Prosecutors have laid charges against a retired army colonel over alleged breaches of the Civil Servant Service Act (公務人員服務法) following accusations that he improperly used his influence and inside knowledge of military procurement programs to secure contracts for two private companies.
The Taichung District Prosecutors’ Office said in an indictment that Tseng Yuan-yuan (曾源淵), 55, had worked for Chi Yu Industrial Co (啟宇企業) and Tang Cheng Co (堂丞公司) as a business consultant since his retirement from active service in 2011.
From July 2008 until he retired in July 2011, Tseng held the post of deputy director in the army’s Ordnance Readiness and Development Center, an important military hardware and armored-vehicle maintenance and production facility based in Nantou County’s Jiji Township (集集).
Tseng was indicted on charges that he breached the so-called “revolving door” provision of the act, which aims to deter conflicts of interest by prohibiting former military personnel from taking jobs within three years of their retirement in private companies that do business directly related to their work during their final five years of service.
Tseng worked as a consultant for Chi Yu Industrial and Tang Cheng starting in May 2012, prosecutors said, adding that the investigation revealed the two entities are in reality the same company, which is based in Taichung and owned by Hsu Jih-hsu (許日旭).
In a separate investigation, Hsu was found guilty earlier this year in a 2013 bid-rigging case to secure a NT$22 million (US$696,754) contract to supply transmissions for armored vehicles at the Ordnance Readiness and Development Center.
According to prosecutors, Tseng provided technical expertise and knowledge of procurement procedures, and also helped to finalize bid documents for submission to the center, which signed a contract to supply engines and parts.
Investigators said Tseng’s name did not appear on a list of company employees, adding that he tried to evade detection by asking the companies to pay his monthly wage — NT$56,000 — in cash to avoid having his name on their ledgers.
Tseng denied having broken the law, saying the monthly payments were for travel expenses.
Prosecutors said Tseng’s case indicated he had used undue influence and created a conflict of interest in violation of the revolving door policy, as his consulting role for the companies helped to secure the two contracts.
Tseng had also been “double-dipping” by getting a monthly salary from private firms, while receiving a military pension of more than NT$80,000 for a colonel with at least 20 years of service, prosecutors said.
If found guilty, Tseng faces a two-year jail term and a fine of NT$1 million, while his wages from the companies could be seized, prosecutors said.
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