Myanmar military proxy political party hit by new financial scandal

USDP members and supporters on the party’s election campaign in Naypyitaw ahead of the 2020 elections. / The Irrawady

By The Irrawaddy July 14, 2022

After a senior member of the Union Solidarity and Development Party (USDP) in the Myanmar military recently revealed details of a loan to the party’s spokesman, controversy over how the USDP acquired its assets came back into the limelight.

The financial scandal erupted as the USDP grapples with a split over the party’s future leadership, with the USDP split into two camps – one that wants to bring down current president U Than Htay and the another who is faithful to him. The group seeking to oust U Than Htay is stronger and reportedly backed by junta leader General Min Aung Hlaing, who is planning elections next year and may want to choose someone he trusts as his next president of the USDP, with the party. should play a crucial role if the coup leader is to realize his dream of the presidency.

U Maung Myint, senior USDP member from Mingin township in Sagaing region, said USDP spokesperson Dr. Nanda Hla Myint took out a loan of two billion kyat (1, 07 million dollars) with the party. U Maung Myint called the reckless loan a theft. Even though the money was lent by an official party decision, it was a decision to steal, U Maung Myint said.

At first glance, two billion kyat seems like a huge sum. To make a comparison, the biggest prize in the national lottery was only 1.5 billion kyats before last year’s coup. But the amount is less than two months of expenses for USDP.

USDP Central Executive Committee (CEC) member U Soe Naing told the press in 2015 that the party’s monthly expenses amounted to 1.4 billion kyat.

“If Ko Nanda Hla Myint can get this amount, how many more [senior members] get?” a USDP CEC member told The Irrawaddy.

USDP headquarters in Naypyitaw. / The Irrawaddy

While Dr. Nanda Hla Myint is a member of the CEC, there are around 300 people in the party leadership who rank at or above him.

Asked by The Irrawaddy about his income, the USDP CEC member replied that the monthly stipend given by the party was enough for him.

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

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

USDP leaders have never revealed the party’s strengths. The only way to assess them is to look at party expenses. USDP’s assets are state property and political privileges, rights the party has enjoyed for many years since its founding by former dictator General-in-Chief Than Shwe.

Previous financial scandals

After Than Shwe became the de facto military leader 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 work aimed at generating public support for its regime. The USDA formed the Myan Gon Myint Co, which had interests in various businesses across the country.

The company engaged in the mining of precious stones and minerals, construction, agriculture, animal husbandry and trade.

Leaders of USDA regional chapters have been competing to try to impress Than Shwe with their regional development ventures, said a longtime USDP member who was previously involved with USDA.

The USDA has 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 in Than Shwe’s regime. The position was key for U Aung Thaung and his family to open the door to a treasure, the party member said.

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 United Amara Bank and construction.

U Htay Oo was another key USDA man. He and U Aung Thaung were confidants of Than Shwe. When the regime’s communications ministry sold SIM cards for a million kyat each in the 1990s, half of the revenue went to the USDA, a former USDA member said.

A senior USDP official, U Myint Swe (left), who is now Myanmar’s regime-appointed interim president, seen in Yangon with other USDP officials shortly before the 2015 general election.

The association has acquired lots of land in cities like Yangon and Mandalay because its members are army commanders, ministers and mayors.

When the USDA was transformed into the USDP to participate in the 2010 general elections, the party acquired state-owned assets from its predecessor for free, which allowed the party to open offices throughout the country, including included in rural villages.

The USDP Headquarters in Naypyitaw is a beautiful building set in extensive grounds. The party made billions of kyats when it sold its former headquarters on University Avenue Road in Bahan Township in Yangon. Even the party leaders don’t know where the money went from the sale of this property.

U Aung Thaung said in an interview with the Myanmar Herald Journal in 2014 that he was unaware of the sale. The building was reportedly sold for 30 billion kyats, which U Aung Thaung said was below market price.

Another USDP CEC member said U Htay Oo led the sale and the money from it was spent on USDP’s campaign for the 2015 general election.

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 disbanded. But the party continues to play to its strengths.

USDP has earned 16 billion kyat alone in 12 years from Myan Gon Myint Condominium’s X-ray system installed at Asia World Port Terminal in Yangon for cargo screening, according to a report by the Auditor General’s Office of the Yangon area under the NLD. government.

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

Some USDP chief ministers of regions and states failed to hand over regional development funds worth billions of kyats to the NLD government after their party lost in the 2015 general election.

The NLD government has asked U Phone Maw Shwe to return over three billion kyats that were collected as taxes from small oil producers in the Magwe region by the previous regional government.

Similar cases have been reported in other regions and states, and according to a report by the Office of the Union Auditor General, four USDP regional governments had yet to return three billion kyats by 2020.

Justice for Myanmar, an activist group formed to monitor rights abuses by the Myanmar military, has called ahead of the 2020 general election for an investigation into USDP’s exploitation of state-owned assets.

“It is a great loss for the people of Myanmar that the USDP has acquired state-owned property and is profiting from it. It should be investigated and the party should be dissolved if it is found to have broken the law,” said Ma Yadana Maung, spokesperson for Justice for Myanmar.

At the time, USDP spokesperson 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 Burmese military later staged their coup. The junta-appointed Union Electoral Commission has since audited political party assets in August 2021, but has not officially released its findings.

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

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