Enkhbayaris arrested. The Godfather of Corruption is finally behind bars. This would not have happened if he were still in good terms with his party. Had he won the Presidential election in 2009, he would have been idolized. Had he not excessivelyextorted those entangled in his web, he would have been just fine.
Those who are next in line [for arrest],Ulaan, Terbishdagva, Chuluunbat, and Davaasuren; his long time partners, hastilyorganized a movement to free him. Another group of comrades, S. Batbold, Bat-Erdene, EnkhboldMiye, Munkh-Orgil, Tsengel, Raash, and many more, are left to fear of what may come next. Those who did not participate in his transgressions; including Bayar, Nyamdorj, Lundeejantsan remain content. Thousands of those who are already entangled in his spider web, but have not met and are not aware of their secret master, are at a loss and in confusion.
Seven years have passed since I published the last installment of theSpider Web series. Since then, the web of corruption has expanded to enormous proportions, fully covering the vast land of Mongolia. During this period, the state budget has increased ten-fold, whereas the sum consumed by the web has grown a hundred-fold. Previously a mere billion USD, Mongolian GDP has now reached an incredible USD10 billion. The state budget has risen from USD300 million to USD4 billion. Incidentally, the budget of the capital city, Ulaanbaatar, surpassed a hundred million USD from 10 million USD. However, the lives of the peoplehaveremainedvirtually the same, except for over 20 thousand Governors and those who spend the budget. The flow of money to their pockets has increased nearly a hundred times in these seven years. In 2000, total cost of election was 7 billion tugriks. Today, a single candidate is ready to spend this sum for his campaign.
Many people have claimed to have written the Spider Web series during this period. First serving as advisor to Bagabandi, and then to Enkhbayar; some Dugar has emerged through newspapers as the author. Baabar, who first seized Spider Web-5, mailed to the office of The Daily News; delivered the article to Enkhbayar, claiming to have written it himself. In return for Baabar’s promise to not publish it anywhere, Enkhbayar provided him with evidence of Ulaan’sswindling of USD11 million. This step was first and foremost caused by Ulaan’s plan to compete in the 2005 Presidential election. And since his receipt of that evidence ,Baabar has accused Ulaan of being a thief and other names, without fear of retribution.
Enkhbayar’s name shall leave a glaring black spot in the contemporary history of Mongolia. In the times when a closed society became an open one, and amidst the turning of the page of our history, Enkhbayarinherited a decaying web, which was the MPRP (Mongolian People’s Revolutionary Party), and resurrected it with blunt force. He felt in his guts that only a large sum of money, and an equal amount of greed could resurrect this web, now devoid of any ideology and belief. And he accomplished it without any hesitation. He weaved a giant net that reached farthest points of Mongolia. But now, he is seized by the next generation. Thousands of flesh eating, iron ants of his own creation are now lashing out to feast on him.
Out of twenty-seven independent cases in which he is the prime suspect, six are so far confirmed by the Independent Authority Against Corruption (IAAC). The immense amount of money embezzled by Enkhbayar, somewhere between USD80 million to USD100 million is staggering. Everyone talks about it. Everyone suspects it. Foe-turned-friend Enkhsaikhanonce graced Enkhbayar with a title “Godfather of Corruption,” a name, which the public has readily accepted.
It is said that the IAAC was established too late and with too much hesitation to be effective. The first chief of the agency was Enkhbayar’s pawn and a personal accomplice. Today, the ex-chief has been accused and sentenced forcriminal corruption. Because the chief of the anti-corruptionagency has legal immunity, Parliamentaryannulment is necessary in order to prosecute him. However, Enkhbayar’s old partners and accessories in crime were so fearful of him that they wasted a full year to demolish the chief’s immunity. Only after his pawn was removed as head of the agency, has the opportunity arisen to investigate Enkhbayar. Up until then, the 10 crimes that the agency exposed since its establishment were small offenses of minor, rural officials.
The same as in any society and any nation, corruption did exist in communist Mongolia. However, with so many severe restrictions on the private sector, when poverty embraces the whole society which is under a strict state control, and when there is nothing to bribe with; corruption was measured by a bottle of vodka. The same picture can now be seen in North Korea. In 1990, however, with theadoption of a free, democratic system and a market economy, and after the old social code fell apart without a new one to replace it, corruption spread like wildfire. It infected every state institution, with the level of corruption increasing the higher the government official. In 1994, Jargalsaikhanof Buyan was given a Government guarantee when obtaining a loan from Japan. After a few years and much scandal regarding this matter, the then-Prime Minister denied the fact that his cabinet produced such guarantee. But, he was cornered by Jargalsikhan, who confronted him through media with a question “Do you remember how many suits you have received from me?” This story displays how much corruption was needed to strike a deal. A Couple of suitswas enough for a USD 18 million deal. But by today’s standards, this kind of job would fetch at least a couple of million USD. So, we can see the progression in the cost of corruption.
Corruption in the new Mongolia was kick-started during the privatization activities of 1990 and 1996, plus through foreign loans and assistance. Most foreign assistance, in particular, food assistances, was stolen by corrupt public officials before it ever reached the intended recipients. According to research conducted by the Soros Foundation at that time, 80% of international assistance intended to alleviate poverty and food assistance was embezzled and 70% of the poor was not even included in those programs.
Moreover, it is a common knowledge that these internationalfood assistance programs were one of the main tools for attracting votes during elections. Until 2000, the Government of Taiwan considered Mongolia to be a part of their country and sent millions of dollars of food assistance through the Mongolian and Tibetan Affairs Commission. Although the Mongolian government opposed the assumption underlying this assistance, unofficially they received it and it was skimmed off through the hands of public officials. If requested, the Taiwanese government probably can provide the actual assistance financial numbers.
When Enkhbayar assumed the Prime Minister’s position in 2000, a corrupted and morally bankrupted society awaited him. With 98% of the seats in Parliament held by his party, Enkhbayar embraced infinite state power. He had a chance to correct and purify the society. However, he chose instead to further harnessthe already widespread corruption, and evolve it into a systematic mechanism. The level of corruption in present day Mongolia, as well as its structure, is Enkhbayar’s masterpiece. First and foremost, he single-handedly applied the method of “rent-seeking,” discharging 15 thousand public servants in an extremely short period, based on his calculation that they would hinder his plans. 250 million tugriks from Chuluunbat, who was appointed as the Governor of Mongolbank, 280 million tugriks from former Director of Erdenet Mining Corporation the late Otgonbileg, and 200 million tugriks from the current Prime Minister S. Batbold, to appoint them to their respective positions. This is only the peak of a now-obvious iceberg of rent-seeking.
His cabinet was composed of “poor” folk, on whose desire to plunder and squander, Enkhbayar choreographed his “dance.” Former Minister of Education Tsanjid has moved from his home at a student dormitory to shine as the owner of numerous buildings and apartment-blocks during his four-year tenure. Everyone knows ex-Minister of Social Welfare Batbayar, formerly a head of an almost poverty-ridden household, is now owner of a whole building at Central Square, where he also owns a restaurant. By current market rates, that can fetch several million USD. During his tenure, he established a company authorized to send Mongolian employees abroad under a government quota, and ruthlessly quashed his competitors. As a result, owners of a competing company also working on this project, a husband and a wife, died within prison cells. Three children were orphaned. But no one was held accountable for this crime.
Former Minister of Foreign Affairs Erdenechuluun was also one of the “poor” folk. His ministry acquired a land license designated for the building of the Korean Embassy from the city administration. However, Erdenechuluunsold the license to a Chinese company for USD2 million, pocketing the money. Today, declaring that Mongolian society lacks justice and equality, he is employed at a foreign project. Ex-Minister of Energy Jigjidended up as the head of a large-scale mafia ring.
These are only a few examples from within the cabinet headed by Enkhbayar. However it is the original model, and soon was copied by lower level officials all around the country. According to a foreign research completed in 2003, out of world countries Mongolia didn"t even make the 120th place in the international corruption index. 30% of social wealth of Mongolia, one of the poorest countries in the world with a GDP of a mere billion USD, now belongs to the “shadow economy.”
One of the biggest bonanzas for them was Erdenet Mining Corporation (EMC). Accounting for a certain percent of world’s total aluminum production, astoundingly,Erdenet was not registered internationally. Efforts put forward by many international organizations, including the World Bank, ADB, and IMF to register this corporation on international accounting books were hindered by direct pressure from Enkhbayar. To this day, Erdenet still remains the only contributor of world aluminum production not registered internationally, for the sole reason that Enkhbayar was its master since 2000. Until today, out of only three persons who had the authority to issue direct instruction to the director of EMC and coordinate its trades, two were family members of Enkhbayar. Today Narankhuu and Ganzorig,directors of EMC at times, are under investigation, and if they face jail time, their fingers would undoubtedly point at Enkhbayar.
Previous Spider Web installments have revealed in detail how Enkhbayar traded the aluminum quotas of EMC. A notorious figure of international fraud, Markrichiamassed quite a fortune under the names of several different companies out of this unmonitored and unregistered mine.
Another money-spinner was Mongolia’s foreign debt. Clearing Communist Mongolia’s debt to other communist nations was a grand scheme of robbery in the name of a poor motherland. My previous article detailed how the debt of 35 million convertible rubles to Czech and Slovenia was “paid.” Current Member of Parliament, and then an official at Ministry of Finance, Davaasuren, played a leading role in embezzling almost USD3 million, and was rewarded generously. He used the bank accounts of a close relative, who was director of a company under the municipal administration. The very first successful business operation between then Governor of Mongbolbank, Chuluunbat, and then-Prime Minister Enkhbayar was a transaction of USD 5 million debt some Mongolia’s entrepreneurs loaned from Germany’s Credit bank, which in the first place should never have been paid by taxpayers’ money. This laid the grounds for a long and fruitful cooperation, earning them a reward of USD1 million.
Land dealing was another kind of looting. Most people assume that today’s land dealing mess in Ulaanbaatar City is the handiwork of ex-mayor EnkhboldMiye (now deputy Prime Minister and MP). What he stole for himself is relatively very small. But even a small amount, theft is still theft, so he could never expose Enkhbayar. But little do people know that Enkhbayar was thedealer and real supervisor ofhis activities. An example at hand would be of howEnkhbayar brokered the obtaining of licenses for the construction of the Blue Sky Building, and in return, now owns 15% of it. Half of that was handed to him in cash, but only after he employed threats and blackmails to delay the completion of the tower. The land for now-erectedMonnis Tower was also valued at several million USD. Two of the current cases against him, concerning two large pieces of land in Ulaanbaatar’s downtown area, were completed when he was serving his last term as President. It was done in a hasty, clumsy manner because of Enkhbayar’s fear that despite all his blood and sweat, nothing would be leftfor him. These are not mere cases of a rusty printing factory and an old hotel, but a grand scheme concerning two perfectly located properties in downtown Ulaanbaatar that could bring him millions of USD.
Yet the most lucrative land business was held not in the downtown area, but in the outskirts of the city. Former Minister of Nature and Environment Barsbold was his partner-in-crime in these deeds. The number of licenses for land along the road from Ulaanbaatar to Terelj National Park has risen from 7 in 2000 to over 700 in 2005. Each license fetched a bribe of around USD 40 thousand, most of which were sold to foreign nationals because they were least likely to raise a hue and cry later. The protection and control of sacred Bogd Khan Mountain range to the south of the cityrests with the Ministry of Nature and Environment, not the municipal administration. Barsbold and Enkhbayar’s sale of the land surrounding Bogd Khan Mountain has proven to be enormously profitable. The entire valley of Artsat located on route to Yarmag is licensed under Enkhbayar’s mother’s name, meaning,in fact it belongs to him. Northern parts of Bogd Khan Mountain were also looted by at their hands, including the previously vacant large land surrounding Orgil Spring Sanatorium, from which Enkhbayar’s former aide Choijilsuren also profited.
But all of the above is nothing compared to the enormous fortune he accumulated from Mongolian mineral deposits. When Ivanhoe Mines discovered OyuTolgoi deposit in 2001, Enkhbayar was Prime Minister of Mongolia, or in other words, the almighty “Emperor.” Ivanhoe CEO Robert Friedland,dubbed “toxic Bob” in the USA, was the owner of this junior mining company, infamous for his plunder of developing countries. The late Steve Jobs of Apple Inc. included Friedland’sfraudulent youth and the beginnings of his misdeeds in his memoir,a part, which was translated to Mongolian and published. Friedland, whose understanding of Mongolia was limited to an oppressed country in post-communist Central Asia, calculated that he could solve everything by simply buying or bribing a single dictator, Enkhbayar. That is how a decade-long business partnership between Friedland and Enkhbayar began. They chose Chuluunbaatar, Director of Monnis Company, as their main mediator, and in return for his services, Monnis’s business partner,Germany’s Liebherr Mining Equipment,grew and prospered in the Mongolian market. Japan’s Kamatsu, which was EMC’s main supplier at the time, despite having superior and cost efficient merchandise, was pushed out of the Mongolian market by pricey and less sturdyLiebherr products. Again Enkhbayarprofited greatly from this deal. Because EMC is not registered internationally, all business conducted there was shrouded in secrecy and out of sight. Enkhbayar, alone, was fully in control of those affairs.
On December 25, 2003, Friedland received a long-distance call from Mongolia. It was Christmas, a holiday for almost half of world’s population. On the other end of the line was Prime Minister Enkhbayar, who was asking for a spare USD50 million by the next day, to pay Mongolia’s debt to the former USSR before the New Year. Because it is a holiday, no bank transaction was available, Friedland said. However, as a businessman with an eye for a bargain, he was ready to provide the USD50 million within the next 24 hours in exchange for an exploitation license for OyuTolgoi.
The license was ready on December 26, 2003. Mongolia was finally clear of USSR debt. For that alone, Enkhbayardemanded to be awarded with the Order of ChinggisKhaan, conducted a nationwide ceremony, and broadcasted a televised spectacle of his groupies weeping with pride and joy.
The clearing of this debt is a grand accomplishment indeed, if only were there no scandals later on about a missing USD50 million. Russians claimed they received USD200 million out of USD250 million. Because they were distressed about the possibility that a large sum of money was laundered to support terrorism, they queried the IFC on the issue. Obviously there were no terrorists, but only a group of corrupt officials on both the Mongolian and Russian sides, who pocketed this money. Then Prime Minister of Russia Kasyanov, dubbed “Mishaten percent”, could not provide a credible explanation for this case, and apparently this was the very foundation from which President Putin started his investigations.
The license for OyuTolgoi was sold by Enkhbayar himself, not by asubsequent government as he now claims.
Friedland, who purchased OyuTolgoi, the richest copper deposit in the world, for USD 50 million from Enkhbayar, has contrived in every possible way to raise money through international stock exchanges. Likening his business in Mongolia to selling a USD5 t-shirt for USD100, he bragged at the Brazilian stockexchange about the fortune he was making there. However, news of his actions soon reached Mongolia, and Mongolians started eyeing OyuTolgoi with due suspicion.
In 2006, then-Prime Minister EnkhboldMiye made the first decision to exploit OyuTolgoi. His efforts, however, were hindered by suspicions about Friedland.And both the public and the Parliament stood unanimously against it. The next Prime Minister, Bayar, who viewed Friedland as unreliable to cooperate in the exploitation of this deposit, approached Rio Tinto, one of the biggest mining corporations in the world and provider of hefty financial assistance to Ivanhoe. Bayar met Friedland only once. But with Rio Tinto, he held lengthy discussions, which resulted in an undisclosed pact to eventually push Ivanhoe out of OyuTolgoi.
The OyuTolgoi Investment Agreement was signed in 2009 between Rio Tinto, Ivanhoe, and Government of Mongolia. It marked the beginning of a three-year old duel between Rio Tinto and Friedland. Because he owned majority of the stocks, the scale was heavier on Friedland’s side. However, Rio Tinto and Government of Mongolia jointly opposed each of his moves.
Ivanhoe is more of a stock
exchange player than an actual mining company. It takes risks in exploring
possible deposits, announcing its findings with hype and grandeur to fetch the
highest price. Thus, price fluctuations at stock exchanges are more important toFriedlandthan
OyuTolgoi’s(OT) copper and gold. Prior to the signing of the investment
agreement, OT’sstock price reached USD 17 at its peak to fall flat to USD 1.5.
This was due to regular mass hysterias surrounding OyuTolgoi. The regular
appearances and disappearances of these hysterias would prove beneficial for attentive
shareholders, and many witnesses insist that Friedland was behind them, either
orchestrating, financing or coordinating them.
Enkhbayar’s strangely “accidental” involvement also played an important role here. His involvement concentrated on luring criticizers of Enkhbold’s or Bayar’s cabinet, and it became even more palpable after the OyuTolgoi Agreement was signed. This agreement was penned only because Enkhbayar lost the Presidential Election in 2009, and because the new President did not veto the Cabinet’s decision. Now, Enkhbayar emerged as the harshest criticizer of the OyuTolgoi Agreement, becauseFriedlanddoes not want to be pushed out by Rio Tinto.
Rio is a massive company, owning mines and deposits all around the world. And they never confer more than 10% of the established company to others. The main reason Rio granted 34% to the Mongolian government by loan is that they wanted to expel Ivanhoe from the deal.
Enkhbayar’s regular announcements now focused on how he originally scored a deal from investors to keep 51% of OyuTolgoi for his beloved motherland Mongolia and her people, who now own only 34%, losing the rest to foreigners… It was only a game of words. OyuTolgoiis the property of Mongolia and willremain so in the future. The Government of Mongolia came into possession of this percentage by leveraging the profit to be made in the future from this deposit. Indeed 34% is a grand number for Mongolia, a country with almost non-existent mining experience. However, Friedland ultimatelynurtured the idea in order to further sink this inexperienced government into debt by presenting it with 50% of the operating company, and with the intention to eventually sell it to the highest bidder.
It became evident that Friedlandhad obtained a low-interest loan to be used by the Mongolian side for its expenses, and conveyed it to the Mongolian side at several times the original interest rate, and pressured OyuTolgoi LLC to accept it. Only after it was uncovered, and fiercely opposed byTsagaan, Bagabandi, and Rio representatives on the OyuTolgoi board, did his plan fail. Because, Ivanhoe Mines is the biggest stakeholder of OyuTolgoi LLC, Friedlandis able to make such decisions single-handedly.
Currently there is no pressing need to further explore OyuTolgoi lands, as its immenseestablished reserves will be sufficient for the coming fifty years, and exploration activities can be gradually carried out along with the excavation process. However, an increase in stock prices is of more importance for Friedland than the exploitation of OyuTolgoi. Abusing his superiority over other stakeholders, he started pushing for new exploration activities and wasting money in huge amounts. This further fueled hostility between Rio and Friedland. The scandal blaming the OyuTolgoi Agreement being neither fair nor profitable for Mongolia is more Friedland’s words than Enkhbayar’s. Enkhbayar is but a high-maintenance mouthpiece of Friedland’s.
Friedland and Enkhbayar are so overly inter-dependent that it is impossible for them to part ways. Each holds the other captive. Southgobi Resources LLC, a company owned by Friedland came into possession of its current coal deposit of 400 million tons with Enkhbayar’s involvement, and already raised USD2 billion on stock exchanges. At the request of Chuluunbaatar, and the effort ofEnkhbayar, equipment tender for this deposit was awarded to Liebherr, for which Enkhbayarearned USD 4 million. When conveying Chuluunbaatar’s request through phone, Enkhbayar promised Friedlanda number of mining licenses. Friedlandnow owns about 40 licenses in Mongolia, most of which was acquired with the direct assistance from Enkhbayar. However, because Southgobi is a public company registered at stock exchanges, any tender process is required to be transparent and under strict legal monitoring. If Enkhbayar falls, Friedland falls. If Friedland falls, Enkhbayar falls.
Money is of utmost importance to Friedland, as power is toEnkhbayar. These two traits formed the basis of a close cooperation; a close personal cooperation which started to impinge upon Mongolia’s foreign policy, principles, and geopolitical policy. At the intergovernmental session of a bilateral meeting whichtook place in Moscow in 2009, the issue of Mongolia was discussed by Russians and Chinese counterparts. The two sides agreed that the growing interest of western countries following the unearthing of vast natural resources in Mongolia conflicts with their geopolitical interests. Thus China and Russia have conspired to deter major investments by western countries in Mongolia, particularly in the mining sector. This notion displays their intent to bar Mongolia’s two decade-long effortto implement a third neighbour policy.
There is an evident link between the growing hostility against western investment in Mongolia and the Enkhbayar-Friedland duo. The book Confessions ofanEconomic Hitman wastranslated, published in large quantities, and distributed free of charge. Where did the finances come from? This book pinpoints Rio Tinto as the biggest economic hitman to start with. In truth however, this book belongs to the same sort of “literature” as “Jews secretly rule the world,” “Americans did not land on the moon,” and “9/11 was orchestrated by Americans themselves”; some resembling hypothesis, and others resembling provocation.
According to a recent study conducted by a foreign company, 75% of mining licenses in Mongolia actually belong to Chinese companies, meaning that our third neighbour policy has been reduced to a hoax. The well-resourced, massive campaign against western companies (the main pillar of Mongolia’s foreign policy balancing act) has already begun and is accelerating.
Enkhsaikhan, who recently became “bosom bodies” with Enkhbayar, has become a shining knight against the West since OyuTolgoi talk reached its peak around 2005. At that time, he all but became the foster son of old lady Wu Yi, former Vice Premier of China. Whenever he visited China, four bodyguards escorted him, insulating him from the rest of Mongoliandelegation. No Mongolian delegate in history has been the recipient of such respect and care in China. Even though Enkhsaikhan divorced his original party (the DP), and created his own one of almost no consequence, he still scored official invitations from China. There is not even a slim chance that our Chinese neighbours were not aware of his open threats and announcements calling for a state coup, revolution, and unconstitutional assumption of state power.
There are around fifty mega-large scale state owned enterprises in China, including those that have expressed their interests to participate in the exploitation of TavanTolgoi, such as Shenhua and Chinalco (which provides loans to Erdenes-TavanTolgoi LLC). All of their directors are members of the Central Committee of Communist Party of China, meaning their policy is not corporate, but governmental. With Mongolian parliamentarian election just a few months away,Chinalco expressed its interest in purchasingSouthgobi from Friedland. As a result of the serious public outrage following this announcement, the Minerals Law of Mongolia is now to be amended. Previously discarded articles to block, repress, and limit foreign investment, and calls to re-evaluate already signed investment agreements were brought up once again to be included in this amendment. Chinalco’s bid obviously will not succeed. More seriously, Rio Tinto could be kicked out and the OyuTolgoi project halted. With its solid state policy, strict discipline, and five millennia civilization history, it is natural for China to have calculated her interests and geopolitical gains carefully—especially in this case.
In fact, Mongolia accounts for a mere 0.1% in China’s foreign trade. Mongolia’s natural resources are not of that much of consequence for China, as they have recently announcedthat they have now become an oil exporting country,following the beginning of their offshore oil drilling. For Mongolian resources however, China remains the only market. If China does not purchase our products, Mongolia will collapse. This method called “isolation,” is employed by Russia and China on North Korea. They relentlessly block international sanctions against the country, but never really assist it, despite claiming to have friendly relations. When needed, North Korea serves as their mad dog on a leash, and they return the favor by providing a minuscule reward just to keep it from collapsing completely. North Korea is an isolated nation with only two neighbours - Russia and China.
Five hundred thousand heads have quarreled back and forth about TavanTolgoi for five years, but all for naught. This matter is a mix of public hysteria and various personal interests, and is stuck with no prospect of moving forward. During his visit to China last fall, Batbold promised to grant a majority of this deposit to Shenhua. In return, he offered nine mining licenses for a lofty price, and succeeded in selling them. This decision however, further fueled the ongoing battle, making the TavanTolgoi project even more impossible to be carried out. It is not important for China to necessarily own TavanTolgoi, for it already owns 75% of the mining licenses in Mongolia either secretly or in the open. For China, isolating this deposit, which is attracting much western investment, would be a much better alternative.
No matter how hard it is pushed, Mongolia’s coal output will not exceed 50 million tons per annum. For instance, Southgobi has decades of reserves on its own, and is now in the process of holding talks to purchase Nyamtaishir’s part of the deposit. Therefore, it is a much better move geopolitically to thwart western investment in Mongolia by the hands of Mongolians, than bluntly trying to get into the TavanTolgoi project.
Enkhbayarhimself is an avid partner of China in the minerals business. It did not escape the eyes of the free press when Enkhbayar travelled to Beijing, just before the Presidential Election in 2009 and at the height of his election campaign, on the pretense of visiting his sick mother at a Chinese hospital. In fact, it was his mother-in-law, not his mother at a hospital. Secondly, her daughter wasn’t visiting her in China, she was travelling in Korea. And thirdly, Enkhbayar never went to the hospital. However, he did host numerous meetings with Chinese companies at his hotel.
How would you explain the fact that his younger sister purchased a luxury townhouse located in the most prestigious part of Beijing, resided mostly by Chinese celebrities? How can an unmarried person, previously having worked as a public servant at the Mongolian Embassy in Singapore afford such property? During his meetings, Enkhbayar gave his verbal agreement that the license for a certain gold deposit near the Mongolia-China border would be readied after the election, and suggested that they commence “digging” from their side of the border. How come then-President Enkhbayar’s letter to influential political and business figures in Australia and in the USA, naming his delegates for negotiation, included the head of his office, Bilegt, as the only Mongolian, plus four Chinese citizens?
Tumurtei iron ore deposit was owned 50% by a Chinese company, 25% by a Mongolian citizen, and 25% by Enkhbayar’s wife’s sister. Her share was hastily sold when rumors started. An apartment located at the most prestigious Kutuzov Avenue in Moscow was purchased in the name of Enkhbayar’s sibling and sold for almost USD1 million, also amidst rumors and speculations. Who purchased the USD4 million house for Enkhbayar’s wife’s sister and her husband, where they live unemployed in San Francisco? Chief of Customs Department in SelengeAimag personally looked over the construction of a building complex in Enkhbayar’s mother’s name located on the bay of Lake Baikal. Whose money was that and where did it come from?
Now charges have been filed against Enkhbayar and he has been arrested. The investigation and his crimes stemmed long before from inside of Enkhbayar’s faction at the old MPRP (now the MPP). Constantly under his mercy, with ever-increasing possibility of prosecution or jail time, it was impossible for those under Enkhbayar’s auspices to carry on. Former customs chief Baatar – is a prime example of that. Baatar obviously was corrupt, but the whole process was thoroughly organized by Enkhbayar. Next comes the Khurelsukh’sincident, and the case of Badamjunaiand Zandanshatar. When visiting Korea, Enkhbayar asked his Korean counterpart for the records of them gambling taxpayers’ money away at a Seoul casino. Even though the President of Korea agreed in the name of diplomatic courtesy,in a country bound by strict legal regulations and processes, only the copiestheir passports provided at the casino entrance were given to Enkhbayar. These were published numerous times on daily newspaperZuuniiMedee. However, the most interesting fact remains that Enkhbayar’s wife travelled to Seoul to retrieve these documents in person.
These curious cases marked the beginning of a secret “servile war” against Enkhbayar. Still, entrapped deep in his web, no one could voice their resistance strongly except for Khurelsukh, Nyamdorj, and Bayar. Thanking and congratulating President Elbegdorj on Enkhbayar’s arrest is their cheap ploy to re-direct public perception and demonstrate their innocence in this matter. Once Enkhbayar went on a hunger strike, it was out of fear from his wrath that they have organized a party meeting at night, producing a document which begged for mercy, and a more humane and kind approach towards Enkhbayar.
Left with nothing to lose, Ulaan, quite contrary to the meaning of his name in English “Red”, was one of the first ones to go running to Enkhbayar unabashed. He embezzled a fortune from the state, and materials of his activities are kept with Enkhbayar. He bartered a copy of those documents to Baabar, who is now using them as a tool in his harassments and threats. Some of Ulaan’s acts were solo, while some were the result of a team effort with Enkhbayar. One of them is the incident of USD3 million debt of DarkhanMetallurgicalPlant. This plant was completed with Japanese assistance, and was taken over by Mongolians in 1989. However, a company, Monimpex, was contracted, and additional investments were made because the Mongolian side still could not operate the plant. Soon Monimpex declared bankruptcy, and the Japanese investment of 10 years -- USD3 million -- has disappeared along with the company. When the Japanese demanded back their investment, then-Minister of Finance Ulaan signed and sent an official letter stating that there were no legal foundations for Mongolian government to pay the sum. The Japanese then appealed to Darkhan city court and lost. The matter was finally settled when a contract was signed between the parties to repay the USD3 million with the products from the plant in the course of 25 years. The certificate of this unreliable debt was bought by Ulaan for USD 200 thousand. He, the Minister of Finance, then allocated the USD3 million debt to Japan in the annual State Budget of 2005, earning himself a USD 2.8 million bounty. No wonder only two options await him today; joining Enkhbayar or serving jail time.
Chuluunbat is also with Enkhbayar now. They share a long history of joint business affairs. When Chuluunbat was serving as the President of Mongolbank, he issued a letter of credit on USD200 million from the foreign reserves of Mongolia, undisclosed to anyone. It was followed by a lame explanation that Mongolians would be able to buy apartments by partaking in an all-round program called “Sufficient Livelihood by Salary” financed with the premiums he earned from importing vegetable oil from Malaysia to Saudi Arabia. The spectacle is remembered by many, when both then-President Enkhbayar and then-Prime Minister Enkhbold raced to participate in the ceremony to lay foundation of those salary-supported apartments for the sake of good PR.
Sometime later, Mongolbank’s letter of credit melted away like a spring snow. Then it was purchased by a German individual from a bank in Holland. When he demanded to be paid his money, officials at Mongolbank expressed no knowledge of that matter, resulting in a court dispute. If poor ill-named Nyamdorj did not halt this matter by immediate closure of this letter of credit, Mongolia would have fallen into a USD200 million debt instead of a current USD22 million one. In response to this matter, Chuluunbat spent a hefty amount of money to organize Nyamdorj’s dismissal from his position as the Speaker of Parliament. Matters of little consequence such as appealing to the Constitutional Court and others were achieved by some small figures who were not aware of the true nature of matter; Burmaa and Lkhagvajav. Many other frauds of Chuluunbat are known to Enkhbayar, so who else is left for him to seek refuge with?
Raash, Bat-Erdene, Batbayar, Munkh-Orgil, EnkhboldMiye, Otgonbayar, S. Batbold, and many others have escaped troubles by now. For instance, poor Batbayar had his hands in one of the current cases against Enkhbayar regarding the old hotel building, and is now indebted to Enkhbayar for 1 billion tugriks. Now he has nothing; no money, no Enkhbayar, and no party. In 2004, Enkhbayar himself declared that then-chief of the railway agency, Raash, keeps USD 3 million in-hand, in his safe box at home.
Batbold and Munkh-Orgil have invested millions of tugriks into Enkhbayar-owned TV9, with no return. However, they never complained because they were given more than enough incentives. Many TV viewers saw how Enkhbayarcalled former national wrestling champion and current Member of the Parliament Bat-Erdene on the night he was arrested. Our beloved champion of Mongolian national wrestling Bat-Erdene replied in his baritone voice “The number that you have dialed is not in use.”
The primary advocate for Enkhbayar’s tainted international businesses, John L. Thornton, is the main perpetrator of the campaign to politicize and hype Enkhbayar’s case. A professor at Tsinghua University in Beijing, he is also a member of the International Advisory Council of the Chinese sovereign wealth fund China Investment Corporation. When he was serving as the President and Co-CEO of Goldman Sachs, Thornton visited Mongolia numerous times, and became quick friends with Enkhbayar. In 2008, Thornton and then-President Enkhbayar signed a Memorandum of Understanding to provide about million portable computers for national program “One child–One computer.” However, the number of computers sent to Mongolia never reached this number. Interestingly,Enkhbayar’s son chose a veteran Sachs employee as his bride.
Officials of this bank, who never delivered their promised computers for Mongolia’s children, but produced a bride for Enkhbayar’s son, are not eligible to oppose Mongolia’s fight against corruption. There is a growing suspicion that, in fact, it was Enkhbayar’s daughter-in-law, not his daughter who produced and broadcasted materials, spoiling Mongolia’s reputation internationally. It is probable that Thornton is using this girl, who resigned her position at Sachs pledging to work for her family business, as Enkhbayar’s puppet. Thornton spread vicious rumors worldwide for his “good pal”, and provided mostly bogus information to influential figures in London, Washington D.C, and some international organizations. His partner Minton’s close ties with Enkhbayar date back to when he was serving as US Ambassador to Mongolia. Minton provided an incorrect forecast of the 2009 election results to his superiors, assuring that Enkhbayar would once again be elected President. After returning to the States, he established an NGO under the name The Korea Society. When Minton tried to include Mongolia in the activities of his organization, he faced strong opposition from a better established organization The Asia Society. When President Elbegdorj paid an official visit to the United States, The Asia Society honored him with an award, further fuelling Minton’s discontent.
Another great advocate for Enkhbayar has emerged from all the way across the pond, in the distant United States of America. Senator Dianne Feinstein, an elderly lady of almost 80 years of age. With her money and power she ranks in the top four influencers of current USA policy, and is a close friend of Secretary Clinton. Senator Feinstein is also the wife of Richard Blum, one of the top billionaires in America, and is the richest woman working in the US Senate. Daughter to a Russian Jew who fled to America during the October Revolution, she detests communism, was born and raised in San-Francisco, and represents California in Congress.
Enkhbayar first met Mr. Blum and Senator Feinstein in 2002 in the States. In order to utilize the status and reputation of this influential billionaire, Enkhbayar asked Mr. Blum to become an Honorary Consul of Mongolia. The couple immediately warmed up to this young and energetic “democratic reformist,” who “annihilated” communism in the very heart of Asia. In 2003, they visited Mongolia, where Enkhbayar himself made introductions of his country, and then-Deputy Foreign Minister Batbold took them on a helicopter tour around the country. The reason why Mr. Blum agreed to this offer was obviously not due to any monetary or tangible benefit. He simply liked the young “democratic reformist” he saw in Enkhbayar. Since then, they have become close family friends. The elderly couple loved Enkhbayar as their own son. Enkhbayar was not only a welcome guest at their home whenever he visited the States, but his daughter also stayed at their mansion during her stay in America. It displays a personal relationship of an almost sentimental level.
As soon as he was arrested, Enkhbayar authored a heartbreaking letter in English, describing himself as a repressed, political prisoner. This letter was sent in mass to numbers to foreign embassies, international organizations, renowned figures and others. Of course, Blum and Feinstein were on the very top of this list. Feinstein took immediate measures to issue a personal statement, pressure the State Department to issue a statement, and halt plans for Secretary of State Clinton to visit Mongolia this summer. She even succeeded to recruit Britain’s former Prime Minister Tony Blair and UN Secretary-General’s involvement in this issue. Who cares if Enkhbayar is the prime suspect of several large-scale corruption cases, his “well-being” should top concerns of a whole nation! As soon Feinstein mentioned his “well-being,” Enkhbayar tactfully declares a dry-strike, endangering his health on purpose. No one would believe that when he was arrestedEnkhbayar proudly announced that he would never declare a hunger strike, for this would only satisfy his enemies. But it’s different now. He raised a huge havoc on the matter, and threatened doctors who suggested enforced medical action; his wife has played a main role in delivering those threats.
The ten-day strike would obviously leave a mark on his once-polished look. The plot was for Enkhbayar to send a photograph of his famished and rugged self to western media, who by Feinstein’s orders should launch a “hate campaign” on Mongolia. By the words of an influential senator, American newspapers have unanimously declared how Mongolia fell back from her accomplishments in democracy. Enkhbayar’s close buddy, former Ambassador to Mongolia, Minton, has played a leading role in this spectacle. Once a beaming icon of democracy, Mongolia is portrayed as having become a ghastly display of repression and violator of human rightsin just a few days.
Feinstein and Blum don’t know anyone from Mongolia except Enkhbayar and his family. Their perception of our country is based on Enkhbayar’s words alone, and Enkhbayar-hosted tour in Mongolia. They don’t know that Enkhbayar is the chairman of a communist party, which was registered in Guinness world record as the only political party in the world which was in power for the 86 years out of last 90 years. They don’t know that when his original party changed its name to Mongolian People’s Party, leaning towards a more social-democratic orientation, they met severe resistance from Enkhbayar, who later formed his own party under the old communist name of Mongolian People’s Revolutionary Party.
They don’t know the fact that during every election, Enkhbayar is assisted by Mongolian neo-Nazis. They don’t know that, bizarrely in Ulaanbaatar, there are young people who worship Hitler, wear swastika adorned leather uniforms, and beat and blackmail foreigners for money. Perhaps, Feinstein and Blum are not aware of the fact that this was published several times on international news websites.
They probably don’t know that Enkhbayar organized dozens of assemblies, repeatedly calling on the Mongolian people to launch a bloody revolution that would seize state powers by unconstitutional means. By percentage, Mongolia is the biggest victim of communist-led massacres along with Cambodia. They don’t know that in late 1930’s 30 thousand of Mongolia’s 700 hundred thousand people were slaughtered by the name of enemy of revolution. Even more, they don’t know that a pregnant woman, tagged as the enemy of revolution, was shot at that time, and that she was the governor of a province where Enkhbayar’s mother lived. They are not aware of the fact that one of the main candidates who would compete in the parliamentary election on behalf of Enkhbayar’s party is swearing an oath that says “In 1937, officers wearing this uniform cleaned our country of foreign enemies, and now I shall carry on their deed to sweep foreign looters from my country,” clad in the uniform of Interior Ministry killers of the 1930’s.
Perhaps, they don’t know how Enkhbayar embezzled television equipment and machinery to establish his own mouthpiece, TV9. They don’t know that he obtained the license to broadcast European soccer championship for several hundred thousand dollars, and is now in the process of purchasing two other television stations.
When Enkhbayar was at his heights as the leader of the opposition party, one of the leaders of Mongolian democracy, Zorig was assassinated. Feinstein never heard that a so-called suspect of this murder, a Mongolian, was kidnapped from USA, imprisoned for a year here and later discharged as innocent. She never heard how another suspect was kidnapped on then-Prime Minister Enkhbayar’s orders from France through Germany, and was tortured during his imprisonment. It is for sure that Feinstein does not know how the suspect’s lawyer was wrongfully convicted for disclosing “a state secret” and imprisoned. Feinstein does not know that the suspect died within a year from his release.
Seized by corruption and bribes, Mongolia is now in agony, which now rivals the corruption levels experienced during our time of communist oppression. International friends, in particular, Americans warn how this young democracy is slipping farther into oblivion due to corruption. We, Mongolians are also immensely troubled and ashamed of the fact that we are now one of the most corrupt nations in the world. Corruption is devouring our country, along with our democracy, our principles, and our pride.
When Enkhbayar was Prime Minister of Mongolia, U.S. Ambassador John Dinger specifically named Enkhbayar’s cabinet as being overly-corrupt. Even though, not in line with diplomatic etiquette, Mongolians accepted his words as the well-intentioned warnings of a friend. Americans continuously express their support for Mongolia’s democracy. But there is no such thing as a corrupt democracy, and there never should be one.
As of today, investigations of only four out of Enkhbayar’smany instances of corruption are concluded by the prosecutor’s office. These four cases account for over USD6 million. It is only the surface of crimes accounting to tens, or even hundreds of millions of USD. Is a political figure, who embezzled that kind of sum, left free in the name human rights in America?
The prosecution authority delivered notice to Enkhbayar ten times over a full year, requesting him to come for questioning. He never complied. What do you do in America under the same situation?
The arrest of Enkhbayar was clumsy and rude. But that is the current level of Mongolian police professionalism. You can also find a video of Enkhbayar, covering his ears with hands, and yelling expletives at the prosecutor who was reading his sentences. What do you do in America when something like that happens?
Big nation as it is, I assume that America has more prisoners than Mongolia, and consequently, more of them going on hunger strikes. However, I don’t recall a single incident where a prisoner has died of a hunger strike in America. It is certain that the state enforces appropriate measures to prevent that.
As for Mongolia, in average 20 such incidents occur annually in prisons. And each of them ends with an enforced life-saving medical treatment. This is our law. It may seem crude to some, but it is our law, approved by our representatives. Even though Enkhbayar is claiming to be a political victim, in fact,he is a notorious figure who is suspected of severe crimes in violation of the Criminal Code of Mongolia. Perhaps lady Feinstein could not care about Mongolia’s laws, and is only concerned with Enkhbayar’s health. But the State of Mongolia has never threatened Enkhbayar’s health or well-being. Indeed, the State of Mongolia, for the first time in her history, has commenced a substantial battle against corruption. Today, there are nearly a dozen influential political figures entangled in corruption crimes and awaiting court orders.
Enkhbayar claims that he is the victim of political oppression started by the ruling opposition party. No! It is rule of law that has been started. The state is responsible for punishing those who have violated the law and making sure that justice is served on behalf of the victims. In any nation, in any society theft is never a political matter.
Is former President of France Jacques Chirac a political victim? What about former Chancellor of Germany Helmut Kohl? What about Taiwan’s ex-President Chen Shui-bian, or Gloria Arroyo, former President of the Philippines? Were they all oppressed and vilified?
PS: This time, Spider web-6 is delivered to multiple newspapers concurrently, except for the Daily News. Because they delivered the previous ones to Baabar, who conceals and trades the materials, and advertises himself as the author. In his recently published book “100 influential figures of the last century,” he not only included Friedland, but also celebrated him as Baron Robert, borrowing the name of a historic figure, who assisted Mongolia enormously in gaining her independence. It is probably true what people say about Baabarbeing paid by Friedland. Though seemingly a harsh criticizer of Enkhbayar, the two of them are connected. Baabar has delivered my previous article to Enkhbayar’s home, and promised not to publish it.
By PhD.B.Ganbat.18 May, 2012
B.Ganbat is a columnist, specializing on investigating corruption cases. He has published numerous articles over the last decade, all of which exposed scandals concerning large-scale corruption and bribery.
NambarEnkhbayar, Chairman of the Mongolian People’s Revolutionary Party, which single-handedly ruled over Mongolia from 1921-1990.Former Prime Minister, Parliament Speaker, and the Third President of Mongolia until 2009.Public nickname – Godfather of Corruption.
Ulaan, current MP, orthodox planner, and twice Finance Minister, including one term in Enkhbayar’s cabinet.
Terbishdagva, current MP, an orthodox, former Ambassador to Germany during the abduction in France of a suspect in Zorig’s assassination.
Chuluunbat, current MP, two-times Governor of Mongol Bank
Batbold, current PM
 Bat-Erdene, current MP, wrestling champion
Enkhbold, current MP, former Mayor of Ulaanbaatar city, PM
Munkh-Orgil, current MP, former Foreign Minister, Justice Minister and Chairman of the State Emergency Committee during the 1 July 2008 civil disturbances
Tsengel, current MP, former Minister of Road and Infrastructure
 Rash, current MP, long-term General Director of Russo-Mongolian Joint Railway, former Minister
 Bayar, current MP, former PM during the 1 July 2008 civil disturbances
Nyamdorj, current MP, three-times Minister of Justice
Lundeejantsan, long-term MP, former Parliamentary Speaker
Bagabandi, second President of Mongolia
Baabar, well-known publicist and a historian
Enkhsaikhan, former MP, PM, Chairman of a minor party split from DP
Jargalsaikhan, former MP, and Minister involved in numerous shady deals
Otgonbileg, died in a helicopter crash during his tenure as MP
One of the three persons pardoned by President Clinton on his last day in office. At that time he was suspected of tax evasion, and was under investigation by US authorities. Clinton later revealed in his memoir that pardoning of Marcrich was done on the personal request from Israeli Prime Minister.
OyuTolgoi, the world’s largest untapped copper and gold deposit in the southern part of Mongolia
Tsagaan, one of three Mongolian members of OyuTolgoi Board
TavanTolgoi, world’s largest untapped deposit of coking coal
Baatar, the only high ranking official of that was arrested and sentenced to jail in 2005.
Khurelsukh, former MP, current Secretary of Mongolian People’s Party
Badamjunai, current MP, Minister of Food, Agriculture, and Light Industry
Zandanshatar, current MP, Minister of Foreign Affairs and Trade
Batbayar, MP, former Mayor of Ulaanbaatar
Otgonbayar, current MP, Minister of Education, Culture, and Science