After nearly 10 years of investigations, an international court of arbitration in Paris has finally ruled that the French defense contractor Thales has to pay Taiwan more than US$591 million as a sanction for payment of commissions in its sale of six Lafayette-class frigates to the Republic of China Navy in 1991.This hugely important case involved alleged kickbacks of $5oo million, $100 million to Beijing and $400 million to the KMT. This being a scandal heavy with big KMT names, amazingly no one has served any time. For more information, see my old posts: Lafayette, Lee, and Hau and Lafayette, we are still here. And don't miss this shortie on bodies flying everywhere French arms are sold.
The multi-billion frigate deal struck with Thales' precursor, Thomson-CSF, exploded into the limelight after Navy Captain Yin Ching-feng died under suspicious circumstances in late 1993. Yin is believed to have been poised to blow the whistle on colleagues who had allegedly received kickbacks from the deal.
A French judicial probe opened in 2001 to investigate claims that much of the money paid by Taiwan for the warships went to middlemen, politicians and military officers in Taiwan, China and France as commissions.
Kyodo News reported on local news:
The China Times newspaper also said Wednesday that, in an attempt to settle with Taiwan's government during arbitration, the French government on several occasions offered to sell Taipei the advanced Rafale fighter from French manufacturer Dassault Aviation.According to the China Times report, Paris was so embarrassed it was willing to risk the wrath of all 1.3 billion Chinese people (does such wrath occur serially, or is it all at once? I have never been able to find out) to sell Taiwan fighters.
The allegation is significant because it would show the French government, by offering to provide Taiwan with advanced weaponry, was willing to risk significant damage to its relationship with China in order to save hundreds of millions of dollars.
France does not maintain diplomatic relations with Taiwan, and in recent years Taiwan has had to rely almost exclusively on the United States for purchasing military equipment. The China Times quoted an unnamed former National Security Council official as saying the offer to settle did not involve a reduction in the price of the fighters.
Nationalist Party (KMT) Legislator Lin Yu-fang alleged Tuesday that France also offered to sell Taiwan more Mirage fighters and pay for maintenance and spare parts, but was rebuffed each time.
The offers from the French side amid arbitration allegedly began during the administration of former President Chen Shui-bian, but progress was hindered after KMT opposition in the legislature triggered the dissolution of Taiwan Goal, an arms procurement company set up by the government.
The successful action against Thales has prompted the ROC Air Force to consider action against France for the 1992 Mirage contract, which has long been rumored to have a similarly sleazy mix of middlemen and payoffs.
- VIDEO: Ros-Lehtinen on US-Taiwan FTA.
- Formosa Displayed by Steve Nelson on traveling here.
- Jon Adams with a truly fine piece on gangsters, politics, and urbanization in Taiwan in Global Post.
- Pingpu aborigines ask UN for help in getting recognized as aboriginal peoples.
- Robin Kwong in FT blog says Chinese tourists revive Taiwan tourism. Are Chinese tourists really "reviving" the tourism industry here (which was nothing like dead) or are they just crowding out bigger spenders like the Japanese? The real key would be to look at visitor expenditures, since Chinese tourists are notorious for spending less. Only -- wait for it -- the Tourism Bureau hasn't posted any public data on that since 2008. Probably just a coincidence....
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