Lessons from Chen Shui-bian for KMT Assets Investigators

Lessons from Chen Shui-bian for KMT Assets Investigators
Photo Credit: Reuters/達志影像
What you need to know

Will the KMT assets investigations descend into a fresh round of political persecution?

Just as the long-running investigation into former president Chen Shui-bian (陳水扁) took another turn last month, Taiwan has started a fresh campaign to tackle past political corruption.

The U.S. Department of Justice last month announced it was returning US$1.5 million to Taiwan. The figure was the proceeds of the sale of a forfeited New York apartment and a house in Virginia, which the U.S. believes were purchased with cash from bribes paid to the family of Taiwan’s ailing former president.

According to court documents, Yuanta Securities Co paid a bribe of NT$200 million (US$6 million) to former First Lady Wu Shu-jen (吳淑珍) in 2004, during Chen’s eight-year administration, the DoJ said in a statement.

“The bribe was allegedly paid to ensure that the president would use his power so that the Taiwan authorities would not oppose Yuanta’s bid to acquire a financial holding company,” the DoJ says. “The former first family used Hong Kong and Swiss bank accounts, shell companies and a St. Kitts and Nevis trust to transfer the bribe proceeds needed to purchase the properties in Keswick, Virginia, and New York.”

The U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) led the investigations. The HSI has special agents in 62 offices across 43 countries and worked with the Taiwan Supreme Prosecutors Office’s Special Investigations Division on the case.

HSI executive associate director Peter Edge said the investigation was part of an “ongoing effort” to “identify and seize illegal assets in the United States obtained by corrupt foreign leaders who abuse our financial systems in order to conceal the illicit proceeds of their crimes.”

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Photo Credit: Reuters/達志影像
Former Taiwanese President Chen Shui-bian waves to supporters while leaving Taichung Prison, central Taiwan, Jan. 5, 2015. REUTERS
More ‘ill-gotten’ assets

M. Bob Kao is a lawyer and PhD candidate at Queen Mary University of London. He has taught law at the Judicial Yuan in Taiwan and Henan University in China. Kao told The News Lens International from London that while there are still four cases in the judicial system related to Chen, they have been suspended due to his medical parole and his wife's deteriorating health.

“It appears that Chen will have his medical parole extended indefinitely, so it is unlikely the cases will be adjudicated on in the foreseeable future," Kao says. "Some of these cases concern their son and money in Swiss accounts that were transferred back to Taiwan.”

After decades of campaigning, Taiwan’s ruling Democratic Progressive Party (DPP) last month passed a law to investigate the party assets that were allegedly illegally obtained during the Kuomintang’s (KMT) 50 years in power. The Act Governing the Handling of Ill-gotten Properties by Political Parties and Their Affiliate Organizations 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.

Comparing the investigations against Chen with the KMT inquiry, Kao says the main difference is the branch of government leading the inquiry.

“Chen was prosecuted and tried in criminal courts, while the assets will be dealt with by a civil commission under the Executive Yuan and should there be appeals, [in] the administrative courts.”

He says the commission's work will likely be more transparent, because the law is designed to encourage truthful reporting.

“There will be no criminal charges involved for disclosure,” he says. “Rather, there may be penalties for obstruction.”

While Kao has highlighted potential legal difficulties in uncovering the assets from the KMT, compared to the unresolved cases involving Chen, he says “in theory the party assets process should be much smoother with fewer allegations of political persecution.”

Amnesty for Chen?

Chen, 65, who was in office from 2000-2008, was convicted in September 2009 and sentenced to life in prison for bribery, embezzlement and money laundering. The sentence was later reduced to 20 years. He maintains the charges are politically motivated.

Kao believes that in the interest of resolving Chen's cases, the best legal solution would be for President Tsai Ing-wen (蔡英文) to grant amnesty to Chen in exchange for "honest reporting of the money he did take, if any."

Unlike pardons, he says, amnesties can be granted before final decisions are made or appeals are exhausted.

“This will take the focus away from blame and punishment and allow everyone to find out the truth, which is important for the people of Taiwan to move forward and hopefully stop this cycle of political persecutions.”

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