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Court exonerates former navy chief over scandal

A former navy commander-in-chief avoided the embarrassment of being the highest military officer to be convicted of a crime after the Taipei District Court found him not guilty of covering up a scandal involving the misuse of navy funds.

The court ruled that retired admiral Yeh Chang-tung (葉昌桐) had done nothing wrong when he agreed to a proposal from his subordinates to ask retired lieutenant-commander Peng Chi-kang (彭繼岡) and former commander Yuan Yu-fan (袁友范) to leave the navy rather than face prosecution.

Yuan had been accused of depositing money in an account controlled by Peng so that he could borrow the interest it accrued.

Peng was found not guilty of accepting bribes yesterday after he argued that he did not know the money came from the navy, but Yuan will face theft charges in a military court.

"Yeh was basically doing his job as the head of the navy and ... accepted his joint staff's proposal, which means he did not know details of the scandal, so we decided he was innocent," said Huang Jiunn-ming (黃俊明), spokesman for the Taipei District Court.

"Peng accepted the money from Yuan but he also did not know anything about the case. So he is innocent too," Huang said.

"As for Yuan, his committing a crime was discovered while he was still in the navy. As a result, his part of the case shall be transferred and heard by the military court," the spokesman said.

None of the defendants attended yesterday's hearing.

Yuan was in charge of the navy's minesweeper procurement program when he served at Navy General Headquarters more than a decade ago. At that time, Peng was stationed in Germany to arrange weapons procurement.

According to the July 5, 2001, indictment, Yuan in 1991 forged documents that allowed DM674,296.39 (US$329,681) of public money earmarked for the minesweeper deal to flow into Peng's personal account at the Germany-based Bremen Bank.

The move allegedly allowed Peng to illegally pocket the interest.

Eventually the money went to Abeking and Rasmussen GmbH and Co, a German company that was making minesweepers for the Taiwan navy.

Yuan told Peng to withdraw the money when he came back to Taiwan for a vacation on Aug. 1, 1991. The interest amounted to DM7,429.18. According to the indictment, Yuan spent DM4,000 of that figure and gave Peng another DM2,609.41. The remaining interest stayed in the account.

All the money was eventually returned.

During previous hearings, Peng told judges that Yuan had lent him the money and that he had no idea corruption might be involved.

As for Yeh, he was accused of covering up the acts of his subordinates.

The indictment said that Yeh, when he discovered Yuan's alleged misdeeds, approved an illegal proposal that Yuan should receive administrative discipline and leave the navy. Legal procedure would have required Yeh send Yuan to military prosecutors after the offence was discovered in 1991.

The navy's discipline section proposed two options for punishing Yuan: either have him face criminal proceedings, or hand down administrative disciplinary measures and force him to retire from the navy.

Senior navy officials favored the second option and made the recommendation to Yeh, who accepted it. As a result, Yuan left the military without being prosecuted.
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