Lu special allowance fund trial begins

Vice President Annette Lu (呂秀蓮) pleaded innocent yesterday during the first hearing of a corruption trial in which she stands accused of misusing her special allowance funds.

Lu yesterday became the nation's first incumbent vice president to be a defendant at a hearing.

"Prosecutors unfairly chose me as an investigation target and then indicted me. The prosecutorial system should have thoroughly probed the nation's more than 6,500 government officials in their use of their discretionary funds before deciding whether or not to indict me and other officials," Lu said, while making a short statement at the Taipei District Court before she entered the courtroom.

Lu said that former premier Su Tseng-chang (蘇貞昌) last year had said the special allowance fund controversies were the result of a "historical glitch," that no individual was at fault and that the Ministry of Justice had said that the special allowance fund should be seen as a "substantial subsidy," which means that officials would not be required to return any unused money to the government.

"We must not allow the faults from an incomplete system of the old era to bring new disasters," she said.

Asked by judges how she would plead, Lu said: "I am not guilty of these charges."

Lu told the judges she did not know the details of the process involved in the reimbursement of special allowance funds, never received the funds illegally or directed her subordinates to use fraudulent receipts to claim her special allowance fund.

She said the charitable donations she had made during her term of office as vice president exceeded the special allowance funds she had received.

The Supreme Prosecutors Office in September indicted Lu, Democratic Progressive Party (DPP) Chairman Yu Shyi-kun and National Security Council Secretary-General Mark Chen (陳唐山) on suspicion of misusing their special allowance funds.

Lu, Yu and Chen were charged with corruption and forgery.

Prosecutors alleged that between December 2000 and May last year Lu used a total of 1,005 fraudulent receipts to claim reimbursements from her special allowance fund.

Prosecutors added that the receipts, collected by Lu's office staff and security guards, amounted to NT$5.6 million (US$170,000).

Earlier this year, Chinese Nationalist Party (KMT) presidential candidate Ma Ying-jeou (馬英九) faced similar charges. Prosecutors said that he misused a special fund while he was Taipei mayor from 1998 to last year.

A district court accepted his argument that by law the fund was an official subsidy, and acquitted him in August.

However, prosecutors have filed an appeal to a higher court to challenge the acquittal.

DPP presidential candidate Frank Hsieh (謝長廷) was investigated for misuse of discretionary funds during his tenure as mayor of Kaohsiung. No charges were made against him.