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Logo of Phnom Penh Post newspaper Phnom Penh Post - CMAC scandals prompt management purge

CMAC scandals prompt management purge

SAM SOTHA was removed from his post as Director General of the Cambodian Mine

Action Center (CMAC) on Wednesday, finally paying the price for months of

denials and evasions in the face of the demining organization's seemingly

endless series of scandals.

In a press release issued on the afternoon of

August 4, the Chairman of CMAC's Governing Council, Ieng Mouly, announced that

the Prime Minister, Hun Sen, had agreed on August 2 to replace Sam Sotha with

the current Deputy Commander-in-Chief of the RCAF Lt. General Khem

Sophoan.

Sophoan is well regarded in the RCAF and among donors. One donor

said that Sophoan was seen as being honest, hard-working, and having the ability

to build up teamwork; however he lacks management experience of an organization

the size of CMAC.

Sam Sotha will retain his position until the actual

signing of the sub-decree necessary to remove him, which is expected to occur

next Tuesday.

The press release also announced the removal of CMAC

Assistant Director Niem Chouleng and Director of Finance Ek

Boulin.

Chouleng, fingered in June for channeling more than $50,000 in

Royal Government funds to kickbacks to Ministry of Finance personnel, has been

shuffled into a "temporary" position on CMAC's Governing Council. Current CMAC

Director of Planning Oun Sang Onn is slated to temporarily fill Chouleng's

former position pending the recruitment of a permanent

replacement.

Boulin has in turn been made assistant treasurer, a position

previously held by Ieng Mouly's brother, Ieng Vuthea.

Ieng Mouly's

announcement has long been expected and came as a surprise to no one save

perhaps Sotha himself, who last month dismissed the mounting evidence of

financial misappropriation, fraud and nepotism within CMAC as "small

stuff".

Sotha's dismissal came in the wake of media leaks of increasingly

lurid details from a long-suppressed audit of Royal Government funds to CMAC by

the international accounting firm KPMG.

Exclusive media access by the

Phnom Penh Post to the entirety of the KPMG report reveal that Sam Sotha was

personally cited for numerous instances of apparently fraudulent

misappropriation of funds.

The KPMG audit report catalogues hundreds of

thousands of dollars of Royal Government funds misappropriated by CMAC

management between 1995-1998.

The scandal - and evidence of Sam Sotha's

participation in it - will likely widen following the release later this month

of a far more comprehensive KPMG audit of all funds supplied to CMAC from the

UNDP trust fund, which supplies 95% of CMAC's operating

expenses.

Although the 62-page KPMG audit report was released in

mid-June, its recipients - the Cambodian Ministry of Finance and CMAC management

and foreign donors - have consistently refused to make public the audit

results.

CMAC Director-General Sam Sotha limited his comment on the audit

report after its initial release to an admission that KPMG had discovered that

accounting records for the period from Dec 1 1993 to October 31, 1995 were

missing.

A glance at the KPMG audit report reveals good reason for

Sotha's reticence to discuss the audit result.

A few of the more

disturbing "financial irregularities" revealed in the KPMG are as follows:

  1. $102,177 of Royal Government funds provided to CMAC between 1995-1998 are

    unaccounted for. The KPMG report notes that "...The verbal explanation from CMAC

    management was that such a shortfall in funds was on account of costs incurred

    for 'speeding up processing and release of funds' which we are unable to

    substantiate'."

  2. Out of a total of $42,077 in cash disbursements and transfers, US$38,865

    "...were not supported by adequate supporting documentation .. so] the

    reasonableness of the expense cannot be ascertained."

  3. $22,508 of Daily Subsistence Allowances (DSA) allowed to CMAC management

    when traveling on CMAC business were ruled as "in excess of their entitlement".

KPMG notes that in direct contravention of CMAC guidelines, DSA was paid to

non-CMAC employees as well as to Sam Sotha while he was on official

leave.

KPMG recommended that "...$8,054 in excess of [DSA] entitlement

should be recovered from the Director General [Sam Sotha]."

Sotha's

largesse with Royal Government funds was apparently not limited to dodgey DSA

claims.

The justification for Sotha's claim of five days DSA for a visit

to Tokyo in last December also raised the eyebrows of KPMG

accountants.

According to the audit report, "...the tickets as well as

the passports of the Director General did not indicate that he had visited Tokyo

during that period."

 

All in the family: the CMAC guide

to nepotism

 

By Phelim Kyne

THE KPMG audit report offers the first

substantive evidence of the extent to which nepotism governs the hiring of top

CMAC management.

In a section of the KPMG audit report titled "Hiring of

Close Kin or Relatives", KPMG charges that "relatives and close kin of the

Chairman [Ieng Mouly], Director General [Sam Sotha] and Director of Operations

[Pan Sothy]" have been hired for the following six key positions within

CMAC:

  1. Ieng Vuthea, Assistant Treasurer (Ieng Mouly's brother; Ieng Mouly himself

    has denied that the position "Assistant Treasurer" exists).

  2. Ouk Wathanak, Regulatory Officer (described by KPMG as Ieng Mouly's

    brother-in-law, a charge that Ieng Mouly denies).

  3. Muth Vuthoeun, Secretary to the Governing Council.
  4. Chea Eang, Executive Secretary (believed to be the nephew of Sam Sotha's

    wife).

  5. Kong Sisodeth, Receiving Inspection Officer.
  6. Kay Sanoun, Chief Security and Communications.

In an interview with the Post last month, Sotha deflected allegations of

nepotism by insisting that only one of his "blood relatives" was employed at

CMAC, neglecting to mention the hiring of in-laws such as Chea Eang.

Sam

Sotha's wife is also listed by KPMG as a beneficiary of CMAC hiring policies,

receiving unauthorized Royal Government funding to attend a demining conference

in Oslo in August 1997.

The "management response" that follows the KPMG

allegation justifies Mrs Sony Sam Sotha's presence in Oslo due to the fact that

"two other [participants] could not attend...[and] Mrs Sony Sam Sotha was then

advisor to the Chairman of the Governing Council ... [and] possesses a great

deal of knowledge of [the] land mines issue."

Long-whispered allegations

that Ieng Mouly has used CMAC positions as rewards for members of the Buddhist

Liberal Democratic Party (BLDP) of which he is president are also substantiated

by the audit report.

KPMG notes that "...key members of the Buddhist

Liberal Democratic Party are placed in key positions in CMAC, such as the

Assistant Director General (Niem Chouleng), Assistant Treasurer, and Head of

Regulatory Authority."

However, the "management comments" below the KPMG

allegations concede that members and staff of CMAC's Governing Council are

"political appointees...recruited on the basis of their loyalty ... confidence

and trust."

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