The controversy over Kuomintang (KMT) assets, brought to a boil by the proposal of the Political Party Law, calls to mind one of the more celebrated exchanges of Mr. Sherlock Holmes:
"Is there any other point to which you would wish to draw my attention?"
"To the curious incident of the dog in the nighttime."
"The dog did nothing in the nighttime."
"That was the curious incident," remarked Sherlock Holmes.
That the KMT, which ruled Taiwan for more than fifty years as the supreme, and for most of the time the solitary, political party, accumulated assets that are difficult to separate from the state is not the least bit remarkable. Like it or not, the KMT and the government of Taiwan were inseparable. What is remarkable is that it has taken so long for the KMT to divest party coffers of state funds and sever state assets from those of the party after the establishment of a true multiparty democracy--and especially after the election of an opposition politician to the presidency in 2000. The silence of KMT leaders on the subject is the curious incident.
With assets estimated at over US$6 billion, the KMT might well be the world's richest political party. The source of the KMT's wealth is at the heart of the matter. KMT assets have been called both "ill-gotten" and "illegal." The truth is murky, for a thorough accounting of the KMT's assets would take an auditor on a historical journey beginning in 1894 in Hawaii, where overseas Chinese met with Dr. Sun Yat-sen and founded the Society to Regenerate China, which grew into the KMT in October 1919. The auditor, following the trail of money flowing into the KMT treasury, would meet along the way anti-Manchu republicans, overseas Chinese, Green Gang opium racketeers, Shanghai bankers, communist agents from Soviet Russia, and anticommunist agents from the US. Each would have cash in hand, sometimes weapons in tow, and most certainly a particular aim to further. Our overworked auditor at this point would probably give up and become a professor of modern Chinese history. But the story gets more complicated still.
Critics of the KMT's finances find the true wellspring of the "ill-gotten" gains in the period just following World War II, when the Japanese colonial government's assets devolved to the Nationalist government. The assets included much of the industry that the Japanese had built up during their fifty years of rule. Ownership of factories, railroads, fleets of trucks, electrical power plants, ships, and so on, was transferred to the government. Valuable real estate in the cities, including many of the buildings used by the government today, was also inherited by the government, as were large tracts of arable land.
What became of these assets? Our friend the auditor, coaxed out of retirement to pick up the trail once again, would discover that the KMT had made an equitable start at redistributing the assets. Public land amounting to 20 to 25 percent of arable land in Taiwan, most of which had belonged to the Japanese colonial government, was sold to private farmers at fair rates. Some of the revenue was then spent on public projects or went toward the running of the government. All seems well so far, but at some point, and here is where the auditor earns his salary, some assets were sold, some say transferred, by the Nationalist government to the Nationalist Party. Moreover, the growing capital of the party treasury, as opposed to the state treasury, was almost certainly supplemented by sales of government property, rents collected on publicly owned real estate, and profits made from the investment of government money.
To this day, the KMT claims that the party's assets do not include state money. But the source of much of the party's wealth is derived, undoubtedly, from the KMT's plummy position as the ruling party. The Control Yuan, the branch of the national government responsible for financial oversight, has ordered an investigation into KMT assets. The Executive Yuan, not to be left out of the fun, proposed the Political Party Law, which if passed by the legislature would prohibit political parties from owning or investing in commercial enterprises. The KMT, squeezed between these two pincers, has agreed to donate substantial real estate holdings to the public and place the Central Investment Holding Company, the KMT's largest commercial enterprise, into a trust, from which the party, however, would still collect interest. After meeting the question with silence for so long, this seems like a last-minute escape plan.
In the 2000 presidential election, voters registered their displeasure with the KMT at the ballot box. Many felt that corruption and arrogance had spread like moss on a stone. The lack of motion caused by fifty-odd years of political power had bred a sluggish indifference to the concerns of the people. Not even its assets could save the KMT from defeat at the polls.
For the good of Taiwan's political system, all political parties should get out of the business of making money and focus on the business of the government in a democracy--namely, serving the people. The books should be opened, and the process made transparent. This is the very purpose of the reform legislation known as the sunshine laws, of which the Political Party Law is a central pillar. And passage of the sunshine laws will go a long way toward bringing party politics out of the silence of the past and out of the gloom of the nighttime.