Case 1. About 700 thousand budget tugrug is allocated for crop dusting or spraying pesticide for  control and eradication of harmful forest and steppe insects.  There is a talk about lobbying, this what happens as soon as Ministry of Finance submits draft budget proposal budget administers start going into huddle with parliament members. Everyone is dissatisfied with allotted sum and employ all possible means to increase the amount. It is the same with crop dusters and they approach a strong man in parliament with a request to increase the sum to one billion. He immediately proceeds to the parliament chamber, arguing with foam at mouth he succeeds to increase it to three billion. This is how parliament members engage in trading among themselves. The simple principle is you should support what I’m pushing through and I’ll support what you’ve brought in.

    For businessmen who import agro-chemicals it was an unexpected gift from the heaven. That member contacted 5-6 companies importing agro-chemicals and successfully wraps up his and their business transaction. His partners are awfully greedy just like him. They imported Sumicidin, Decis, Kinmiks but uses of these chemicals had been banned all over the world, as hazardous to environment, toxic to man and livestock as well as to birds and animals. Under pressure from international organizations use of these chemical substances had been banned about ten years ago, its use is also banned by law in China. China is a developing country introducing  international standards gradually. So it is evident that our fellows ordered those chemicals from small private companies, changed its packaging and brand names and by deceiving the authorities imported them. Since at what price these banned toxic chemicals were bought , it is impossible  to calculate the coefficient efficency. It is also unclear what was the share of the parliament member for we don’t know what was his deal with the companies. We are used to spraying toxic pesticides, what is interesting is how the parliament member succeeded in turning 700 thousand into 3 billion on the request. But there is nothing new here. Allocating hefty sum in budget, then put pressure to buy various goods  is a widespread fraudulent business. When Enkhbold was in power at a time of peace the Ministry of Defense was forced to buy immense amount of goods in such a manner.      

They talk a lot about poisoning from imported Chinese food, time and again huge uproar and noise are raised around this subject. But it turns out that it was our traders who smuggled sub-standard goods  over the boarders. At bilateral meetings Chinese side proudly state that if  it let sub-standard goods pass through its customs Chinese side will take full responsibility. The food stuff that are intoxicating happen to be not registered at customs or not documented at all.      

Case 2. Over twenty years ago Japan had built an iron-works factory for socialist Mongolia. Mongolia made full payment and the matter was wrapped up. But Mongols could not operate the factory and Japan provided additional technical assistance and sent its specialists. In ten years the assistance amounted to 3 million US dollars. Japan demanded Mongolia to pay debt but Ministry of Finances turned it down several times on the ground that it was an agreement between two companies. Japanese side twice appealed to the court, on both occasion the court ruled in favor of Mongolian government. Afterward the Japanese company began negotiations with iron works factory, which acknowledged its debt and the factory agreed to pay off the debt in kind by its products in 20 years. The Japanese company decided to lower the debt and sell it for it was still unclear when it will be paid in full, the debt of 3 million was  sold only for 250 thousand. So a small group headed by a parliament member bought it. However, in 2005 state budget 3 million dollar was earmarked as full payment of the deb. The o coefficient of efficiency was 1200 percent.

     Case 3. 51 percent of Selenge flour and fodder plant was bought through bids and it was agreed to pay 600 million tugrugs. The winner of bid “sold back”  to the state for one billion tugrug, a capacity of only 15 thousand  tons which was even less than 20 percent of capacity of the elevator capable of storing 85 thousand tons. This was contagious example. Another parliament member had bought Darkhan flour and fodder plant for 400 million and soon sold back a capacity of 15 thousand tons or only 15 percent of the full capacity of 90 thousand ton elevator for “mutually agreed” sum of 1.3 billion. Soon after yet another parliament member has bought Bulgan flour and fodder plant with an elevator of 32 thousand ton capacity for 200 million and taking advantage of the “Atar-3” (Virgin land reclamation-3) drive sold back to the state for 4 billion tugrug multiplying the sum he paid twenty folds. Ratio of coefficient by the aggregated sum of these three deals in money is 1500 percent. On one hand it seems that process of privatization is moving ahead but on the other hand it is becoming a fashionable business for the state to buy factories and plants from private sector. I heard that the winner of TV broadcasting bids is seeking to sell it back to the state. Since the state is very rich it’ll probably buy broadcasting rights back. Parliament members experienced in this business have, apparently, begun actively discussing additions and amendments to the budget.

The above cases I referred to is not something that people are unaware, new or something unusual and unique. I simply brought them as illustrations. It is a theft disguised by law! The perpetrators are legitimized thieves. Can one say it is not a theft? I have singled out one case from many different ways, only three as the most common, modish and shrewd forms of embezzling the state budget. The police, intelligence, judges and ant-corruption authority are all well-aware of it. But since they share the booty, who’d dare to touch the other.

By the way, coefficient of efficency in physics never equals 100 percent. After all this is the law of nature.                                                     

2010.5.3