The Anti Corruption Commission (ACC) has decided to conduct an ‘information enrichment’ process on the government’s complaint over conflict of interest and policy corruption in fiscal incentives granted to Hotel Le Meridien.
The Commission took the decision last week based on the complaint sent in by the government on 25th January, 2018 to the ACC.
An ACC official said that ‘information enrichment’ is simply gathering more information on a complaint. The ACC based on this additional information will decide on how to proceed ahead including looking at whether an investigation is required or not.
The official said that information will be collected from all possible sources. It would look at the rules of procedures in the cabinet, how the issue emerged from the respective ministry, if cabinet members are required to declare conflict of interest and from there to see if the minister has actually unduly influenced the decision.
The ACC official said that the ACC is conducting an information enrichment process since the complaint alleges ‘conflict of interest’ which is covered by the ACC Act, where it falls under the misdemeanor category.
ACC will also look to better understand the Fiscal Incentives (FI) as a whole from 2010 including any anomalies in the law and its implementation. ACC will also seek clarification from relevant agencies and officials.
The ACC official said that the agency would first have to educate itself and then it would take some time to collect all the information.
The information gathered would be presented to an evaluation committee of technical experts which may ask for additional information from the ACC officials conducting the ‘information enrichment’ process.
Once the committee is satisfied it has all the relevant information it will take a call on what next to do including recommending an investigation or not.
The committee’s recommendation and information will then be forwarded to the Commission which will take the final call.
The ACC official said that normal ACC procedures and standards would be followed in this case like any other case.
The complaint letter from the Prime Minister’s office alleged ‘conflict of interest’, ‘policy corruption,’ and ‘official misconduct,’ against former minister Yeshey Zimba for chairing a cabinet meeting three days before the government dissolved in 2013 to give Fiscal Incentives worth Nu 186.59 mn to hotels.
The letter to the ACC says that of the 92 hotels that took the incentives the bulk of the incentives coming to Nu 76.88 mn went to Hotel Le Meridien registered in the name of the former minister’s daughter. This the letter says is 41.20 percent of the total exemption.
It says that Hotel Le Meridien had already benefitted by nu 1.05 mn under the general incentives granted to hotels from 2010 up to 16th April 2013.
The complaint says that normal processes to give FIs was not followed which included presenting the matter to the National Assembly before implementing it, all of which was not done.
It also alleges that the FI were narrowly targeted only at hotels under active construction and not for attracting new investments or construction of new hotels to attract FDI or for hotels on the verge of completion.
The FIs, the letter says, was timed to primarily benefit Hotel Le Meridien which at the time was under active construction. This the letter says shows the vested interest of Yeshey Zimba. The letter says the new FIs were timed between April 2013 to December 2015 when Le Meridien was under active construction.
The letter says that as one of the cabinet ministers the minister had failed to declare ‘conflict of interest’ as per the laws and also committed ‘official misconduct’ and ‘policy corruption’ by chairing the meeting and using his official powers to favour his own family members.
The PM’s letter to ACC which was released to the media also mentions that the Department of Revenue and Customs was originally against this ‘additional fiscal incentives.’
The letter in addition to an investigation also asked for the restitution of the amount from the hotel if the above are adjudicated to have been committed.
It also says that the minister would be guilty of outright corruption if he is proven to have a personal stake in the hotel.
The Opposition in response (Opposition defends Le Meridien FI case and attacks govt published on the 10th February issue) accused the government of political motivation by timing the complaint at this stage. It also said that theses were not additional fiscal incentives but the resolution of certain anomalies in the implementation of FI 2010 for the resolution of which a committee was formed and it was based on the recommendation of the committee that the April 2013 FI was approved by the cabinet.
The Opposition also said that Yeshey Zimba did not commit conflict of interest as the FI benefitted 92 hotels and not just Le Meridien alone. They said Le Meridien benefitted more in terms of numbers due to bigger size and scope of the hotel’s investment. The opposition also said that the minister chaired the cabinet meeting in the absence of the then PM as he was the acting PM even at other times.
The opposition also said that hotel had provide a lot of training and jobs and contributed to the high value and low impact tourism in Bhutan. The Opposition argued that that this was character assassination of the former minister.
The Opposition also said that if ACC accepts to investigate the case then it would affect ‘investments in Bhutan, create a precedent, derail democratic process and political stability and negatively affect economic growth and societal harmony.’
The government in response to the Opposition recently issued a press release (see full story on pg 5) where it said that it would leave the ACC to adjudicate on the facts of the case. However, it denied any political motive and also explained the timing of the case in addition to responding to other issues raised by the Opposition.