By filing a lawsuit about the debt time bomb, the bondholders and TCRLO have exposed the seamy underside of KMT politics. The price tag of reconciliation would no doubt fall disproportionately on Taiwanese and, while the PRC might pay some of the old debt, they would not pay all or even most of it.
Then there is the question of what happened to the gold that backed the bonds in the first place. Before the KMT fell, it evacuated, by air and sea, many of its hard assets from China. TCRLO and the bondholders contended that this gold formed the basis of the KMT’s billions, the so-called black gold that has financed so many KMT business and political operations over the years.
The KMT would be loath to give up its billions, now dispersed among its business subsidiaries and banks, and it would never permit an audit. Again the people of Taiwan would be forced to take up the slack and give generously to finance a reconciliation with the CCP that they do not need or want.
Ultimately, the bondholders should be paid a fair return by the PRC, which still benefits from the infrastructure the bonds paid for, and from the KMT, which apparently absconded with the gold to fund its own enrichment. The rehabilitation of Chen’s legacy is the first step in a process that hopefully will lead to both the independence of Taiwan and breaking the back of the KMT’s unjust enrichment.
Jonathan Levy is a member of the International Criminal Bar and an adjunct faculty member at Norwich University’s Diplomacy Program. The author represented the bondholders and TCRLO in TCRLO v. Kuomintang and has also represented former president Chen Shui-bian. The opinions expressed herein, however, may be attributed to the author, who speaks only for himself and not his former clients.