First, the KMT’s wealth allows it to unduly influence elections. The party’s wealth largely results from historical circumstances. Following the defeat of Japan at the end of World War II, the KMT took over substantial amounts of property in Taiwan that were previously controlled by the Japanese government. Under the four decades of authoritarian rule, there was no distinction between the party and government in terms of resource appropriations, the KMT profited handsomely from numerous forms of public corruption and graft.
To illustrate the massive extent of the KMT’s accumulated wealth, one study found that in 2010 — during a bear market — it received about US$100 million in dividends from its equity investment in Taiwan’s stock market alone — which translates into a conservative US$3.3 billion portfolio, assuming a 3 percent average yield. This is only a very small portion of its total assets, which include many real-estate holdings and businesses in Taiwan and overseas.
These illicit funds were used to control the media in Taiwan, providing KMT candidates with an enormous advantage in any election at any level of government. These funds were also used for substantial direct funding to its candidates. No wonder there has been widespread vote buying by the KMT candidates.
Ma has repeatedly promised to return the KMT’s ill-gotten assets back to the Taiwanese, but these promises have proven empty.
Second, the KMT controls the judiciary. For decades, the KMT directly controlled the judiciary, which has never functioned as a truly independent branch of the government.
Eighty percent of judges are former KMT members. While Chen ordered them to forgo their formal party affiliation, their loyalty remains unaffected. The judiciary does not treat all citizens alike, but administers selective justice swayed by political considerations, with the goal of protecting the KMT’s grip on power and harming the party’s opponents. The clearest example is the politically motivated prosecution of Chen.
Third is Chinese interference in Taiwan’s elections. Taiwan’s domestic political contests do not take place in a vacuum. The Chinese government, which previously made repeated threats to take over Taiwan by force, has now resorted to more subtle means to advance the goal of making Taiwan part of China. First and foremost, the Chinese government lends its support to the pro-China KMT.
In January’s presidential election, it used a carrot-and-stick approach to interfere in the election in the south, where the DPP enjoys strong support. On the one hand, it strategically deployed procurement missions to curry favor with voters in these areas, a practice that equates to vote buying; on the other, it withheld approving tourist groups visiting these areas before the election.
Tourist related industries, including hotels and restaurants, suffered a tremendous economic loss during this period. This was a warning and a threat to voters that unless they supported the KMT candidates, their economic suffering would continue.
Moreover, China urged Taiwanese business concerns that have large investments in China to compel their employees to vote for the KMT ticket. From Chinese Vice President Xi Jinping (習近平) on down, the Chinese government openly declared that it would not tolerate any Taiwanese president who did not accept the so-called “1992 consensus,” a none-too-veiled threat against the DPP and its candidate, former DPP chairperson Tsai Ing-wen (蔡英文).