Deputy Chief of Staff Chen Pao-yu (陳寶餘) yesterday denied allegations that the military had fabricated financial reports in connection to Ching Fu Shipbuilding Co (慶富造船), vowing to resign if any officer is found guilty of wrongdoing.
Chen made the remarks during a heated exchange with Chinese Nationalist Party (KMT) Legislator William Tseng (曾銘宗) at a question-and-answer session at the Legislative Yuan’s Internal Administration Committee.
The shipbuilder was contracted to build minesweepers for the navy and is under criminal investigation for allegedly taking out fraudulent loans from a consortium of state-owned banks.
Photo: Huang Yao-cheng, Taipei Times
Ching Fu’s top executives told Kaohsiung Marine Bureau Director-General Wang Tuan-jen (王端仁) on Oct. 7 last year that the shipbuilder obtained payments for hull casting ahead of schedule after lobbying the Presidential Office, KMT lawmakers said.
The lawmakers alleged that Ching Fu had applied for the payments in November last year and the military delivered the payments the following month, which does not match what Ching Fu said in October.
The lawmakers provided an audio recording they said was made at the Oct. 7 meeting.
Chen said that the payment, which was made for the third-phase separation of hull casting from the mold, did occur on Dec. 16 last year.
However, Tseng cited a Ministry of National Defense report to the Foreign Affairs and National Defense Committee, which said the payment was processed early that year.
That the payment was completed in the same month shows that the ministry “cooked the books and lied,” Tseng said.
Chen denied the allegations, saying that the military is ready to face any legal consequences of the investigation.
The two exchanged heated words, with Tseng saying he had “spent more time on the stand” than Chen, to which Chen replied: “That has nothing to do with this.”
Tseng asked Chen how the ministry could have paid for the hull casting if the Foreign Affairs and National Defense Committee had frozen its funds.
Only one-10th of the budget was frozen, Chen said, adding that the ministry can legally pay outstanding obligations from a frozen budget.
The courts would decide if the ministry committed wrongdoing in paying Ching Fu, Chen said, adding that the ministry did not allocate the payment from the frozen portion of the budget.
Tseng then cited the ministry’s contract as saying that the ministry is authorized to delay contract payments due to fiscal difficulties.
If Ching Fu completed its third-phase contractual obligation and sustained financial losses as a result of the ministry’s failure to make payments, the navy could incur legal liabilities.
If Ching Fu completed the hull castings without being compensated for fulfilling its contractual obligations, it could be more costly for taxpayers, Navy Command Planning Section Deputy Director Hu Chia-sheng (胡嘉聖) said.
“The navy has not broken any laws. It is clear that Ching Fu is the party that has violated laws... If we [the military] broke any laws — be it the navy or the ministry — we will face the consequences. If not, I trust the public will give us the satisfaction. Do not injure the ministry’s good name,” Chen said.
“You overstepped yourself. There have been plenty of scandals in the defense ministry and the navy. Are you willing to step down if any thing untoward is found?” Tseng said.
“Of course I am,” Chen replied.
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