By Julian Dierkes
One of the recurring challenges in trying to keep up with political developments in Mongolia is the extent to which these developments seem to be driven by rumours and accusations.
That is especially the case during an election.
What I continue to find very odd in this context is that allegations often do not seem to be examined as to their basic plausibility as they are repeated in the public.
In my remarks below, I do not claim that any of the allegations are unfounded or that individuals against whom they are levelled are innocent. I simply do not have the resources to really investigate any of these allegations and can only hope that Mongolian journalists and civil society will continue to intensify their activities in this regard.
In the past week, allegations against all three candidates have been made and have coloured the campaign. I look at these allegations to consider whether they appear to be plausible at all.
I ask these questions in good faith, not to bias any views about any of the presidential candidates, but as a comment on the campaign and the way it is unfolding. See also, my statement on my independence as an observer of developments in Mongolia.
A video is circulating that allegedly shows MPRP candidate S Ganbaatar receiving ₩50m (₮100m) from someone associated with the Korean Unification Church.
I do not have the technical resources to investigate the authenticity of the recording.
But I have to note that this is the third campaign in a row (if I recall correctly) that alleged funding from the Unification Church surfaces in Mongolia. The last two times these allegations involved Elbegdorj.
- Did anyone ever follow up on these allegations after the campaign and find out whether there is concrete evidence?
- What interest does the Unification Church have in Mongolian elections? Is there a plausible argument that would see them funding Ganbaatar’s campaign?
Moonies get a lot of publicity out of #Mongolia-n elections, featured every time.
This time Ganbaatar is alleged to have received funds.
— Julian Dierkes (@jdierkes) June 18, 2017
- Given past allegations about Elbegdorj, would Ganbaatar not be especially careful in interactions with the Unification Church?
- Would the amount alleged to have been exchanged be enough for Ganbaatar to consider compromising his reputation and integrity?
Battulag’s Offshore Account
DP candidate Kh Battulga’s reputation is perhaps even worse than that of most Mongolian politicians in terms of mixing personal profit with government business.
With the release of the Panama Papers last year and the appearance of a handful of Mongolian names in them, offshore accounts have increasingly been demonized even though it is unclear whether they are primarily suspected of serving as tax havens (not that plausible given Mongolia’s 10% flat tax until the IMF demanded a more progressive income tax), or as evidence for corruption. Anyone who is wealthy in Mongolia, of course, would be likely to hold a significant portion of their wealth in currencies other than the Tugrik given the Mongolian currency’s weakness over the past several years.
Battulga’s reputation and the discussion of offshore accounts makes it a plausible allegation that Battulga holds US$1.1b in offshore accounts.
Wait a second. Mongolia’s GDP is somewhere around US$12b. Could Battulag’s wealth really amount to the equivalent of 1/10 of the country’s GDP? Given the rapid growth of Mongolian GDP over recent years, it’s not very plausible to think of the accumulation of such wealth from compounded financial income or investments of earlier gains. In his recent statement on earnings, Battulga only reported holdings in meat processing and tourism. Those businesses do not contribute 10% to Mongolia’s GDP and I do not see any particular reason that these would be sectors that are so overvalued or so massively profitable that they would produce massive wealth.
But the amount of wealth that is reported to be held by Mongolians is a question that would need further investigation as well. Is it in line with the relation between GDP and reported wealth in other countries, for example? If it is, then perhaps the US$1.1b figure would become more plausible.
Also, some of Mongolia’s other purported mega-wealthy (e.g. Odjargal of MCS) might have something to say about Battulga’s industrial enterprises claiming any significant fraction of GDP.
Of course, offshore holdings are not the same as a share of holdings of GDP, but the money would have to have come from somewhere.
So, if there is a $1.1b fortune out there, Battulga’s statement on his holdings and earnings can’t possibly be true.
Where does this $1.1b figure come from in the first place. It appears to be reported on a website called wealthx.com for the year 2015.
Is this plausible? Here are some of the elements that make me wonder:
There are very few references to the wealthx reporting in the mainstream press and no references I could find at all in academic writing.
The website of wealthx is very sparse. It offers nearly no information about the company, other than that it is relatively clear that it is a consultancies that seems to sell “access” to überwealthy individuals.
Most worryingly to me as a social scientist, there is not even a hint of a discussion of methodology. There are some vague references to research, but what kind of research? Could it be that vein wannabe-billionaires self-report their fabulous net-worth here? Could Battuga’s industrial-sized vanity (yes, he did build a 40m-tall statue of Chinggis Khaan) have gotten the better of him and he reported his fortune as over $1b?
I have written to wealthx to try to learn more about their methodology but have yet to receive a response.
And what is even reported here? “Estimated net worth”. There is nothing about offshore accounts in that term. Yes, as I mentioned above, someone who did have significant amounts of cash in Mongolia would probably convert this to other currencies and likely hold this outside the country (and there’s nothing illegal or nefarious about that), but “offshore accounts” specifically as convoluted constructions of shell companies, etc. that are hidden on exotic islands to avoid taxes? Not mentioned here.
And, net worth does not mean cash, it means what his holdings are worth. Clearly, again, the holdings reported in his recent declarations are not worth $1b, they may not even be worth $10m.
Again, either his recent statements are wrong or this $1.1b figure is wrong.
Kh Battulga reports ₮161m (self+fam). Styles himself business tycoon. Seems like small income on investmnts in meat processing, tourism. 3/3 https://t.co/fCbvhemnz3
— Julian Dierkes (@jdierkes) June 18, 2017
None of this is conclusive in any way and others who have access to more detailed financial reporting in Mongolia and more resources to investigate may come to better conclusions, but for myself, I have to conclude that neither the US$1.1b offshore allegation is plausible, nor is Battulga’s income statement.
Ah yes, the millions and billions are being tossed around fairly liberally.
The current allegation against MPP candidate M Enkhbold is actually an “old” one, in that it stems from a recording of an alleged conversation involving Enkhbold about party finances and how the sale of high offices in the MPP government could be used to gain funding (namely,₮60b). A small part of this recording was released during the parliamentary election last year. [Note, that I am not trying to provide a full account of this allegation here, but rather look at its basic plausibility.]
Most people find it quite plausible that offices are being sold, in fact most Mongolians I speak to about this, assume that this is going on, irrespective of party in power. That, of course, is outrageous and shocking in and of itself. But the allegation is plausible on the face of it.
At the same time, I would have to say that from my personal perspective if there actually is evidence of the involvement of a party leader in the sale of offices, that would certainly disqualify that person from any political leadership position in my eyes.
The whole context of this allegation is complicated and casts doubt on its credibility that will have to be dispelled by further investigations, investigations that I, again, have no resources for.
The self-styled whistleblower, G Dorjzodov, has been doubted by some, though that happens to all whistleblowers, almost by definition, and does not by any stretch mean that he is not credible.
Why were these allegations not investigated further during the past year? [See paragraph on “media” below.] They were to some extent, but a court seems to have concluded that there was no definitive evidence that the voices on the recording are genuine.
Now, additional materials have been released, but those will also need verification.
With these allegations, I would thus conclude that they are at least basically plausible, but that they require much more serious investigation of the recording and of the parties involved.
These allegations are partly just evidence for how dirty the current campaign is.
Any views on mild austerity imposed by the IMF? We don’t know, that is not being discussed.
How to achieve growth that is economically, environmentally, and socially sustainable? The parties are not going to tell Mongolians.
Does anyone have workable solutions to Ulaanbaatar’s winter-time air pollution catastrophe?
Instead much energy and resources is being spent on looking for dirt on the other candidates and amplifying any discoveries.
I have to wonder whether all these revelations have any impact on Mongolian voters. Are they not sick of endless revelations with ever-more outrageous amounts of money? When the allegations fly in all directions, does that not simply give credence to a view that sees Mongolian parties as fundamentally corrupt?
Of course it is idle to speculate on this, since we will not know on what basis Mongolians will cast their ballot on June 26.
The fact that allegations of this sort are so massively amplified does make me wonder about the role of the media. It seems like most media outlets content themselves with shouting about allegations rather than investigating them. Or, they are so shackled by the funds they receive from parties, companies and others to safeguard against negative reporting about these “donors”, that they will not investigate these allegations.
Obviously, there are some exceptions to this. I very much hope that a different kind of journalistic ethic continues to grow beyond few examples like MongolTV’s E Lkhagva and D Jargal “de Facto”, so that the public’s interest is served by investigating the wrong-doing of officials by providing credible and concrete evidence.