TAIWAN DEMOCRACY VERSUS CORRUPTION

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 003126

SIPDIS

SIPDIS

STATE FOR EAP/TC, INL/C/CP DLUNA/DKOHN

E.O. 12958: DECL: 09/12/2016
TAGS: KCOR ECON POL TW
SUBJECT: TAIWAN DEMOCRACY VERSUS CORRUPTION

REF: STATE 131554

Classified By: AIT DDIR ROBERT WANG, REASON 1.4 B/C



1. (SBU) Summary: Taiwan Justice officials see the growing
number of indictments of high-level government officials for
corruption as a positive sign of both increasing
democratization and higher standards of accountability for
government officials. End summary.

Government Corruption Dominates Taiwan News
--------------


2. (C) Reports of corruption among government officials and
business leaders is a daily motif in the Taiwan media. On
September 7, two of Taiwan's largest circulation daily
newspapers each devoted six of 20 pages in their lead section
to developments in the multiple campaigns to unseat the
President for alleged corruption. We believe that over the
past two years a larger percentage of media coverage, as
measured in column inches, or minutes of broadcast airtime,
has been devoted to the issue of government corruption than
to any other single topic.

Not Just Media Hype
--------------


3. (C) There are more factors behind the barrage of media
reports on government corruption than just efforts to sell
more newspapers. Official statistics comparing the six years
before and after a dedicated anti-corruption task force was
established in 2000 show the number of senior government
officials indicted for corruption between the two six-year
periods increased by about 10% (from 409 to 451) and the
number of elected officials prosecuted increased by about 80%
(from 290 to 528). In an interview with several
district-level prosecutors, AIT learned that in 2004
approximately 10% of Taiwan's 700 district level prosecutors
were under investigation for corruption. According to these
district prosecutors, the portion under investigation was
even higher among higher level judicial officials: In 2005,
of Taiwan's approximately 300 higher level judicial
officials, 42 were under investigation for corruption,
including 31 prosecutors and 11 judges. Official statistics
also show that the total number of corruption indictments in
the six years before and after 2000 has actually declined by
about 10% from 5643 to 5079 cases prosecuted. The trend is
toward more indictments of higher level and elected
officials, but fewer indictments of lower level officials.

Signs of Embarrassment...
--------------


4. (C) In conversations with AIT, prosecutors and other
Justice Ministry officials have expressed some embarrassment
at evidence of widespread corruption among their colleagues
and co-workers. Taoyuan District Chief Prosecutor Liu
Wei-tzong defensively explained that corruption could never
be entirely eliminated from government, and that it existed
in all governments, including the U.S. government.

... And Pride
--------------


5. (C) However, the Justice officials who spoke with AIT
also unanimously expressed some pride in the growing number
of arrests, indictments, and prosecutions of high-level
government corruption. Chief Prosecutor Liu proudly told AIT
that most of the corruption investigations against district
prosecutors were initiated by fellow prosecutors in their own
districts. He mentioned the case of Hsu Wei-yu, a prosecutor
in the Yunlin District Prosecutors' Office who was arrested
in late 2005 for soliciting bribes, pointing out that it was
the chief prosecutor of Yunlin District that had initiated
the case against Hsu. Liu argued that this was an example of
determination to root out corruption in the prosecutorial
system. He believes that corruption is significantly less
widespread than it was 20-30 years ago, that Taiwan's
prosecutorial system is much more transparent than in the
past and is now closely monitored by media, lawyers, and
judges.

Bah, Humbug! No Stockings Will be Hung at MOJ
--------------


6. (C) In a separate meeting with AIT, Taiwan's Minister of
Justice, Shih Mao-lin echoed the view that government
corruption was no worse today than it had been when he
started his career with the Ministry of Justice (MOJ) nearly

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30 years ago. He attributed the increased number of media
reports of government corruption to a freer press since Chen
Shui-bian's election in 2000 and higher standards of
accountability to the public. He told AIT that the standards
of integrity for judges and prosecutors were now much higher
than during the days of KMT rule prior to 2000. He said the
former practice of turning a blind eye to unsolicited gifts
was no longer permitted. (Note: Ministry of Justice
officials refused to accept AIT's 2006 Lunar New Year
holiday gratuity gifts for the first time. End note.)

MOJ Anti-corruption Mechanism in Place
--------------


7. (C) Minister Shih told AIT that his ministry had
established an anti-government corruption mechanism about 10
years ago under which a MOJ official is assigned to every
government agency and tasked with reporting any indications
of corruption to the MOJ Investigation Bureau and to the
Prosecutors' Office. In addition, these officials are
responsible for publicizing anti-corruption laws and programs
within the agency where they are assigned.


8. (C) As an example of how standards of public
accountability were changing throughout the Taiwan
government, Shih referred to the criticism directed at
state-owned China Steel Corporation Chairman Lin Wen-yuan's
receiving NT$40 million (US$1.2 million) in dividends. Shih
said awarding the heads of state-owned corporations
performance-based dividends was not a new practice and was
not illegal, but the public would no longer tolerate "public
servants" earning great sums of money through their official
duties. (Note: This change in attitudes has extended beyond
civil servants: According to AIT contacts in medical
services, when Taiwan's national health insurance program was
getting started ten years ago, health services workers found
it difficult to understand why they should not accept
gratuities (aka: kickbacks) from pharmaceutical firms for
prescribing specific medicines. Now, however, according to
our contact, this behavior is generally viewed as improper.
End note.)

Taiwan Law Enforcement Agencies Overcome Handicaps
--------------


9. (C) The Director of the MOJ Prosecutorial Affairs Office
Shawn Tsai (Ching-hsiang) told AIT that despite the exclusion
of Taiwan law enforcement agencies from most international
law enforcement organizations, Taiwan compared well with
neighboring economies in terms of fighting government
corruption. He explained that Taiwan had been the first
economy in Asia to establish laws against money laundering
and related white-collar crime, and he highlighted Taiwan's
position on the steering committee of the Asia Pacific Group
Against Money Laundering. He noted Taiwan's ranking
according to Transparency International (TI) had improved
from 35th in 2004 to 32nd in 2005 of the 158 economies
ranked. Director Tsai argued that Taiwan was even further
ahead of Malaysia and South Korea than the TI rankings
indicated (Malaysia was 39 and South Korea 40 in the 2005 TI
rankings),pointing to the relative transparency of Taiwan
government proceedings compared with those of South Korea.
(Note: When compared to the 85 economies on the TI listing in
1998, Taiwan has improved from 29th in 1998 to 27th in 2005.
According to the international Corruption Perception Index of
economic integrity, Taiwan has improved steadily from a
ranking of 5.3 in 1998 to 5.5 in 2000 to 5.6 in 2004 and 5.9
in 2005. End note.)

Progress Comes with Democratization
--------------


10. (C) MOJ Prosecutorial Affairs Director Tsai told AIT
that he believed the increased number of high-level
prosecutions for corruption was a sign of democratization in
Taiwan. He said that in the past prosecutors did not dare to
pursue cases involving high-level government officials. He
commented that the relative scarcity of media reports on
corruption in past years did not mean there was any less
corruption, but primarily reflected a less transparent
government and less aggressive media. Tsai argued that the
increased number of prosecutions and news reports on
government corruption demonstrated the progress Taiwan had
made in government transparency and public accountability.


11. (SBU) The Presidential Office announced on September 7
that President Chen himself and the First Lady, Wu Shu-chen,
had been questioned by prosecutors as potential suspects in
connection with MOJ investigations into allegations of
government corruption in the Presidential Office.

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Comment:
--------------


12. (C) The issue of government corruption is a
highly-politicized issue in Taiwan these days. The DPP came
to power in 2000 in part because of its promises to root out
government corruption, and public outrage over the huge
fortunes that had been amassed by the KMT during its decades
of one-party rule. While there is some irony that the DPP is
now being hoisted with its own petard, and concern among some
government officials that the media frenzy over corruption
will lead to a loss of trust in public and government
institutions, corruption appears to be no worse than in the
past, and there also appears to have been progress in
government transparency and standards of senior-level
accountability to the public. The higher standards that
Taiwan leaders are now held to and the higher public
expectations of government accountability demonstrate how
democracy can create a virtuous cycle of better governance.
They also reflect the success of U.S. policies to encourage
participatory democracy and political reform in Taiwan.
YOUNG