Another Political Storm Hits Taiwan

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Nicky Loh / Reuters

Taiwan's former President Chen Shui-bian walks with his bodyguard in Taipei on May 14, 2008

Remember that old saying about what happens when you put yourself on a pedestal? Taiwan's chief opposition party, the Democratic Progressive Party, or DPP, is finding out — the hard way. The DPP has always portrayed itself as the movement for justice and honesty in Taiwan politics compared to its overbearing and once often-corrupt rival, the Kuomintang, or KMT. But this month, the tables have turned as former DPP head and Taiwan President, Chen Shui-bian, has become embroiled in a major corruption scandal that threatens to seriously undermine the party's political authority. Says Antonio Chang, a political analyst and former advisor to Chen: "The DPP is morally and politically destroyed."

Last week, Chen admitted that while he was still in office, his wife wired over $20 million of leftover campaign money overseas. A spokesman for the prosecutors told the press that the money was "deposited in overseas bank accounts belonging to his family members"; Chen said he only found out about the transfer in January. On August 18, Taiwan prosecutors named the former president and first lady, their son and daughter-in-law and the first lady's brother as suspects in money laundering and are investigating the case. Chen has apologized for not fully reporting his campaign funds, but denied embezzling money from the government or engaging in money laundering.

Chen is not a stranger to political scandal. His administration and family, including the first lady, were dogged by corruption allegations during his eight-year presidency, which ended in May, and were a key reason for the crushing electoral defeats suffered by the DPP this year. In March, KMT candidate Ma Ying-jeou won the presidency by the largest margin ever over the DPP's Frank Hsieh, and in January, the KMT blew out the DPP in legislative elections.

The latest trouble facing the former president could give Ma a freer hand in pursuing his own policies. Ma is focused on improving relations with China through closer economic ties, a strategy that he believes will rejuvenate the island's sagging economy and reduce tensions across the heavily armed Taiwan Strait. Many core DPP supporters oppose Ma's agenda which they believe can threaten Taiwan's de facto independence by tying the island too tightly to the mainland. This latest scandal, says Loh Chih-ching, a political scientist at Soochow University, may hurt that cause and "further damage [the DPP's] legitimacy in challenging the ruling party."

How long the political fallout for the DPP will last is a matter of debate. To cope, the party immediately tried to distance itself from Chen after the news broke. "As the case goes on, people will see that it is not the fault of the party, but the individual, and people will come back" to the DPP, said party spokesman Cheng Wen-tsan. Ma, too, is facing his own problems. Though his approval ratings have recovered after a sudden post-inaugural swoon, and stand around 46% in one recent poll, Ma will still have to contend with public frustration over Taiwan's economy, which is being hurt by the slowdown in the U.S. Some political analysts even believe the Chen scandal will soon be forgotten as the public refocuses on the island’s economic struggles. "The scandal will be a media hype for a couple of weeks but the bottom line is people care about their economic situation," says Soochow's Loh.

But the Chen family's latest trouble is more than a tabloid headline. The corruption allegations that have been flying within Taiwan politics for years are a sign that its government could use some serious reform. Future laws, analysts say, should force all politicians to release a full disclosure of their assets and more carefully regulate contributions from businessmen. "It's growing pains," says Loh. "Taiwan's a new democracy. It's time to rethink and review the personal and institutional problems." If that takes place, perhaps some good will come out Chen's embarrassing scandals after all.