THE INDEPENDENT AUTHORITY AGAINST CORRUPTION

About the Authority
The Independent Athority Against Corruption of Mongolia (IAAC) was established in 2006 following the passage of the Anti-Corruption Law by Parliament in 2006. The creation of the IAAC is the result of longstanding initiatives to crack down on government corruption and ensure transparency and accountability in government. The Government of Mongolia (GoM) has undertaken a number of initiatives to fight corruption during the past decades. For example, The Parliament approved a National Program for Combating Corruption (NPCC) in 2002. Subsequently, a National Anti-Corruption Council (NACC) was established to oversee the implementation of the NPCC. In October 2005, the Parliament ratified the United Nations Convention against Corruption (UNCAC). The process of revising national laws and regulations to comply with UNCAC is underway. In August 2007, Mongolia’s Criminal Procedures Code was amended and the IAAC was added to the list of state bodies authorized to conduct investigations and either bring charges against government officials or absolve them of wrongdoing.

Oversight and Resources
The IAAC reports to the parliament each year and is subject to oversight by the Attorney General’s Office under the Criminal Procedures Code. The IAAC is designed to be a coordination center that brings together investigations, intelligence, asset disclosure, and public awareness to ensure the integrity of Mongolia’s government and bureaucracy. The IAAC is comprised of approximately 90 professional staff members ranging from accountants and investigators to researchers. The annual budget is $1.65 million.

Charges against Mr. Enkhbayar Nambar, the former President of Mongolia.

• On 12 April 2012, Mr. Enkhbayar was formally arrested and charged with government corruption under the Mongolian Criminal Code.
• Mr. Enkhbayar.N, jointly with a few other government officials, stands accused of felonies consisting of the following five allegations involving misuse of government power and others’ property:
  

1. Misuse of capital city property “Urguu Hotel” for a personal gain. On 17 August 2007, the Mayor of the Capital City, Mr. Batbayar.Ts (currently a MP), submitted a proposal to the Capital City Representatives’ Hural (City Council) to establish a joint company by inviting private investment into the “Urguu Hotel” State Enterprise. The Presidium of the City Council accepted the Mayor’s proposal with the condition that the private investor should be selected through an open bidding process. However, Mr. Batbayar.Ts, the former Mayor did not organize an open bidding process as required. Instead, he dismantled the “Urguu Hotel” State Enterprise and proposed to establish a new joint company “Dun Urguu”. The Capital City Council adopted Batbayar’s new proposal and the “Dun Urguu” Joint Company was established on 10 October 2007. But the Dun Urguu Joint Company’s private partner “Har Dun” company ended up owning 75% of the new joint company, while “Har Dun” company itself was established just 10 days before the establishment of the joint company and had only one member and with only a one million tugriks charter fund (less than $1,000). The Director of “Har Dun” company, Mr. Huyag Buya was the sole owner of “Har Dun”. Five days before “Har Dun” company was approved as 75% of ownership of the “Dun Urguu” new joint company, it was subsumed as a daughter company of “Remif” LLC by the order No.01/13 of Mr. Batshugar Enkhbayar (a son of Mr. Enkhbayar Nambar), director of Remif LLC. “Remif” LLC became a daughter company of “Escon” LLC founded by Mr. Enkhbayar Nambar in 2010. As a result, the capital city property “Urguu Hotel”, with a market value of 605,000,000 tugriks (USD600,000) in 2007 was misappropriated by Mr. Enkhbayar Nambar for his personal gain.


2. Misuse of Capital City property “Printing House” for personal gain using unlawful privatization: The capital city property “Printing House” is a large historic building sited approximately 50 meters in the east of Government House, as the most expensive real estate area of Ulaanbaatar. In 2008, the building was occupied by the “Ulaanbaatar Times” newspaper and its management team had a contract with the Capital City for use of the property. On 08 September 2008, the Capital City Privatization Commission issued the Resolution No.75 to privatize the building and sell it to the “Ulaanbaatar Times” management team at 369,724,000 tugriks (approx.USD350,000). However, the “Ulaanbaatar Times” management team had not fulfilled their contractual obligations and had unpaid debts, it was unlawful to privatize the property to sell it to the management team. Moreover, as the stated market value of the property in August 2008 was 2,125,000,000 tugriks (approx. USD 2.0 million), the loss from the privatization was over 1.7 billion tugriks. The “Ulaanbaatar Times” management team lead by Mr. Chuluunbaatar Dolgor received 500 million tugriks from the “Media Holding” Company as an investment when the team bought the building at privatization. The “Media Holding” company lead by Ms. Enkhtuya Nambar, a sister of Mr. Enkhbayar Nambar, immediately became a 49% of owner of this privatized building. Later, in 2010, “Media Holding” Company became a daughter company of “Escon” LLC founded by Mr. Enkhbayar Nambar.

3. Misuse of a gift addressed to Mongolian Buddhist for personal gain: Mr. Enkhbayar Nambar, while serving as the Chairman of the MPRP caucus in the parliament, visited to Japan in early February 2000. The Buddhist center “Agonshu” based in Kyoto, Japan, hosted him at a religious ceremony and donated of 11 kinds of 46 sets of television equipment for the purpose of establishing a television station by Gandandegchilen Monastery. According to the Customs declaration, the donation valued USD 113,453.21. However, Mr. Enkhbayar.N misused the gift for his personal gain instead of conveying the television equipment to the Gandandegchilen Monastery.

4. Caused significant loss to Mongolian International Air Transport (MIAT) Company by misusing government power: During his tenure as the President of Mongolia, Mr. Enkhbayar Nambar, used the state owned airline MIAT to transport his newly printed eight volumes of books.for free of charge from Korea to Mongolia,

5. Letting others to misuse “Erdenet Factory” LLC and caused the state extremely large amount of loss using his and their official powers: Mr. Enkhbayar Nambar, repeatedly ordered the leadership of “Erdenet Factory” to provide preferential treatment to make contracts on purchasing steel balls and other materials from Mr. Myagmarjargal.J, who was the director of both “Hinlon” LLC and “Great Global International” LLC. Even though Mr. Myagmarjargal.J repeatedly failed to meet his contract obligations, Mr. Enkhbayar Nambar continued to give pressure to the “Erdenet Factory” LLC; thereby enabling others to misuse the USD3,356,369 contracted advance for personal gain and causing extremely significant loss to the State.

• At the investigation stage, the Agency filed charges against Mr. Enkhbayar.N under the provisions 150.3 and 263.2 of the Criminal Code. These provisions are subject to change by the Prosecutors, if they find the charges are too light or too heavy.
• The provision 150.3 of the Criminal Code or the crime of “misusing and mishandling others’ trusted property by causing significant or extremely significant damage to others” is to be punished by confiscation of property and 5-10 years of imprisonment.
• The provision 263.2 of the Criminal Code or the crime of “repeatedly misusing government power by a government official and causing significant damage and loss” is to be punished by barring the right to work for the government for a period of up to 5 years and fining with an amount of 51-100 times of the monthly minimum wage, or up-to 5 years of imprisonment.
  

Investigative Process/Timeline

• Over a year ago, the IAAC became aware of reports regarding the activities of Mr. Enkhbayar.N, while he held public office concerning illegal activities.
• After a preliminary investigation, the IAAC investigators found the reports credible and launched a formal investigation.
• Since May 2011, the IAAC contacted Mr. Enkhbayar.N for 10 times requesting him to appear for questioning. Each time, Mr. Enkhbayar.N refused IAAC investigators’ requests. 
• Because of Mr. Enkhbayar’s refusal to appear, IAAC investigators, acting within the law, submitted a request for his arrest to the prosecutor’s office. According to the Law on Criminal Procedure, the prosecutor’s office verified the legitimacy and grounds of the Agency’s request and conveyed it to the Sukhbaatar District Court. An order for the arrest and detention of suspect Mr.Enkhbayar beginning from April 12, 2012 was issued by a Sukhbaatar District Judge.
• The Agency and the Police officers who came to arrest Mr.Enkhbayar on the evening of 11 April 2012 faced several serious obstructions to justice. Some actions were taken to overcome the obstructions. For example, during his arrest one of Mr. Enkhbayar’s bodyguards was disarmed after brandishing a firearm and pointing it at law enforcement authorities. Currently, several citizens, including Mr. Enkhbayar’s bodyguard who was aimed a firearm at law enforcement officer, is being investigated by Khan-Uul District Police.
• Mr. Enkhbayar, when requested to obey the Sukhbaatar District Judge’s decision, refused to follow the order stating that he would not leave his home until forced to. Therefore, he had to be forcibly taken into custody after initially fleeing from law enforcement.
• Due to multiple layers of obstructions to the law enforcing process, the Sukhbaatar District judge’s decision wasn’t read to Mr. Enkhbayar during his arrest. Police’s usual procedure was standing in front of the suspect and orally reading the Court decision before it makes an arrest. However, this procedure could not be fulfilled during Mr. Enkhbayar’s arrest owing to the actions of his scores of bodyguards endeavoring to interfere with the arrest. However, the Judge’s decision was conveyed to him and his lawyers, namely, Mr. Ganbaatar.B and Mr. Shinen.B, on the same day and it was informed them and him of the nature of the charges against him. 
• Mr. Enkhbayar was immediately allowed access to legal counsel and continues to have full access to legal representation. Since 13 April 2012, he is being represented by attorney Mr. Baasankhuu.O and four other attorneys. All of his rights under Mongolian’s constitution and legal code have been, and will be, respected. 
• Because some of the suspects of the same crime were detained in Ulaanbaatar Houses of the Court Decision Enforcement Office, Mr.Enkhbayar was jailed in nearby Tuv Province in order to separate him from the other suspects and accused. Tuv Province jail is located south of Ulaanbaatar and can be reached by car in 40 minutes. The detention center’s doctor examined Mr. Enkhbayar’s upon his arrival and found no pain, wound or injury to his person. 
• The Independent AgencyAgainst Corruption has submitted an investigation file number 21147024 to the Capital City Prosecutor’s Office on May 7, 2012. The case involves five criminal actions and two charges concerning Mr. Enkhbayar Nambar and other government officials.

#	Date	Subpoena Received by	Subpoena refused to be accepted
1.	2011.05.18	Byambajav Bolorchuluun, officers of the State Special Security Department
2.	2011.06.09	N. Enkhbayar received upon signing
3.	2011.11.23	Javzmaa, Governor, 8th microdistrict, Sukhbaatar district, Ulaanbaatar
4.	2011.11.23	N. Enkhbayar	Subpoena was delivered at the office of MongolRosTsvetMet company, located in the 5th microdistrict of Bayanzurkh district, UB; N. Enkhbayar refused to sign
5.	2011.11.23		N. Enkhbayar told through the building guard to give the subpoena to his attorneys as he was busy in a meeting
6.	2011.12.02		Subpoena was taken at his residence address, but he was missing there; he asked by phone to give it to his attorney
7.	2012.01.13		When subpoena was delivered by the MongolRosTsvetMet company building, the State Special Security department officer refused to accept
8.	2012.03.20		N. Enkhbayar was absent at his residence address, his whereabouts were clarified from the guard, and due notes were made.
9.	2012.03.21		Enkhbayar did not pick up his mobile phone. His son Batshugar refused to accept
10.	2012.04.02		Enkhbayar was absent at the address, clarifications were made with Javzmaa, the governor of the microdistrict, and a letter of confirmation was produced.