Settling Party Assets under Chen Shui-bian and Tsai Ing-wen

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government-general’s corruption, dictatorial rule, and general mismanagement. He also did not punish those responsible for the violence.

The Research Report on Responsibility for the 228 Massacre was also significant in that it once again reformed the national narrative on 228. Whereas the 1992 report, due to the continued rule of the KMT and the fear of an infant democracy regressing back to

authoritarianism, skirted around the question of Chiang Kai-shek’s involvement in 228, the research team commissioned by a DPP-led executive was emboldened to expound more definitively on responsibility for the tragic event. This new narrative is very likely an important factor in the current drive to eliminate positive portrayals of Chiang, including statues bearing his likeness at the Chiang Kai-shek Memorial Hall in Taipei and on school campuses and public spaces around the country.

3.2.3 Settling Party Assets under Chen Shui-bian and Tsai Ing-wen

The KMT’s assets have been a frequent target of pan-green camp resentment and public criticism since democratization, but became a real cause for concern for the party after the election of Chen Shui-bian in 2000. As mentioned previously, Chen’s election signaled a turning point in how issues concerning the KMT’s authoritarian past were handled. During his eight-year tenure, Chen made numerous attempts to push forward human rights and moderate transitional justice measures.

Party assets are not limited to monetary or financial resources, but also include wealth scurried out of China after the Nationalist defeat in 1949, property expropriated from the Japanese following the retrocession of Taiwan, as well as the party-owned enterprises (POEs) that have generated billions of dollars in revenue since the KMT’s arrival in Taiwan (Li, 2008; Matsumoto, 2002). According to Hwang (2016), “it is estimated that the KMT, a quasi-Leninist political party, has accumulated $2 to $20 billion dollars during its rule in Taiwan” (p. 181). These resources have made the KMT one of the richest political parties in the world, an aspect that opponents maintain is antithetical to true democratic competition.

The Chen Shui-bian administration made the investigation and purge of KMT party assets one of its prime directives, beginning in 2002 with the draft bills of the Political

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Parties law (政黨法) and the Statute Regarding Improperly Obtained Party Assets (政黨 不當取得財產處理條列). The Political Parties Law was designed to “ban political parties from operating or investing in a profit-making enterprise,” while the statute on party assets aimed to “empower the government to investigate and confiscate assets that have been unlawfully obtained by political parties” (Ko, September 2002). However, these two draft bills were stalled 75 times by the pan-blue majority coalition (the KMT and Peoples’ First Party) in the legislature “via parliamentary maneuvering in the fifth legislature’s Procedures Committee” (Yang, July 2016).

The Control Yuan, led by Huang Huang-hsiang, also released a report on KMT assets that were appropriated from the exiting Japanese colonial government, as well as the content of KMT account transfers, on April 2, 2001. The investigation that led to this report discovered “19 movie theaters transferred from the Taiwan Provincial Chief Executive Administration to the KMT as well as favorable land ownership, land structure and materials” (Lin, 2007, p. 190). The report was important in determining the legal status of the KMT’s assets as it “considered [them] not to conform to the ‘Principle of the Fundamental Rule of Law’ and advised the KMT to return them back to the government”

(Ibid., p. 190).

The DPP legislative caucus attempted to petition for a referendum on investigating party assets in 2006, and continued to pursue such a referendum throughout the sixth legislative session until 2008, when the bill finally made it to the review process (Luo, 2012; Shih, August 2006; Yang, July 2016). However, “by then the DPP administration had been voted out of office, and when then-president Ma Ying-jeou’s cabinet was sworn in, Ma withdrew the bill from the legislature, effectively freezing party-assets reform for the eight years of his presidency” (Yang, July 2016). Ma, according to Yeh (2017), made several promises to settle the question of the KMT’s assets during his term of office, but these promises consisted of placing the assets in a trust rather than returning them to the state’s coffers (p. 28).

However, Ma and the KMT experienced a sharp drop in popularity during his second term in office. This led to several large-scale popular protests, a crushing defeat in the 2014 9-in-1 local elections, in which the KMT lost several key municipalities and

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counties, and ultimately the election of DPP presidential candidate Tsai Ing-wen and a DPP legislative majority in the 2016 presidential and parliamentary elections. Tsai and the pan-green legislators came into office on May 20, 2016 with a renewed promise of settling the issue of the KMT’s assets. By July, the Act Governing the Handling of Ill-Gotten Party Properties by Political Parties and their Affiliate Organizations was passed, and the next month the Ill-Gotten Party Assets Settlement Committee (Budang dangchan chuli weiyuanhui, 不當黨產處理委員會) was inaugurated (EY Press Release, 2016).

The committee currently has twelve members and states its mission as being the

investigation, recovery, and return of improperly obtained assets by political parties and their affiliate organizations (Ill-gotten Party Assets Settlement Committee, 2016).

So far, the committee has frozen a number of assets and financial accounts, including hundreds of millions of NT dollars in bank account funds and two large holding

companies, one of which owns the party’s headquarters (Economist, December 2016). It is also currently in the process of investigating two organizations deemed affiliated with the KMT, the China Youth Corps and the National Women’s League.

Due to the actions of the committee, the party has had to lay off more than half of its staff because it is now unable to continue paying their salary. This has led party leaders to push back against what they see as a political witch hunt. In November 2016, the KMT petitioned the Taipei High Administrative Court on the legality of the freezing of several of its bank accounts. This was done in response to the KMT cutting 10 checks from these accounts worth a collective NT$520 million, an action which violated the Committee’s strictures on attempting to dispose of illegitimate assets (Pan and Hsiao, 2016). The Court ruled in the KMT’s favor, however, stating the Committee’s action “lacked some of the legal requirements needed to freeze the KMT’s bank accounts, and therefore…may have violated provisions in Article 9 of the act” governing ill-gotten assets (Pan and Hsiao, 2016).

In some regards, the persistent pursuit of KMT assets could be viewed as retributive in nature, quite similar to the South Korean Pro-Japanese Collaborators investigations. After all, these efforts have largely been led by the DPP and have targeted a specific political party to investigate, confiscate, and liquidate their assets, as well as punish them if they

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don’t comply. Meanwhile, the party in question has no discernible recourse of action – no dispute mechanism – under the July 2016 law if it disagrees with the committee’s

findings, except to file an administrative suit. However, as Yeh (2017) points out, the DPP have painstakingly avoided inciting severe punishment as a justification in their discussion of party assets, neither have they advocated the prosecution or lustration approach adopted by countries like Hungary and Germany. In the end, party assets settlement is more of a mild form of retributive punishment on the transitional justice spectrum (p. 28).