The special panel investigating the long-running kickback and murder scandal involving Taiwan's Lafayette-class frigate procurement deal with France in the early 1990s made a major breakthrough yesterday with the detention of a new suspect.
The Taipei District Court approved chief prosecutor Tsai Chiu-ming's (
According to court files brought back from Switzerland by Tsai late last year, a sum of US$20 million in slush funds from the Lafayette deal was remitted into the bank accounts of Kuo Wen-tien and his brother Kuo Li-heng (
Tsai, who heads the Lafayette scandal investigative panel, determined that Kuo Wen-tien should be kept under detention after summoning him for questioning on Wednesday because the panel secured solid evidence of his involvement.
Under a bilateral judicial aid agreement, the Swiss government handed over to Taiwan last November a collection of bank files suspected of being linked to the Lafayette kickback scandal.
French arms manufacturer Thompson CSF -- now called Thales -- agreed to sell six Lafayette-class frigates to Taiwan in 1991 for US$2.8 billion.
After poring over the six cases of files brought back from Switzerland, the investigative panel concluded that there was an "18 percent kickback" contract between Thompson CSF and Andrew Wang (
Investigators said that each time the Taiwan made an installment payment for the frigates, a sum roughly equivalent to 18 percent of the payment would be remitted into bank accounts owned by Wang or members of his family. The remittances were believed to be illegal commission payouts, Tsai said.
According to the panel's estimate, the Lafayette kickbacks amounted to US$486 million, of which US$120 million was used to bribe Taiwanese military or administrative officials.
After Thompson CSF remitted US$486 million to Wang's Swiss bank accounts, Wang transferred US$120 million of that sum to his accounts in Luxembourg for use in bribing Taiwanese officials, according to the panel.
Of that amount, the investigative panel said, US$20 million was remitted to the Kuo brothers' accounts in Taiwan in several installments to bribe middle-ranking naval officers, while US$40 million was remitted to the Wang family's bank accounts in Taiwan, allegedly for use in bribing senior political figures.
The remaining US$60 million never entered Taiwan, and is believed to have been remitted to the overseas bank accounts of corrupt personnel.
The additional US$366 million that the French firm gave to Wang was probably used to bribe French officials as well as Chinese military and political leaders to prevent them from voicing opposition to the arms deal, investigators said.
The files brought back from Switzerland include 46 bank accounts under the names of Wang, his three sons and Wang's company, all of whose accounts have been frozen by the Swiss Federal Court.
The Swiss files show that frozen deposits in the Wang family's bank accounts top 900 million Swiss francs (about NT$23 billion). Even after the family's legal assets are deducted, the amount that Taiwan intends to reclaim is still large.
It may take three to five years to conclude the lawsuit, judicial authorities said, adding that Taiwan might still seek judicial assistance from several other countries, including France and Luxembourg, to back its request for Switzerland to return the money.
Moreover, the lawsuit will be very expensive. According to a preliminary estimate, the cost of retaining foreign lawyers alone could be in excess of NT$100 million.
"The Ministry of Justice must appropriate funds for the lawsuit," he added.
The files, which are written in English, French and German, also include a number of previously hidden overseas bank accounts related to the US$2.8 billion Lafayette deal, as well as information about relevant capital flows in Switzerland, judicial authorities said.
They added that the Swiss court files clearly document deposit times and destinations of the capital.
Wang has been charged in absentia with murder, corruption, money laundering and fraud.
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