Center for Individual Freedom Calls on Bush Administration to Defend Western Interests in Mongolia

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US Taxpayer Monies Undermining American Interests, Benefiting Russians

WASHINGTON, March 13  — Today, the Center for Individual Freedom (CFIF) sent a letter urging U.S. Secretary of State Condoleezza Rice to investigate the rapidly-deteriorating situation in Mongolia, a key U.S. ally, as it seeks to expropriate Western interests.

The Mongolian Government in recent weeks has moved to force Western companies to relinquish control of mineral deposits to the state. These actions pave the way for Russian companies to make billions in profits at the expense of Western firms.

In the letter CFIF said, “Mongolia’s government is attempting to ‘shake down’ private sector companies located in the West that do business in Mongolia through confiscatory taxation, and it is attempting to intimidate companies into relinquishing equity in their commercial enterprises to the state.”

“Mongolia’s attempt to seize western business assets is an assault on the special relationship between the United States and Mongolia,” wrote Timothy H. Lee, Esq., CFIF Director of Legal and Public Affairs. “We urge Secretary Rice to investigate this situation and to engage in immediate talks with the leaders of Mongolia to find a solution.”

Even more troubling is the fact that Mongolia has made these decisions despite receiving nearly $300 million in U.S. foreign aid assistance from the Millennium Challenge Corporation (MCC).

“The behavior of the Mongolian Government raises serious questions as to why the MCC grant should go forward,” said Lee.

Founded in 1998, the Center for Individual Freedom (http://www.cfif.org) is a Constitutional and free-market advocacy organization with more than 250,000 supporters and activist nationwide. CFIF opposes over-burdensome state and federal regulations and taxing regimes that impede the evolution of the Internet and e-commerce.

Excerpts of the letter:

“The ex-Communist government of Mongolia has begun a full-scale assault on the rule of law in recent months by jettisoning legal contracts with Western natural resources firms.”

“Mongolia’s government is attempting to ‘shake down’ private sector companies located in the West that do business in Mongolia through confiscatory taxation, and it is attempting to intimidate companies into relinquishing equity in their commercial enterprises to the state. This is a deliberate disruption of the business and legal climate in the country, one that may ultimately force Western business interests to leave.”

“What should raise even more eyebrows in Washington, D.C., however, is the fact that Mongolia is engaging in such tactics despite receiving hundreds of millions of American taxpayer dollars via the MCC.”

“Indeed, some prime beneficiaries of the Mongolian government’s regrettable efforts include political elites hoping to line their pockets, as well as Russian commercial and governmental interests who own large stakes in Mongolia’s natural resource and extractive industries.”

“In other words, as reports come pouring in that the Mongolian government is attacking the values Americans hold dear, including those demanded by the MCC, it is simultaneously accepting American taxpayer largesse.”

“Mongolia’s activities threaten the rule of law and individual freedom around the world. We therefore ask that you investigate the rapidly-deteriorating situation in Mongolia, a key American ally located in an area of strategic geopolitical interest.”

SOURCE: Center for Individual Freedom

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