Surprise, surprise.

KMT proposes ‘decriminalizing’ fund

The Chinese Nationalist Party (KMT) caucus yesterday again proposed “decriminalizing” the use of the special allowance fund by government chiefs.

The KMT caucus first suggested an amendment to the Audit Law (審計法) in April 2007 that would decriminalize government chiefs’ personal use of special allowance funds....

“Now that Chen has been found guilty in the first trial, we can now discuss [decriminalization] of [how the government chiefs use their] special allowance fund,” [KMT caucus secretary-general ] Lu [Hsueh-chang (呂學樟)] said, referring to the verdict handed out by the Taipei District Court on Friday sentencing Chen and his wife Wu Shu-jen (吳淑珍) to life in prison in the first trial of Chen’s state affairs fund case.

Lu told reporters that it was necessary for the legislature to pass the legislation given that some 200 government chiefs are still being investigated for how they spent their special affairs funds.

I am speechless, though the term "shameless" (袂見笑) comes to mind.

hmmm..

As the DPP prepares a petition drive to "free Chen Shui-bian" from his detention, a tremendous blow is dealt to Chen's case; his daughter Chen Shing-yu (陳幸妤) and son-in-law Chao Chien-ming (趙建銘) plead guilty hours ago in court to perjury, according to lawyers. Apparently son Chen Chih-chung (陳致中) also admitted guilt today.

Chen Shing-yu was, as always, hounded by reporters and she apparently even somehow took an umbrella to the face. She came with a group of body guards who ended up getting into a shoving match with the media, since I'm sure everyone wanted a camera very close to her face. You can see the very unflattering picture TVBS submitted on the right here.

In any case, I imagine this development is really going to put this circus of a case on the fast track to completion. So far they are apparently only pleading guilty without providing more details like which parts of their statements were false; we'll see what happens.

What a nightmare.

KMT party property, revisited.

Update: whoops, missed this Taipei Times article on the subject. It's a very clear and well written article.

I have still not gotten around to posting about this incredibly important move by the KMT to clear themselves of party property problems and go on selling land and material that were stolen or 'given' to the party by the government in the past. Until now.

Remember that NT$55billion (US$1.6billion) had been sold by the KMT over the first 7 years of DPP rule, and total KMT worth could have been up to US$10billion as of 2001.

There are a lot of excellent details in the post, but it can be summarized like this:

• The DPP started pushing a law in September 2002. By 2004 there were PFP and TSU versions of the law. Main objectives would have been to review the process by which the KMT got a number of pieces of land and buildings that are now KMT party property. Many of these were either confiscated from Taiwanese (who had bought them from the Japanese before those soldiers left), taken over directly after the Japanese left (if the property had remained unsold), or gifted/sold out outrageously low rates (both happened) from the state to the party.
  
• These bills basically would have forced the KMT to compensate the government for stolen property or return it to the state (and I presume private owners/their decedents in those other cases).
• These laws were blocked in the Procedural Committee by the pan-blue majority 179 times over three Legislative Yuans. The KMT came up with its own lenient version of the bill, but didn't even pass that.
• The Interior Ministry, however, under DPP Executive control, labeled a number of KMT properties with a special code that would make it difficult for anyone buying KMT party property to later claim, "Hey, I'm just a third party who bought this property legally! Can't take it from me now!" just in case the bill ever was passed. That made it difficult for the KMT to convince anyone to buy the property.
  
• Now that the KMT's back in black, the new cabinet has removed this property code, reasoning that "the party property bills have been holed up in the legislature forever" so there is no legal basis for the code.
  

Shameless? Sure. Surprising? Not really. Could the DPP have done more? I think so, if they had bothered to mention the party property issue in public more often than the couple of weeks before an election.

Keep in mind the KMT has repeatedly promised to "solve" the party property issue, which they have also repeatedly openly stated means selling everything they own. They've also taken down a government sponsored website on this topic from the DPP days.

See also these related posts and sites for some background on the party property issue:

• Taiwan Quick Take: Editorial version
• DPP pushes party assets referendum
• 社團法人中國國民黨黨產總說明
• 國家資產經營管理委員會-黨產處理小組 (dead link since KMT executive rule resumed, but you can see that site using the way back machine here.)
  
• 台灣全民討黨產大聯盟
  

Corruption ranking

The Hong Kong-based Political and Economic Risk Consultancy ranked Taiwan lower (more corrupt) than China in a recent corruption report. President Ma Ying-jeou is spinning this as a DPP era problem, and calling for action to clean up "major" scandals.

But since the ranking results are based on a survey of foreign business executives, most of the corruption being talked about would be low level corruption that the business executives deal with when opening a company, dealing with regulations, taxes or officials, etc.

Ma is proposing the wrong remedy for the malady-- a set of laws that are designed to facilitate corruption (political donation laws that ask politicians to report spending but not receipts, a lack of transparency in politicians income, a legislature which won't take back salary of unqualified legislators who stole their salaries, etc). These laws work hand-in-hand with a low level political culture which expects corruption.

If Taiwan wants to improve its ranking on the corruption index, it will have to do much more than have a set of "investigations" of "major" corruption scandals.

Confirmed...

I have confirmed that this information is in fact on the prosecutors' tapes:

Yesterday Chen's office released the testimony of Koo from November 4th... Prosecutor Chu Chao-liang (朱朝亮) said to Koo: "How about we first chat about some details of the case, I want to understand first and then I will tell you what other [witnesses] have said, and then we can [compare and decide] whether or not the testimony is correct."

Chen's office said this shows the special prosecutor was obviously attempting to lead the witness, and that later, Chu also said: "The amount of 400million is something you ought to say. You think about it, because it has already been a long time [since this happened]. At least we are sure that this is what you said to [Taiwan Cement Group (台泥) chairman] Leslie Koo (辜成允), this is [the amount] you mentioned to Leslie Koo."

Most damning of all?

Prosecutor Wu Wenchung (吳文忠): [responding to a question from Koo] "Yes, otherwise it will be exhausting later. If we can, we'd like to finish [your testimony] today."
Prosecutor Chu: "Take your time thinking about it."
Jefferey Koo: "I understand what you mean. I need to at least help, I must avoid being more of a hindrance than a help."
Chu: "You must avoid being more of a hindrance than a help, [otherwise] [the case] will be wrecked."

The prosecutors argue that immediately after that dozy of a line, Chu said "But of course you should tell the truth." But I think the implications are obvious.

Again: Chen & his wife are clearly guilty of tax evasion, and very likely took some very large "political donations" and returned favors, which pretty much constitutes the definition of a bribe even though it may be hard to prove legally.

But that in no way makes the highly personal, politically-tinted prosecution of Chen any more comforting.

Chen & Koo

There is an article in the Taipei Times today about Former president Chen Shui-bian (陳水扁) questioning the reliability of Chinatrust Financial Holding Co vice chairman Jeffrey Koo Jr's (辜仲諒) testimony.

First, Koo flew back to Taiwan to give this testimony with no fear of arrest, apparently in some sort of deal with the prosecutors though everyone denies it. Second, Koo seems to have been willing to fabricate testimony.

The article lays out Koo's statements and involvement in the case:

Koo said he introduced Tsai Ming-chieh to Taiwan Cement Group (台泥) chairman Leslie Koo (辜成允). Prosecutors allege Chen received kickbacks from the sale of a plot of Leslie Koo-owned land in Longtan (龍潭), Taoyuan County, to the Hsinchu Science Park Administration.

After the deal was completed, [First Lady] Wu allegedly told Jeffrey Koo: “You owe me NT$400 million [US$11.4 million]...."

He said that ever since Chen became mayor of Taipei, Chen would tell him the “big picture,” while the former first lady would tell him the actual amount of money to be paid.

“The president would never tell you how much money he wants,” he said.

Prosecutors allege that the Koo's Group had secured billions of NT dollars in kickbacks from selling land to the government for the development of an industrial park after giving NT$400 million to Chen and his wife.

Wu has admitted taking NT$200 million and insisted it was a political donation.

OK, now for Chen's strongest objections:

Chen said Jeffrey Koo should not be a witness, but a suspect, because he is heavily involved in the case. He also questioned the validity of Koo's testimony and suspected that prosecutors asked leading questions to produce the answers they wanted. He added that prosecutors violated protocol by revealing the testimony of others to Jeffrey Koo.

You may be wondering, "what testimony was revealed?" And while I can't tell you the specifics of that, there was some very revealing information on this very topic not that long ago. While watching FTV, I saw something and a Google search turned up the article I was looking for:

Yesterday Chen's office released the testimony of Koo from November 4th... Prosecutor Chu Chao-liang (朱朝亮) said to Koo: "How about we first chat about some details of the case, I want to understand first and then I will tell you what other [witnesses] have said, and then we can [compare and decide] whether or not the testimony is correct."

Chen's office said this shows the special prosecutor was obviously attempting to lead the witness, and that later, Chu also said: "The amount of 400million is something you ought to say. You think about it, because it has already been a long time [since this happened]. At least we are sure that this is what you said to [Taiwan Cement Group (台泥) chairman] Leslie Koo (辜成允), this is [the amount] you mentioned to Leslie Koo."

Most damning of all?

Prosecutor Wu Wenchung (吳文忠): [responding to a question from Koo] "Yes, otherwise it will be exhausting later. If we can, we'd like to finish [your testimony] today."
Prosecutor Chu: "Take your time thinking about it."
Jefferey Koo: "I understand what you mean. I need to at least help, I must avoid being more of a hindrance than a help."
Chu: "You must avoid being more of a hindrance than a help, [otherwise] [the case] will be wrecked."

Now I haven't heard the tape of that, and I'm having trouble verifying if what Chen's office released was in the official evidence (that would seem insane), so can I get some help on confirming the validity of this? Because if so, I think you really do have to throw out Koo's testimony all together.

Diane Lee resigns

Bam. Now comes the court process.

New, not so funny joke: How many vote buying KMT legislators does it take to consider changing the election law?

Five. [TVBS video]

Meanwhile, China delays the release of Cape No. 7 in China (but really, not for political reasons!); the Justice Minister states (rather unconvincingly, given the evidence,) that it would be "impossible and unacceptable" for the judicial branch to become a political tool; the unreasonable and overly expensive 18% preferential savings rate for civil servants is rebutted with a creaking, verbal promise of reform; and the endless Chen Shui-bian drama continues.

A-bian "took home" 400+ intelligence reports

And if this report bears out, I think everyone would have to agree its obviously illegal.

I really feel let down by A-bian. Not for the little president's fund at first. Rather, for what looks like was a wholesale fleecing of his own supporting donors. For potentially taking bribes in shockingly massive amounts. And now for doing something unnecessary and stupid like this that just keeps him in the spotlight forever.

We'll see what the courts say, but I for one am pretty turned off at this point. Thanks for screwing us, A-bian.

whoops!

The Special Investigation Group has summoned former premier Chang Chun-hsiung (張俊雄) to appear in the court. Chang said he had accepted a gift of NT$2million from Chen Shui-bian, given by Chen in appreciation of Chang's handling of the financial dangers of 2002 and the cleanliness of the 2001 elections. It is difficult to know how this will effect the investigation, except that prosecutors have basically promised to convict Chen already anyway.

Correction/update: via ICRT:

Former premier Su Zhen-chang and former Interior Minister Li Yi-yang say Chen
Shui-bian gave them 20 million NT for an anti-China rally back in March of
2005.

Prosecutors on a special anti-corruption unit questioned the former senior
politicians for about 50 minutes this afternoon ... as they investigate
alleged abuse of a special presidential fund for state affairs by Chen.

Su and Li ... who were DPP chairman and secretary general respectively back
in early 2005 ... say Chen gave them the money for a rally on March 26th of
that year to protest China's anti-secession law.

When the two came out of the prosecutor's office ... media asked Su if the 20
million NT came from the special presidential fund for state affairs.

Su responded with a question of his own ... asking reporters if they were
also working with authorities to investigate the case.

Refusing to elaborate ... Su noted that the details of a prosecutorial
investigation by law are to be kept confidential.

Another day dominated by Chen...

Latest from ICRT:

The Ministry of Justice says it has received positive responses from
Switzerland and Singapore to its requests for assistance in getting to the
bottom of the growing money-laundering scandal involving the former first
family.

Justice Minister Wang Qing-feng said today that Taiwan has applied through
formal channels for aid from the two foreign governments in investigating the
alleged financial wrongdoing of former president Chen Shui-bian, his wife,
and their relatives.

Wang says her ministry has received favorable responses, with both foreign
governments expressing willingness to cooperate.

As to reports that Taiwan had received reports from Singapore early last year
about the current scandal, Wang said those reports may be indicating a
different case, such as the Papua New Guinea diplomatic fund scandal.

Wang also urged any individual or business involved in the burgeoning money
laundering case to turn themselves in to receive protection under the law.

ICRT wrap of Chen scandal

Wu's older brother admitted today to having put a shitton of money in his account for Wu Shu-chen, Chen's wife. Here's the wrap in full:

Former President Chen Shui-bian and his wife - Wu Shu-ren - have been listed
as suspects in a money laundering case and have been barred from leaving the
country.

According to the Supreme Prosecutors Office .... other suspects in the
ballooning case are Wu's elder brother - Wu Qing-mao - and Chen's son Chen
Zhi-chong and daughter-in-law Huang Rei-qing - both of whom have left the
country and face possible detention on their return.

Speaking to reporters .... lead Prosecutor Chu Zhao-liang .. said that the
former first lady's brother has admitted to be instructed to wire money into
various overseas bank accounts - some of which was transferred via an
underground banking system.

Prosecutors say that Wu Qing-mao also confessed that he began to handle his
sisters finances when Chen served as Mayor of Taipei between 1994 and 1998.

The former first lady had told prosecutors that all overseas funds came from
the balance of Chen's campaign election expenses, his earnings as a lawyer
before entering politics, her dowry and her investment gains.

Chen admitted last Thursday that he did not faithfully report election
campaign expenses from his two mayoral elections and two presidential
elections between 1993 and 2004 ... but said that he was unaware that the
balance of the funds was wired abroad by his wife until early this year.

Meanwhile ... Chen's daughter has claimed that her father used the funds at
the center of the ballooning financial scandal to help the election campaigns
of several D-P-P heavyweights.

According to Chen Xing-yu ... the D-P-P members who received election
subsidies from her father did not file reports about those funds .. and nor
did they report any surplus funds honestly.

Chen claimed that former Premiers Su Zhen-chang and Frank Xie as well as
Gaoxiong Mayor Chen Chu are among a long lost of party members who received
financial assistance from her father during their election campaigns.

Yelling a reporters who followed her to her place of work yesterday ... Chen
described the investigation into the former president's suspected money
laundering as a "political struggle" ... adding that politicians from the
K-M-T have also filed dishonest reports regarding election campaign
contributions.

All of the D-P-P heavyweights Chen claim's received funds have denied the
allegations.

Prosecutors have also questioned former Ministry of Justice Investigation
Bureau chief .. Yeh Sheng-mao over alleged concealment of information
regarding suspected money laundering by members of the former first family.

At issue is a report from the Egmont Group -- an international anti-money
laundering organization -- that Yeh allegedly received in January detailing
the status of overseas bank accounts created by Chen's family.

Yeh admitted that he did not deliver formal documents concerning the
sensitive information to State Public Prosecutor-General before his
retirement last month because of what he claimed was his "personal
negligence"

However, Yeh has said that he made an oral report to Chen Cang-ming in
early February -- a claim that the prosecutor-general denies.

The case has been assigned to the Taipei District Prosecutors Office,
instead of the special investigation unit of the Supreme Prosecutors Office
headed by Chen ... in order to avoid any conflict of interests.

A note on the extent of Chen's damage

In case it wasn't perfectly obvious, I thought I'd outline why I think Chen's actions have now totally shattered what was left of the defeated DPP:

+ The party put all its political capital in him personally. Through all the previous corruption allegations, the party stood by him (even castrating those who dared to try and draw a line between the DPP and Chen, the so-called '11 bandits'). They let Chen run the legislative campaign, a disaster. And now it's simply too late to break with him. Even a ritual suicide wouldn't be enough.

+ Chen surly gave at least some of these campaign donations to other party members running for election (as his daughter stated flatly when chased down by reporters yesterday). That information will leak out over the next couple of months, further decapitating the party. Tsai Ing-wen is likely to be the only charismatic person left standing at the end of this.

+ As much as the greens would like to talk about what really matters to them, standing up for Taiwan's sovereignty and (now) closing corruption loopholes, there is no way for them to control this narrative or even a single news cycle. And this will go on through the December elections. Nobody is going to pay any attention to what Ma's government is doing. He'll probably effortlessly get his way on everything -- up until the 'peace agreement,' which will be a tougher sale.

+ Even B.S. allegations will stick in people's mind, which is why people like Chiu Yi are slinging everything they can make up before a morning press conference.

+ The DPP's attempt to paint itself as clean, anti-black gold party are now doomed for the foreseeable future. And Ma really will look like Mr. Clean. I think he gets one more free term now.

More on Chen's case ...

From ICRT:

A Taiwan prosecutor just back from Switzerland is optimistic authorities
there will cooperate in helping to get to the bottom of allegations of money
laundering against the former first family.

Qing Qi-ren said Taiwan and Swiss officials are working to freeze a bank
account at the centre of the investigation involving former president Chen
Shui-bian.

Upon returning to Taiwan Qing said a request for the return of any illegal
funds stashed by Chen or his family in Swiss banks was well received.

She said Swiss investigators also indicated their willingness to cooperate in
turning any suspicious materials over to Taiwan as well.

Qing's disclosure of her efforts in Switzerland came as Chen and several
others involved in the case have been barred from leaving the island pending
the outcome of their investigation.

A total of three people including Chen and former first lady Wu Shu-zhen ...
as well as her brother ... are among those who have been barred from leaving.

And:

The daughter of former president Chen Shui-bian threw a temper tantrum in
front of reporters this morning ... suggesting her father is being singled
out, and that other members of the DPP are not saints.

Cornered by local media ... Chen Xin-yu screamed that before she dies she
intends to tell on everyone in the DPP who has come asking for money from her
father at election time.

Chen denied their family has taken any money that wasn't theirs ... saying if
that was the case she could lie at home everyday and not worry about having
to work.

She then turned her tirade on the top members of the DPP ... asking "has Su
Zhen-chang not taken money? Has Frank Xie not taken money? Has Gaoxiong mayor Chen [Chu] not taken money?

She said now that her father is in trouble DPP politicans are acting like
they're saints who have never done anything wrong.

Lowering her voice only to answer a phone call ... Chen asked if all the DPP
politicians who took election money from her father reported it or just put
unused funds into their own pockets.

Weekend Report

I spent the weekend listening to underground (green) radio here in Kaohsiung and let me tell you: the green supporters are pissed and panicked. A-bian's impropriety here has screwed over the DPP cause more than anything the blue camp has done in the last eight years.

This will kill enthusiasm for the 8-30 rally; it will drain blood from the DPP daily as the year-end County Commissioner and Mayoral elections approach; it will distract from what Ma does in office; and it has made a joke of the DPP's cause. Remember, the problem isn't just the corruption. Chen stole from his own supporters, many of whom made sacrifices to make donations to his campaign.

As Feiren pointed out in a chat:

The worst thing is that it confirms the Taiwanese belief in conspiracies and rampant corruption everywhere, and the attitude that I should just go get my stack first and fuck everyone else.

The whole Independence-oriented media, like Liberty Times and the underground radio, is calling for the same direction: disown Chen and continue to stand up for Taiwan's right to self-determination. All good in theory, but very difficult to execute at this point.

Now what? Frankly, I think the best we can do is wait and pray. Because we are royally screwed.

Breaking: A-bian, wife to leave DPP

Now that A-bian's heavier dead weight than the sunken Titanic, he's announced he and his wife will leave the party almost immediately. It is about the only contribution he can still make to the DPP and Taiwan's cause, and this did not go unnoticed.

Wow. Just wow. What an incredible and disappointing finish.

Former VP Annette Lu points out A-bian's resignation is just too little, too late.

(For more about the scandal, check here.)

(For once, I beat Michael Turton to a post on something like this. Too bad it has to be over such a sad story.)

Follow up on Chen scandal ...

Michael Turton beats me to it for now.

Chen laundered money?

ICRT reports ...

A lawmaker claims to have proof that former president Chen Shui-bian
laundered money through his son and daughter-in-law.

Hong Xiu-zhu claims to have a letter from the Swiss government saying it is
investigating bank accounts opened under Chen Zhi-zhong and Huang Rui-qing's
names.

According to Hong, Huang had originally opened two Swiss accounts, one with
over 20 million U.S. dollars, the other with over 70 billion NT.

The funds were later transferred to a company set up by Huang in the Cayman
islands, though 10 million dollars were transferred once again to a Swiss
account under Chen Zhi-zhong's name.

Lawmaker Hong alleges that this money was provided by former president Chen,
who is currently being investigated for abuse of a special state affairs
fund, and that the various transactions were meant to cover up the
embezzlement.

A-bian has admitted that there were discrepancies in his expense report tax report but denies wrong-doing admits wrong-doing, but I'm not clear on the details yet. Let's wait until tomorrow.

We'll see how this goes; this can be nothing but a demoralizing blow to the already crawling DPP.

DPP sues Ma Ying-jeou for treason

Updated: After Ma nullified the classification of the documents related to Chen's State Affairs fund, the DPP has opted to sue him for treason in the Taipei District Court, A-bian's lawyer has asked for the Constitutional Court to decide if this constitutes treason, claiming it was an act of political revenge. As the Taipei Times reported today,

The documents contained information pertaining to six diplomatic missions and were therefore protected under the Classified National Security Information Protection Act (國家機密保護法), [Chen Shui-bian's (陳水扁) lawyer Richard] Lee (李勝琛) said. ...

Following Ma’s inauguration, instead of declassifying the documents, the Presidential Office granted the court access to them. The Special Investigation Section of the Supreme Court Prosecutors’ Office said however that access was inadequate and sought again in June to have the documents declassified.

On Tuesday, the Presidential Office said it would declassify the documents, adding that they should not have been classified in the first place.

Who knew you could sue someone for treason?

Mine, all mine!

KMT preparing to reclaim NT$240m from Taipei court (Taipei Times)

By Rich Chang STAFF REPORTER Monday, May 26, 2008, Page 3

The Chinese Nationalist Party (KMT) is preparing to reclaim the NT$240 million (US$7.87 million) involved in the Chung Hsing Bills Finance scandal involving People First Party Chairman James Soong (宋楚瑜) from the Taipei District Court, a Chinese-language newspaper reported yesterday.

The Chung Hsing Bills Finance scandal broke in 1999 when Soong was accused of embezzling millions of dollars during the time he was KMT secretary-general.

Part of the case involved allegations that Soong stole NT$240 million from the KMT and used it to buy US bonds in his son’s name. Soong has said the money was to be used as a gift for members of Chiang Kai-shek’s (蔣介石) family in the US and that he did not steal the money.

After news of the scandal broke, Soong attempted to return NT$240 million to the KMT, but then-president and chairman of the KMT Lee Teng-hui (李登輝) refused to accept the funds.

In January 2000, Soong asked the Taipei District Court to take custody of the funds, naming the payee as Lee.

The report in the Chinese-language United Evening News said because civil law stipulates that funds held by the district court are given to the treasury if a payee does not apply to receive them within 10 years, KMT Chairman Wu Poh-hsiung (吳伯雄) and Soong recently discussed how to withdraw the money.

The news report said the KMT has asked its attorneys to look into whether Wu can apply to take back the money in his capacity as KMT chairman.

KMT Secretary-General Wu Den-yi (吳敦義) confirmed yesterday that the KMT chairman had been discussing the issue with Soong and Lee.

“I believe that the three will reach a consensus on the issue pretty soon,” he said.

Additional reporting by Mo Yan-chih