Over the past week, the Presidential Office has punished national security staff for alleged smuggling of cigarettes on flights for President Tsai Ing-wen’s (蔡英文) trip to the Caribbean last month. Tsai has also apologized for the incident. An investigation was initiated, but the political fallout continues as public anger has not abated.
As people close to the president have been involved in illegal activities and showed a lack of discipline, the incident has attracted widespread attention. In addition, crisis management has been inadequate, there have been attempts to shirk responsibility and a political reward system has been revealed within China Airlines (CAL) and affiliated companies.
These factors have been a source of massive disappointment among those who hoped that the Democratic Progressive Party (DPP) would use its position to address political malpractice. This is something that must be addressed with the utmost urgency.
There are a couple of important aspects to the alleged smuggling incident:
First, the president was clearly not aware of what was going on. According to media reports, then-National Security Bureau (NSB) director-general Peng Sheng-chu (彭勝竹) only learned of what was happening when Investigation Bureau informed him at Taiwan Taoyuan International Airport.
The smuggling of tobacco products has clearly been going on for years, highlighting a disregard for the law among NSB officials, showing that internal procedures for preventing malpractice have failed and that top officials are incapable of providing leadership.
Second, it appears that CAL has been complicit in allowing the culture of disregard for the law, and while suspects and accomplices must of course be brought to justice, the investigation must not lose focus or allow blame to be shifted to CAL.
After the tobacco tax was substantially raised last year, NSB officials smuggled tobacco products using special privileges. Such disparity between privileged people and the public foments discontent.
Moreover, this incident is a gift to scandal-hungry media. Still, although it could be a crisis for the president, it could also be an opportunity for change, depending on whether the handling of the incident is reasonable and meets public expectations.
The main reason the scandal is unlikely to subside is because of inadequate crisis management by the Presidential Office. Its first reaction was to fire Peng and the head of the president’s security detail. While stressing the seriousness of the incident, the Presidential Office also showed a responsible attitude by taking resolute action and not protecting anyone. Nevertheless, blaming longstanding malpractice comes off as an attempt to shift responsibility to previous administrations.
The president and the Presidential Office spokesperson set the tone when they said that “the accurate description is excess purchases,” displaying a lack of reflection and admission of wrongdoing.
This public relations failure sparked a backlash. Taipei Mayor Ko Wen-je (柯文哲) provided the most memorable response when he said that the dictionary definition of “smuggling” would have to be revised.
It is still too early to say how involved CAL is, but even former vice president Annette Lu (呂秀蓮) expressed surprise that top officials at CAL and its affiliates are allegedly involved and that the practice of political rewards from the party-state era remains in place.
All aspects of the incident have been a great source of disappointment for the public.
Although the government remains the biggest shareholder in CAL, it does not own a majority stake. Such businesses have for many years been treated as state-owned and major personnel appointments, from the chairman to the executive team, have been controlled by the government. CAL is no different, nor is Chang Hwa Bank, First Bank or Huanan Bank, which are sometimes collectively referred to as “the three commercial banks.” This runs counter to the liberalization of Taiwan’s economy. In 1993, CAL was ostensibly being privatized and listed on the stock market, but it was private in name only; it still remains under the government’s control.
The smuggling incident shows that two CAL vice presidents and the chairs and presidents of China Pacific Catering Services, TACT Logistics, Yestrip, Tigerair Taiwan and Dynasty Aerotech Inc are controlled by the DPP. The way people are rewarded by being parachuted into these positions and the way politics is allowed to override expertise is ugly. People who are appointed in this manner do not always have the management expertise or the experience needed, but are still given fat salaries. They sometimes assume high airs, run roughshod over others and reverse corporate governance, which is not good for company culture or nurturing new talent, nor does it respect shareholders.
In the wake of this incident, CAL employees have said that government interventions interfere with professional management.
There is no difference between the Chinese Nationalist Party (KMT) and the DPP in this regard. Both treat publicly owned businesses as their exclusive domain and only consider their own interests. The DPP is especially disappointing. The KMT was in power for a long time and was unable to cast off the habits of the party-state era. As the DPP is a local, Taiwan-centered party that prides itself in promoting democracy, the public undoubtedly expected it to be different and that it would eradicate the bad habits of the party-state era, bring renewal and cast off political and economic difficulties.
This is precisely why Taiwanese gave the DPP control of the government and the legislature in 2016.
However, as the smuggling incident has showed that the DPP, for the first time in full control of the state apparatus, behaves no better than the KMT, especially when it comes to using personnel appointments at publicly owned businesses as political rewards.
This will only further consolidate how the public sees the confrontation between the pan-green and pan-blue camps: that there is no difference between them.
Taiwan has now had three changes of government, but if democratic change cannot keep up and is lost among political confrontations and negative developments, people should take action to bring about change as campaigning for next year’s presidential election heats up.
The smuggling incident is still being investigated. If the president wants to win back the public’s trust, she must focus on truth and action, in addition to shouldering responsibility and leaving no stone unturned. She must clarify who is responsible and ensure that malpractice never happens again.
Equally important is that the national security team has been the weakest link in Tsai’s administration. She should take advantage of this incident to improve it.
As for the staff situation at CAL and its affiliates, it might be difficult to carry out a complete overhaul in the short term, but if the president is unable to correct the situation, there will be a strong backlash.
Translated by Perry Svensson
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