No settlement out of court for Lafayette kickbacks

The old scandal, bared long before President Chen Shui-bian was elected in 2000, took at least one victim. Yin Ching-feng, a navy captain, was found dead while investigating alleged wrongdoing in the purchase of six Lafayette frigates in 1991. At least US$520 million is said to have been given back to Taiwan as kickbacks. On assuming office, President Chen promised a thorough investigation to find out the truth even though it might “shake loose the foundation of the country.” However, the case still remains a mystery, albeit part of the rebate has been frozen in a Swiss bank. When the US$2.5 billion deal was struck, Thomson-CSF of France promised not to pay any commission. The contractor later changed its name to Thales.

International commercial arbitration is still going on to settle Taiwan's petition for recouping all of the slush fund.

While the arbitration was under way, the previous Democratic Progressive Party (DPP) government all but agreed to the settlement out of court. The French side, convinced of its highly likely loss in the arbitration that would cost as much as 1.4 billion euros, wanted a settlement so that half of the repayment might be recouped from Taiwan. President Chen had an arms dealer firm set up under the control of the Ministry of National Defense (MND) with the other half of the fund. Taiwan Goal, the company, was formed shortly before Chen stepped down as president last year. Contact was made with Thales to negotiate the settlement out of court, but the underhanded haggling came to light and Taiwan Goal was disbanded.

The French have tried to renegotiate the settlement after President Ma succeeded Chen in May last year. Thales executives asked the French foreign ministry at the beginning of this year to mediate in the rebate repayment. Taipei's representative office in Paris was requested to transmit the French government's intention to settle the issue. The buck finally came to Ma's office, where he reportedly took the decision not to settle it out of court.

The settlement, sans international arbitration, may be above board, but it may still suggest a settlement under the table. Ma “Mister Clean” Ying-jeou cannot tolerate even such an innuendo. Taiwan has to tell the world it does not want any shady or dirty dealings in its procurement of weapons and equipment needed for its self-defense against a possible attack from China. Beijing vows to take Taiwan back to its communist fold, by force if necessary. All arms purchases must be fair and square, as well as transparent. We also wish President Ma would order a reinvestigation of the death of Captain Yin to find out how the shady Lafayette deal was concluded.

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