LEFT TO LANGUISH, COSTLY FIRE TRUCKS PRESENT A REMINDER OF THAI DYSFUNCTION

[Now, after years of judicial proceedings and investigations by Thailand’s anticorruption authorities, the Supreme Court here last month ruled that the deal, for the equivalent of about $183 million, was “massively overpriced.” It sentenced two former senior Thai officials to prison terms for malfeasance and bid-rigging in the procurement of 315 fire trucks, 30 firefighting boats and other equipment bought from the General Dynamics business unit, then known as Steyr-Daimler-Puch Spezialfahrzeug.]

By Thomas Fuller

Giulio Di Sturco for The New York Times

Never-used fire equipment parked in a  lot in Sai Noi, on the outskirts of Bangkok.

SAI NOI, Thailand — In a weed-covered parking lot on the outskirts of Bangkok, tens of millions of dollars of never-used firefighting equipment sits decaying, punished by bouts of searing heat, monsoon rains and a flood that swamped the area two years ago.

The equipment, bought from an Austrian unit of the American defense contractor General Dynamics, has remained idle since it was delivered seven years ago in a deal that quickly fell under suspicion because of its high price tag and a lack of competitive bidding.

“It’s so sad how much money is being wasted here,” said Suthep Ruengprat, the assistant manager of the company storing the trucks. “We don’t know if the engines still function, or if anything works.”

From the start, the tale of Bangkok’s languishing fire trucks has been a potent symbol of dysfunctional government — and the foreigners who appeared to take advantage of it.

Now, after years of judicial proceedings and investigations by Thailand’s anticorruption authorities, the Supreme Court here last month ruled that the deal, for the equivalent of about $183 million, was “massively overpriced.” It sentenced two former senior Thai officials to prison terms for malfeasance and bid-rigging in the procurement of 315 fire trucks, 30 firefighting boats and other equipment bought from the General Dynamics business unit, then known as Steyr-Daimler-Puch Spezialfahrzeug.

Yet justice remains elusive, Thai officials say. Both convicted men, a former chief firefighter and a former deputy interior minister, have fled the country, according to the Thai news media.

Also absent on the day of the verdict — and during the trial — was Steyr, which was listed as a defendant but closed its office in Thailand in 2008 after the investigation started. The case against the company was suspended after it left the country.

In addition, Thai officials say, they were unable to conduct a credible investigation into the unspoken question in the case: Did bribery grease the deal? To do so, they say, they would have needed help from the Austrian government and General Dynamics, which they say they never got.

While the case dragged on, Bangkok decided it could not use its expensive new equipment because it feared that putting the trucks into service would legitimize the purchase and possibly affect the outcome of investigations.

The Austrian government did not respond to repeated requests for comment sent to the embassy in Bangkok. General Dynamics says it cooperated with the authorities but has declined to discuss the case in depth because it is in the middle of arbitration over a financial settlement with Bangkok.

In its decision last month, the Supreme Court said the deal that brought the trucks to Bangkok “originated” in 2003 with a letter from the Austrian ambassador to Thailand, on behalf of Steyr. The court ruled that the deal was falsely portrayed by Austrian and Thai officials as a government-to-government sale, in that way allowing Steyr to avoid a competitive bidding process. (The company has since changed its name to General Dynamics European Land Systems-Steyr.)

The National Anticorruption Commission in Thailand described Steyr as “liable” in the case because it “facilitated government officials in committing the offenses.” The commission ordered the deal canceled in 2008 after completing an investigation.

Nitiphan Prachuabmoh, a director of the international division of the commission, said he had spent four years trying to engage the Austrian authorities. “We got no result,” Mr. Nitiphan said. “It’s their jurisdiction, and we can’t do much.”

Mr. Nitiphan said he had also been in touch with the American authorities and had raised the case with the antibribery committee at the Organization for Economic Cooperation and Development, of which both Austria and the United States are members. He said he hoped that the Supreme Court verdict would spur an investigation.

A spokesman for the United States Department of Justice, which would oversee investigations of possible corruption by American companies and subsidiaries overseas, responded to a query in an e-mail saying the department does not generally confirm or deny whether a matter is under investigation.

In the decision last month, the Thai Supreme Court sentenced Pracha Maleenont, the former deputy interior minister, to 12 years in prison and Athilak Tanchukiat, the former head of Bangkok’s Fire and Rescue Department, to 10 years.

The court said the Steyr ladder trucks that were bought were 67 percent more expensive than Mercedes ladder trucks bought in a previous procurement. And fire trucks with the capacity to carry 2,000 liters, or more than 500 gallons, of water were each bought in the Steyr deal for 18 million baht, or about $580,000 — six times the price of a similar Isuzu fire truck previously bought in Thailand, the court said.

“The panel of judges, by majority, resolved that the purchase of fire trucks and fire boats with disaster relief equipment in this case was not reasonable and caused damage to the state,” the judges wrote.

Sungsidh Piriyarangsan, one of the leading experts in Thailand on corruption who has closely followed the case, said the deal followed a pattern of grossly overpriced contracts.

“This is a type of corruption that we have seen many times,” Mr. Sungsidh said. “They closed off competition.”

“You won’t find evidence of the bribe, but everyone assumes there must have been payoffs,” he added. “If you want a project like that, you need to pay for it.”

An American diplomatic cable from 2006 made public by WikiLeaks discussed the fire truck case and suggested that payoffs may well have been made.

“In Thailand, the odds are pretty good that a no-bid government contract could involve money flowing to politicians,” it said. “Whether the foreign suppliers might be party to any possible corruption is not certain.” The cable also quoted the commercial attaché at the Austrian Embassy at the time saying that corruption allegations were “nonsense” and politically motivated.

After a visit to its offices by the governor of Bangkok, General Dynamics in 2011 offered a rebate of about 10 percent of the value of the deal. Thai government officials countered that they wanted the entire deal scrapped, and the full amount reimbursed. Financial aspects of the deal are now under arbitration in Geneva.

The arbitration process does not cover possible criminal aspects of the case.

Meanwhile, the costs for Bangkok keep mounting.

As a result of the legal battles, the municipality calculates that it owes storage fees for the equipment as well as accumulated taxes and customs duties amounting to more than $80 million.

@ The New York Times

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LETTER FROM INDIA

INDIAN BILLIONAIRES GET A PASS

[Mr. Birla, on the other hand, was treated as an unfortunate victim of politics and overenthusiastic investigators, and even of India’s historical mistrust of businessmen. On the front pages of newspapers and on television, leading businessmen expressed shock that Mr. Birla, whose company, Hindalco, was a beneficiary of a seemingly arbitrary allocation of coal deposits, had been dragged into the muck.]

By Manu Joseph

NEW DELHI — Prime Minister Manmohan Singh is a wise man, but in recent times no one in India has called him a “competent authority.” Yet, that expression, mentioned in a preliminary report by the Central Bureau of Investigation that formally opened a police inquiry, inspired a consensus in the news media that Mr. Singh was indeed the unnamed “authority” in question.

The report was a part of the bureau’s examination of the government’s allocation of the country’s coal deposits to private corporations between 2004 and 2009. Among those whose roles the bureau is interested in examining is one of India’s richest men, Kumar Mangalam Birla.

In their coverage of the report, India’s mainstream news media treated Mr. Singh and Mr. Birla very differently. Once again, Indian journalism appeared bold while attacking the prime minister and subdued when it had to investigate a billionaire.

There were insinuations that the prime minister was not revealing everything he knew about the allocation of coal deposits. Commentators and politicians taunted the prime minister and asked him to throw more light on the matter as he was not only the head of the government at the time of the allocation but also the country’s coal minister.

Mr. Birla, on the other hand, was treated as an unfortunate victim of politics and overenthusiastic investigators, and even of India’s historical mistrust of businessmen. On the front pages of newspapers and on television, leading businessmen expressed shock that Mr. Birla, whose company, Hindalco, was a beneficiary of a seemingly arbitrary allocation of coal deposits, had been dragged into the muck.

Industrialists asserted that accusations against top businessmen would further squeeze India’s economy. Columnists wondered if the investigating bureau had enough evidence to point a finger at the head of a major business. Eventually, in a strong hint that the prime minister had accepted that he is the “competent authority” mentioned in the bureau’s report, his office defended the awarding of the mining license to Hindalco in a statement that argued that no rules were broken.

Last week, the bureau raided Hindalco’s offices and in its Delhi office found 250 million rupees, or $4 million, in cash. The bureau said the cash was unaccounted for. Hindalco expressed surprise at the discovery. The news media reported on this development but did not dwell on it for too long.

A fact that will not startle any professional journalist in India is that the nation’s mainstream news media are firmly in the grip of corporations, which exercise control chiefly through direct or indirect ownership of news outlets and advertising budgets. It is rare for a major scam involving a corporation to be unearthed exclusively through a journalistic investigation. Most scandals, including the one over how the government allocated coal deposits, have surfaced as reports on investigations by government agencies or public interest lawsuits filed by concerned citizens.

The national fame of the anti-corruption gladiator Arvind Kejriwal, whose party will debut in electoral politics when it contests the Delhi state elections in December, is in no small measure due to the contribution of reporters suffocated by their own management. Mr. Kejriwal held news conferences accusing some of the richest Indians, including the billionaire Mukesh Ambani, of sponsoring corruption. This column has earlier argued that journalists used Mr. Kejriwal’s news conferences to report news that their employers would not have normally allowed. It is in recognition of this journalistic ruse that Mr. Ambani sent legal notices charging defamation not to Mr. Kejriwal but to several television channels demanding that they refrain from reporting on Mr. Kejriwal’s news conferences.

Except for the occasional reports on court rulings and briefings by government agencies, there is nothing much in India’s mainstream media that has hurt the nation’s big corporations. Indian journalism, it appears, has been tamed.

Manu Joseph is editor of the Indian newsweekly Open and author of the novel “The Illicit Happiness of Other People.”

@ The New York Times