Running alongside the Mekong and Tonlé Sap rivers, the Sisowath Quay is the main drag for tourists, expatriates, and international aid workers in the Cambodian capital of Phnom Penh. By day they flock to the grounds of the Royal Palace, with its famous Silver Pagoda and dollhouse-like Napoleon III Pavilion, and to Wat Botum, a golden spire–topped Buddhist monastery (where in the 1930s a young novice monk named Saloth Sar, better known later in life as Pol Pot, was rated as “a lovely child”). At night Westerners push their way to the quay’s open-air bars and restaurants through a circus of street vendors: book and video sellers, opium dealers, tuk tuk drivers, and the inevitable young prostitutes. (“I’m too tired these days to even think about sex,” I overheard a British man complain while having a drink at a faux pub called Huxley’s.) A waitress holding a small baby under her arm served them mugs of beer and the signature “Huxley’s Tower” of Cajun-breaded shrimp, pork ribs, and chicken wings.
Hostess bars, the most visible component of Cambodia’s notorious sex industry, are heavily clustered just off the riverfront and in a few other spots around the city. Neon lights flash from the windows, and young women sit at tables out front waving at men walking by, urging them to come in. The soundtrack trends heavily toward 1960s and ’70s rock; songs like “Brown Sugar” and “Alabama Song (Whiskey Bar)” (“Show me the way / To the next little girl”) are standards. Middle-aged Western men sit at tables talking to each other as hostesses drape themselves over their shoulders or in their laps, or massage their shoulders.
In his 1998 book Off the Rails in Phnom Penh, Amit Gilboa described Cambodia as “an anarchic festival of cheap prostitutes [where] you are never more than a few minutes away from a place to purchase sex.” Prostitution isn’t quite as flagrant these days, but the temporal distance from paid sex is roughly the same. Streetwalkers can be found day and night along the perimeter of Wat Phnom, the Buddhist temple that is one of Phnom Penh’s top tourist sites. There are numerous karaoke bars and massage parlors, and freelance prostitutes abound at bars and nightclubs catering to Westerners.
Outside of the sex trade, though, most of Phnom Penh shuts down early. By ten o’clock the streets are free of traffic, and a motorcycle can quickly cover the city center. Along Mao Tse Tung Boulevard sit the foreign embassies and the garish blue and white tower of the antipoverty group CARE, a perfect symbol of the excesses of the international charity complex. Norodom Boulevard, named for the country’s former king, is home to the most powerful political institutions: Prime Minister Hun Sen’s ruling People’s Party, whose logo, a goddess sprinkling gold dust, is fitting for a regime whose bosses have grown rich through corruption; and the Ministry of the Interior, which oversees the police and otherwise maintains order.
Norodom Boulevard connects to Road Number 2, which is lined with dozens of apparel factories and winds east through a procession of shantytowns to the border with Vietnam, roughly a hundred miles away. The plants, and hundreds more around the city’s periphery, have sprouted up since 1999, when Cambodia signed a bilateral trade agreement that for five years allowed it to export a set quota of textiles to the United States under highly favorable terms.
Pay at local factories has remained appallingly low: One global survey put the average wage for apparel workers at thirty-three cents an hour, lower than anywhere but Bangladesh.1 Labor unions are abundant, but most are funded and controlled by employers or the government, and independent activists have been targeted for repression. And so even as factories poured into Cambodia and exports boomed, apparel workers got poorer. The monthly minimum wage at apparel plants was forty-five dollars in 2000 and a decade later it was fifty dollars; during that same period, inflation rose by 53 percent. The low pay and poor conditions are precisely why so many women opt to work at hostess bars and other sex trade jobs. A labor-rights activist with a group called the Community Legal Education Center, Tola Moeun, told me, “A lot of women no longer want apparel jobs. When prostitution offers a better life, our factory owners need to think about more than their profit margins.”2
The US cut most assistance to Cambodia in 1997 after Hun Sen staged a coup but resumed aid a decade later. Today Cambodia is the third-largest recipient of US aid in Southeast Asia, after Indonesia and the Philippines. Competition with China for influence in the region and growing trade ties—the United States buys more than half of Cambodia’s apparel production, its primary export—are among the factors behind the political warming.
But a US diplomatic cable written in 2007 and released by WikiLeaks pointed to another reason for the rapprochement: the discovery of massive extractable resources, including gold, bauxite, and other minerals, plus potentially large reserves of oil and gas.
Doing business in Cambodia is not easy, though. The WikiLeaks cable said corruption in the country was “systemic and pervasive” and expressed concern that Cambodia might become “the Nigeria of Southeast Asia.” One Western investor I talked to described the situation as “a nightmare,” saying, “Anything having to do with licenses, natural resources, or concessions—that’s where you have problems and where you always have military and government officials looking for money.”
For major Western companies trying to navigate this complicated and perilous investment climate, this is where Bretton Sciaroni comes in. The portly Sciaroni makes a most unusual power broker in contemporary Cambodia. A former ideologue of Ronald Reagan’s White House, he played a little-known but vital role in enabling Oliver North’s weapons shipments and assistance to the Nicaraguan Contras during the 1980s. Yet now he is an official adviser to the government of Prime Minister Hun Sen, a one-time Khmer Rouge cadre. The Cambodian government has bestowed upon Sciaroni the titles of minister without portfolio and his excellency. He is the chairman of the International Business Chamber (IBC), an association that includes most of the multinational corporations in Cambodia and which is the most important business group in the country.
From his office in an exclusive section of the city—his neighbors include the president of the ruling party—he runs a consulting firm, Sciaroni & Associates, which provides advice and counsel to foreign investors seeking to do business in Cambodia. He has brokered land and natural resource deals that offer little to the public but that benefit government officials and well-connected domestic and foreign insiders, including Bretton Sciaroni.
Sciaroni’s clients include a number of natural resource firms, including Chevron, which received a stake in the most promising field. “Of particular importance for an investor in an emerging economy is the establishment and maintenance of good government relations,” his firm’s Web site explains of its modus operandi.
Sciaroni & Associates enjoys excellent working relationships with major ministries and governmental institutions. Several of our senior staff have served or are serving in various official capacities with the [Cambodian government], giving them the understanding of both the people and processes of government.
Unlike international oil fixers, who often have global ambitions and influence, Sciaroni is a gatekeeper whose utility is limited to Cambodia and a few neighboring countries. His skill set is also narrower, and is based almost exclusively on his ability to leverage his political contacts to open doors. For example, Sciaroni worked with a company called Raptor Forestry, which was (according to a confidential business plan) exploring large-scale agricultural and forestry projects. “The compelling nature of this opportunity is the ability of the project to return investors’ funds within 12–18 months,” the proposal said. “Assuming assumptions are met, investors can expect a … continuing share in an estimated $35 million in free cash from clearing activities.” Sciaroni, it said, had been given an equity stake for providing his “network of local contacts and delivering legal services to the project.”
The gatekeeper role is frequently played by well-connected locals and is especially common in countries where the rule of law is weak and corruption is especially entrenched. In Cambodia, Sciaroni is one of a handful of foreigners who arrived in the country during the chaos of the post–Khmer Rouge period and who have lived well and amassed influence through their dedication to the new leadership. Among them are Helen Jarvis, an Australian academic who became an adviser to Sok An, the country’s deputy prime minister.
Sciaroni is the most influential of the foreign lot. The others have curried favor through ideological fealty and support for Hun Sen’s regime—“They are more pro-government than the government,” one source told me. Sciaroni has done that as well, but he has also played a hugely important role with his consulting firm. And unlike the other prominent foreigners, who are recognized as progovernment hacks by Western diplomats, Sciaroni has managed in large measure to avoid that taint. He consults regularly with the US and British embassies and is viewed as an important interlocutor. The US embassy in Phnom Penh selected Sciaroni to represent Cambodia at a Global Business Conference hosted by Secretary of State Hillary Clinton in Washington in early 2012. In August of that year he hosted an event at his law firm to welcome the new American ambassador, William Todd.
During a reporting trip to Cambodia in 2011, I met Sciaroni for drinks at the Elephant Bar of the Raffles Hotel. Sciaroni wore a light-colored jacket and yellow tie and sported gold-rimmed glasses and a thick gold bracelet; he offered an upbeat view of his adopted country. “This is very much an emerging economy and democracy,” he said, while sipping from a glass of Château Batailley, a French Bordeaux. “There’s been a lot of political progress. The ruling party no longer intimidates the opposition.” He describes his own work in Cambodia in an altruistic fashion, saying, “This is a country where you can make a difference. If you make a suggestion to a government official, and he likes it, it will happen.”
Dana Rohrabacher, a conservative California congressman and old friend of Sciaroni’s, takes a dimmer view of his work there and relationship with the regime. Though he says he personally likes Sciaroni, Rohrabacher told me that Hun Sen—who has held power since the 1997 coup—“had no genuine legitimacy” and that “Brett has become part and parcel of a clique of the Cambodian elite that is neither democratic nor honest.”
How did a fervent right-wing anticommunist and old pal of Ollie North’s end up in Cambodia as the chief foreign advocate for Hun Sen, a man who in the 1960s fought as a Khmer Rouge guerrilla against a US-backed government before becoming head of the Vietnamese puppet regime that overthrew Pol Pot in 1979? It was a big ideological leap, but Sciaroni’s chief talent—performing intellectual acrobatics for his paymasters, whoever they might be—has served him equally well in Washington and Phnom Penh.
By 1984, just five years after he received a law degree from UCLA, the sky seemed the limit for young Bretton Sciaroni. Following short stints at two right-wing think tanks and as a Commerce Department political appointee under President Reagan, he was named chief counsel to the president’s Intelligence Oversight Board. During this period he provided the legal arguments Reagan needed to move forward with his Star Wars scheme (on the specious grounds that it didn’t violate the Anti-Ballistic Missile Treaty) and with military aid to the Nicaraguan Contras, which Congress had flatly forbidden.
When Iran–Contra investigators subsequently asked him why the administration turned to him for advice instead of to more experienced staff lawyers at the White House or Justice Department, Sciaroni replied, “Frankly … that thought has crossed my mind as well. I don’t know why my opinion was the only one.”
The reason, however, was quite apparent. Like John Yoo and other conservatives on whom the Bush administration more recently relied for the flimflam needed to justify torturing terrorism suspects in violation of the Geneva Conventions, Sciaroni was a loyalist who the Reagan administration knew would reach the conclusions it wanted.
Indeed, compared with Sciaroni, Yoo looks like Oliver Wendell Holmes. In 1986, Sciaroni wrote a series of opinions, including a memo that said North’s aid to the Contras was legal even though Congress, through the so-called Boland Amendment, had flatly banned any training “that amounts to participation in the planning or execution of military or paramilitary operations in Nicaragua.” Sciaroni determined that the Boland Amendment ban didn’t cover “generic” military aid, which he expansively defined to include categories such as marksmanship, intelligence reporting, and the construction of fortifications.
When he was later asked by a superior at the oversight board to investigate media accounts of illegal aid to the Contras, Sciaroni determined that they were false, largely on the basis of a five-minute conversation with North. The latter denied everything, which was good enough for Sciaroni.
Lou Cannon, Ronald Reagan’s biographer, later wrote that the Reagan administration’s claim that it could arm the Contras despite the Boland Amendment was
an after-the-fact invention constructed to provide a legal rationale for North and others … who were charged with violating the law. If the Reagan administration had questioned the legality of Boland, it could have and should have challenged the issue in the courts. What happened instead was that the law was evaded while the president and his surrogates were proclaiming that it was being obeyed.
Sciaroni’s 1987 testimony before the congressional committee investigating Iran–Contra was a disaster for the Reagan administration (and would have been even worse had it not been overshadowed in the media by the appearance on the stand the same day of Fawn Hall, Oliver North’s attractive secretary). During his testimony it emerged that he only passed the bar exam on his fourth try—in three states—and that he was given the chief counsel’s position despite never having previously held a job in the legal profession.
CONGRESSMAN THOMAS FOLEY: Were you ever involved in writing legal opinions on legislative acts prior to your service with the board?
SCIARONI: I can’t recall that I was.
FOLEY: Did you ever write one before the September 1985 opinion that you’ve described?
SCIARONI: None comes to mind.
FOLEY: So this is the first time in your legal career that you ever wrote an opinion regarding a legislative act?
SCIARONI: Perhaps outside law school.
Sciaroni was dismissed from his government job soon after his testimony. In early 1988, a group of right-wing supporters held a fundraiser at Washington’s prestigious University Club to help pay the lawyers he’d hired to help him prepare for his questioning. In an interview at the fundraiser with the Washington Post, Sciaroni was clearly feeling sorry for himself. “Congress writes a bad law,” he said. “I write an opinion, which is correct. I get roasted on national television … It is so blatantly unfair.”
The following years were rough for Sciaroni. He surfaced in 1991 as a fellow at the American Conservative Union and the same year became a pro bono lobbyist for an outfit called the Central America Lawyers Group (CALG), which was registered at a Miami post office box. In disclosure forms, Sciaroni described the lawyers (none of whom were identified) as dedicated to “creating a just society in El Salvador.”
The CALG was actually a front for the murderous right-wing Salvadoran government, which was prosecuting a civil war against leftist guerrillas. Its chief mission was to whitewash the military’s appalling human rights record, specifically the notorious murder of six Jesuits in 1989. The following year a task force led by Congressman Joe Moakley issued a report that said the two soldiers convicted of the killings in Salvadoran courts were fall guys for the true culprits, a group of senior Salvadoran officers. The report said that one of the key figures who ordered the killings was Colonel René Emilio Ponce, who had been promoted to minister of defense in late 1990 and was a close ally of the Reagan administration. Moakley said at the time:
From the beginning, our task force was asked to view the murders of the Jesuits as the deranged actions of a few individuals, and not as an indictment of the armed forces as an institution. It is my view that it is both.
The Moakley report was a PR catastrophe for the Salvadoran regime and threatened to lead to the end of American aid to the country, which Congress had already cut in half. In response, the CALG produced a 150-page booklet that it used to lobby Congress, deriding Moakley’s report as a “conspiracy theory.” The study, which thanked the Salvadoran government and military, was clearly written by Sciaroni and demonstrated the same intellectual dexterity he deployed on behalf of the Contras. While Moakley alleged that there was a high-level plot to kill the Jesuits, the CALG said that there was “no evidence of any specific orders, general policy, or permissive environment fostered by the High Command demonstrating institutional guilt.” There was also no evidence that Ponce had anything to do with the murders; indeed, he had “actively assisted investigators.” The Salvadoran government and military cooperated with investigators and never sought to control or influence the investigation. “As important as the successful resolution of the Jesuit case is, its outcome—whatever it may be—should not effect fundamental US–Salvadoran relations,” CALG argued.3
Two years later a United Nations truth commission issued a report that corroborated Moakley’s findings and demolished the claims of CALG and the right-wing government. Reinaldo Figueredo, one of the commissioners, said at the time:
In examining the staggering breadth of the violence that occurred in El Salvador, the Commission was moved by the senselessness of the killings, the brutality with which they were committed, the terror that they created in the people, in other words the madness, or locura, of the war.
Nonetheless, American aid to the Salvadoran regime was never cut off, just as Sciaroni and the CALG hoped.4
By 1993, Sciaroni’s career prospects in Washington were grim. That year he learned from Congressman Rohrabacher that Hun Sen was looking to hire an American attorney for a short-term assignment. Sciaroni was quick to seize the opportunity. He arrived right before the May 1993 elections, which were organized by the UN following the reign of the Khmer Rouge and years of civil war. The royalist party triumphed in the balloting but agreed to a power-sharing arrangement when Hun Sen and his Cambodian People’s Party (CPP), which came in a distant second, threatened to lead an armed revolt.
“Pol Pot killed all the [Cambodian] lawyers,” Sciaroni told me at the Elephant Bar, in explaining his good luck in getting the job. “They had some French ones, but I think they wanted an American … Rohrabacher came to me and said, ‘How would you like to go to Cambodia for two months?’ The funny thing is that if the CPP had won the election, I probably would have been back in the US after two months. But they lost, and they panicked. I had written up some things they liked, and they asked me to stay on.”
Rohrabacher has been a strong critic of Hun Sen ever since the 1993 vote, so it seemed odd that he would help Sciaroni get a job with the CPP, but the congressman confirmed the story during a phone conversation. It turned out that Rohrabacher and Sciaroni had known each other since their college days, when they were members of Young Americans for Freedom and Youth for Reagan. “After the Iran–Contra scandal, all of Brett’s friends deserted him, which is typical of Washington,” Rohrabacher told me. “A Cambodian–American constituent told me that Hun Sen was going to hold free elections; he was looking for a lawyer to draw up an honest election code and was willing to pay top dollar. I knew Brett really needed the money and thought he ’d be perfect for the job. And he did a good job—they did have a free and fair first-round vote. The only problem was that Hun Sen lost and didn’t abide by the results, and our government buckled. They should have told him, ‘You lost, get out,’ but instead they agreed to a compromise, and Hun Sen became one of the two prime ministers.”
Rohrabacher was furious about the outcome, but Sciaroni continued to work for Hun Sen.
“He’s like a Lord Jim character,” Rohrabacher told me of Sciaroni. “His own country abandoned him when Iran–Contra became a scandal. He became a destroyed human being who went overseas to start a new life.”
Sciaroni’s close relationship with the regime became especially apparent after Hun Sen seized power in a bloody military coup in July 1997 that left at least forty-one oppositionists dead. At his government’s request, Sciaroni assembled and directed a lobbying and public relations team that tried to spin the coup in Washington. The centerpiece of the campaign was a “white paper” that alleged that the royalist party had employed a “campaign of provocation” against the CPP, and that the coup was therefore a legitimate preemptive measure by Hun Sen.
The Washington Times exposed the campaign, prompting outrage among Americans in Cambodia and some of Sciaroni’s right-wing comrades back home. “In private conversations, members of the American community in Phnom Penh have expressed outrage over Mr. Sciaroni’s role in helping create the legal defense,” the newspaper said. “Other lawyers, upset at the way Hun Sen crushed his rival, said they would have refused to do so on ethical grounds.” When the Times asked him what help or advice he contributed to the white paper, “Sciaroni grimaced and responded, ‘No comment.’ ”
In 1998, Sciaroni coordinated another PR campaign around an election that Hun Sen organized and won handily. The International Republican Institute, an organization with ties to the Republican Party, described the election as “among the worst we have observed” and “fundamentally flawed.” Problems it pointed to included the forced exile of opposition leaders after the 1997 coup, the “destruction of opposition party infrastructures,” the denial of media access to opposition parties, and “the murder of up to 100 opposition members without any resolution to the crimes.”
Rita Colorito, who worked on the campaign for an American lobbying firm recruited by Sciaroni, later wrote about her experience in an article called “Confessions of a Spin Doctor.” “The Cambodian People’s Party didn’t care about human rights progress,” she wrote. “It simply wanted favorable media coverage and renewed international aid.”
Hun Sen’s American spin team did its best to sell their client by “taking semantics to an absurdity,” according to Colorito:
We argued incessantly that only Hun Sen could deal with the lingering threat [of the Khmer Rouge]. Although he had driven the regime from Phnom Penh in 1978—with the help of the Vietnamese army—we ignored the fact that he’d once been a Khmer Rouge lieutenant. More important, as of June 1998, the Khmer Rouge amounted to some 400 ill-equipped guerrillas in Cambodia’s far northern jungles. Yet, our campaign mantra focused on this vastly exaggerated fear…
After the elections, the Cambodian Ambassador asked me directly how we could make the media like them. “You can’t just say you’ll investigate killings, you actually have to do it,” I explained, referring to the 100 opposition supporters that had been killed since the 1997 coup.
The Washington team advised they investigate at least one killing to demonstrate progress. We suggested Thong Sophal, whom Cambodian police claimed had committed suicide. Sophal’s eyes had been gouged out, his arms and legs cut off, and his body skinned. The ambassador looked at me blankly, then uttered the standard refrain: “It’s not easy. It will take one, maybe two years.”
Sciaroni’s campaign misfired, though, when it persuaded Tina Rosenberg of the New York Times Magazine to come to Cambodia to report on Hun Sen’s inspired leadership. Rosenberg wasn’t impressed and wrote an article (under the headline “Hun Sen Stages an Election”) that said that since 1975 “Cambodia has suffered under an assortment of dreadful Governments, and Hun Sen has been in all of them.”
Petrified that Rosenberg’s story would cause them to lose their fat contract, the PR team held an “emergency phone conference” to spin the article to Hun Sen and convince him that it wasn’t as bad as it looked. Hun Sen apparently accepted the explanation. Sciaroni continued to enjoy a close relationship with his government, and in 2002 it granted him Cambodian citizenship.
Sciaroni’s success is based on a simple truth. Political contacts are the handmaiden of business operations the world over, but in a country like Cambodia—with its tiny intertwined political and economic elite—they are vital. “You get opportunities because you are close to the government,” a Western diplomat told me over coffee in Phnom Penh. “You have to be in their good graces. You can accumulate wealth and live comfortably but to accumulate jet-set wealth requires government connections.”
No critic of the CPP would ever be allowed to develop a major business, he said, because that would allow him or her to gain financial resources and public prominence, and ultimately challenge the regime. “Economic development tends to be land intensive, which is all concession-based,” he said. “That totally depends on your relationship with the government. What are the chances you will be able to do business if you criticize it? Zero.”
Sciaroni’s connections, this person said, run wide and deep: “Brett has been here since the early days, when things were very rough. There aren’t many [foreigners like that], and Brett is the only American.”
Sciaroni is well known in Phnom Penh and is a fixture at Freebird, which offers “The Best American Food in Cambodia.” The restaurant’s walls are covered with pictures of Elvis Presley, Marilyn Monroe, and Bob Denver and Alan Hale (better known as Gilligan and the Skipper), and typical menu entrées include a cheeseburger, rib-eye steak, and meatloaf and mashed potatoes.
Sciaroni founded his consulting firm in 1993, the year he arrived in the country. His chief partner at Sciaroni & Associates is Matthew Nicholas Rendall, an Australian attorney described by Fortune magazine as the leading land attorney in Cambodia. A BBC story called him “the land lawyer, in a sharp suit, who advised the government so closely that it is often said that he ‘wrote’ Cambodia’s investor-friendly 2001 Land Law.”
The firm’s Web site says that Cambodian laws and regulations “often are vague or so general as to preclude obvious application in specific circumstance,” and that, as a result, governmental officials “frequently have discretion in interpretation and implementation.” Sciaroni & Associates has long “worked at maintaining a good relationship with key officials in the major ministries,” it continues. “This relationship is important not only to better understand governmental policies but also to work toward mutually advantageous interpretations of vague or general laws.” The Web site even boasts a testimonial from Hun Sen, who congratulates “his Excellency Bretton” for “seeking justice for Khmers” and expresses hope that “he will continue to stay here with us.”
Everyone from Amnesty International to Freedom House has condemned Cambodia’s human rights record. The State Department’s 2011 annual report on human rights said that Hun Sen’s ruling CPP has “consolidated control of the three branches of government and other national institutions” and that the government “restricted freedom of speech and of the press … and at times interfered with freedom of assembly.”
Sciaroni, needless to say, has quite a different assessment. “Investor confidence has been strengthened by the awareness of political stability,” he said during a speech at a 2007 investment conference.
From one mandate to another, you are likely to deal with the same ministers in the last mandate that you deal with in the next mandate, and very likely the next mandate. You don’t have the revolving door phenomenon that other [Third World countries] have. Therefore you are not likely to see great swings in policy because of new officials coming on the scene.
In other words, Hun Sen’s authoritarian brand of government is a plus for business.
He also has sought to minimize human rights violations and kindred abuses. In an op-ed for the Phnom Penh Post, he chided the World Bank’s resident country director for warning that the “incarceration of political figures could affect Cambodia’s ability to attract investors.” In fact, said Sciaroni, the “protection of free speech when that speech is irresponsibly exercised” was a far bigger concern. By his reckoning, opposition protests of the bogus 1998 election—that he was paid to spin as a great democratic moment—amounted to an example of such irresponsible free speech.
Son Chhay, one of the few oppositionists in Parliament, said he feared Sciaroni had played a role in softening American policy toward Cambodia, which until a few years ago placed a heavy emphasis, at least rhetorically, on human rights. Nowadays, expanded trade and military cooperation get far higher billing. Sciaroni “covers up the government’s bad practices and uses his connections to convince the US to keep [supporting] the government,” he told me. Another government critic, who asked to remain unidentified, offered a similar assessment. The United States has become “obsessed with the need for ‘dialogue’ with the government, and Sciaroni is seen as a bridge for that,” this person said.
Sciaroni is not shy about what he can deliver for clients of his consulting firm. During a speech at a conference for foreign investors in Phnom Penh he explained how his firm had negotiated a deal for an American company that had balked at investing locally because the import of raw aluminum was taxed at a rate of 7 percent. “In rapid succession we met various senior officials,” Sciaroni recounted. “[One of them] said ‘what would you like it [the rate] to be?’ and the company said ‘How about zero percent?’ And zero percent it was and is today.”
The Sciaroni & Associates Web site says the list of its clients comes “from various sectors and includes global blue chip giants as well as leading regional companies.” One of its specialties is negotiating deals for natural resources firms, especially mining and energy firms. The company “has provided advice to the majority of extractive industry companies in the Royal Kingdom of Cambodia for many years,” says the Web site. The head of Sciaroni & Associates natural resources practice, Billie Jean Slott, is the cofounder and legal adviser to the Cambodian Association for Mining and Exploration Companies.
The natural resources industry has been a cash cow for Hun Sen and his ruling party. “A corrupt elite has captured the country’s emerging oil and mineral sectors,” Global Witness said in a 2009 report called “Country for Sale.” It said Cambodia could earn vast wealth from oil and minerals, but that its “future is being jeopardized by high-level corruption, nepotism, and patronage in the allocation and management of these critical public assets.” According to Global Witness, key concessions and resources were awarded “behind closed doors” by a few power brokers with close ties to Prime Minister Hun Sen and senior government officials.
A number of Sciaroni’s clients have obtained concessions in Cambodia through murky means. For example, clients at his consulting firm include Chevron, which won stakes in Cambodia’s most promising oil field. Production has been delayed, but Chevron originally estimated its holdings in the Gulf of Thailand at four hundred million barrels, enough to generate peak annual earnings of about $1.7 billion a year. Chevron was one of seventy-five oil, gas, and mining firms that refused to reveal how much they paid for their stakes in Cambodia, making it impossible to track whether the money ended up in the national treasury or the pockets of regime officials.
Another Sciaroni client, BHP Billiton, an Australian firm that won a bauxite project in Cambodia, was alleged to have paid a $2.5 million bribe to close its deal, according to published accounts and the parliamentarian Son Chhay. The payment, which was supposed to go to a social fund to develop projects for local communities, disappeared into a black hole and never found its way into government books. As a result, not a single school, hospital, or irrigation project was built by the fund, as had been pledged by both BHP and the government.
“No doubt BHP knew from the beginning this money [was a] bribe,” Son Chhay told an Australian newspaper. “There is no excuse for BHP.”5
That Sciaroni’s clients have been accused of making suspicious payments to the Cambodian government does not, of course, mean that they did so at his suggestion nor is there any evidence to suggest that. What it does show is the difficulty of doing business in a country where corruption is so rife. Indeed, while Sciaroni has been a public apologist for the government’s record on human rights and good government, in private he has acknowledged that corruption is a major problem. “Cambodia currently has laws which criminalize corruption-related offenses, including extortion and bribery,” he is quoted as saying in a 2009 US government cable released by WikiLeaks. But Sciaroni, the cable said,
noted that the political will to enforce these provisions is lacking, as evidenced by a dearth of corruption-related prosecutions. He warned against allowing the lack of prosecutions to lull business people into a false sense of immunity and an acceptance that corrupt practices are business as usual.
Sciaroni’s consulting firm has also been involved in shaping Cambodian land law and in brokering land deals that have benefited his clients and Sciaroni personally. I spent two days in Sihanoukville, a seedy but gorgeous coastal town whose beaches and islands have been sold off by the government to well-connected domestic and foreign companies that said they were planning eco-friendly luxury hotel and condominium projects. All of this was done by decree, without public disclosure, and with the terms of the deals kept secret. “Those who lived or worked there were turfed out—some jailed, others beaten, virtually all denied meaningful compensation,” said a 2008 story in the Guardian. The newspaper quoted a British property developer, Marty Kaye, who said, “Nowhere else in the world could you create your own kingdom from scratch … It’s fantastically exciting, the opportunity to zone [a] whole island, to see where the luxury exclusive villa plots will be, for the Brad Pitts, etc.”
By now, almost all of Cambodia’s coast is owned privately, by rich locals and foreigners. According to the Guardian, “The Sokha Hotel Group, run by Sok Kong, a Cambodian oligarch and Hun Sen ally, was confirmed as the new owner of the lion’s share of Occheuteal Beach, the largest and most popular public dune in the region.” Kith Meng, another businessman with close ties to the ruling party and a personal adviser to Hun Sen, obtained beautiful islands and property in the region. A WikiLeaked cable from 2007 called Kit Meng “Mr. Rough Stuff” and quoted sources who described him as “a relatively young and ruthless gangster” who was “notorious for using his bodyguards to coerce others into brokering deals.”
A number of well-connected foreigners landed deals during the Sihanoukville sell-off as well. The Guardian reported:
With all the big islands sold, even smaller outcrops have gone, too, including a clump of rocks known as Nail Island, bought by Ukrainian entrepreneur Nickolai Doroshenko, who has transformed it into a James Bond–style lair, complete with a giant fibre-glass shark that soars over the fortress-like construction. He already owns Victory Beach, in Sihanoukville, a restaurant stuffed with live snakes and a bar that advertises “swimming girls.”
Sciaroni was listed on initial incorporation records as chairman of the board of a local subsidiary of Paris-based CityStar, another consulting firm client for which he also provides legal counsel. CityStar set up shop in Cambodia in early 2007, almost precisely as the government was selling off for development public land near the coastal town of Sihanoukville. CityStar quickly won two concessions in Ream National Park, which contains beaches, mangrove forests, jungle, and, according to a UN Web site of protected areas, 150 species of birds and a noted monkey population—as well as two areas for development on islands off the coast of Sihanoukville.
“Our development will be really green and in total accordance with landscapes and vegetations,” Etienne Chenevier, CityStar’s executive director in Asia, told the local press. “We will have very low density villas or cluster villas, a few bungalow hotels with everything … in respect with the Cambodian spirit.” He said the selling price of villas would range between $170,000 and $200,000, and he expected buyers from Phnom Penh and France.
A foreign businessman I spoke with in Phnom Penh said that Cambodia had great potential but corruption and the government’s lack of concern for the poor—the overwhelming majority of the population—were holding the country back. “To get to the next level, like elsewhere in Asia, they need a healthy, educated population,” he told me during an interview at his office. “Vietnam and Laos have done better with rural electrification and educating their people. I can’t believe I’m saying this sort of thing, because I’m generally right-wing, but you have to have schools and health care to make your economy run better, and the private sector is just not going to do it.”
My visit took place during the early days of the Arab Spring, and the businessman said that the uprisings in the Middle East made him wonder about Cambodia’s political stability. “People ask if a Libya or Egypt could happen here and I wonder. You have the same conditions here as forty years ago—a wealthy and corrupt elite in Phnom Penh and the Average Joe is very poor. The prime minister has consolidated power. The risk is that they get too greedy.”
As for political reform, he added, “We may never see real democracy here. Strong, authoritarian leaders have always been the types that do well in this region.”
But for now the future looks bright in Cambodia—at least for the ruling party and hangers-on like Sciaroni.6 American companies like GE, DuPont, and Microsoft have set up shop here in recent years, and his firm recently began offering “the same experienced advice for clients with business interests in Myanmar and Laos.”
Cambodia’s ties to the US government are also warming. Then secretary of state Hillary Clinton traveled there on an official visit in 2012, and Barack Obama visited the same year to attend the East Asia Summit. His aides claimed that he pressed Hun Sen in private on political freedoms, but in public he didn’t raise the subject of human rights abuses and pointedly declined to meet with opposition political figures or activists. Following the visit, Sciaroni told the local press that relations between the United States and Cambodia had never been better. “This goes beyond the business relationships: diplomatic, political, economic relations are all very good between Cambodia and the United States,” he said.
And so it goes for Bretton Sciaroni, whose fleeting success in Ronald Reagan’s Washington served as a stepping-stone for far bigger things here. “Opportunities abound,” he told me of Cambodia when we met for drinks, though he may as well have been describing his own good fortune in washing up here. “It’s a great environment.”