Taiwan’s legislators yesterday passed a landmark bill that will allow investigators to identify political assets acquired illegally over the past 71 years and return them to the state.

The Act Governing the Handling of Ill-gotten Properties by Political Parties and Their Affiliate Organizations was passed after an 11-hour session in the Legislative Yuan – which since the January elections is now controlled by a majority of Democratic Progressive Party (DPP) members.

The Kuomintang (KMT) has long been accused of exploiting its decades of one-party rule and building up a massive asset base, worth billions. The party earlier this year claimed the net worth of its assets was no more than NT$16 billion (US$500 million) – this figure is widely disputed and far below many other estimates.

The law will see the establishment of a special commission, which will operate under the executive branch of government, to investigate all party assets acquired since August 1945.

Lu Tian-cheng (盧天成), a lawyer at Taipei firm TC Attorneys at Law, said that defining “ill-gotten assets” and recovering them will be difficult. He said while the law is retroactive it will be challenging to investigate the acquisition of assets dating back as far as 70 years.

He also suggested the disposal of the assets should be done from within the judicial system, rather than the Executive Yuan.

In an editorial in March, the Taipei Times – Taiwan’s left-leaning broadsheet – pointed to the The Palace luxury complex in Taipei, located on the site occupied by Taiwan Broadcasting Corp’s headquarters during the Japanese colonial era, as an example of how the KMT acquired so-called “ill-gotten gains.”

“When Chiang Kai-shek (蔣介石) came to Taiwan, he ordered that the Central Broadcasting Affairs Management Office, the predecessor of the Broadcasting Corp of China (BCC), take over that plot of land, thus turning public property into a KMT asset. The party sold the land for NT$9 billion (US$273 million at today’s exchange rates) — raising funds for election expenses — to Hung Sheng Construction Ltd (宏盛建設), which built The Palace.”

洪秀柱_Hung Hsiu-chu, newly elected chairperson of Taiwan's Nationalist Party or Kuomintang, waves in front of a portrait of the founding father of the Republic of China, Sun Yat-sen, after a news confer

Photo Credit: Reuters/達志影像

Hung Hsiu-chu, then-newly elected chairperson of Taiwan's Nationalist Party or Kuomintang, waves in front of a portrait of the founding father of the Republic of China, Sun Yat-sen, after a news conference in Taipei, Taiwan, March 26, 2016. REUTERS/Tyrone Siu - RTSCBA5

Political responses

The legislation is firmly targeted at the KMT, which fled China for Taiwan in 1949 and ran the country for more than 50 years. The DPP was founded in 1986 and first won the presidency in 2000, but this year marks the first time it has controlled both the executive and legislative branches of government.

In an op-ed in the United Daily News, reporter Lin He-ming (林河名) argued that the law will hit the KMT’s coffers, but also gives the party the chance to move forward from an issue it has long been plagued by. For the DPP, passing the law has been a success, but the issue will no longer give it the same political leverage.

Stanford University research associate and program manager at the Taiwan Democracy Project, Kharis Templeman, noted on Twitter that the law demonstrated the ability of the DPP to move its legislation through the parliament – the Legislative Yuan is notorious for its inability, at times, to pass new laws.

President Tsai Ing-wen (蔡英文) wrote on Facebook that the law will make a fairer competition between parties, and is the first step for Taiwan in achieving transitional justice.

KMT Chairperson Hung Hsiu-chu (洪秀柱) claimed the new law breaches Taiwan’s constitution and her party has promised to mount a fresh challenge in the courts. She criticized the DPP, said the law was “evil” and was aimed at establishing a “one-party system” in Taiwan.

Chen Ming-siang (陳銘祥), professor in the Department of Public Administration at Tamkang University, said it is unlikely that a legal challenge in the Constitutional Court would be successful.

KMT Vice Chairman Hau Lung-bin (郝龍斌) says the DPP wasted time and money in calling for special sessions of the parliament to pass the bill, rather than focusing its efforts on lifting Taiwan’s economy.

ICRT notes party membership fees or political donations are excluded from the law.

First Editor: Olivia Yang
Second Editor: J. Michael Cole