Graft Probe Linked to Rice Subsidies Targets Thai Premier Yingluck

Graft Probe Linked to Rice Subsidies Targets Thai Premier Yingluck

WARANGKANA CHOMCHUEN

Jan. 16, 2014 1:06 p.m. ET

BANGKOK—Thailand’s anticorruption panel said it would investigate Prime MinisterYingluck Shinawatra’s role in the government’s controversial rice subsidy program, putting more pressure on the embattled leader amid a campaign to force her out of office.The National Anti-Corruption Commission will investigate whether Ms. Yingluck neglected to prevent financial damages from the rice subsidy program, which has cost the government about 670 billion baht, or about $20 billion, since it began in October 2011.

The anticorruption body, which has the power to launch criminal investigations against politicians, has already charged two of Ms. Yingluck’s former ministers together with 13 others for their alleged involvement in fraudulent rice deals.

Ms. Yingluck, who oversaw the national rice policy committee, “has acknowledged the objection and the financial damages from the rice subsidy, but has neglected to take action to stop the damage,” said Vicha Mahakun, a commissioner and the agency’s spokesman.

Ms. Yingluck didn’t comment on the allegations Thursday. In the past, the government has defended the program, saying the handling of the rice subsidy was transparent.

The rice subsidy is one of a raft of policies Ms. Yingluck’s opponents say is a political tool Ms. Yingluck has used to win votes in Thailand’s poorer rural regions at the expense of taxpayers.

Under the program, the government has been buying rice from local farmers at as much as 50% above market rates in an effort to improve the livelihood of Thai farmers, a key support base for Ms. Yingluck’s Pheu Thai Party.

But the policy has backfired. The government now has millions of tons of rice that it is struggling to sell, while increased global supply of the grain is pushing down the price. Many rice farmers haven’t been paid in months. The massive stockpiles have lost Thailand its spot as the No. 1 rice exporter, surpassed by India and Vietnam.

The agency’s investigation could take several weeks and will likely galvanize the tens of thousands of mostly urban, middle-class antigovernment protesters who have poured into Bangkok’s streets this week, paralyzing the capital in an effort to force Ms. Yingluck to resign and halt a Feb. 2 election. They accuse Ms. Yingluck and her brother, former Premier Thaksin Shinawatra, of widespread corruption, saying their populist policies amount to vote buying. Mr. Thaksin was ousted in a 2006 coup and later convicted of corruption—a charge he says was politically motivated—and he has been living in self-imposed exile to avoid prison time.

On Thursday, seven main intersections in Bangkok’s commercial and business hub were still blockaded as the protesters marched to several government offices to pressure state officials to abandon work.

Some watchdog groups and rice exporters have accused Ms. Yingluck’s administration of irregularities and corruption in connection with some government-to-government rice sales.

On Thursday, the anticorruption panel said it found no evidence to support rice-sale agreements that the Thai commerce ministry says it has made with the Chinese government through two Chinese firms.

It also said it found no evidence to suggest that two Chinese firms involved in the negotiations had been authorized by the Chinese government to carry out a government-to-government sale.

The agency also found no record of overseas rice shipment as a result of the deal. Instead, the rice was sold to domestic rice traders, Mr. Vicha said.

Former Commerce Minister Boonsong Teriyapirom, his deputy, and a dozen government officials and individuals who were charged will be summoned to the anticorruption panel to defend themselves before the agency comes to a verdict.

Opponents of Ms. Yingluck and her brother welcomed the report of the probe, which they said has affirmed their accusations of corruption in her government.

“I think it’s the right thing for the [anticorruption panel] to do,” said Sagai Sornmanee, a demonstrator who joined the rally Thursday.

“As the prime minister, Yingluck has to be responsible for actions of her ministers and her policy.”