Last November 17th, two French reporters charged in a weekly French political magazine that a high-ranking French government official had received kickbacks in connection with Taiwan's purchase of Lafayette-class frigates from France. The article further declared that several hundred million US dollars may also have found its way into pockets on both sides of the Taiwan Strait.

The affair is now a hot topic in the French press. While the facts have not yet come fully to light, the case is drawing intense scrutiny. According to Minister of National Defense Chiang Chung-ling, the purchase contract stipulates that Taiwan has the right to recover any bribes, gifts, or kickbacks given out in association with the purchase. "They would have to pay back every penny," he said.

With the facts surrounding the alleged international kickbacks still unclear, a series of other shady military procurement deals in Taiwan came to public attention. In addition to the detention of high-ranking military officers, Lieutenant-General Wei Yu-hui (former head of the CSF General Political Warfare Department) and eight other military officers in the CSF Engineering Bureau have been either reprimanded or reassigned for failing to prevent irregularities. The resignation of CSF Commander-in-Chief Ting Chih-fa, tendered to President Lee Teng-hui on 20 March, has been accepted. The outbreak of this far-reaching scandal can be traced to 13 January, when the home of Major-General Wo Chi-kao, former director of the CSF Engineering Bureau, was hit with Molotov cocktails. Soon thereafter, Yang Shih-chang, chief of the design department at the CSF Engineering Bureau, was seriously injured by unidentified assailants. On 30 January, Wo Chi-kao and Li Ching, an official from the CSF Engineering Bureau, were taken hostage and beaten to obtain confessions. After being released they reported the incident to their superiors. At the same time, the wife of Li Ching, fearing for her family's safety, appealed for the assistance of Taipei City Councilor Lin Jui-tu. After looking into the case, Lin shocked the public by announcing in a press conference that the case involved generals with a total of 27 stars on their uniforms.

The scandal is related to plans to build bomb-proof ammunition warehouses and aircraft shelters. The original plan was to build the structures of reinforced concrete as in the past, but Sheng Pai Corporation, which imports corrugated bomb-resistant steel plate, made a case for its product to Wang Tien-ching, a member of the national legislature. After learning about the product imported by Sheng Pai, Wang was convinced that corrugated steel plate, which is used in dozens of countries, was an extremely good bomb-proofing material and would cost NT$30 billion less than the alternative. He took up the matter with the Ministry of National Defense. Sheng Pai, for its part, engaged in vigorous lobbying of CSF Engineering Bureau director Wo Chi-kao as well as Li Ching, the person in day-to-day charge of the project.

Because Sheng Pai was the only importer of corrugated bomb-resistant steel in Taiwan, the Ministry of National Defense sought to persuade other companies to begin importing the material, and it dispatched Wo Chi-kao and Li Ching on a fact-finding trip abroad in 1996. The ministry subsequently decided to put the project up for public tender. To everyone's great surprise, Kuoteng Corporation came out of nowhere to win the contract on 13 January. Events took a drastic turn soon afterwards when Sheng Pai kidnapped Wo and Li and subjected them to rough treatment.

There was a reason for Sheng Pai's violent reaction. Sheng Pai, the Kaohsiung-based distributor for Neuero Technology, the German manufacturer of the steel plate, was reportedly on very cozy terms with Wo, who lives in Kaohsiung. Sheng Pai, furthermore, had worked long and hard to persuade the military authorities to switch to corrugated steel. Investigators have revealed that classified blueprints connected with plans for construction projects worth over NT$20 billion at ammunition warehouses, aircraft shelters and military bases throughout Taiwan were found at Sheng Pai Corporation and in the homes of Chuang Ping-huang and Chuang Chin-hsing, the brothers who act as joint CEOs at Sheng Pai. The company was apparently extremely ambitious, and had penetrated deeply into the military bureaucracy. Civilian investigators discovered records of telephone calls which suggest that Sheng Pai Corporation supplied mobile telephones to personnel from the CSF Engineering Bureau to discuss bid prices, the progress of the bidding process, and other classified information. Sheng Pai employees also accompanied officials from the Ministry of National Defense on trips to Germany and South Korea. Civilian and military investigators are now working together to determine whether Sheng Pai has bribed any officials, and the extent to which CSF Engineering Bureau officials are in cahoots with Sheng Pai. As for Kuoteng Corporation, rumors abound that it was able to join the fray as a latecomer and snatch the bid from Sheng Pai because it had obtained powerful backers of its own.

An ad hoc task force comprising both civilian and military investigators is now hard at work on the case, but has discovered signs that many documents have either been lost or falsified. Many worrisome questions remain unanswered: How many people are involved? How high up does the case reach? What actually happened? On 20 March, Premier Vincent Siew ordered State Public Prosecutor General Lu Jen-fa to immediately establish the ad hoc task force mentioned above to carry out a complete investigation. He also stated that anyone involved would be seriously punished no matter what their rank, and called for complete cooperation from the armed forces and the Ministry of National Defense.

With this case still in full furor, yet another one came to light. Improprieties in the project to reinforce aircraft shelters at an air force base in Hsinchu have already led to the detention of five military officers ranging in rank from lieutenant to colonel. To make matters worse, national legislator Lin Yu-fang has stated that improper dealings are suspected in connection with military procurement of radio communications systems and sonar systems. The Investigation Bureau has received a tip that organized crime might be involved in the development of a radio communications system and related equipment, a project being carried out by the Chungshan Institute of Science and Technology on contract to the armed forces.

Commenting on the recent spate of scandals within the military, Assistant Professor Sung Hsiao-yuan comments: "The likelihood of corruption increases in direct proportion to the degree to which an organization is closed. The same holds true regarding the level of technical expertise required to carry out its operations." Military procurement operations require a firm grasp of engineering, and involve huge sums of money. In addition, there is only a limited number of suppliers capable of meeting the needs of the military. The government must develop a system that is both efficient and free of corruption.

Hau Pei-tsun, a former premier as well as chief of the General Staff, was a member of the armed forces for most of his career. Speaking about his experience as chief of the General Staff, Hau has stated that the military already has a perfectly sound procurement system, and that the important thing is the ethical standards of the officers in charge. If top generals get involved in politics and start engaging in tricky power plays, the military will naturally fall into disarray. He also argues, however, that if the military were to be downsized, the first target for elimination should be the CSF, since its functions could be performed by the Ministry of National Defense.

Chen Hsin-min, a researcher at the Academia Sinica's Institute of Social Sciences, argues that the government should adopt a policy of appointing civilian officials to serve in the military bureaucracy. He points out that civilians account for 40% of the officials in the US Department of Defense, and more than 20% in the German military establishment. Civilians, according to Chen, can bring a higher level of professionalism to non-combat operations and are not as pressured by the type of personal loyalties that develop among career military officers. The Executive Yuan's Public Construction Commission hopes for early passage of the procurement bill which is now being debated by the legislature. According to commission vice-chairman Li Chien-chung, the Procurement Law will require the military to report to the Public Construction Commission on the progress of all procurements, even for classified projects. The intent is to subject military procurements to an extra layer of oversight.

Upon the order of Premier Vincent Siew, Minister of State Chen Chien-min has organized an ad hoc committee for review of the military procurement system. Committee members include officials from the Ministry of National Defense, the Directorate General of Budget, Accounting, and Statistics, and the Public Construction Commission. The ad hoc committee will make proposals for improvements within two months. In addition, the Executive Yuan plans to transfer the Procurement Bureau and the Chungshan Institute of Science and Technology (which have until now belonged to the General Staff Headquarters) to the Ministry of National Defense. Premier Siew has also ordered the Ministry of National Defense to move as quickly as possible to improve its procurement procedures, strengthen internal oversight, and require procurement officials to report their personal finances.

No matter what the result of investigations, the current rash of scandals appears to have provided the impetus for the establishment of a sound military procurement system.

To reduce potential damage from air attacks, bunkers housing important military installations usually have extra bomb protection. A recent corruption case involved steel bomb protection panels being used in bunkersin Taiwan for the first time. Pictured here is a shelter for fighter aircraft. （photo by Diago Chiu）