Investigations into a scheme in Lao

Investigations into a scheme in Laos in which private companies cashed government bonds issued in promise of payment for work they never performed have revealed the involvement of senior government officials who will never be brought to trial, a state auditor says.

The auditing of the so-called “ghost projects,” in which the Lao government commissioned the construction of roads that were later never built, is “very challenging for us,” the auditing official told RFA’s Lao Service this week.

“Those who are responsible for this corruption will never be prosecuted in our country’s courts, because national leaders were behind these projects,” RFA’s source said, speaking on condition of anonymity.

A “very powerful member” of the one-party communist state’s ruling politburo is also suspected of involvement, he said.

“They are now trying to resolve this problem by using ‘administrative approaches,’” he said.

'Commissions' paid for cash

Last year, the Lao government granted concessions to private firms to build roads in Oudomxay province in northern Laos to support the country’s 10th National Sport Games, which were held in December, RFA's source said.

And though those roads were never built, the contracting firms later converted bonds issued in promise of future payment into cash with the help of “commissions” paid to finance ministry officials, he said.

The scheme has caused losses so far of over 300 billion kip (U.S. $36,840,092) to the state budget, with little chance that money will ever be recovered, he added.

According to a report presented to the National Assembly last year by head of the Government Inspection Authority Bounthong Chitmany, Laos suffered losses from corruption of more than 1 trillion kip (U.S. $123 million) between 2012 and 2014.

Corruption among high-level officials in Laos is so widespread that it has deterred foreign investors, created problems with the country’s ability to enforce business contracts and regulations, and left many ordinary citizens frustrated and impoverished.

In 2014, Lao ranked 145 out of 175 countries on corruption in the nongovernmental organization Transparency International’s corruption perception index, which scores nations on how corrupt their public sectors are seen to be.

Reported by RFA’s Lao Service. Translated by Ounkeo Souksavanh. Written in English by Richard Finney.