Burma Gives 'Cronies' Slice of Storm Relief

By Glenn Kessler
Washington Post Staff Writer
Friday, June 13, 2008

Just seven days after Cyclone Nargis devastated Burma last month, the ruling military junta parceled out key sections of the affected Irrawaddy Delta to favored tycoons and companies, including several facing sanctions from the U.S. Treasury, according to a Burmese magazine with close ties to the government.

Some of the most notorious business executives in Burma, including Tay Za and Steven Law, also known as Tun Myint Naing, were given control of "reconstruction and relief" in critical townships, under the leadership of top generals. Tay Za was identified by Treasury as a "regime henchman" this year when it slapped economic sanctions on hotel enterprises and other businesses he owns.

All told, more than 30 companies and 30 executives are to divide up the business in 11 townships in areas affected by Nargis, according to the report.

The document in the magazine is dated May 9, a time when the United Nations, aid groups and many countries were pleading with the Burmese government to allow access to affected areas in the aftermath of the storm, which killed as many as 130,000 people and left 2.5 million without homes. Despite promises of greater openness, the Burmese rulers have continued to impose restrictions on aid relief, including new and onerous identification requirements for aid workers, according to reports from the region.

The document, which includes the cellphone numbers for many of the executives, was published in the Voice, a weekly journal published by Nay Win Maung. A translation was provided by BIT Team, a group of India-based Burmese who try to promote information technology in the xenophobic country.

Nay Win Maung is a son of a military officer and was brought up among Burma's military elites, giving him good connections to military insiders. His magazines can access government-related news and exclusive information.

"The Treasury is targeting the regime's cronies, and the regime wants its cronies to get the money," said Tom Malinowski, Washington advocacy director for Human Rights Watch. "They see it as an opportunity to profit from the international community's compassion. But these are not experts in providing relief; they are experts in running guns and drugs and making a lot of money."

Efforts to reach Burmese representatives in Washington last night were unsuccessful. The cellphone number listed for Steven Law in the Voice was answered by an associate who said he was not available.

While some of the executives awarded contracts are well known to human rights activists and financial-crime experts, others are less prominent, potentially making the document a guide to the individuals currently in favor with the military leadership.

The government estimated it needed more than $11 billion in reconstruction aid shortly after the May 2-3 cyclone, a figure that met with a cool reception at an international donors conference in Rangoon three weeks ago. Burma, also known as Myanmar, is rich in natural resources, but much of the country is desperately poor. The junta has enriched itself with natural gas fields that bring in about $2 billion in annual revenue, as well as trade in jewels, heroin, amphetamines, timber and small arms.

Some of the conglomerates given business in the delta, such as Law's Asia World and Tay Za's Htoo Trading, were also tasked with building the country's new capital at Naypyidaw, more than 200 miles from the old capital of Rangoon. With little notice three years ago, the junta uprooted the capital to a remote area, requiring massive construction of new government buildings, hotels and housing for civil servants.

Much of the country, in fact, is a forced labor camp, with more than 60 prisons, labor camps and detention centers, according to a report this year by the Burma Fund, an anti-government activist group. People forced into construction are paid minimal wages, if at all.

Hlaing Sein, an officer with the London-based Burma Campaign UK, said that Htoo Trading, which was given control of Heingigyum and Ngaopudaw townships, forced cyclone victims to work for 800 kyat a day, roughly 70 cents, in order to meet a government order to reopen schools by June 2. But a quart of water in the delta now costs the equivalent of $1.50, she said.

The Treasury sanctions against Tay Za, Law and other junta cronies -- and some of their companies -- freezes their assets and prohibits all financial and commercial transactions by U.S. entities with the designated companies and individuals, as part of an effort to break up their financial networks. The Treasury has released detailed charts about the financial links among the junta and Tay Za, Law and related associates.

Tay Za, whose businesses include timber, palm oil and aviation, is said to be close to Senior Gen. Than Shwe, the junta leader, in part because of his habit of hiring the children of powerful generals. The Bangkok Post recently reported that though no public warnings were made about the approaching cyclone, air force fighters and private passenger planes from Bagan Air -- believed to be a joint venture between Tay Za and Than Shwe's family -- were moved the evening before the storm from Rangoon airport to Mandalay, which was not in its path.

© 2008 The Washington Post Company