Taiwan Government news, TAIPEI: The special panel investigating a snowballing kickback scandal involving Taiwan's Lafayette frigate procurement deal with France in the early 1990s made a major breakthrough Thursday with the detention of a new suspect.
The Taipei District Court approved chief prosecutor Tsai Chiu-ming's application to place Kuo Wen-tien, the brother of a convicted corrupt naval officer, in custody on suspicion of involvement in the Lafayette kickback scandal.
According to Swiss 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, a naval officer who has been imprisoned for conviction in another corruption case.
Tsai, who heads the Lafayette scandal investigative panel, determined that Kuo Wen-tien should be kept under detention after summoning him for questioning Wednesday as the panel has secured solid evidence proving 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. 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 Thomson CSF — the French arms manufacturer that agreed to sell six Lafayette frigates to Taiwan in 1991 for US$2.8 billion — and Andrew Wang, the French firm's agent in Taiwan who fled Taiwan following the death of a Navy captain under suspicious circumstances in 1993.
Investigators said each time the Republic of China government made an installment payment for the frigates, a sum roughly equivalent to 18 percent of the payment would “coincidently” 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 deal kickbacks amounted to US$486 million, of which US$120 million was used to “bribe” Taiwan military or administrative officials. After Thomson CSF remitted US$486 million to Wang's Swiss bank accounts, Wang transferred US$120 million from that sum to his accounts in Luxembourg for use in bribing Taiwan 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; US$40 million was remitted to the Wang family's bank accounts in Taiwan probably for use to “bribe” decision-making or powerful political figures.
The remaining US$60 million didn't enter Taiwan and is believed to have been remitted to overseas bank accounts of relevant 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 astronomical.
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 relevant 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 exceed 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, adding 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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