Liberty Times: What are your thoughts on how Lin Yi-shih (林益世) meddled in China Steel’s contracts? Lin recently admitted to having accepted a NT$63 million (US$2.1 million) bribe in 2010 from a metal-recycling company owner to help the latter secure procurement contracts from CSC and its subsidiaries
Lin Wen-yuan (林文淵): The involvement of CSC in the recent scandal and controversy has dragged the name of the corporation through the mud. It is no wonder that the Labor Union at CSC is asking CSC chairman Tsou Juo-chi (鄒若齊) to step down if he can only write letters to company employees online and can not stand up and defend the honor and name of the company.
I do not believe Tsou would take money in return for favors and that was never the question; the question is, does he have what it takes to resist the pressure when the time comes?
Of course I was under pressure when I was in the same position, how could I not be? However, I turned them all away.
Take for example, the rumors that [during the former Democratic Progressive Party (DPP) administration] then-president Chen Shui-bian’s (陳水扁) father-in-law, Chao Yu-chu (趙玉柱), came and asked me for a favor, but I just said no and turned him away. He went and told his son, who then told his wife, Chen Hsing-yu (陳幸妤). Chen Hsing-yu then had a fight over the matter with her husband, which meant that then-first lady Wu Shu-jen (吳淑珍) got involved.
When Wu invited me over for a talk, I told her it just would not float. Chao may have thought the corporation would not lose anything because it would be selling to him for the same price it sells to others — and as long as the chairman approves of it, what harm is there? However, the corporation’s clients are all long-term clients, so in terms of moral responsibility and integrity, how can I give materials to others when I am scrambling to supply my clients?
Chang Chia-juch (張家祝), the corporation chairman appointed by then-premier Liu Chao-shiuan (劉兆玄) after the KMT took power in 2008, also dealt with the pressure instead of collapsing under it.
Chang is a scholar, someone who plays by the rules, and he did not “cooperate” with the political practices of the KMT and was thrown out; ask anyone in the company, they all know what happened.
Nobody shows up on the day of an annual general meeting and says they are quitting; it is like slapping the shareholders in the face, but Chang did and he decided to quit, because he had been told he was being thrown out.
That is not the case with Tsou. While the public is not clear about how the money was handled in the Lin corruption case, it is clear that, given Lin’s former position of power [as a lawmaker and the KMT’s policy committee director], Tsou would not deny him anything because [Tsou] is too political and could not deal with the pressure.
Some say it was the DPP who brought politics into the CSC after they came to power in 2000, but it is actually the other way around.
LT: What role do state-owned corporations like CSC play in elections?
Lin: After Chang was named chairman of the corporation, he once asked in a meeting “Did Lin Wen-yuan ask anyone to raise money for political donations?” One of the vice presidents in response said: “Lin never asked us to do anything that was political.”
From this example, I can guarantee that I never raised a penny in terms of political donations from the employees of the corporation, nor have I raised political donations from the corporation’s clients.
When I was chairman of the corporation, I made it a rule that no election flags or banners should be flown on corporation grounds and I also barred access to candidates, including Chen Shui-bian. During my tenure as CSC chairman, I took not one action that was politically motivated.
Tsou, on the other hand, mobilized everyone in the company during elections and sent corporation employees out to rallies and also used company cars.
In another example, prior to assuming my position as chairman of the corporation, the corporation even had an on-site KMT office with someone specifically tasked with managing party affairs.
When I became chairman, that person was not permitted to continue managing KMT party affairs and was transferred to a subsidiary. Now that person is back in at the CSC headquarters and holds a position of power.
The corporation now also runs a Legislative Yuan contact office, which I find to be very odd.
Did any lawmakers come to visit the corporation when I was chairman? Yes, there were visits and I treated them courteously, but I did not fawn over them.
If they brought along any firms that wanted supplies, I told them to meet with vice president of the administrative section to see if they met the appropriate standards and I left it up to them to hash it out.
The vice president then asked me if we should budget for some of the materials to be used for public relations. I just said to him: “Are you trying to make trouble for me? How much material can you provide? If 200 lawmakers came here with companies in tow, can you handle it? We’re going by the rules.”
All the employees in the corporation are pan-blue, but even so, they can verify my claims.
LT: Why does CSC have so many subsidiaries?
Lin: When I assumed office there were a lot of paper companies under the corporation and I made an effort to find out why. From what I am told, there are three main reasons for this state of affairs.
The first reason was because the government holds 21 or 22 percent of the corporation’s shares and every time the company has to hold an election it would gather all the proxy statements from the government. So the government set up a lot of paper companies for one purpose only — to control the board of directors.
Since the paper companies do not have any chairmen appointed to them, and the government does not pay any salaries at these paper companies, the corporation does not have to spend any money getting those proxy statements, making everything legal.
The second reason is because the China Steel Express Corporation. This firms holds under its name the majority of ships used to ferry China Steel’s cargo and rents these ships to outside companies when they are inactive.
It is a company that makes a tidy profit and is currently chaired by the son of Chao Yao-tung (趙耀東), one of the founders of China Steel Corp. Given that it does business all over the world, the company been set up and registered overseas so that the ships can fly the flag of the Republic of Panama because it would encounter difficulties if it flew the Taiwanese flag.
The third reason for the corporation having to set up so many paper companies is because of the China Steel Global Trading Corporation. Given its need for a slitting and cutting center for all the materials its businesses bring in from around the world, the trading corporation also had to set up multiple paper companies on foreign soil.
These companies have been set up over a timeframe of three to four decades, but these paper companies do not have any major expenditure or maintenance costs and they are all reflected in the CSC’s financial statement; it’s proof that the establishment of these companies was not to launder money.
The CSC is mainly criticized because its chairman brushed aside the warnings from the corporation’s financial evaluations and made several investments, which would of course raise problems.
When I entered the corporation, I did not make any changes to personnel structures and I also did not bring my own people. I did not even bring a chauffeur, I just went to my new job with my secretary.
Under my leadership, CSC experienced five of its best years and made NT$65 billion (US$2.1 billion) per year, an achievement that had not been seen before.
I am saddened to hear that such a company is actually in the red in the first quarter.
LT: The reformation of state-owned corporations has been talked about for many years. What are your thoughts concerning the issue?
Lin: When I was appointed to the Ministry of Economic Affairs’ commission of national corporations, eight out of the 12 state-owned companies were running into deficit and the other four were only making money because they held a monopoly on petrol, electricity, water and salt.
I spent a lot of time implementing reforms while saving these state-owned corporations one by one.
It was after this particular experience that I was deeply convinced that all state-owned corporations should be completely privatized, because as long as the government is still in control, the companies will never be able to truly change; there is just too much politics and outside interference and the longer it goes on like that, the companies will only stagnate.
Take Taiwan Power Co (Taipower, 台電) for example. It used to attract the best and the brightest, but why did the company not turn out to be as good as expected? It is because the company is too set in its ways and no matter how hotly the passion burns within the new employee, put him in a mold long enough and the passion will cool and the employee’s mindset will become institutionalized.
The national corporation review committee that President Ma Ying-jeou’s (馬英九) administration set up — it was then called the management evaluation committee — is basically useless. So what if you send an academic to CPC (中油)? He would not be able to understand what is going on in the company even if you gave him three weeks.
It is just bureaucratic lip-service, showing the people that it is doing something.
In a nutshell, in order to remove interference by the Legislative Yuan or other administrative sources, the government needs to sell off all its shares in state-owned companies.
LT: Can you talk about your experience with the Special Investigation Division (SID)?
Lin: After I stepped down in 2008 I was summoned by the SID, the Taipei District Prosecutors’ Office and the High Court Prosecutors’ Office, at least ten times for questioning. At first I was summoned as a witness, but then my status was changed to defendant.
I was very surprised at this. Coming from a civil service background, I never touched anything that would break the law, of that I was certain. When I asked the SID why I was being listed as a defendant, it said it was because the media was applying a lot of pressure about the issue, so to assuage some of that pressure, it listed me as a defendant.
After being listed as a defendant, the SID asked me the same questions they asked before. I said that I had already answered their questions — even giving them specific dates when they had asked them — and said there would not be a different answer because the truth is the truth.
In the end, the case against me was closed and I was found not guilty, but the process took around a year and both my parents and my family members were upset by the whole ordeal. I was not guilty of a crime, but the SID succeeded in smearing my name.
The SID was merciless against us and gave no quarter — putting you through the ordeal based solely on rumors which did not even require proof. How can the judiciary system of this nation be based on political standpoints and not on seeking the truth? How can such a system inspire trust from people? I think that is what let me down the most.
Translated by Jake Chung, staff writer
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