Kerry and Kay Danes

Kay Danes in 2007.

Kerry Arthur Danes and Kay Frances Danes are an Australian husband and wife who were controversially arrested on 23 December 2000 by authorities in Laos. The Danes were detained without charge in a detention centre in Vientiane, Laos for six months until formal charges were laid on 13 June 2001. On 28 June 2001, the Danes were taken to the Laotian Municipal Court in Vientiane where they faced trial and were convicted of embezzlement, destruction of evidence and violation of Laotian tax regulations. They were sentenced to 7 years imprisonment and ordered to pay compensation. On 6 November 2001 the Danes were pardoned by the President of Laos.

Background

Location of Laos within ASEAN.

In 1994, Danish citizen Bjarne Jeppesen and his wife, New Zealand national, Julie Bruns, founded Gem Mining Lao PDR (GML) at Huay Xai with Lao-born American, Somkhit Vilavong. They were granted a 15-year concession from the Laotian government to mine Sapphires. American citizen Lee Wolf and Australian Trevor "Ted" Doyle, through their company Pacific East Trading Co, had a royalty agreement with GML whereby gems from the Huay Xai mine were sold in Bangkok but this was allegedly a cover for laundering money embezzled by Max Green. Wolf and Doyle had also loaned $3.8 million of Green's money to GML. Following Green's murder in 1998 funding for the company ended and, through a series of share transactions, GML was acquired by Asia Sapphires Ltd. (ASL), which was floated on the Canadian stock exchange by Green's former partner, a disbared Melbourne lawyer named Gary Shugg who retained Jeppesen and his wife as executive directors. After failure to pay Jeppesen and Bruns a promised shareholding in ASL they both resigned and Shugg, prevented from open participation due to his disbarment in Australia, began a board take over through friends in London claiming Jeppesen was mismanaging the company. Jeppesen and Bruns in reply claimed Shugg was illegally diverting millions of shares to a Liechtenstein based company. During the dispute mine equipment was sabotaged and plant machinery was sliced up with cutting torches. On 28 May 2000, Jeppesen and Bruns fled to Bangkok, Thailand after being accused of stealing Sapphires and in August quantities of the missing gems turned up in nearby Chanthaburi's gem market.

Kerry and Kay Danes Involvement

Kerry Arthur Danes, an Australian Special Forces Soldier working on leave without pay from the Australian Defence Force, was the Managing Director of a company [Lao Securicor] that provided security to over 75 foreign investors, including United Nations, World Bank, International Monetary Fund, numerous Embassies, Hotels, Garment Factories and both domestic and international airports. He also provided security for GML. Before he fled Laos, Jeppesen appointed GML's security chief, Kerry Danes, to handle all GML's affairs. Kerry Danes also cosigned a letter from Jeppesen accusing members of the Laotian government of corruption. Reporter Richard Hughes was to say later "in 20–20 hindsight, we can safely state something that even Danes would now agree to – this was not a good move".

In November 2000 Jeppesen and Bruns fled to Denmark and the Laotian government convicted the couple In absentia for misappropriation from GML, sentenced them to 20 years imprisonment and ordered them to pay US$31 million dollars and 10.1 million kip in damages to the Laos Government. On 23 December 2000, Kerry Danes was detained and accused of involvement in the theft of 167 rough Sapphires and 3.2 kg of finished sapphires from a safe in the Vientiane office of GML although it was to be another six months before he was informed of the charges. In January 2001, it was reported that Kerry Danes, was being held as a foreign agent by the Laotian secret police and would be charged with spying.

Hours after her husband's arrest, Kay Danes was detained at the Lao-Thai border. She was in the company of Australian Embassy officials who were attempting to evacuate Kay Danes and the couple's two children from the country. US$50,000 in cash was found in her possession, the payroll for wages and other expenses for her Thailand security company. According to the Danes lawyer, Ted Tzovaras the cash became a non-issue and was returned to the Danes at the court hearing of 28 June 2001 along with a further $98,000 that was frozen in the couple's local bank account. The couple were held without charges being laid for six months. Bjarne Jeppesen later said he believed Doyle had bribed Laos authorities to pursue the case against the Danes as a way to enhance the Doyle/Wolf/Shugg team's chances of winning control of the mine.

In September 2001, the Australian Government admitted to the Danes, in the presence of the Australian Embassy and Laotian Immigration officers, that the Danes were in fact, being held hostage. The Australian Ambassador made the following public statement on Australian national television: "It's very difficult for the Laotian authorities to accept that there's anything much wrong with a situation where people may take the rap for something that they didn't do. As they said to us on a number of occasions, 'if the Danes had been released, where does that leave us? How can we get the compensation for all the damage that has been done to the Laotian people over the years by Gem Mining Lao? Don't be too fussed about the connection between the Danes and Gem Mining Lao. The Danes are all we've got left.'"

Trial

In early 2001 the Danes' legal representation submitted a 317 page submission based on affidavits, forensic accounting, witness testimony and Laotian law. Evidence indicated that Kerry Danes did not have the key or combination to the GML safe from which the sapphires were taken and included documents showing that on 29 May 2000, Jeppeson telephoned the Laotian Manager and asked him to collect the jewelry and take it to them in Thailand. It was also shown that Bruns had presented the sapphires to the New Zealand Embassy on 24 January 2001 for verification of ownership. This submission was never referred to in the Laotian court. In the Laotian legal system no-one has ever been acquitted once charged. The Defence never argues that the accused are not guilty. The normal function of a Defence lawyer in a Laotian court is to argue mitigating circumstances and the extent of the defendant's co-operation before asking for clemency.

The couple were tried on 28 June 2001 in the Vientiane Municipal Court. The trial lasted five hours, their legal representation was not permitted to speak, no cross-examination of witnesses or allegations was permitted and the already typed judgment was delivered within 25 minutes. The Danes were sentenced to seven years imprisonment for embezzlement, destruction of evidence and tax evasion and fined $463,885 and 700 baht for the stolen property and $66,847 for the tax debt. The Danes appealed.

Evidence presented at the trial included a contract signed by Jeppesen, allowing the couple to sell the company’s property because GML owed the Danes money (sapphires owned by GML can't be sold without government approval) but the main evidence was that the Danes had opened a bank account, allegedly under a false company name (DP Protection Service Co), and the amount in the account was close to the claimed value of the stolen Sapphires.

Aftermath

After extensive political lobbying between the Australian and Laotian governments, Foreign Minister Alexander Downer negotiated a settlement. The Danes would drop their appeal and pay $1 million compensation in exchange for release. August 2001, a Laotian government official stated, "the Government was prepared to release the couple and a release should by no means be viewed as a pardon" as it would only be an exercise to smooth bilateral relations between Laos and Australia. The appeal failed while they considered the settlement and "in desperation" they signed the compensation bill. On 27 September 2001, the Australian Ambassador to Laos, Jonathan Thwaites, signed a "note" stating that the Australian Government would make sure that the Danes pay the fines and the Danes later signed the bail form accepting the court's verdict on 4 October. Kerry and Kay Danes were released on 8 October and placed under house arrest at the residence of the Ambassador but not permitted to leave the country. The Danes then requested a pardon with a promise to pay the fines.

On 6 November the Laotian President Khamtay Siphandone signed a decree pardoning the Danes by means of a third party note between two governments. The document was placed under the protection of National Security by the Australian Government and is not available to the public or to the Danes who have attempted to obtain a copy under the Australian Freedom of Information Act. "I am delighted that Kerry and Kay Danes have been pardoned by Laotian President Khamtay Siphandone today," Foreign Minister Downer stated on 6 November 2001. The Laotian Government, who consider the compensation a civil matter separate from the criminal charges, received US$150,000 from Kay Danes as the initial payment against the agreed compensation as a sign of good faith. The Laos government has since condemned the couple for failing to meet the terms of their pardon, claiming the Danes failed to pay the fines and have "embarked upon a campaign against the Lao Government" by criticising their treatment in prison. Lao authorities stated that conditions in the prison were considered "good and suitable" considering the current social and economic development of Laos. To date it is understood that the payments have not been made despite high level protests from the Laos government.

At the time of the release, the Australian Government officials who were advising them said that the agreement was simply a diplomatic face-saving exercise. Alexander Downer stated the Laotian Government was given no guarantee that the Danes would pay the compensation nor would the Australian Government enforce payment. Laos officials said the couple agreed to admit guilt as part of the release deal but Canberra maintains the Danes did not admit guilt, and that they only acknowledged they had been found guilty by the Laotian court. [1]

See also

• Australian Special Air Service Regiment
• List of Australians imprisoned or executed abroad
• Punishment in Laos

Bibliography

• Danes, Kay (2009). Standing Ground: An Imprisoned Couple's Struggle for Justice Against a Communist Regime. Australia: New Holland. ISBN 978-1-741107-57-9. 
• Danes, Kay (2008). Families Behind Bars: Stories of injustice, endurance and hope. Australia: New Holland Publishers. ISBN 978-1-741106-76-3. .
• Danes, Kay (2006). Nightmare in Laos : the true story of a woman imprisoned in a Communist gulag. Ireland: Maverick House Publishers. ISBN 978-1-905379-08-8. 
• Danes, Kay (2002). Deliver us from evil : bad things do happen to good people. North Melbourne, Victoria: Crown Content. ISBN 1740950259. 

External links

• http://www.kaydanes.com
• http://www.ruby-sapphire.com/lao_sapphires.htm
• http://www.phaseloop.com/foreignprisoners/political_prisoners.html
• http://www.un.int/lao/5_sept_2002.htm
• http://www.maverickhouse.com/books/nightmareinlaos.php
• http://www.newholland.com.au/products/details.asp?id=9781741107579
• http://www.myaustralia.ws/danes/kd.pdf
• http://redland.yourguide.com.au/news/local/news/general/kay-crusades-for-families-behind-bars/788561.aspx
• http://www.kerrianne.com.au/public_panel/todays_show.php?id=115
• http://www.amnesty.org/en/library/asset/ASA26/004/2002/en/dom-ASA260042002en.html
• http://media-newswire.com/release_1088730.html