The rewards of public service in Cambodia [With their salary of between $500-$3000 per month, how can they afford an 18 million or a 45 million dollars house?]

On an $18 million chunk of prime Phnom Penh real estate, a retired customs director is building a palatial mansion. It seems public service has been good to him. And he’s far from the only one Heng Chivoan

Sat, 28 February 2015

Kevin Ponniah and Vong Sokheng

Behind the Senate building in central Phnom Penh, a recently retired customs department director is building an enormous mansion worth millions. But the former public servant is far from the only government official to own a palatial property

A young construction worker caked in dust gestures to the grandiose, off-white mansion behind him with a shrug.

Sitting on a 6,500 square-metre plot of premium real estate behind the Senate in central Phnom Penh, the land alone is estimated to be worth about $18 million. Include the lavish three-storey, 600 square metre, two-building villa being constructed on it, and the property would be worth much more.

But the worker says he is not shocked that a recently retired civil servant – a class of workers considered to be poorly paid – could afford such an expensive property.

“This is the biggest house [in Phnom Penh]. I have never seen a house like this,” he says casually. “[But] he’s a rich man. With this kind of money, they can get whatever they want.”

A middle-aged colleague, white hair peeking our from under his cap, agrees. He is quick to add, however, that he didn’t think they could afford it on just their salaries.

Pen Siman, the recently retired general director of the General Department of Customs and Excise at the Ministry of Finance and a personal adviser to Hun Sen, is the official owner. He currently lives in a smaller villa abutting the site.

Chea Sophara, the minister of rural development and a former governor of Phnom Penh, owns an 11-hectare estate, which boasts private golf holes, Angkorian-style walls around its perimeter and no less than six luxury villas of differing styles. The land alone is worth an estimated $45 million, He also has other valuable properties in the capital, including on Sihanouk Boulevard. Pha Lina

Former colleagues say he would have been earning about 3 million riel ($750) monthly when he retired as head of customs, a government department that Hun Sen has previously chided for corruption, last October.

Workers say that gold leaf and coins were put in the building’s foundations for prosperity and describe the interior as opulent.

In a telephone interview this week, Siman claimed he only stumped up about $10 million for the land a couple of years ago and that all taxes were paid. He added that while his name is on the title, it actually belongs to four people and his house sits on one of three lots.

Documents seen by Post Weekend show that the land was sold in two lots in 2012.

Siman said the mansion only “looks formidable” because the land was waterlogged and so he had to build on ground one metre higher than normal.

“Other people in Phnom Penh …have bigger houses than this, but they just don’t appear [as big] as mine,” he said, adding that he welcomed the opportunity to “clarify” the truth about his property.

He said he has declared it in asset declarations required by the Anti-Corruption Unit.

“I am not a greedy person or doing anything too unreasonable. I’m not a person like that.”

Siman is far from the only government official to own a palatial property. Luxurious mansions around the city, and sprawling properties on its outskirts, serve as a potent symbol to Cambodians that high government positions are often synonymous with immense wealth.

Cham Prasidh, the current minister of industry and handicrafts, and the former commerce minister, is believed to own a large portfolio of properties around the country.

His 10-hectare former residential property not far from Pochentong Airport in Samrong Krong commune is similar in size to the capital’s most prominent high schools.

Land for sale in the vicinity had asking prices of $150 per square metre last year, putting Prasidh’s landscaped and palm-tree fringed estate, which features a large moat, at a minimum value of $15 million, but likely much more.

Prasidh, whose tycoon wife Tep Bopha Prasidh has the honorific title of oknha, declined to comment via phone and did not respond to an emailed request for comment regarding the source of his wealth.

While the current salaries of ministers are not publicly available, Prime Minister Hun Sen told reporters in 2011 that he was making $1,150 a month.

Chea Sophara, the minister of rural development and a former governor of Phnom Penh, owns an even grander property than Prasidh’s near Camko City in Russey Keo district.

Cham Prasidh, the current minister of industry and handicrafts, and the former commerce minister, has a landscaped and palm-tree fringed 10-hectare estate with a large moat worth at least $15 million. His family is believed to own an extensive portfolio of roperties.

The regal 11-hectare estate, which boasts private golf holes, Angkorian-style walls around its perimeter and no less than six luxury villas of differing styles, is worth approximately $45 million just for the land, according to a local real estate valuer.

Sophara declined to comment on the size or value of his estate but said any explanation for how he could afford it would have to take into account the situation in Phnom Penh after the fall of the Khmer Rouge, when he and other Cambodian rebels liberated the country with the invading Vietnamese.

“I have owned my land since January 7, 1979. If you look at the history of that time, there were [at first] only 70 [Cambodians] in Phnom Penh, so individuals could own several houses or several pieces of land,” he said.

“It is easy for [people] to criticise senior CPP officials as corrupt, but look at the history … No one was using money yet. I was the commune chief at the time, my land was three metres deep in water, and step by step I have developed it until today.

“Those people who make such criticisms came to Cambodia in 1991 and many of them were retired people in foreign countries who came to create a political party in the country. They don’t understand the history, and their criticisms were made because of jealousy, envy or unfairness due to hatred.”

Opposition party whip Son Chhay claimed several CPP ministers had wealth in excess of $100 million. He said that public officials “have the responsibility to explain” where that money came from.

According to Chhay, many top officials made their fortunes when the Kampuchean People’s Revolutionary Party renamed itself the Cambodian People’s Party in 1991, abandoning communism and opening its arms to capitalism and land privatisation.

As Sebastian Strangio describes it in his recent book Hun Sen’s Cambodia, state-owned land and businesses were sold off to government officials, foreign investors and CPP-linked tycoons.

“All pre-1975 land claims were annulled, reassuring investors that they would be safe from eviction if the old owners of the land returned,” he writes.

“Phnom Penh became a boomtown. Wild speculation drove land values up to dizzying heighs. Dilapidated villas that had lain vacant since the Pol Pot regime were snapped up by government officials, who sold them off to Thai and Singaporean businessmen or leased them to international relief agencies scrambling for a foothold in the Cambodian ‘aid market’.”

According to Chhay, the period following the 2008 election, when the CPP obtained a dominant 90 seats in the National Assembly, was the second period when officials made significant sums of money, mostly through economic land concessions or property swaps.

Chhay does not buy the former Phnom Penh governor Chea Sophara’s argument.

The lavish home of recently retired customs director Pen Siman is being constructed on a 6,500 square metre plot of premium real estate that sits behind the Senate in central Phnom Penh.

“Why is he able to have so much land when there are so many people in Phnom Penh who do not have the privilege of owning so much land [now] and in [1979], too?” he said.

“And this is [another] question. Look at the houses inside the land, so many big houses there, it did not come cheap. He has all of his children in there in houses that cost millions and millions of dollars. Where does this money come from?”

Chhay added that officials like Pen Siman, the former customs head, are not afraid to flaunt their wealth despite questions about how it was gained “because they think it’s something that they have the right to do, or they have the party protecting them”.

Two senior customs officials told Post Weekend on condition of anonymity that lucrative positions in the customs and excise department – at ports and border crossings, for example – required “at least $50,000 to $70,000” to be paid upwards – but could not provide evidence of the practice.

“Some individual customs officers have sold their houses or borrowed money to bribe for a job and position,” one of the officials claimed.

A 2007 US Embassy cable describes Siman’s wife, Ngyn Sun Sopheap, as a business associate of Attwood Import Export Company chief Lim Chhiv Ho.

The customs officials said that Siman’s name was a free pass for imported goods.

“I don’t know about other businesses of Pen Siman, but all cargo transportation is untouchable if you say it belongs to him,” an official said.

Post Weekend could not independently verify the claims.

Siman denied the corruption allegations. He said that the promotion and appointment of officials at the department had been up to the Ministry of Economy and Finance and not himself.

Bou Bunnara, head of the Customs Department’s public relations unit, only said that he “didn’t know” when asked to comment on allegations of corruption.

CPP spokesman and lawmaker Sous Yara said that critical “individual perceptions” about the properties of government officials could not be taken as general public opinion.

“The regime is committed to multi-party democracy and also [to] stand on the principle of free-market economics. So whoever has the ability to raise their family’s development without interfering in the public interest, you don’t have anything to accuse them,” he said in a phone interview.

“The free market means [it is for] all. Everyone who lives under this society will benefit from economic growth. If you are an officer, you have a rule that before you enter the public service you have to announce your property, and when you [leave] office you have to declare your property. As long as they abide by this rule, we have no comment on that.”

Asset declarations at the Anti-Corruption Unit are kept confidential and only opened in the case that the chairman decides to investigate. Good governance groups such as Transparency International have urged the government to change legislation to make them public.

“Questions should be raised, as it is difficult — if not impossible — to comprehend how a government official who earns around USD1,000 a month can own a property worth millions. But these questions cannot be answered if public officials are not required to declare their assets publicly,” Transparency International Cambodia executive director Preap Kol said in an email.

He said that while the 2010 Anti-Corruption Law contains a provision on “illicit enrichment”, defined as an unexplainable increase in the wealth of public officials, the fact that asset declarations are not available for public scrutiny makes investigations under this “impossible in practice”.

Opposition lawmaker Chhay agreed, adding that if the ACU were truly independent, it would investigate civil servants and government officials that own lavish properties.

ACU vice-president Nuon Sophal said, however, that under the anti-corruption law, the unit cannot simply questions individuals without a complaint.

“The rights of individual citizens are important, and if we question them, it means we are investigating,” he said.

“If there is no evidence, it would be a violation of the rights of the individual.”

Additional reporting by Meas Sokchea

Contact authors: Kevin Ponniah and Vong Sokheng