Proof is in the Papers – Democracy as the Best Defense Against Corruption in Mongolia

  • Wallis Stanfield

On October 3, 2021, the International Consortium of Investigative Journalists (ICIJ) released the Pandora Papers, a multi-year investigation into nearly 12 million documents that exposed the offshore holdings and bank accounts of over 300 public officials from 91 countries across the globe. Among notable public individuals implicated, former prime ministers from both major political parties in Mongolia have been pushed into the spotlight, including S. Batbold of the ruling Mongolian People’s Party (MPP), who also currently serves as a Member of Parliament (MP), and Ch. Saikhanbileg, of the opposition Democratic Party (DP).

MP S. Batbold, who was a private businessman before he entered politics and named by ICIJ as one of the “power players” in Asia, was revealed to have assets in an offshore account in the island tax haven of Guernsey. Batbold was also linked to the 2016 Panama Papers for several international lawsuits related to alleged embezzlement of mining contracts. Meanwhile, Ch. Saikhanbileg was named for his role in facilitating the sale of Russia’s Erdenet Mining Corporation’s minority stake to the Mongolian Copper Corporation (owned by the Trade and Development Bank of Mongolia) in 2016 without obtaining prior parliamentary approval.

He is currently residing in the United States and under local investigation for violating numerous laws and avoiding extradition. If he returns to Mongolia, he will likely face additional scrutiny from authorities, the media, and even members of his own political party. For S. Batbold, who was recently re-elected to parliament in June 2020, there has been relatively little in-depth coverage in the local press, with some outlets only running statements by his attorney denying any wrongdoing in his offshore dealings without providing substantive analysis or context.

This revelation implicating high ranking members of both main political parties comes on the heels of inflation, slow economic recovery from the COVID-19 pandemic, and years of endemic corruption that has thwarted economic development, squandered much of the country’s mineral wealth, and eroded public faith in democratic institutions. For example, according to IRI’s latest national poll, 95 percent of Mongolians believe that corruption is a serious problem, while a majority of the country holds negative opinions of political parties and the Independent Authority Against Corruption, the government agency that investigates graft. President U. Khurelsukh and Prime Minister L. Oyun-Erdene, the latter chair of the ruling MPP, have publicly committed to tackling corruption to better attract foreign investment.  

The government has established a working group to eliminate corruption and improve Mongolia’s corruption index ranking within the next two years. Prime Minister L. Oyun-Erdene pledged that “In two years, we will create a new social culture that does not tolerate corruption.” In his election platform, President U. Khurelsukh promised to “create a legal environment that prohibits government officials at all levels from holding assets and money in offshore accounts.” Such high-level commitments to address corruption and murky offshore accounts as well as the release of the Pandora Papers come at a time when controversy continues over the transparency and national benefits of Mongolia’s mining and natural resource industry, which has been plagued with politicization, controversy and development delays.

For Mongolia and for many countries, the Pandora Papers offer the opportunity for citizens to hold their public officials and other implicated celebrities accountable and for governments to address loopholes in legislation that have enabled patterns of kleptocracy. Furthermore, the impact the release of the Pandora Papers is having globally reinforces the need to support independent journalism and democratic institutions that call attention to abuse and promote transparency in every corner of the world. Despite a generally free press, most of Mongolia’s media outlets have some degree of political affiliation or ownership, which only enforces self-censorship or sponsored media bias, and the erosion of independent journalism is likely why no Mongolian journalists participated in the ICIJ investigation, unlike the Panama Papers several years ago. Through journalist trainings on media integrity, party strengthening, and parliamentary oversight peer-to-peer workshops, IRI will continue to prove that the best defense against corruption in Mongolia is democracy.  

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