Thursday, May 06, 2010

Lafayette: Taiwan wins victory?

New developments in the Lafayette frigate scandal (CNA courtesy of Taiwan News):
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.

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.
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.

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.

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.
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 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.
Daily Links
  • 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....
Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums!


mx said...

Can there is any doubt that the KMT is just a bunch of thieving criminals? I mean, how blind and obtuse do you need to be to think otherwise. Yeah, sure CSB fu*cked up and I am disgusted what his family did, but that was minor compared to the thief involved in this case. How can the Taiwanese put up with this? Even the westerners here know this story inside and out.

Anonymous said...

Can there be any doubt....
thief = theft
sorry, I screwed that comment up.

Unknown said...

So, is the legislature going to ask KMT to pay the 400m back into the treasury? Where is the outrage that the taxpayer's money went to bribing PRC officials to turn a blind eye to the arms deal?


I also wonder if any Chinese generals got a bullet in the head for this, and far up the chain of command that corruption went. If it came out in China that someone on the politburo or CSC took cash to let Taiwan have frigates...

Anonymous said...

Come on. The Tourism Bureau doesn't need to go to the trouble of collecting data. We've all seen interviews with Chinese tourists on those ever so impartial news channels. They treat the NT dollar like monopoly money.
Everything's going to be ok...

Anonymous said...

of course everyone knows. or is pretty sure about it.
but it feels like no one cares about corruption, if he can take a small part of the bacon, too.

Pekingese said...

I find it incredulous that the pan-blue political talk shows have appropriated the Lafayette case to slag off CSB again and talk about his guilt in the matter, even going as far as allowing suggestions that funds could have been misappropriated into his accounts! They really are obsessed with him!

Anonymous said...

"Kickbacks to Beijing".....what on earth?

Michael Turton said...

"kickbacks to Beijing" -- the story was that France paid off Beijing to avoid its anger over the frigate sale.

mx said...

Thinking about it, the kickbacks to Beijing deal in the early 90's may have been when the the KMT first started to take a different viewpoint of the CCP.

(mutual corruption so every fatcat elitist is happy).

Anonymous said...

Seems to me Chinese tourists have had a positive impact on the economy. I'll concede the lack of growth in Japanese arrivals could be related to some sort of "crowding out", but I'm more inclined to attribute this to a weak Japanese economy and Taiwan's inability to connect with a younger demographic.

By the numbers......

Taiwan Tourism First Quarter 2010

Chinese visitor arrivals: + 98%
Japanese visitor arrivals: - 0.93% Number of international standard hotel rooms: + 4.71%

Japanese Tourist Arrivals 2009

Canada: -28.4%
New Zealand: -23.5%
Thailand: -16.5%
Singapore: -14.1%
Hong Kong: -9.1%
Malaysia: -8.7%
Taiwan: -7.9%
China: -3.7%
Macau: +3.3%
Korea: +28.4

Michael Turton said...

Could be. Could well be. But it would help immensely if the numbers were broken out differently. I was more interested in the fact that the data is not available than in the claims of FT.

I think the "younger demographic failure" is a thing well worth exploring. Blog on that man, I had no idea that we had become passe in Japan.