- The story of Ulaanbaatar corruption -
The name derives from ‘Three Dramatic Characters’, one of Mongolia’s most famous operas.
‘Ulaanbaatar Civic Forum’, a non-governmental organization, organized an open discussion with the subject of ‘Urban planning based on civic involvement, its implementation, and public oversight’ on March 22, 2017. I attended the event at their invitation and expressed my thoughts. As what I said reached thousands of people and received lots of comments on social media, I have elaborated more on this article about corruption – especially land corruption – that has always had a heavy impact on the fate of our hometown.
People are asking questions around what happened to the Ulaanbaatar Fund, which was established with donations, taxes, and private property of people, why 99.9 percent shares of Ulaanbaatar Bank, which was set up by the Ulaanbaatar Fund, belong to one person today, where the Ulaanbaatar Insurance is, and how land trade was allowed to prosper so much that only one company now owns all the land from Dunjingarav district to Amgalan.
Although I posed these questions ten years ago with my fellow comrades who established the Civic Alliance movement, no one has provided the answer so far. Today the people are demanding the responses from Speaker M.Enkhbold, who is a former Mayor of Ulaanbaaatar (1999-2005) and the current leader of the Mongolian People’s Party. The moderator of the discussion this week reminded me that they were not holding a political demonstration, but every single citizen has the right to ask these questions and get the answers.
A peculiar thief: Ulaanbaatar Fund
In 1997, J.Narantsatsralt, who was the Mayor of Ulaanbaatar, set up the Ulaanbaatar Fund, which would be made up of donations, aids, and other incomes contributed by not only international and national organizations, but also people. The fund was supposed to be utilized for urban development of our capital city. A year later, when J.Narantsatsralt became the Prime Minister, he did not imagine what his successor would turn the fund into. During his term as the mayor, M.Enkhbold turned the status of the Ulaanbaatar Fund into a state-owned plant in 2000, and then a limited liability company (LLC) in 2002. It did not take long before the Ulaanbaatar Fund LLC started deviating from their objective to develop Ulaanbaatar city, improve urban planning, increase its financial capacities, and find solutions to problems people faced. Without any oversight, this company, which was installing lighting on some roads of the city, has suddenly become a much more powerful institution that owned the land in Ulaanbaatar and made relevant executive decisions.
The company started having private companies build apartment blocks on the land it owned, and obtained the ownership of the sections of those apartments under the name of Ulaanbaatar city. The 2006 audit report says that many of those apartments were not registered under the assets of Ulaanbaatar city, and the few that were included in the list did not have any real estate certificates. Then, Ulaanbaatar Fund LLC stopped producing any reports, and went low-key. In 2003-2004, Mayor M.Enkhbold ‘gifted’ a bulk of empty land (970 hectares from the east of the current Dunjingarav district to Amgalan) to only one company Mon-Uran, which boosted land trade at smaller scale. As a result, the price of land increased, and so did corruption. It led to the surge in the prices people had to pay to acquire apartments. Basically, Ulaanbaatar moved away from the poor, and let the ger district expand. Ulaanbaatar, which means ‘red hero’ in Mongolian, was turned into Utaanbaatar, which means ‘smog hero’. If you look at the ‘human herds’ gathered on the garbage collection sites surrounding the city, one cannot help thinking that even our enemies would have never been capable of doing this to Ulaanbaatar.
It looks like that Ulaanbaatar Fund changed its name and status several times since 2010. The 2006 audit report mentions that 56 billion MNT was put into the fund in 1999-2006. Are there any officials who can tell us where our fund is and what is happening to its income and expenditures?
Another peculiar theft: Ulaanbaatar Bank
In 1998, the Ulaanbaatar Fund board made a decision to establish Ulaanbaatar Bank in order to create and centralize financial reserves of Ulaanbaatar city, invest into apartments and infrastructure, and fund projects and programs. Their decision involved putting 500 million MNT as the statutory fund of the newly established bank. One billion MNT was required to set up the bank, and the remaining funds were contributed by citizens Ts.Dashdorj (250 million MNT) and D.Ganzorig (250 million MNT).
In 2001, the Ulaanbaatar Bank shareholders convened and increased the statutory fund to 2 billion MNT. This increase was made possible by drawing 500 million MNT from the Ulaanbaatar Fund, and receiving 200 million, 100 million, and 200 million MNT from citizens Altangerel Manal, Dashzeveg Yagaan, and Enkhzaya Radnaa respectively. All businesses in Ulaanbaatar were demanded to open an account only in Ulaanbaatar Bank and receive its services. It helped the bank grow rapidly. The Ulaanbaatar Bank shareholders issued their decree no.3, dated 25 October 2003, and increased the statutory fund to 5 billion MNT. This meant citizens T.Boldkhuu, B.Tsogkhuu, and G.Battumur became shareholders for contributing 1.5 billion, 500 million, and 500 million MNT respectively. The Ulaanbaatar citizens today are demanding an answer to why these people have become shareholders when the offer was not openly announced.
This is how M.Enkhbold and his team took control of the majority of Ulaanbaatar Bank by adding their associates as shareholders under the name of increasing the statutory fund. The citizens’ representatives who are supposed to be protecting our interests were well aware of what was happening, but did not say a single word about it. Our Civic Alliance sent several requests formally at the time, but no one seemed to listen or take notice because social media was not widely present as it is today.
The 2006 audit report mentions “The Ulaanbaatar Fund did not register or report their additional investment because the decision to register was apparently not received, despite having acquired a bank certificate valuing their investment into Ulaanbaatar Bank at 1.6 billion MNT.” This shows the true purpose they had for the Ulaanbaatar Fund.
At the time, Ulaanbaatar Bank declared a total of 465 million MNT in dividends, including 20 million in 1999, 96 million in 2000, 87 million in 2001, and 183 million in 2003. It caught the attention and greed from many directions. D.Erdenebileg, who came into play during one of the increases to the statutory fund, had been taking from the others and now owns 99.9 percent of Ulaanbaatar Bank shares. The Trade and Development Bank, which is Mongolia’s biggest commercial bank, is almost fully owned by the same person. D.Erdenebileg is also seen as a major financier for the Democratic Party and the Mongolian People’s Party. Furthermore, he managed to take control of Erdenet’s 49 percent shares with support from the Russians. People see that the reason why our anti-corruption agency, police, prosecutor’s office, and courts are keeping silent is connected to the presidential elections coming up in three months’ time. It appears that Mongolian government has been ‘privatized’.
People can see that MPP’s M.Enkhbold, Ts.Batbayar, and G.Munkhbayar were particularly fond of Ulaanbaatar Bank and the Trade and Development Bank, because they used to transfer the most highly valued land in Ulaanbaatar to these two banks when they worked as the mayor of our city. The clearest example is that, after his political party was defeated in the 2012 elections, G.Munkhbayar, who was the mayor at the time and the current Minister of Construction and Urban Development, transferred the ownership of some land to Ulaanbaatar Bank. He carried it out on the day before Naadam, just in time before the new city administration was formed. The land he gifted before handing his job included the southern section of Sukhbaatar Square together with its garden, the garden in front of Ulaanbaatar Hotel, the garden in front of the General Intelligence Agency, Tsedenbal square and its garden, and the Students’ Square along with its garden and the statue of B.Shirendev.
The other peculiar theft: Ulaanbaatar Insurance and the others
Just like Ulaanbaatar Bank, the Ulaanbaatar Insurance was set up by the Ulaanbaatar Fund in 2002, during M.Enkhbold’s time as mayor. The Ulaanbaatar Insurance had a statutory fund of 100 million MNT, 40 million of which came from Ulaanbaatar city, and 10 million from each of citizens Gantumur Gombo-Ochir, Lkhagvasuren Tserendagva, Choibat Tsogt, Sukhbat Damdinsuren, Enkhzaya Radnaa, and Narantuya Daakhuu. Only the mayor at the time would know why these exact people were involved. All businesses in Ulaanbaatar were ‘advised’ from the top to protect their properties from potential risks through this insurance, which was the reason why Ulaanbaatar Insurance expanded so quickly. Soon after, they increased their statutory fund, and the shares people owned decreased to 8 percent in 2005, and have been reduced to 4 percent today. Under this exact same scheme, we lost our Tengis cinema and many other properties. What do we – the people of Ulaanbaatar – do now?
As land trade grew bigger, the parliament passed a law on special protection, which allowed MPP’s U.Barsbold, who was the Minister of Environment at the time, to sell 4,000 hectares of land from the river basins of Tuul and Terelj. He got away with it by orchestrating a play and opening a court case over the secret sale of Bogd Mountain passes and the Yarmag Hill. Neither this minister nor the MPP (Mongolian People’s Revolutionary Party at the time) were held accountable for these corruption cases. The people of Ulaanbaatar are demanding the government to return the Yarmag land at least.
Fellow citizens,
The government has the duty to ensure protection of the properties that are rightfully acquired, worked for, and owned by people and businesses. The government is not supposed to be protecting the criminals who stole from public funds. The people are demanding the government determine and reveal the sources of income of those who have grown wealthy despite working in government agencies for their entire careers, those who have used their power to steal from public funds, and those who unlawfully gained from the money that came from the government bonds. The people are demanding their income sources to be reported to the public, seize their property as the law allows it, and dedicate it to paying back the government debt and turning ger districts into apartment blocks. This demand is fair and just.
Is our judicial system, prosecutors, police, and the anti-corruption agency today capable of protecting our property and ensuring our security? Or, have they been ‘privatized’ as well? In any case, Mongolians have not turned into fish that do not make a sound when caught, skinned, and cooked.
“My body can tire, but my country must never be exhausted.” (a quote from Chinngis Khaan) Think, remember, and wake up.
2017.03.29
Trans. by B.Amar
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