Project description

In 2009 Mongolian Government expanded the Small and Medium Enterprises Support Fund /SMES/ to support small and medium-sized enterprises. The fund provided companies with low-interest loans at 3 percent interest per year, up to five years and 2 billion Mongolian tugriks roughly $780,000 at today’s exchange rate. Which has been one of the most favorable conditions to start and develop SME in our country, because average interest on SME loans by commercial banks are from 18-20 percent which is very high for people who are starting just their own businesses. The fund was created in and continues to be overseen by The Ministry of Food, Agriculture and Light Industry.

Small and Medium Enterprises contribute about 17 percent of Mongolia’s GDP and 2.3 percent of exports but struggle with high-profit taxes and fluctuating local currency. About 65 billion tugriks total of 25.4 million US dollars was allocated to the fund in the State budget of 2018.

But over the year there had been rumors and facts that senior government officials may have been channeled to the government money through the companies that were related to their families and friends.

Therefore, the first allegations of \”Small and Medium Enterprises Support Fund embezzlement by Mongolian politicians\” was found and posted on social media among citizens in September of 2018.
Based on those allegations and facts iKon.mn News team used and checked three public databases published and maintained by government agencies. Through comparative analysis and identifying discrepancies wealth and income disclosure report of more than 35,000 public officials in Mongolia, using in-house developed software.

We began to publish first findings of the companies that received loans are tied to prominent politicians through ownership of the Small and Medium Enterprises that benefited in October of 2018. Since then we have published more than 100 articles related to SME and other public fund and still, no one disputed the leaked lists, suggesting that they are genuine.
All published facts were confirmed by SME Fund official numbers, annual wealth and income disclosure report issued by the Independent Authority Against Corruption and public company information of Mongolia\’s Stock Exchange.

As a direct result of our report and findings were published, current 14 members of parliament, including 3 ministers, 1 deputy minister, and other senior government officials like The State General Prosecutor\’s Office, The General intelligence Agency, State Professional Inspection Agency, Mongolian National Audit Office, Police offices are benefited from that very low-interest loans of State Budget. Also, former minister of Food, Agriculture, and Light Industry B.Batzorig offered his resignation. This helped to set a precedent use of data to ensure government accountability while also underlining the importance of transparent reporting from government agencies.

Finally, iKon News team is pleased to announce that we have received “Transparency Award 2018” for Integrity and Anti-Corruption from Transparency International Organization, for reporting SMES Fund embezzlement by Mongolian politicians. Also, iKon News team has been awarded as “The Best website” of the year in 2018 for the second year in a row named by The Union of Mongolian Journalists.

In Mongolia there are 28 special funds like the SME fund, which we are still working on more evidence of malfeasance is yet to come.

What makes this project innovative?

The project implemented a relatively new method of investigative journalism in Mongolia which employed a method of cross-verification analysis against public records, namely company ownership data. Once published, the use social media platforms and branding such as Twitter hashtags (#ЖДҮ, #бидуучлахгүй) were essential in unifying the public voice and allowed public discussion on the topic to be streamlined. Concurrently, the persisted use of social media meant that it gave the media and the public much more of a voice than in the past. Previously, traditional media outlets would be more susceptible to political influence, which allowed politicians to control the narrative. The widespread coverage on social media made it impossible for any media outlets to not cover the story and even brought the scandal to a global stage. These aspects of the project represent a rapidly changing media sector, one which is better equipped to fulfil its role in enforcing accountability with the government.

What was the impact of your project? How did you measure it?

The most recognizable impact of our investigative report into Mongolia's SME scandal was the movement that it sparked. The movement calling for political accountability started on social media, continued nationwide in mass media, and eventually made its way onto the streets. Several demonstrations were held, despite the harsh Mongolian winter. Our investigative report used three public databases published and maintained by government agencies. Through comparative analysis and identifying discrepancies, we were able to identify which company received loans from the SME Support Fund and which politician was associated with the said company. As a direct result of our report being published, the Mongolian government was forced to prioritize the SME scandal, resulting in the dismissal of several Cabinet members, and the eventual dismissal of the Speaker of Mongolian Parliament. This helped to set a precedent for the use of public data to ensure government accountability while also underlining the importance of transparent reporting from government agencies. The investigative report and the ensuing scandal was one of the most explosive and impactful events that transpired in recent Mongolian history. It had a wide-reaching political impact and sparked debate on corruption, transparency, and accountability of civil servants and politicians.

Source and methodology

1. http://opendata.burtgel.gov.mn/les - open database which includes ownerships and financial details of all registered companies in Mongolia. This database helped us to find out ownership of related companies and high officials. 2. http://xacxom.iaac.mn/xacxom - open database of wealth and income disclosure report of more than 35,000 public officials of Mongolia. 3. http://www.shilendans.gov.mn/ - an open database which includes over 400 transactions of Small and Medium Enterprises Fund transactions details between 2015-2018. First of all, we downloaded and copied all the data information from stated above three public databases which makes easier and faster to process the data in our system. Secondly, we cleaned all unnecessary data information and characters from the downloaded sources and integrated them into one format which makes easier to process the date. And finally, we compared and matched all stored pieces of information through comparative analysis and identifying discrepancies, where we were able to identify which company received loans from SMED Fund and which politician was associated with the said company. Until the publication of our first article many people, companies and media outlets had no idea about how to use open government database. By making datasets public and available public institutions become more transparent and accountable to citizens.

Technologies Used

We used 3 main technological features. The data visualizations and analytics in this project are powered by D3JS system. MYSQL community server allowed us to store and save the data from sources. RUBY programming language allows us to collect the data script /crawler/ and to process the data which means help us to find possible relations between companies.

Project members

iKon News Team

Video

Link

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