Three former navy officers yesterday denied charges against them at a pre-trial hearing into their alleged role in the minesweeper-procurement scandal.
The Taipei District Court (台北地方法院) began its three-day hearing into the Lafayette frigate and German-made minesweeper-procurement scandal on Wednesday. The hearing focused on the Lafayette scandal for the first two days and turned to the allegations concerning the minesweepers yesterday.
The three indicted navy officers are former commander-in-chief admiral Yeh Chang-tung (葉昌桐), former commander Yuan Yu-fan (袁友范) and former lieutenant-commander Peng Chi-kang (彭繼岡).
Yuan was the officer in charge of the navy's minesweeper procurement when he served at Navy General Headquarters (
Prosecutors, citing the three suspects' cooperation with their investigation, did not suggest any sentence, preferring to leave that matter to the court.
According to the indictment, in 1991, Yuan allegedly forged documents that allowed DM674,296.39 (US$329,681) of public funds to flow into Peng's personal account at the Germany-based Bremen Bank.
The move allegedly allowed Peng to illegally pocket the interest to his personal savings.
Eventually the money went to Abeking and Rasmussen GmbH and Co, the German manufacturer.
Yuan told Peng to withdraw the money when he came back to Taiwan for vacation on Aug. 1, 1991. The sum earned interest of DM7,429.18. According to the indictment, Yuan spent DM4,000 of that figure and gave Peng another DM2,609.41 from the interest.
At the hearing, Yuan said that he did everything according to orders from his supervisor, former navy captain Kuo Li-heng (
"Prosecutors said that I spent that DM4,000. The truth is that I exchanged that money for NT dollars with senior officers who were going to Germany for a business trip so that they wouldn't have to go to the bank. It was a money exchange between public funds. It's not difficult to find the evidence," Yuan said.
Peng, meanwhile, said that Yuan lent him the money and that he had no idea corruption might be involved.
As for the former commander-in-chief, he is accused of covering up the acts of his subordinates in connection with the procurement.
According to the indictment, Yeh, when he discovered Yuan's alleged misdeeds, approved an illegal proposal that Yuan should receive administrative discipline and leave the navy. Legal procedure would have required Yeh to send Yuan to military prosecutors after the offence was discovered in 1991.
The navy's discipline section proposed two options for punishing Yuan: either have him face criminal proceedings, or hand down administrative disciplinary measures and force him to retire from the navy.
Senior navy officials favored the second, illegal, option, which the commander-in-chief followed, thus allowing Yuan to leave without being prosecuted.
Yeh told the judge that he thought Yuan had only attempted to break the law. Pointing to the public funds having been returned, Yeh opted for forcing Yuan's retirement from the navy. The commander-in-chief said he didn't know that Yuan had committed a crime.
"As commander-in-chief of the navy, I would have definitely punished my subordinates if I knew they had broken the law," he said.
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