Aung Thaung: Why Now, Why Him and Who’s Next?

“By intentionally undermining the positive political and economic transition in Burma, Aung Thaung is perpetuating violence, oppression, and corruption,” read a statement by Adam Szubin, the director of Treasury’s Office of Foreign Assets Control

 By AUNG ZAW / THE IRRAWADDY| Monday, November 10, 2014 |

Before receiving US President Barack Obama in Naypyidaw, Burmese activists and pundits have already heartily welcomed his administration’s recent decision to blacklist one of the ruling party’s most powerful and notorious lawmakers: Aung Thaung.

Nearly everyone I spoke with last week in Rangoon—tycoons, pedestrians, opposition party members, monks—were happy to hear that the Lower House parliamentarian, a member of the Union Solidarity and Development Party (USDP) and former industry minister for the military junta, had been singled out by the US government for “undermining” Burma’s democratic progress.

“By intentionally undermining the positive political and economic transition in Burma, Aung Thaung is perpetuating violence, oppression, and corruption,” read a statement by Adam Szubin, the director of Treasury’s Office of Foreign Assets Control, which oversees and maintains the Specially Designated Nationals (SDN) list, a roster of individuals and entities that US citizens are prohibited from doing business with.

The Treasury Department was unsurprisingly sparse in its explanation. Many Burma scholars and analysts quickly made the association that Aung Thaung was long thought to have been involved in aggravating ethno-religious tensions, and that the United States would most certainly have known about it. But several questions still loom large: why now, why him and who’s next?

The first question can be easily satisfied. The announcement was made on Oct. 31, less than two weeks before Obama was set to join other global leaders in Naypyidaw for two major regional summits. The timing was viewed as a last-minute reprimand from the Obama administration, which has since been dubbed as “too optimistic” by opposition leader Aung San Suu Kyi. During a recent visit to Burma, John Sifton, the Asia advocacy director for Human Rights Watch, said it was clear that the US government could not justify supporting Burma’s government while withholding serious criticism much longer.

“Burma cannot complete a transition to democracy if the existing military leadership and its cronies refuse to relinquish their power and corrupt revenue sources,” he said, explaining that Aung Thaung was one example of a senior politician who has faced very serious allegations and, so far, no real scrutiny. Yet while sanctioning a senior politician was a stern warning, one that Burma’s current leadership—including Suu Kyi— has shown displeasure over, many think it wasn’t quite stern enough.

Aung Thaung was, for many reasons, an easy target for the Western power wishing to appear firm in the face of criticisms over its support for a “stalled” reform process. He was a minister of the former regime, the close friend of a dictator, a possible accomplice to a fatal attack on members of the opposition, a notorious hardliner and a known nepotist.

It was two of Aung Thaung’s sons, after all, that benefitted most from their father’s close relationship to former Snr-Gen Than Shwe, with whom he is reportedly so friendly that he occasionally had breakfast at the ex-dictator’s home. This is considered a supreme privilege among Burmese, demonstrating a deep and personal camaraderie.

That friendship is believed to have resulted in a series of business concessions allowing Aung Thaung’s progeny to develop a thriving conglomerate, International Group of Entrepreneurs (IGE) Ltd., which deals in timber, oil, gas and mining. In particular, his sons were granted exclusive licenses to work with Chinese companies building gas and oil pipelines from the Arakan coast to Yunnan, China.

One of his sons, Nay Aung, is also a 90 percent shareholder in United Amara Bank (UAB). Another, Pye Aung, is married to the daughter of the regime’s second-in-command Vice Snr-Gen Maung Aye.

Aung Thaung’s two industrious sons are not on the US sanctions list, nor are their businesses, but last week’s decision did have a minor ripple effect on their empire. Executives of UAB said the bank saw a marginal increase in withdrawals and decreased deposits shortly after the announcement of sanctions.

More chilling is the message the announcement sent to tycoons already on the blacklist, as recent talks with the US government may have led them to believe they were on a clear path to redemption. Last June, State Department and Treasury officials met with a range of blacklisted entities to lay out guidelines for removal from the SDN list, after which many agreed to open auditing by American companies.

While other business moguls in Burma, a high percentage of whom are considered “cronies,” may worry that they might be next in line for punishment, the State Department may actually have a more complex agenda. If, in fact, Aung Thaung’s blacklisted status was due to his alleged support for anti-Muslim campaigns, who knows who will be the next to fall?

Aung Thaung was not just your ordinary naughty businessman. Born in Taung Tha, about 80km west of Mandalay, he served several years in the army fighting communist insurgents and earning the trust of the regime’s leader, Than Shwe. He was often involved in political organizations, most notably as a key leader of the Union Solidarity and Development Association (USDA), the pre-reform permutation of President Thein Sein’s ruling party, USDP.

He has also been accused of involvement with Swan Arshin, an organized group of hired thugs widely believed to have been deployed during times of unrest. One instance was the 2003 Depayin massacre, during which Suu Kyi and her convoy were assaulted in northern Burma and dozens of her supporters were killed. Another was the crackdown on thousands of monks during the Saffron Revolution of 2007. Most recently, Swan Arshin has been accused of involvement in the anti-Muslim riots that have rattled the country since mid-2012; witnesses and analysts alike have claimed that in just about every case, outside aggressors have entered areas primed for trouble immediately after a trigger incident.

Aung Thaung has denied a connection with Swan Arshin, a mysterious militia of what some have described as “uneducated thugs” closely aligned with the USDA. He has also distanced himself from another, newly emerged militia known as the Taung Tha Army. The latter was reportedly involved in riots that took place in Lashio and Meikhtila last year and, as some observers have pointed out, bears the name of Aung Thaung’s birthplace.

These associations, while largely accepted by Burmese dissidents and activists, are tenuous and difficult for outsiders to see. Where such connections do exist, they are inherently difficult to prove. An established US diplomat, under condition of anonymity, told The Irrawaddy that Burma’s exile and pro-democracy communities have pleaded with the State Department to blacklist Aung Thaung since the very onset of the conflict in 2012. Another Western diplomat, also wishing to remain anonymous, voiced his belief that Aung Thaung and a handful of other current members of the nation’s leadership directly financed anti-Muslim campaigns.

If Aung Thaung had been involved, many argued, US diplomats would know. Whether or not they would admit it is the question. Moreover, if a central figure of the ruling party was involved, surely he didn’t act alone.