- - Wednesday, July 6, 2016

PHNOM PENH — An intricate network of companies controlled by the family of longtime Cambodian Prime Minister Hun Sen has amassed a secret fortune with a value of at least $200 million and possibly five times that figure, according to a damning report by the anti-corruption activist group Global Witness obtained by The Washington Times.

The report, being released Thursday morning in the Cambodian capital, offers a rare insight into the private dealings of the country’s first family.

Frustration is growing among the U.S. and other outside critics over the lack of democracy and the harassment of civil society under Mr. Hun Sen, who has held power for a quarter-century and is looking to extend his rule in local and national elections over the next two years.

“The Huns are renowned as one of the richest, if not the richest, and most powerful families in Cambodia, with a combined wealth estimated by experts to total between $500 million and $1 billion,” the report said.

The report, “Hostile Takeover,” is being released just a week after the Senate Appropriations Committee in Washington approved a spending bill that makes foreign aid to Cambodia worth $77.8 million contingent upon an end to government harassment of opposition politicians.

It also tied other aid earmarked for the trial of a Khmer Rouge commander implicated in the 1975 capture of the SS Mayaguez — which led to the deaths of 41 U.S. servicemen — and directed the State Department to press Mr. Hun Sen to conduct a credible investigation into a 1997 grenade attack.

That attack, targeting a rally led by opposition leader Sam Rainsy, killed 16 people and wounded more than 100. The wounded included an American citizen, prompting an FBI investigation. It drew no formal conclusion but indicated that the ruling Cambodian People’s Party (CPP) was involved.

Mr. Rainsy, 67, has been in self-imposed exile since November in the face of rising official pressure on his party and legal charges against him. He has been spending much of his time in Manila.

The Global Witness investigated financial links into 114 domestic, private companies controlled or owned outright by members of Hun Sen’s family — with a listed value of about $200 million — and their links to big international brands such as Apple, Visa, Unilever, Procter & Gamble and Nestle.

“This is likely just the tip of the iceberg,” the 58-page report concluded.

There was no immediate comment from the government, but the Associated Press reported Thursday that two of Hun Sen’s children posted responses on their Facebook pages, saying the report contained misinformation and was intended as a political attack on their father.

Hun Mana, the prime minister’s eldest daughter who was highlighted as the family member most active in business, sarcastically thanked Global Witness for its work, which she said was “all lies and deceitful to confuse the public about what my Father has accomplished,” according to the AP report.

Hun Sen himself, the world’s sixth-longest-serving premier, has often criticized the U.S. and other Western governments for tying aid and investment to human rights.

Some 40 percent of Cambodians live below or close to the poverty line and, according to “Hostile Takeover,” have witnessed the systematic capture of a state and its resources by “a profoundly corrupt regime” that tramples on free speech and anyone who stands in its way.

Hun Sen’s two eldest children — Manet, a West Point graduate, and Many — have been touted as future prime ministers. They were featured in the report, as was the prime minister’s nephew Hun To, who was tied to narcotics trafficking to Australia. He has denied the links.

“The Hun family includes members once implicated in a $1 billion heroin smuggling operation, shoot-outs, a fatal hit-and-run, and land grabs that have caused mass displacements and destitution among Cambodia’s rural poor,” the report said.

The prime minister’s extended family dominates the country’s energy and media sectors, where Ms. Hun Mana emerged as quite possibly the most influential and successful of all tycoons. She lists a pro-CPP newspaper, television and radio stations among her assets.

Ms. Hun Mana and CPP Sen. Ly Yong Phat, who was once accused of employing child labor on his sugar cane plantations, are the only two people with controlling interests in all three types of media, a trump card for Hun Sen come election time. There are also interests in at least 20 economic sectors, including mining, franchising, gambling, garments, forestry, retail, telecoms and pharmaceuticals.

Trade fraud

Trading companies accounted for 15 percent of the family’s corporate interests. The report cited a 2013 probe by the anti-corruption agency Global Financial Integrity, which estimated that Cambodia had lost $4 billion in revenue on import/export deals worth an annual $18 billion through illicit financial flows. Almost all of that was put down to bogus invoicing.

“This is undoubtedly just a fraction of the true value of the family’s business holdings — they are said to obscure their commercial interests behind fake names and within shell companies,” said the report, compiled from the Ministry of Commerce’s corporate registry. Access to the registry has since been restricted.

Global Witness sent letters to 25 members of the Hun family, including the prime minister. Only one replied, Sok Puthyvuth, husband of Hun Maly and CEO of the Soma Group, which has signed a biomass power deal with General Electric.

“I see many issues and many obvious solutions, but I have seen again and again that the good solutions are seldom implemented correctly,” he wrote back.

Western criticisms and demand for greater transparency, analysts say, have enabled regional power China to step in to woo Phnom Penh.

Beijing offers aid and soft loans without preconditions regarding civil liberties. In return, Cambodia is among the few Southeast Asian nations to support China’s maritime claims in the South China Sea, upsetting regional neighbors Vietnam and the Philippines.

China’s state-owned media have lost no opportunity to highlight Mr. Hun Sen’s refusal to join many of Cambodia’s neighbors in questioning Beijing’s aggressive South China Sea claims and the prime minister’s skepticism of an international tribunal that is set to rule on the case next week.

Mr. Hun Sen has said that, while the Cambodian government is neutral on the clashing sovereignty claims, his ruling CPP would not back the tribunal’s decision if it rejects China’s stance, calling it “the worst political collusion in the framework of international politics.”

London-based Global Witness charged that Hun Sen’s success at the polls is a result of “electoral fraud and the brutal suppression of political opposition, including through murder, torture and arbitrary imprisonment.” It also noted an uptick in violence and intimidation.

In October, two opposition parliamentarians were dragged from their car, kicked and punched near the steps of the National Assembly — in the aftermath of a pro-Hun Sen rally organized by the military.

That incident was followed by the jailing of 19 opposition politicians and supporters and the government’s vigorous pursuit of Kem Sokha, deputy leader of the Cambodian National Rescue Party (CNRP), over accusations of sexual impropriety.

“Global Witness paints a vivid picture of the winners and losers of foreign investment in Cambodia,” said Stephen Peel, a former senior partner at private equity firm TPG Capital and a member of the Global Witness board. “Doing business with companies that are owned or controlled by the country’s ruling family not only raises ethical questions, it also carries significant legal, financial and reputational risk.”

The report calls on members of the Hun family to publicly disclose their assets and all financial connections with international companies.

“It is in everyone’s best interests for investors in Cambodia to carry out careful checks to ensure that their money isn’t being funneled into Hun Sen’s campaign of oppression,” Mr. Peel said.

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