The ROC air force submitted the deal to purchase Mirage fighter jets from France for arbitration in 2003 because of unauthorized commissions, according to sources familiar with the matter.
Following the successful arbitration of the Lafayette frigate contract involving illicit payments to intermediaries, attention has turned to the Mirage case. The air force applied to the International Chamber of Commerce in Paris for arbitration, sources said, following the lead of the ROC navy in the Lafayette case.
Sources said through mutual legal assistance with Switzerland, Taiwan discovered that of the more than US$700 million in the bank account of broker Wang Chuan-pu, also known as Andrew Wang, over US$260 million appears to be a commission for the Mirage sale, while over US$440 million is probably a kickback for the Lafayette case.
Unnamed high-echelon military officers said arbitration of commissions in the Mirage fighters deal is the Ministry of National Defense’s next priority, but at the moment the evidence is not conclusive enough, so the MND is waiting for prosecutors to clear up any remaining questions.
According to a Control Yuan investigation, there were many irregularities in the price negotiations in the Mirage sale, including the French firm’s demand that Taiwan, prior to the deal, provide a letter of credit for 1.2 billion French francs (roughly NT$6 billion), to be deposited temporarily in a bank of Taiwan’s choice, but to be controlled by the French side, with no way for the bank to know how the funds were used.
The investigative report also details even more serious questions in the price negotiations. When Dassault Aviation first quoted a price August 7, 1992, it asked for a total of over 34.853 billion francs for the planes, missiles, reserve fund for modifications and agent to be stationed in the factory. After the air force had made two counter offers, the two sides were still far from agreement.
As air force negotiators readied to make a third offer cutting Dassault’s first price by 30 percent, they suddenly received orders from higher up to “take the whole deal at 16 percent off.” The French company accepted the offer and a deal was struck for 29.11 billion francs. (THN)