Liberty Times: What is defined as KMT party assets?
Kenneth Lin (林向愷): The KMT’s assets, after the KMT came to Taiwan, foremost included ones that primarily came from the confiscation or taking over of Japanese property in Taiwan, including that of the colonial government, private property of Japanese citizens and even property or businesses owned by Taiwanese.
Second are the assets derived from managing party businesses. An example of this management is the KMT’s success enlarging Chiloo Industries to its current size as a corporate group valued at between NT$300 billion and NT$400 billion (US$9.43 billion and US$12.57 billion). Such management is backed using national resources gained from the burgeoning Taiwanese economy.
Photo: Chien Jung-fong, Taipei Times
Taiwan’s economic policy was geared toward the development of export-oriented businesses in the early years, before switching to import-oriented policies. With the transition of economic policy, the KMT had — with corporate groups — entered the markets as materials providers and wholesalers, such as the petrochemical industry, forming the basis for a party-state capitalistic system.
Such a system greatly hampered civilian economic development because industries’ development and access to capital for development into the manufacturing and wholesale portions of the supply chain was heavily restricted, forcing private firms to look to developing the retail end of the supply chain.
Monopolizing the nation’s resources and managing party-owned businesses provided the KMT with an effective strategy for solidifying its rule, further providing the basis for the party’s long-time authoritarian rule.
The party asset issue, when placed in a modern light, cannot therefore solely focus on the amount of real estate and land the KMT illegally acquired; it must also recognize that KMT party-owned businesses have far-reaching influences — both economically and politically — in Taiwan.
LT: Under this definition, is there a distinction between “proper” and “improper” in terms of [the KMT’s] party assets?
Lin: The KMT under Ma’s leadership has maintained that the real estate that is still registered under the KMT had been given to the party by the state or had been entrusted to the party and was legal under past regulations.
It is only due to public expectations [to adhere to democracy] and the resurgence of democratic ideals worldwide that the party has chosen to “give” select property back to the state. However, the party maintained that evidence must be provided to prove other KMT-owned property derived from the “illegal acquisition of state property” or such claims would be dismissed.
Clearly, Ma is attempting to legalize the party’s methods of property acquisition under the “presumed innocent” principle. Despite his efforts, that the KMT holds and manages businesses contravenes the principle that political parties in democratic countries should not operate any businesses.
More importantly, the issue of party assets is not one in which the KMT can behind closed doors arbitrarily decide which asset to dispose and which not to. There must be a fair standard on the disposing of party assets, as opposed to individual political parties unilaterally deciding the legal status of their respective assets.
To this end, the Legislative Yuan should pass the draft act on disposing party assets (黨產處理條例) and the draft political party act (政黨法) to clearly define and regulate how party assets should be disposed.
At the same time, a taskforce should be established, comprising individuals from all walks of life who are deemed just and fair, to investigate and dispose of party assets, to therefore ensure the KMT is not the only voice on the matter. This taskforce should use the legal standards to look into the assets of both primary political parties and make public price estimate quotes before putting the assets up for public auction.
The majority of the KMT’s party assets were obtained illegally under an authoritarian regime.
Ma clearly said in his orders on the “final disposal of party-owned businesses” in 2009 that the Central Investment Co (中央投資公司) would be sold before June 2010 and the funds from the sale would fund all party staff’s retirements.
A definite figure that could be calculated in advance, that sum should be deducted from the final sales (given to the government for safekeeping) while the rest is turned in to the national coffers. In essence, the principle of party asset disposition would be to decisively “clear the counter” on party assets based on current circumstances.
LT: Ma, during his term as KMT chairman, made significant changes to the party assets. What were his methods.
Lin: Since assuming the position in 2005, Ma disposed of many of the valuable, yet still controversial party assets, such as the sale of the land on which the Institute on Policy Research and Development (國發院) was built to Yuanlih Construction Enterprise Group (元利建設), the sale of the Tehua Building in Greater Taichung and the separate sales of China Motion Pictures Co (CMPC, 中影), China Television Co (CTV, 中視) and Broadcasting Corp of China (BCC, 中廣公司) to separate buyers.
The original piece of land on which the KMT headquarters was built, which was originally the property of the Japanese Navy, was sold cheaply to the KMT by then-minister of finance Wang Chien-shien (王建火宣). The land, as well as the building, was later sold to the Chang Yung-fa Foundation under Ma, after which the party claimed the foundation was the property’s bona fide purchaser (BFP) and should not be considered for reclaims by the government as allegedly illegal party assets.
In 2006, Ma made a statement on how the KMT would handle its assets, and claimed he would conclude all auctions by 2007, a promise he failed to keep. His “final disposal of party-owned businesses,” which promised to conclude all sales of party assets by 2010, shared the same fate. During this time, the party maintained that the auctions kept falling through due to the bad economy and that it would resume the sale if there were prospective buyers.
However, if we look at the total of NT$15 billion transferred to the party by the Central Investment Co from 2005 to 2013, it is difficult to believe that a company able to make such high returns could not be sold. If the sales kept falling through due to pricing, there is a simple fix — make public the company’s financial documents to professions who would look into the price estimate and the company’s debt status. A buyer could definitely be found.
Second, to better hide how the party managed its businesses, the Central Investment Co established Hsinyutai Co (欣裕台股份有限公司) as a spin-off in 2010, transferring to it all controversial assets or those in litigation, while the Central Investment Co was taken off public trading. The party claimed the party assets were in trust, but the claims were only a smokescreen preventing the public from inspecting how the company actually worked while the KMT remained in charge.
This all goes to show that Ma never intended to dispose of party assets and only paid lip service to the matter by “gifting” the state with several pieces of worthless party assets when under duress.
Under Ma, the KMT’s assets entered a new mode of management with a heavier focus on land development, such as using its advantage of being in power in both the central government or local governments and trading assets for land.
An example of this was when the KMT traded some assets for the 505 ping (1,669m2) piece of land on which the Taipei Twin Towers were built, reaping the potential benefits of developing that piece of land. Not only were the party assets not disposed of, they only rose in value.
LT: Aside from the three methods just mentioned, rumor has it that many of the party assets are hidden by figureheads or dummy accounts. What can be done about this?
Lin: This method is even worse than the aforementioned, as it unnecessarily complicates the governmental reclamation of party assets by creating more BFPs. The KMT would always say that the ownership of the properties being reclaimed involves BFPs and could not be reclaimed.
The biggest problem the method presents is the complication of profits on both the individual and the political party scale, as well as the opacity of information. The KMT is intentionally dividing and fragmenting its party assets so that it will be difficult to tell where, and how much, of them there are, which increases the difficulty of investigation.
From a social perspective, all political parties of democratic countries should refrain from operating any businesses, and if they need to, should make transparent their financial information.
LT: With Ma stepping down and New Taipei City Mayor Eric Chu (朱立倫) poised to be the next party chairman, is this a chance for reform and to dispose of the party assets?
Lin: The best time to deal with the party assets would have been from 2000 to 2008, when the Democratic Progressive Party (DPP) was in power. At the time, the public knew the impact the party assets had on the development of democratic politics, but the DPP, within the authority entrusted on it as the government, was only able to reclaim some of the illegal realty. The complexity of whose profits the party-owned businesses reclamation would affect was another reason why the DPP was unable to reclaim more of the assets.
Now, as the KMT is still the majority party in the Legislative Yuan and faces the upcoming 2016 presidential and legislative elections, which may prove crucial to the KMT’s continued governance of the nation, the party will be all the more reliant on its party assets. Under the circumstances, asking them to give up their greatest advantage will result in certain failure.
At most, and if the public puts on the pressure, the KMT would only adjust the definition for “improper” to limit its impact on the party’s economic lifeline for the elections. However, if there is no pressure from the public, such expectations might prove futile altogether.
LT: If it is difficult to expect such changes, what practical steps should the citizenry take to ensure some action occurs?
Lin: If the legislature is unwilling to legislate the act on disposing party assets (黨產處理條例) and the draft political party act (政黨法), or even unwilling to complete the legislation governing the establishment of a committee overseeing party asset investigation and handling (黨產調查與處理委員會設置條例), the public then could emulate the party asset reclamation referendum enacted when the DPP was in power.
Although the referendum then did not pass, that one-time failure does not mean that it will never be possible, and such actions should come from the public.
If this is an issue with a high social consensus, then even if the referendum does not reach its legal threshold, it will garner enough votes to reflect strong civic will and place additional pressure on the KMT. Rinse and repeat a few times and the referendum will still have a possibility of being passed.
The result achieved now should not be minded too much, but this movement in itself is greatly symbolic of direct democracy and is something the Chinese Communist Party (CCP) wishes least to see.
If we begin promoting the campaign now, we could at the earliest hold the referendum simultaneously with the 2016 elections.
The party asset issue is one of basic justice, and should not be turned into a political standoff between the pan-blue and pan-green camps. Competition between political parties must be on the same footing within democratic politics, and if the starting line is different, then it is like a professional team playing against an amateur team.
We should not be overly concerned with the pros and cons of the 2016 elections being held simultaneously with the referendum, but should see the promotion of this campaign as one important movement for the normalization of Taiwan’s democracy.
Translated by Jake Chung, Staff Writer
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