Taipei police plan to refer People First Party (PFP) Taipei City Councilor Mike Wang (王育誠) to the Taipei District Prosecutor's Office by tomorrow at the earliest, on the suspicion that Wang and his four assistants are guilty of slander.
Wang was summoned by the National Police Administration's Criminal Investigation Bureau (CIB) on Friday evening to explain his role in the funeral parlor-scam.
Wang accused six local restaurants of illegally purchasing rice and other food used to honor the dead from funeral parlors and then selling them to unwitting customers.
According to Chinese-language media reports, Wang told police on Friday evening that the whole story was made up by his assistants, and that he knew nothing about it until the truth was revealed earlier this week.
He was released by authorities after four hours of interrogation.
According to media reports, two men dressed in black in a video shown by Wang as proof of his accusations were actors who knew nothing about the fake story, and they will be treated by prosecutors as witnesses.
After Wang entered the CIB, his lawyer, Wu Chien-chang (吳建昌), issued a five-point statement on Wang's behalf.
The statement said that city councilors enjoy immunity during question and answer sessions in the city council, and that this immunity is legally protected.
Second, the video was a re-enactment, which is debatable, and he admits that supervision was "not perfect."
Wang gave a teary public apology at a press conference last week. During the press conference, he begged not to be dismissed from the party, maintaining that he knew nothing about the doctored tape.
The statement also called for a question and answer session in the council to show that his motives were well-intended and meant to bring the authorities' attention to the situation and to rectify it.
Voters think that Wang is conscientious and that he has a good record, the statement added.
The final point of the statement urged people not to judge Wang, pending the results the investigation.
According to a related report, Wang said Friday that he would be willing to compensate businesses in the area around Nungan Street and Shuiyuan Market who had lost business as as result of the accusations. Wang was first reported as saying that he would use half his salary over the coming year as compensation.
Regarding the calls for his resignation, he said he would hold an opinion poll among residents in the Peitou district in northern Taipei -- his constituency -- and resign if a majority of people thought he should do so.
Later on Friday, however, Wang changed his mind and said that a compensation plan would be worked out after damages to individual businesses had been assessed.
This about-face was met with severe criticism from the area's local business operators and borough wardens, one of whom said that there was no need for Wang to keep returning to the area to discuss compensation, since local businesses had handed the matter over to a lawyer.