With the aim of establishing a fairer political environment, the government announced last week that a special law would be drafted to regulate the assets of political parties. The move was bound to be controversial, simply because the announcement was made only a week before legislative elections.
The KMT has said that the government's decision was politically motivated, although the Cabinet said it had nothing to do with the elections. The issue, however, is much more significant than its impact on the polls.
During the last presidential election campaign, Lien Chan (
The KMT is the only party in Taiwan that owns and runs a huge business empire. It is the richest party in the world. Possession of the assets in itself may not be a sin, but there are many questions surrounding the way these assets were acquired.
They involved, for instance, the illegal transfer of money, property or commercial interests from the party to the government and vice versa. When the KMT moved to Taiwan in 1949 it had only one party-owned enterprise and less than US$1 million in cash.
But after governing Taiwan for nearly 55 years, the KMT now owns seven stock-holding firms, 27 party-owned enterprises and more than 400 party-invested companies. The value of all KMT assets is estimated at between US$6 billion and US$15 billion. How did the party accumulate such immense wealth?
First, it simply took over properties that had been "owned" by the Japanese government during the colonial period, or purchased these assets at artificially low prices. In later years it benefited from the symbiosis between the government, the source of lucrative development contracts and KMT companies, the recipients of such contracts. Furthermore, it has used its considerable financial power, along with its connections as the former government, to manipulate Taiwan's financial markets via insider-trading and the spreading of rumor -- accomplished through the media.
It is ironic that in its government role, the KMT stressed market stability, whereas in its business dealings the KMT intentionally generates market instability -- sudden rises, sudden plunges -- through which it can earn huge profits as well as
launder payouts for various favors.
What are the major implications of the KMT's possession of such vast wealth? For a start, it creates an unequal basis for party competition.
Since the KMT owns a far higher proportion of political and economic resources than other parties, it is easy for it to use its financial power to engage in illegal activities such as vote-buying. Also, the KMT's business empire undermines Taiwan's political and economic base by enabling "crony capitalism," the corrupt collusion between government, party and local factions.
"Black gold" politics is entirely the product of the KMT's 55-year ownership of party-run-businesses. When the KMT was the ruling party, it was easy for it to deal with demands from the opposition on issues related to its own party assets. But the DPP has begun to force the KMT to face the facts.
Since the KMT began divesting itself of its assets a year ago, the government must move quickly to investigate the party's assets before valuable evidence of how it was acquired disappears. An independent task force must be established to examine the sources and contents of the assets. Then we will know the full extent to which the KMT, during its many years of rule, pilfered from the public with impunity.
A recent investigation conducted by the Control Yuan indicated that some of the methods by which the KMT acquired assets while it governed Taiwan were not in accordance with the principles of the rule of law. The Cabinet's investigation of KMT assets was actually a follow-up of three cases investigated by the Control Yuan that involved KMT properties.
There is no reasonable or legal way for the KMT to resist these investigations. It has been a year and a half since the KMT became Taiwan's main opposition party. But the KMT's central leadership refuses to accept its defeat in the presidential election and has refused to implement party reforms. It is obvious that the key members of the party's central headquarters are only interested in accusing others rather than taking responsibility for losing the election.
In addition, there remains a lack of consensus about how to use the KMT's resources to reform the party structure. While the KMT has made numerous attempts of late to entice some of its wayward members back to the fold, as well as to distance itself from the so-called "Lee Teng-hui line" (
For the KMT to rejuvenate itself, it will have to push through structural reforms.
In order to overcome its decades-old association with "black gold," KMT leaders must change the way the party handles party-owned enterprises.
Liu Kuan-teh is a Taipei-based political commentator.
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