The Tax Department yesterday escalated its attack on the Cambodia Daily by filing a legal complaint accusing its founder and two directors of obstructing the tax process and tax evasion, which could see them face up to six years in prison.
The lawsuit comes a day after the same department asked immigration officials to prevent the now-closed English-language newspaper’s directors – Deborah Krisher-Steele and Douglas Steele – from leaving the country.
On August 4, the newspaper was slapped with a $6.3 million tax bill and given a month to pay the “exorbitant” amount. Unable to do so, the Daily published its last edition on Monday, its closure coming in the midst of a wide-ranging clampdown on independent media. More than 15 radio stations have also been shuttered, with the broadcasts Radio Free Asia, Voice of Democracy and Voice of America disproportionately affected.
The Tax Department’s criminal complaint was drafted on September 4 – the day of the deadline – and submitted to the Phnom Penh Municipal Court on Tuesday. The lawsuit levels the accusations at Krisher-Steele and Steele, as well as the newspaper’s founder, Bernard Krisher, alleging they showed “intention of evading tax with prior knowledge”.
Court spokesman Ly Sophanna would only confirm receipt of the complaint and that it was being reviewed yesterday.
The lawsuit accuses them of tax evasion under Article 135, which comes with a maximum fine of $4,800 and a prison sentence of up to five years. They are also accused under Article 136 for obstruction of the implementation of tax, which carries a fine of up to $2,400 and a one-year prison sentence.
In statements over the last few weeks, the Daily’s management had requested a “fair” audit of their financials in order to assess a reasonable tax liability.
Additionally, Krisher-Steele faces a “public defamation” charge for alleging that a confidential tax document was leaked by the department to government mouthpiece Fresh News, an allegation that was refuted by Tax Department head Kong Vibol, who instead accused Daily staffers of releasing it.
“The act that Deborah [Krisher-Steele] accused the officials at the General Department of Tax of was a serious defamation, which affects the honour [and] dignity of a state institution and a violation of the law on tax, which is not excusable,” the complaint reads.
Vann Puthipoll, Vibol’s deputy and tax representative on the complaint, hung up on a reporter when asked about the lawsuit.
The Daily’s Douglas Steele did not comment on the lawsuit but said the travel ban did not affect him because he had no intention of leaving the country. While Steele is in Cambodia, Krisher-Steele and Bernard Krisher, her father, reside in Japan.
John Sifton, Asia advocacy director at Human Rights Watch, said the lawsuit was clearly not about taxes, but an attempt to silence a media outlet, which would have a residual impact on others.
He added that if Prime Minister Hun Sen was serious about tax compliance, he wouldn’t have to go much farther than his own family to enforce it.
“If Hun Sen wanted to focus on unpaid taxes he could start by auditing his nieces and nephews, and the sons and daughters of his party leadership, who appear to have accumulated vast fortunes and created major conflicts of interest among senior government officials responsible for enforcing financial regulations,” he said.
Days after the Daily’s closure, tributes continued to pour in, with the local Overseas Press Club of Cambodia saying it was dismayed with the newspaper’s closure, which they said had curtailed the Kingdom’s press diversity.