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PROBE INTO LAFAYETTE SCANDAL APPROACHING CODA: TOP PROSECUTOR

ROC Central News Agency

2006-09-14 21:39:39

    Taipei, Sept. 14 (CNA) The investigation into a snowballing scandal in connection with the procurement of six Lafayette-class frigates from France in the early 1990s will be wrapped up soon, the nation's top prosecutor said Thursday.

    State Public Prosecutor-General Wu Ying-chao said in an interview with CNA that the Lafayette scandal investigation panel spent nearly six months poring over a huge collection of bank files presented by Swiss authorities through a judicial aid program late last year. "The arduous work has enabled investigators to piece together the contours of the complicated snowballing case, " Wu said, adding that investigators have come to the conclusion that the Lafayette-related illegal commissions and interest frozen in more than 40 bank accounts under the names of Andrew Wang -- a fugitive arms broker -- and members of his family should amount to US$520 million.

    The investigators have also discovered that Wang remitted US$20 million of that sum to Kuo Li-heng -- a former naval officer who has been kept behind bars for convictions in another corruption scandal -- and his elder brother Kuo Wen-tien in attempts to bribe military officers to facilitate the Lafayette deal, Wu said.

    According to Wu, the prosecution authorities have listed Wang and the Kuo brothers as "defendants" in the case.

    Asked whether any other government or military officials are involved in the case, Wu would not go into detail, saying only: "You'll know when the time is ripe."

    Noting that the long and grueling investigation is approaching a coda, Wu said the investigation panel will give the public a detailed account of the origin and flow of the huge Lafayette slush fund, the about-face in the warship procurement project -- changing from South Korea's Ulsan-class frigate to the Lafayette frigate -- and other suspicious points.

    To describe the complexity and sophistication of the case, Wu said he felt "dizzy" at the first glance of the huge piles of data and documents in connection with the high-profile scandalous case.

    Wu confirmed that he filed an application with the Swiss Department of Justice Sept. 5 for the retrieval of US$520 million in frozen illegal commissions and interest tied to the Lafayette deal from a number of Swiss bank accounts which have a total of US$730 million in deposits.

    According to Wu, the government will be able to take back the US$20 million in the Kuo brothers' Swiss bank accounts first. The amount will be used to finance fees for retaining Swiss lawyers to help with legal proceedings in Switzerland, Wu said, adding that if Taiwan manages to win the suit eventually, prosecution authorities will be eligible to impound the retrieved slush funds in the Wangs' bank accounts.

    Wang, the French arms supplier Thompson-CSF's agent in Taiwan, fled the country following the death of naval Captain Yin Ching-feng, who died under suspicious circumstances in late 1993. Yin is believed to have be poised to blow the whistle on colleagues who had allegedly taken kickbacks in the Lafayette deal.

    According to the investigation panel's estimate, these kickbacks amounted to US$486 million, of which US$120 million was used to bribe Taiwan military or administrative officials.

    After Thompson-CSF, now known as Thales, remitted US$486 million to Wang's Swiss bank accounts, Wang transferred US$120 million of that sum to his accounts in Luxembourg for use in bribing Taiwan officials, according to the panel.

    Through a judicial aid agreement with Switzerland, a team of prosecutors from Taiwan managed to acquire a collection of bank files last November. After nearly 10 months of scrutiny of the files, Taiwan finally applied for the return of the huge sum of frozen slush funds.

    Swiss officials said Taiwan must produce sufficient convincing evidence to prove that the funds originated from criminal activities.

    Taiwan began to seek judicial aid from the Swiss government in 2001 in an effort to retrieve the slush funds frozen in Swiss banks.

    The additional US$366 million that the French firm gave to Wang was probably used to bribe French officials as well as Chinese military and political leaders, to prevent them from voicing opposition to the arms deal, investigators said.

(By Sofia Wu)

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