The politically charged trial has run over two years. The alleged crime involves a complex agricultural subsidy of price guarantees and mortgaged rice. Those who have followed it since the beginning are forgiven for being confused. Here’s a breakdown of the essentials on the eve of the verdict in the malfeasance trial against former Prime Minister Yingluck Shinawatra.
How does rice-pledging work?
For four months at the beginning of harvest season, farmers are usually offered low prices for their rice due to the high supply. So this program takes their rice as mortgage in exchange for loans at a fixed price. When the market later rises, farmers can reclaim their rice to sell at a higher price and repay the original loan amount to the government.
How was Yingluck’s program different?
To ensure farmers have price incentive to reclaim their mortgaged rice, the program – which began nearly 50 years ago – is supposed to secure the rice at a lower-than-market price, such as 80 percent or 90 percent of market value.
But the policy Yingluck delivered to parliament in 2011 called for buying every grain of rice without limit or cap. And the per-tonne purchase prices (depending on type of rice) were set between 15,000 baht and 20,000 baht, double the market value of 8,000 baht/tonne.
Disaster struck at the end of the harvest season when prices failed to reach 15,000 baht/tonne. Farmers didn’t want their rice back because it was actually worth less. That left the government with an oversupply of stock it had to sell off. Some unsold rice would be found rotten in storage.
So program was a bust. Where’s the crime?
Although supporters point out that prosecuting an elected official for implementing a policy openly implemented through parliament is unprecedented and irregular, critics say the program went above and beyond typical graft.
The scope of the program distorted the rice market
by buying higher than market rate. It also made the government the biggest player on the rice market due to its enormous stock: in five rounds of the Yingluck program between 2011 and 2014, it bought 54.3 million tonnes of rice, or 52.2 percent of the entire market.
Ran big losses of over 500 billion baht.
The program was accused of overrunning its original budget, becoming emblematic of poor financial discipline. And the damages kept piling up the more time rice stocks were left sitting in warehouses.
In February 2015, nine months after the coup, a committee formed by the junta concluded the program resulted in losses of 536 billion baht. Niphon Poapongsakorn of the Thailand Development Research Institute, or TDRI, estimated this past May that losses had increased to 620 billion.
Where was the corruption?
- Many flaws resulted in irregularities. A long bureaucratic process involving many people left many holes to exploit.
- Millers bought rice from neighboring countries to sell into the program
- Millers cheated farmers
- Millers bought quality rice from the farmers, resold it, then bought lower grade rice to hand over to the government
- Rice disappeared from storage
- Government did not export rice as it claimed and benefits went to administration associates
How did it become a political crusade?
In December 2012, an effort by the opposition Democrat Party to censure Yingluck was escalated by one of its MPs. Warong Dechgitvigrom petitioned the National Anti-Corruption Commission, or NACC, to investigate the program focusing on alleged irregularities in a government-to-government deal to sell Thai rice to China.
The NACC later concluded that former Finance Minister Boonsong Teriyapirom conspired with officials and businessmen to set up four contracts with private companies that didn’t represent China.
These companies were associated with a businessman with close ties to Yingluck’s brother, exiled former Prime Minister Thaksin Shinawatra. Negotiating the sale as government to government, or G2G, meant no competitive auction for the rice, which was then scooped up at a low price. Those companies then resold to domestic rice sellers. Evidence later emerged that no government to government trade occurred.
A year later in January 2014, at the height of street protests against Yingluck’s government, the NACC filed charges against Boonsong and 20 others. It also launched of a negligence probe against Yingluck in her capacity as president of the National Rice Policy Committee.
But What Was Yingluck’s Alleged Crime?
Prosecutors said Yingluck’s government ignored numerous written warnings from agencies such as the Auditor General and NACC about the program’s risks and its irregularities.
She was charged under Article 157 of the Penal Code, which addresses official malfeasance, for failing to take action to prevent corruption and losses. She was also charged under a 1999 anti-corruption law called the Organic Act on Counter Corruption.
What was Yingluck’s defense?
Yingluck denied the charges. She explained that she didn’t terminate the program because it continued to be useful and said she forwarded the warnings to relevant agencies. After the opposition’s censure debate over graft in the G2G deal, she ordered an investigation, but it found no irregularities.
As for the massive losses incurred by the program, Yingluck said the policy was never intended to generate revenue but to improve pricing for agricultural goods and raise the incomes of farmers. She cited other benefits to the broader economy as well.
Ultimately, Yingluck said she was involved at the policy level and should not be legally liable for any criminality that occurred at the ground-level among those carrying out the policy. To do so would be unprecedented, as no prime minister ever had before.
Consequences so Far?
After the NACC forwarded its conclusions to all branches of the military-led government in 2014, Yingluck was:
Impeached by the junta-appointed legislature on Jan 23, 2015, eight months after her government was ousted by the military. She was also banned from politics for five years.
Ordered to personally pay 35 billion baht in compensation for the program’s losses. > The Finance Ministry issued the administrative order in October 2016. When she did not pay, the government froze 16 of her bank accounts.
Tried on criminal charges for 28 months. The negligence trial began in May 2015 and heard its first witness Jan. 15, 2016. Yingluck secured release on a 30 million baht bond by appearing in person 26 times for hearings at the Supreme Court’s Criminal Division for Holders of Political Positions.
Prosecutors presented 14 witnesses, including Niphon the TDRI researcher, whose study sparked outrage over the program. Yingluck’s lawyers called 42 witnesses.
Yingluck could be exonerated, found guilty and jailed or given a suspended sentence.
If found guilty, she faces up to 10 years in prison and a permanent political ban under Article 98 of the referendum-approved constitution.
But unlike in the past, when politicians could not appeal, the new constitution confers the right for Yingluck to seek bail and appeal her conviction within 30 days.
However the case turns out, Yingluck still faces indictment in 11 other criminal cases brought by the NACC.
What has the junta done to suppress her supporters?
- July 25 Prime Minister Prayuth Chan-ocha threatened legal action against supporters if they gather in front of the Supreme Court when the verdict is read
- Aug. 1-8 Prominent online political commentators Watana Muangsook, Pichai Naripthaphan and Pravit Rojanaphruk were charged with sedition over their Facebook posts.
- Aug. 7 Van drivers hired by Yingluck supporters for transport to Bangkok a week earlier were charged with misusing their vehicles.
- Aug.10 Regulators ordered a 30-day shutdown of Peace TV, a Redshirt-aligned television station, saying it instigated unrest.
- Aug.18 The leader of a farmer network in the north revealed he was forced to sign an agreement not to bring people to support Yingluck on Friday.
- Aug. 22-Now Police have boarded trains and buses searching for Redshirt supporters traveling to the capital.