Officials with Unexplained Sources of Wealth
Can Sunshine Disinfect Taiwanese Politics?
The public outrage over former Taiwanese president Chen Shui-bian's alleged overseas money-laundering is yielding efforts to shore up Taiwan's sunshine laws. But are the two major political parties serious?
Can Sunshine Disinfect Taiwanese Politics?By Sherry Lee
From CommonWealth Magazine (vol. 404 )
Taipei's Bo'ai district, the governmental office district where the island's political elite meet, looks solemn and serene on the surface. Yet it is a marketplace for countless unsavory deals among politicos, officials, local-level powerbrokers, lobbying groups, political supporters and the media.
It is a casino without gambling tables.
As many a lawmaker has witnessed first-hand, political office can also open the door to illicit enrichment. Former DPP lawmaker Lee Wen-chung, who sat on the legislature's National Defense Committee for eight years, was once offered NT$100 million, an overture he rejected. "That was the highest amount I was ever offered," he recalls.
Temptation is in the air everywhere and everyday in this political casino.
Yet the famous Las Vegas ad slogan, "What happens here, stays here," does not go down well with the Taiwanese when it comes to their political capital. The money-for-favor deals struck in Taipei harm the nation and undermine the young island democracy.
Suspicions that former president Chen Shui-bian laundered money abroad and is involved in corruption have made the entire populace wonder what is wrong with Taiwan's legal system and which loopholes must be closed. (Table 1)
Sunshine Laws without Teeth
Over the past years the Legislative Yuan has passed or amended a string of sunshine laws such as the Political Donation Act, the Act on Property Declaration by Public Servants, and the Lobbying Act.
However, the sunshine from these anti-corruption laws has yet to penetrate shady politics. Who or what is to blame?
The power game remains untransparent mainly because some core legislation is missing from the body of sunshine laws, and penalties are too lenient.
The Act on Property Declaration by Public Servants is one example. The current system resembles a statement of assets and liabilities. Public officials are only required to declare changes in assets, but do not need to state the origin, time or means of obtaining these assets. And even if they hide or fail to declare assets, they will only risk a trifling fine of NT$200,000 – NT$4 million.
Hsieh Li-kung, a professor at the Department of Border Police, Central Police University, asserts that public officials should be required to not only declare static assets, but also dynamic money management. Only then would they become extremely mindful of the legitimacy and legality of the assets they obtain.
Hsieh points as an example to Singapore, where courts can confiscate public servants' assets, if they are of unknown origin. Public servants that are convicted of corruption can be punished with a prison term of up to seven years and slapped with fines that rise according to the rank of their posts.
Slack law enforcement is another reason why the sunshine laws are of little help for cracking down on the big fish in the political corruption pond.
Taiwan's sunshine laws are actually not more lenient than relevant U.S. laws, but the island's law enforcement is weak in comparison.
The use of proxies to cover up questionable activities, a practice prevalent throughout East Asia, makes law enforcement doubly difficult.
Hsieh Yihong, professor at the Department of Law at Soochow University and a member of the cabinet's Fair Trade Commission, notes that because sunshine laws only apply to public officials, all a public official needs to do to circumvent the law is to make use of a proxy.
Moreover, the globalization of capital flow allows politicians to relocate their illicit transactions abroad out of the scope of Taiwanese authorities' oversight. Since Taiwan is not diplomatically recognized by most countries around the globe, investigations and law enforcement outside the island are especially difficult.
"They use proxies to get the issue of their status as public officials out of the way and conduct transactions overseas to make it impossible to be charged with a crime (under Taiwanese law)," says the Fair Trade Commission's Hsieh in pinpointing the biggest flaw of Taiwanese law enforcement when it comes to corruption cases.
In Taiwan prosecutors and judges handle sophisticated white-collar crime comparatively early in their careers when they have been on the job only a few years. Lawyers therefore point out that many law enforcement officials lack the experience and expertise that it takes to investigate highly complex financial crimes. In contrast U.S. investigators come from many different professional backgrounds including private enterprises and have abundant experience.
The U.S. government, for instance, managed to hire Thomas O. Barnett as assistant attorney general for antitrust. An experienced antitrust lawyer, Barnett has worked with many industries and has been a partner at the law firm that represented software giant Microsoft in several antitrust disputes. Given first-hand experience with corporate transactions, most U.S. law enforcement officials know very well how games are played with the law and how loopholes are exploited.
Lip Service to Passing Tougher Laws
But now that Chen's secret accounts abroad have been exposed, public outrage has spurred lawmakers into action to specifically define the possession of significant sums of money without an explanation for their origin as a crime, in order to prevent corruption and illicit enrichment.
The bills presently submitted to the legislature by KMT lawmaker John Wu, son of KMT chairman Wu Po-hsiung, and by DPP lawmaker Trong Chai would both elevate the penalty for "unexplained wealth" from a simple administrative fine to criminal punishment, and would shift the burden of proof from the investigating authorities to the person under investigation.
"It is very important to reverse the burden of proof, otherwise we won't be able to break proxy culture," says Hsieh Yihong in arguing in favor of relieving the prosecution of the full burden of proof.
So far Brunei, China, Hong Kong, India, Singapore and other Asian countries have shifted the burden of proof from the prosecution to the defendant precisely because they want to contain Asia's entrenched proxy culture. (Table 2)
The proposed bills to criminalize the unexplained wealth of officials are scheduled for debate as priority legislation in September. What will they look like should they be written into law?
Many legal experts are concerned that the Legislative Yuan will give the bills big play, but will eventually let them die.
DPP renegade Shih Ming-teh submitted his own anti-corruption bill two years ago at the height of the campaign he led to unseat then-president Chen for graft. But it failed in the second reading as lawmakers from both political camps, the then ruling DPP and the opposition KMT, argued that putting the burden of proof on the defendant would violate human rights and the principle of the presumption of innocence.
Shih is convinced that the legislature will boycott the proposed bills on technicalities because "the pressure from shifting the burden of proof will mostly slam shut the back doors and the sources of money that those in power use."
In fact, numerous lawmakers who, aware of voter sentiment, publicly pay lip service to these corruption-fighting initiatives oppose them in private.
As someone who is familiar with the political environment, Sho-wen Chang, secretary general for the KMT legislative caucus, predicts, "With a probability of more than 50 percent, the burden of proof will not fall on the defendant in the end."
That's what many in the legal community fear. A finance lawyer who requested to remain anonymous notes, "If we make unexplained wealth a crime without reversing the burden of proof, the law will be like an empty shell without a soul." If in the future prosecutors still need to shoulder the full burden of proof, their mission will be as difficult as before.
The KMT holds an absolute majority in the legislature, which enables it to pass virtually every law it wants. Yet within the party there is clearly a lack of confidence that the pending bills will be approved. But does the DPP show stronger resolve?
DPP chairwoman Tsai Ying-wen, an expert on Anglo-American law, has some reservations. "The (defendant's) burden of proof must definitely become heavier, but shifting it completely would be an enormous change. We must be very careful because this involves human rights. But politicians must certainly accept stricter monitoring."
Stronger Public Oversight
This is a time of darkness in Taiwan's money politics, but this crisis could also be turned into an opportunity.
To improve the situation, the spirit of criminalizing unexplained wealth must be carried out in reality. But in addition, the executive and legislative agencies must reevaluate potential loopholes in the current laws, they must establish a complete judicial system governing the ethics of public officials, and they must establish an effective law enforcement system. These measures are essential for a successful fight against corruption.
When the gamblers roaming the casino of politics face not only the lure of temptation, but also the threat of vigorous and resolute justice, even if they choose to make a reckless move, they will pay a higher price for their crimes.
Meanwhile, the public must make efforts to continue to watch over politicians and political parties, providing the sunshine that is needed to make the rules of the political power game more transparent.
Translated from the Chinese by Susanne Ganz
Chinese Version: 財產來源不明罪 能照亮政局嗎？