbyist for New Skies Satellites, a rival based in the Netherlands that, like other companies, was able to get private financing, but not at the rates as low as Shin's government-backed loans.

How indeed?

Basically Thaksin borrowed money from the US government to finance his satellite empire, then used Thai taxpayer money to give to Burma to buy Shin Satellite services.

The Thai Export-Import Bank scam will be one of the cases that will probably put Thaksin in jail.

George Bush must feel comforted knowing that the US government financed Burma's use of American technology to hunt down and kill Burmese dissidents.

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