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C O N F I D E N T I A L SECTION 01 OF 03 BANGKOK 000244 
 
SIPDIS 
 
STATE FOR EAP/MLS, NSC FOR WALTON 
 
E.O. 12958: DECL: 01/27/2020 
TAGS: PGOV PREL KDEM TH
SUBJECT: THAILAND: PM'S DEMOCRAT PARTY IN SIMMERING LEGAL 
BATTLE OVER OLD PARTY FINANCE ISSUES 
 
REF: BANGKOK 227 (CHARTER CHANGE) 
 
BANGKOK 00000244  001.2 OF 003 
 
 
Classified By: POL Counselor George Kent, reasons 1.4 (b, d) 
 
SUMMARY AND COMMENT 
------------------- 
 
¶1. (C) Even as the Democrat party struggles to manage the 
political fallout associated with spurning its coalition 
partners on the constitutional amendment push (reftel), 
another cloud looms on the horizon.  The party stands accused 
by political opponents of running afoul of the Political 
Parties Act for two separate alleged transgressions from 
2004-05, when they were in opposition.  The current 
opposition Puea Thai party has packaged both allegations -- 
which include a charge the Democrats failed to declare an 
$8.5 million donation in 2004, as well as a charge that the 
party misappropriated a $1 million government subsidy in 2005 
-- together into a single complaint that now sits before the 
Election Commission (EC).  The EC must now determine whether 
to dismiss the case altogether, or refer the case to the 
Office of the Attorney General for a review by the 
Constitutional Court, which would then decide whether or not 
to dissolve the party. 
 
¶2. (C) Comment: Not surprisingly, most of our Democrat 
interlocutors have dismissed the threat associated with this 
case, arguing that the charges were largely without merit and 
that the party would likely be absolved of any wrongdoing. 
Members of the opposition Puea Thai party and contacts from 
the smaller coalition parties have generally arrived at the 
same conclusion, but on the presumption that the government 
would be able to influence the Election Commission's decision 
and/or receive the assistance of the proverbial "unseen" 
hand.  The second part of the case seems to be more serious, 
and it could still emerge as a nasty surprise, upsetting Thai 
politics either through another party dissolution or 
coalition discord serious enough to bring down the 
government.  End Summary and Comment. 
 
THE CASE AGAINST THE DEMOCRATS -- PART I 
----------------------------------------- 
 
¶3. (SBU) The Democrat party stands accused by the opposition 
Puea Thai of two separate transgressions which have been 
packaged together into one complaint now in the hands of the 
EC.  The first leg of the complaint -- which Puea Thai first 
raised in an unsuccessful March 19-20, 2009 no confidence 
motion against the Democrats -- accuses the party of 
concealing a 258 million baht ($8.5 million) donation in 2004 
from TPI Polene Public Company Limited, a large Thai 
corporation with construction and petrochemical interests 
then led by controversial CEO Prachai Liewpairattana.  Puea 
Thai claims the Democrats circumvented the reporting 
requirements by funneling the donation through an advertising 
company associated with the party -- the Messiah Business and 
Creation Co. Ltd., thereby keeping the donation off of its 
books. 
 
¶4. (SBU) Puea Thai has alleged that the Democrats failed to 
report the donation to the registrar of political parties as 
part of the compulsory end of year itemization of 
expenditures and income mandated by Article 46 of the Act on 
Political Parties under the 1997 Constitution.  According to 
Puea Thai, this failure to report would also represent a 
breach of the donation declaration provision (Article 82) of 
the same law, which compels parties to report any and all 
donations to the EC by March of the following year.  The 
Democrats deny they received any such a donation. 
 
¶5. (SBU) At this stage the EC has still not determined 
whether the 1997 Constitution should apply to the TPI case, 
or if the 2007 Constitution, which came into force three 
years after the alleged transgression took place, should 
 
BANGKOK 00000244  002.2 OF 003 
 
 
instead be applied retroactively as the appropriate legal 
framework to judge the case.  The more germane question is 
whether the failure to report donations would cross the 
threshold of what it takes to dissolve a political party. 
According to Article 66 of the 1997 constitution, and its 
counterpart in the 2007 constitution, Article 94, party 
dissolution can only be triggered by acts that are undertaken 
to overthrow a democratic regime, acts which may be adverse 
to the democratic regime, acts which may endanger the 
security of the state, or other acts of intentional national 
subversion.  In other words, if the EC decided that the 
Democrat party had intentionally covered up a donation from 
TPI, the EC would then have to make a judgment as to whether 
or not that transgression threatened the government in some 
fashion. 
 
THE CASE  -- PART II 
-------------------- 
 
¶6. (C) The second leg of the complaint appears to have more 
legal merit to observers of the case, and thus more potential 
to cause problems for the party than the first.  Puea Thai 
has accused the Democrat party of misusing a 29 million baht 
($1 million) subsidy it received from the government in 2005. 
 Puea Thai has alleged that of the original 29 million baht 
subsidy, approximately 18 million baht was funneled directly 
to Democrat legislators for their own personal use.  Puea 
Thai has argued the alleged transgression represented a 
collective violation of Articles 65, 82, and 93 of the Act on 
Political Parties under the 2007 Constitution, which the EC 
has already determined is the appropriate legal lens through 
which to view the complaint. 
 
¶7. (C) Unlike with the TPI piece of the case, the legal 
implications of this complaint are relatively clear.  If in 
fact the EC determines the party abused a government subsidy 
(Article 82) and/or members of the party received money 
illegally (Article 65), the party would then be subject to 
possible dissolution (Article 93).  The question is whether 
the EC believes there is sufficient evidence to substantiate 
Puea Thai's accusation. 
 
¶8. (C) EC Commissioner Apichart told us January 28 that he 
believed the case would be decided "some time in March." 
Apichart told us the decision on the case would not in any 
way be predicated on the timing involved with the verdict in 
the Thaksin assets case (February 26), as has been suggested 
in the media, but would instead hinge on the time it took him 
to thoroughly read through the 7000 pages of material packed 
into the collective case file. 
 
WHY THE DEMOCRATS SEEM UNCONCERNED - THEORIES 
--------------------------------------------- 
 
¶9. (C) Most commentators outside of the Democrat party 
suggest the Democrats have nothing to worry about.  Suranand 
Vejjajiva, a political commentator, former Minister in 
Thaksin's cabinet, and first cousin of the current Prime 
Minister, told us January 12 that while he believed -- 
legally speaking -- that the case had some merit, there was 
no doubt in his mind it would be dismissed, because "the 
government would not allow it to go anywhere."  Puea Phaendin 
MP Satit Tepwongsirirut suggested if the case made it to the 
Constitutional Court, the Court could easily drag out its 
review until the end of the government's term in December of 
¶2011.  Weerasak Kowsurat, a former Minister of Tourism and 
Sports in the Samak administration and a banned politician 
himself, shared with us January 28 the "unseen hand" 
conspiracy theory - unspecified forces behind the formation 
of the current government could use the case as leverage 
against the Democrats. 
 
¶10. (C) Most of the Democrats we have talked to have also 
expressed confidence the party would emerge from the legal 
 
BANGKOK 00000244  003.2 OF 003 
 
 
ordeal unscathed.  MP Niphon Bunyamanee told us December 18 
the party would be able disprove all the allegations without 
any negative ramifications for the party moving forward.  MP 
Sukit Attopakorn also told us December 18 that he expected 
the party to be acquitted.  According to Sukit, even if the 
case did move to the Constitution Court, it would take so 
long for the case to be tried that the government could 
effectively "run out the clock." 
 
WHY THEY ARE CONCERNED 
---------------------- 
 
¶11. (C) Not all members of the Democrat party are sanguine 
about the case.  Isra Sunthornvut, the Deputy 
Secretary-General to the Prime Minister for Political 
Affairs, told us January 22 that the outcome in the case was 
very much in question.  Isra said the party was watching it 
very closely and he characterized the charges as 
"problematic."  When we commented that, even if the case 
advanced to Constitution Court the next step in the legal 
process would be so time consuming the party seemingly had 
little to worry about, Isra told us that if the case got to 
that stage, the real issue would be keeping the coalition 
together.  Referencing the chinks in the coalition armor that 
had already emerged on the Constitutional amendment issue 
(reftel), Isra told us that if the legal case against the 
party moved forward, he feared the Democrats would have a 
hard time keeping the coalition together.  Isra believed that 
if the case advanced, several of the coalition parties would 
be prepared to jump ship. 
 
¶12. (C) Several contacts have told us the case would have 
reverberations for the government regardless of the EC 
verdict.  Suranand told us that if the EC dismissed the case 
outright, the red-shirts would quickly seize upon the verdict 
as further evidence of the alleged "double standards" 
inherent in the legal system, an opinion seconded by Supachai 
Jaisamut, PJT MP and party spokesman.  Regardless of whether 
there were major legal differences between the cases that led 
to the dissolution of Puea Thai's predecessors Thai Rak Thai 
(TRT) and the People's Power Party (PPP), and the criminal 
complaint against the Democrat party, the red shirts would 
blur such distinctions (Note: PPP was dissolved in 2008 for 
committing election fraud under the 2007 Constitution; TRT 
was dissolved in 2007 after the 2006 coup for retroactively 
violating the 2007 Constitution by obtaining state power 
through unconstitutional means.  End Note.) 
 
WHAT NEXT? 
---------- 
 
¶13. (C) The next step decision rests in the hands of Election 
Commission Chair Apichart Sukhagganonda, who was vested by 
the EC with the full authority to adjudicate the case one way 
or another.  Apichart has already suggested publicly that he 
was inclined to dismiss the case.  While that seems to be the 
most likely outcome, no one can be sure at this stage. 
JOHN