Tue, Apr 17, 2001 page3

• A lesson in connections and profit

  PRIVATE SCHOOLS The Jin-Wen Institute controversy provides an example of the cozy alliances between private schools, politicians and the Ministry of Education

  • By Lin Mei-chun / STAFF REPORTER
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  Education is supposed to be the sole mission of a school. But the financial scandal surrounding the private Jin-Wen Institute of Technology (景文技術學院) exposes the lucrative business opportunities that politicians and organized crime have found in the running of a private school.

  According to information provided by the board of the Jin- Wen Institute, the value of the school's tangible assets is at least NT$2.8 billion.

  

  The Jin-Wen Institute of Technology on Anchung road in Hsintien City, which is at the center of a financial scandal.

  FILE PHOTO

  The chairman of the institute is in charge of a staff of 1,100 and the nearly NT$2 billion in tuition receipts paid by 13,000 students annually -- money that is often used as capital for the chairman's other investments.

  Moreover, getting involved in school management provides board members with an avenue to build ties with political and business circles.

  In return, schools are where the votes are for politicians, and an ideal place to shore up the reputation of those known to have connections with organized crime.

  Politicians, private schools and their supervisors -- officials at the Ministry of Education -- form a solid triangle and their intricate relations can breed corruption when greed overrides educational goals.

  Where are the profits?

  "As long as there are purchases involved, there are profits -- textbooks, computers, school equipment, you name it," said Chang Hui-shan (張輝山), the director of the National Teachers' Association (全國教師會).

  "Take textbooks for an example. Books are sold at a full price to students, but schools buy these books from book dealers at discount prices. There are huge profits right there," he said.

  "Computer software is another example. One can buy a set of software for NT$100,000, but the price can be tripled when reported to the ministry," he said.

  Construction deals

  The gains from selling textbooks and equipment pale in comparison to lucrative construction deals, and it is in these projects where lawmakers and ministry officials step in.

  Each year, the ministry of education earmarks a few billion NT dollars for school construction projects. Because of the small budget, the ministry can only grant approval to a few of the hundreds of applications it receives for funds.

  An advisor for a construction firm, who asked not to be identified, told the Taipei Times that there would be many negotiations between schools, lawmakers and ministry officials would be involved with regard to which school would be subsidized by the ministry and how much the funding would be.

  "It really depends on the personal connections of school leaders -- connections between schools and ministry officials, and between schools and politicians.

  "Funding can more easily be received if lawmakers exert their influence on ministry officials," he said, adding that there were a variety of ways to establish these connections.

  Chang said that schools spend a great deal of time and money on building such connections and that some schools are just like "public relations companies."

  "The fee spent on public relations at certain private schools can reach NT$100 million per year. Presents are regularly sent to public officials and lawmakers, and it is common knowledge that officials enjoy free trips and meals arranged by schools," Chang said.

  "But what's awful is that the funding provided for school construction is not always spent on the projects, or politicians manipulate to solicit schools to do business with the companies that are related with themselves," the construction company advisor said.

  Land gains

  In addition to construction projects, the three parties cooperate even more closely in deals for school expansion projects or the relocation of the school, and there are considerable gains as long as land is involved.

  Board members can buy properties through friends and relatives of the board.

  Or, some board members make private land purchases and then push for the relocation of the school to their newly acquired property, so that they can make a huge profit by reselling the land at a higher price, according to Chang.

  In some cases, with the help of politicians and officials, the zoning of the land can be illegally changed from educational usage to commercial use.

  Such irregularities can be found in the Jin-Wen scandal.

  Chang Wan-li: the man who fled

  Chang Wan-li (張萬利), the former chairman of the Jin-Wen group, who fled abroad last July leaving behind billions of NT dollars in debt, built his enterprises with his superb political connections and his entrepreneurial ambition.

  For years, Chang, using high interest as bait, lured the school's faculty, to deposit money in his corporate accounts for use in his investments.

  Six years ago, Chang spent US$500 million in land speculations in Vietnam, but incurred a loss of more than US$40 million.

  In order to make up for his investment failure, he reportedly embezzled NT$105 million in educational funding for the school provided by the ministry from 1997 to 2000. He also misappropriated an estimated NT$200 million in school capital.

  Luxury dwellings

  In another twist to the complex scandal, more than a dozen high-ranking officials from the former KMT-led government are residing at the luxury community Ta Hsueh Shih Hsiang (大學詩鄉), built by a construction firm owned by Chang.

  The community, built in the early 1990s, is located in Hsintien near the school. The more than 300 villas are built on a steep 12-hectare hillside, which is unsuitable for residential construction.

  But the zoning of the property was altered in 1989 through questionable procedures from school usage to residential construction. Each unit cost between NT$15 million to NT$20 million, but many of the officials reportedly bought the residences at prices much lower than their market value as a favor from Chang.

  Only through investigations can one conclude whether Chang's connections in the political arena have indeed facilitated his misdeeds, but the role of politicians deserves to be questioned in the scandal, said the principle of a private school.

  The fact that lawmakers are often board members of private schools has long been a focus of criticism.

  "Although the Private School Law does not state that publicly elected representatives should not be board members of a school, one can't help but doubt the impartiality of lawmakers who take seats on school boards, who are in charge of the budget reviewing and bills legislation," the principle said.

  "Lawmakers are also known to try and win the schools' purchasing projects, which will be dealt with through companies associated with lawmakers."

  An official at the ministry said that lawmakers are often accused of abusing their authority by pressing the ministry, demanding more funding for their own schools. Under the circumstances, he said, the ministry's officials are impelled to bow to the legislators' authority so as to assure the passage of educational budgets.

  Most of the people interviewed by the Taipei Times for this article said the Jin-Wen scandal was not an exception. They said it was good that corrupt practices have surfaced as a result of independent legislator Lo Fu-chu's (羅福助) attack on PFP legislator Diane Lee (李慶安).

  "The education ministry should seize the chance to clean up these ingrained irregularities. But the point at issue is whether [the ministry] has enough wisdom and guts," was the consensus of those interviewed.

  Political ties

  Private schools that have politicians serving as board members or supervisors

  Chinese Culture University (文化大學)

  KMT lawmaker Mu Min-chu (穆閩珠)

  Chung-Hua University (中華大學)

  KMT lawmaker Lin Cheng-tse (林政則)

  Chaoyang University of Technology (朝陽科技大學)

  KMT lawmaker Hung Hsiu-chu (洪秀柱)

  Kung Shan Institute of Technology (崑山科技大學)

  former Minister of Education Wu Jin (吳京)

  Ta-Hwa Institute of Technology (大華技術學院)

  KMT lawmaker Chiu Ching-chun (邱鏡淳)

  Kao Yuan Institute of Technology (高苑技術學院)

  Senior advisor to the president Yu-Chen Yueh-ying (余陳月英)and Research, Development and Evaluation Commission deputy chairman Yu Lin-ya (余玲雅)

  Transworld Institute of Technology (環球技術學院)

  KMT lawmaker Hsu Shu-po (許舒博)

  Mingchi Institute of Technology (明志技術學院)

  PFP vice chairman Chang Chao-hsiung (張昭雄)

  Kuang Wu Institute of Technology (光武技術學院)

  KMT Lawmaker Cheng Feng-shih (鄭逢時) and KMT lawmaker Huang Hsiu-meng (黃秀孟)

  Chang Gung Institute of Nursing (長庚護理專校)

  PFP vice chairman Chang Chao-hsiung (張昭雄)

  Tajen Institute of Technology (大仁技術學院)

  KMT lawmaker Huang Chao-shun (黃昭順)

  Hsing Wu Institute of Technology (醒吾技術學院)

  Speaker of the Taipei City Council Wu Pi-chu (吳碧珠)

  Hungkuang Institute of Technology (弘光技術學院)

  KMT lawmaker Chen Chieh-ju (陳傑儒)

  Diwan College of Management (致遠管理學院)

  KMT lawmaker Huang Hsiu-meng (黃秀孟); Wang Kung-tien (王宮田), director of the Central Office of the Ministry of Education

  Nan-jeon Jr. College of Technology and Commerce (南榮工商專校)

  New Party Secretary-General Lee Ping-nan (李炳南)

  Ta Cheng Senior High School (大誠高中)

  KMT Lawmaker Lee Hsien-june (李顯榮)

  Taipei Country Mingder High School (明德高中)

  KMT lawmaker Liao Wan-ju (廖婉汝)
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