Myanmar Military’s Proxy Political Party hit by Fresh Financial Scandal

By The Irrawaddy 14 July 2022

After a senior member of the Myanmar military’s proxy Union Solidarity and Development Party (USDP) recently revealed the details of a loan to the party’s spokesperson, the controversy over how the USDP acquired its assets has come back into the spotlight.

The financial scandal has emerged just as the USDP is struggling with a rift over the party’s future leadership, with the USDP divided into two camps — one which wants to bring down current chairperson U Than Htay and the other loyal to him. The group seeking to oust U Than Htay is stronger and is believed to be backed by junta chief Senior General Min Aung Hlaing, who is planning for an election next year and may want to pick someone he trusts as the next USDP chair, with the party set to play a crucial role if the coup leader is to achieve his presidency dream.

Senior USDP member U Maung Myint from Sagaing Region’s Mingin Township said that USDP spokesperson Dr. Nanda Hla Myint has taken out a two billion kyats (US$1.07 million) loan from the party. U Maung Myint called the reckless lending a robbery. Even if the money was lent through an official party decision, it was a decision to rob, said U Maung Myint.

At first glance, two billion kyats seems to be an enormous amount. To make a comparison, the biggest prize in the state lottery was just 1.5 billion kyats before last year’s coup. But the amount is less than two months expenditure for the USDP.

USDP central executive committee (CEC) member U Soe Naing told the press in 2015 that the party’s monthly expenditure is 1.4 billion kyats.

“If Ko Nanda Hla Myint can get that amount, how much will other [senior members] get?” a member of the USDP CEC told The Irrawaddy.

USDP Headquarters in Naypyitaw. / The Irrawaddy

While Dr. Nanda Hla Myint is a CEC member, there are some 300 people in the party leadership who rank the same or higher than him.

When asked by The Irrawaddy how much he earns, the USDP CEC member replied that the monthly allowance given by the party is enough for him.

“I don’t need to take out loans because I don’t do business. But Ko Nanda [Nanda Hla Myint] does business and therefore he needs loans,” he said.

Dr. Nanda Hla Myint owns the Min Kyansit Construction Co, which was awarded a contract to construct Aye Tharyar staff quarters in the Shan State capital Taunggyi under the former USDP government. The then USDP government also provided his company with four billion kyats in loans from the Shan State government’s regional development fund for the project.

USDP leaders have never revealed the party’s assets. The only way to assess them is by looking at the party’s expenditures. The USDP’s assets are in state-owned property and political privileges, entitlements that the party has enjoyed for many years since it was founded by former dictator Senior General Than Shwe.

Earlier financial scandals

After Than Shwe became the de facto military ruler in 1992, he established the Union Solidarity and Development Association (USDA) as a mass organization the following year.

The association was allowed to do business to fund regional development works aimed at generating public support for his regime. The USDA formed the Myan Gon Myint Co, which had interests in various businesses across the country.

The company engaged in gems and mineral mining, construction, agriculture, livestock, and trading.

The leaders of USDA regional chapters competed with each other to try and impress Than Shwe with their regional development undertakings, said a long-time USDP member who was formerly involved with the USDA.

The USDA formed an economic steering committee. It was chaired by the prime minister and its secretary was U Aung Thaung, who later became infamous as the most corrupt official of Than Shwe’s regime. The position was the key for U Aung Thaung and his family to open the door to a treasure trove, said the party member.

The current navy chief Admiral Moe Aung is a son of U Aung Thaung, and U Aung Thaung’s family has interests in various businesses including the United Amara Bank and construction.

Another key man in the USDA was U Htay Oo. Both he and U Aung Thaung were confidants of Than Shwe. When the regime’s Communications Ministry sold SIM cards for one million kyats each in the 1990s, half of the revenues went to the USDA, said a former USDA member.

Senior USDP official U Myint Swe (left), who is now the regime-appointed acting president of Myanmar, seen in Yangon along with other USDP officials shortly before the 2015 general election.

The association acquired numerous land plots in cities including Yangon and Mandalay as its members are army commanders, ministers and mayors.

When the USDA was transformed into the USDP to take part in the 2010 general election, the party acquired state-owned property for free from its predecessor, which enabled the party to open offices across the country including in rural villages.

The USDP headquarters in Naypyitaw is a magnificent building sitting on vast land. The party earned billions of kyats when it sold its old headquarters on University Avenue Road in Yangon’s Bahan Township. Even the party leaders do not know where the money from the sale of that property went.

U Aung Thaung said in a 2014 interview with the Myanmar Herald Journal that he didn’t know about the sale. The building reportedly sold for 30 billion kyats, which U Aung Thaung said was lower than the market price.

Another USDP CEC member said that U Htay Oo led the sale and that the cash from it was spent on the USDP campaign for the 2015 general elections.

USDP benefits from state assets

After the USDP suffered an embarrassing defeat to the National League for Democracy (NLD) Party in the 2015 general election, Myan Gon Myint Co was dissolved. But the party continues to benefit from its assets.

The USDP earned 16 billion kyats alone within 12 years from the Myan Gon Myint Co-owned X-ray system installed at the Asia World Port Terminal in Yangon for cargo screening, according to a report from the Yangon Region’s Auditor-General Office under the NLD government.

The report said that the Customs Department had to pay for it from 2006 to 2018.

Some region and state USDP Chief Ministers did not hand over regional development funds worth billion of kyats to the NLD government after their party lost in the 2015 general election.

The NLD government instructed U Phone Maw Shwe to return over three billion kyats which was collected as taxation from small-scale oil producers in Magwe Region by the previous region government.

Similar cases were reported in other regions and states and, according to a report from the Union Auditor-General’s Office, four USDP regional governments had yet to return three billion kyats by 2020.

Justice for Myanmar, a group of activists formed to monitor the Myanmar military’s rights violations, called ahead of the 2020 general election for an investigation into the USDP’s exploitation of state-owned property.

“It is a great loss for Myanmar people that the USDP has acquired state-owned property and is receiving benefits from it. It must be investigated and the party must be dissolved if it is found that they broke the law,” said Ma Yadana Maung, the spokeswoman for Justice for Myanmar.

At the time, USDP spokesman Dr. Nanda Hla Myint responded that it was a deliberate attempt to smear the party’s image ahead of the 2020 poll.

The NLD won the 2020 general election, but the Myanmar military subsequently staged its coup. The junta-appointed Union Election Commission has since audited the assets of political parties, in August 2021, but has not officially released its findings.

But what is certain is that no other party will be as rich as the USDP. “The wealth of USDP is impossible to estimate,” said a USDP CEC member.