[T]here are growing fears that every effort will be made to thwart the investigation in Thailand. Said one senior official, without elaborating: "Those who are involved will try and prevent the matter from being pursued any further in Thailand.
"Mrs Juthamas has denied everything and threatened to sue the FBI. However, the issue is causing some sleepless nights for several officials, especially those who were known to have been in Mrs Juthamas' camp."
Said one industry executive: "These investigations are problematic for internal morale. There are cliques within the TAT, just like any other large organisation."
Juthamas Siriwan was the governor of the Tourism Authority of Thailand from 2002 until 2006. The TAT organized the lavish Bangkok International Film Festival in an effort to portray Thailand as a glamorous Hollywood of Asia and a great place to make movies. To create the illusion, the TAT flew in celebritities to attend red-carpet premieres and to be wined and dined at Thai taxypayer expense.
An FBI affadavit (PDF) accuses Hollywood producer Gerald Green and his wife Patricia of paying $1.7 million in bribes to "the Governor" in order for their firm, Festival Management, to be awarded the contract to run the festival, which it did from 2003 to 2006.
Thai officials initially said they would look into matters here in Thailand, and cooperate with the U.S. authorities who are prosecuting the Greens for violations of the Foreign Corrupt Practices Act.
Juthamas, however, did deny any involvement, but a day after the scandal broke last month, she resigned from her position as deputy leader and member of the Puea Pandin (For the Motherland) party. This was just days before the December 23 general election. Puea Pandin is now set to join the coalition with the People Power Party in forming the next government. Viewed as a proxy of former prime minister Thaksin Shinawatra, who was ousted in a military coup in 2006, there is concern that anti-corruption investigations begun under the junta's tenure will be derailed by the PPP-led coalition.
Investigation or no, the scandal has done a lot of harm, observers in the travel industry say:
Among the private sector, the response has been pretty much a shaking of the heads because of the damage it does to the image of the Thai tourism industry at large ...
Many in the private sector recalled that they had opposed Mrs Juthamas' appointment as governor in the first place but now say that many things now begin to make sense.
"During the tenure of the Thaksin administration, the TAT enjoyed record budgets," one senior sector executive said. "Thaksin himself had set a target of 20 million tourist arrivals by 2008, even though many in the private sector knew it was totally unrealistic."
I'll be very surprised if the Bangkok International Film Festival is continued, even though the contract with Festival Management was broken and it was scaled back in 2007. Nobody ever took it seriously, so perhaps it's best to sweep the festival under the rug along with the scandal.