Taipei Mayor Ko Wen-je (柯文哲) said on Feb. 14 it was “strange” that Chen Chiung-sung (陳炯松) had remained in his post as president of the Taipei Institute of Pathology for more than 20 years, and he questioned the size of Chen’s annual salary and other payments. The next day, the Chinese-language Liberty Times, the Taipei Times’ sister newspaper, carried an article asking what, if anything, could be done about Chen.
I served on the institute’s board of directors from 1997 to 2001. I originally became a director in my capacity as deputy mayor of Taipei, but after stepping down from that position, I remained on the board until the end of my term as director. When I was minister of the Cabinet’s Research, Development and Evaluation Commission, the commission performed a thorough survey into the establishment and funding of various foundations, and reviewed the legal framework governing such practices.
Until now, Taiwan has had no legislation specifically regulating government-established foundations constituted as juristic persons. Associations and foundations constituted as juristic persons are only regulated by the Civil Code. The Non-Departmental Public Bodies Act (行政法人法) regulates non-departmental public bodies, which are also juristic persons, but quite different from the aforementioned two kinds. Associations and foundations constituted as juristic persons are also quite different from one another.
Foundations are often set up as funds, and they are closed organizations. Their boards of directors are free-standing, and responsible government departments supervise them in accordance with the law. If government departments make financial contributions to establish a foundation, then the departments concerned appoint directors and supervisors in proportion to the size of their donation. However, there is more to this than meets the eye.
When the institute was first established, the Taipei City Government contributed 60 percent of its initial funding, so it was supposed to get 60 percent of the seats on the board of directors, and the city’s Department of Health was the institute’s guiding authority. However, like the Chiang Ching-kuo Foundation for International Scholarly Exchange, the government departments concerned only allocated funds for a one-off donation to the institute. This makes these foundations’ mode of operation different from other government-established foundations for which the government departments concerned allocate donations from their budgets every year. In cases where the government only makes a one-off contribution, the foundations concerned are in effect left to their own devices.
Directors representing non-governmental donors can take advantage of legal blind spots to alter the foundation’s bylaws to increase the donations received from non-governmental donors. As a result, the proportion of donations coming from government departments is reduced, and the proportion of government-appointed directors on their boards shrinks accordingly. In this way, they end up as foundations that are not government-established anymore. Government departments’ rights and interests in such foundations are greatly curtailed and their supervisory function is weakened considerably.
Ko is quite right when he says that he can only work out what is really going on bit by bit. It should be kept in mind that the Democratic Progressive Party has been in power in both Taipei and the central government, and it is very important for the party to pass on its experience. A fitting remedy would need to be found for the legal blind spots regarding government-established foundations in order to solve the problem once and for all.
Lin Chia-cheng is a former deputy mayor of Taipei.
Translated by Julian Clegg
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