T HE government has turned up the volume in its war of words with Sam Rainsy,

accusing the former finance minister of being illogical and irresponsible in his

criticism of Cambodia's business dealings.

In an 11-page report that

displays officials' peaking annoyance with the maverick MP, the government

blasts Rainsy for making "a number of unsubstantiated assertions which appear to

be based on rumor and hearsay. Under the rule of law, allegations without proof

are irresponsible and unethical."

The document, released to the media on

March 7, attempts to refute Rainsy's criticisms point-by-point, but the main

reproach is the ex-minister lacks hard evidence.

Rainsy has been waging

a vociferous campaign against a lack of transparency he perceives in recent

deals between the government and foreign companies.

He says ministers

have been by-passed in the "dubious" signing of contracts that are

unconstitutional and have been kept secret by the Cambodia Development Council

and the two Prime Ministers.

He alleges the rules of public tender have

been ignored and secret logging concessions and other guarantees granted, he

said.

Only dubious investors, resorting to bribery, would agree to forego

laws to take advantage of such a confused and lawless situation, he

said.

On March 2, Rainsy published a list of companies he claimed had

disrupted "free and fair competition."

He said the Malaysian-owned

Cambodian Lottery Corporation (CLC), had "ousted" French company Internationale

Des Jeux to run the national lottery.

In response, the government says

the CLC is running a private lottery and a decision on the national lottery has

yet to be made. Further, it accuses the ex-minister of signing a memorandum of

understanding with the French company without government authorization.

Rainsy claimed Muhibbah-Masteron (Malaysia), ousted Dumez-GTM (France)

for the Pochentong airport renovation.

The government counters that the

tender to renovate the airport had not been awarded as of March 6, and lashed

Rainsy for publicly commenting on a process that was not yet complete.

Rainsy also said Ariston (Malaysia), had ousted Hyatt (US) for a tourism

complex in Sihanoukville.

The government revealed Hyatt had submitted a

two-page document, which was disqualified for failing to meet the tender

conditions, while Ariston submitted a 300-page package which addressed all the

government's questions.

Rainsy said OTC-Telstra is enjoying a monopoly

over international telecommunications because of the government's lack of "a

global, coherent" strategic plan.

The government failed to respond to the

allegation, but claims the deal between OTC-Telstra and the Ministry of Post and

Telecommunications directs profits into the national treasury.

Rainsy

alleged petroleum distributor SOKIMEX enjoyed powerful political support and

engaged in illegal practices - such as fraud, smuggling and under-declaring -

with total impunity.

"For many years, SOKIMEX has been a major financial

supporter of the communist party which the Vietnamese installed in power in

January 1979 and now it bribes leaders from all sides."

The government

did not respond to the accusation, but praised SOKIMEX as a successful

"first-mover" in the oil business, saying it had been smart to pick up some of

the most favorable locations and industry positions in the

country.

Rainsy said the Royal Air Cambodge (RAC) deal with Malaysian

Helicopter Services meant a loss of state revenue, because the money collected

was independent from the state.

The government asserts it will receive 60

per cent of all RAC profits, once it makes any.

In addition, it denied

it had received an unconstitutional loan from the Malaysian company, saying the

government preferred to call it a "financial arrangement" under which no money

actually flowed into Royal Government accounts.

"So it must be concluded

no loan has taken place," the government report states.

Rainsy said he

was alarmed by the alleged granting of vast forestry concessions, similar to

that given to Malaysian company Samling Corp. Logging revenues should add $150

million to state coffers; however, the 1995 budget anticipates only a $1.5

million income, he said.

The government insists the only forestry

concession is the one granted to Samling, which it says has been required to

submit a master plan and an environmental impact assessment before starting

operation.

The companies most quickly established have been in the areas

of importing cigarettes and alcohol; smuggling; gambling; bars and prostitution;

fake banks; real-estate speculation; and in timber, Rainsy said.

The

ex-minister said Cambodian leaders were accountable to the international

community.

"Cambodians must show that they are making real efforts to

curb corruption in their country," he said, adding it should be a condition of

further international aid "out of respect to the tax-payers of the donor

countries."

"Unhappily, it is very difficult to demonstrate that we have

made serious efforts in this direction and we have little chance of convincing

our benefactors."

"Encouraging the professional and moral slackness of

the Cambodian leaders will only prolong Cambodia's misery and dependency and

will deceive those who are willing to support a good cause," he

said.

Countered the government: "Cambodia is less than a two year old

'reborn country.' We do not claim perfection in anything."