Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) has become embroiled in a political storm with multiple court cases hitting him at once. Some of these cases relate to charges of graft and bribery.
A related issue is a series of scandals related to irregularities in Ko’s presidential campaign financial reporting. His financial records are full of errors, and after attempting to explain the myriad inconsistencies during many news conferences, his earlier statements do not match well with his latest tune.
More stories are also coming out related to the misuse and whereabouts of his campaign funds. It is becoming increasingly difficult for him to justify any of his error-riddled account books.
His alleged contravenion of campaign finance laws and regulations has led to criticism that he “used election subsidies as his own personal treasure chest.”
Ko’s presidential campaign expenses did not meet the reporting standards and the Control Yuan in April sent a letter to the TPP reminding it to correct the accounting errors. Several months later, Ko and his colleagues have still not addressed the ledgers. They have not clarified the clerical errors and their explanations are opaque. They have addressed minor discrepancies while ignoring bigger ones, which has raised yet more doubts. It is going to be difficult for him and the TPP to regain the public’s confidence.
The source of these problems is with his and the TPP’s failure to live up to their promises, and instead enrich themselves through unscrupulous means. Their actions have fallen quite short of their words.
During the presidential campaign, Ko and his vice-presidential pick, Cynthia Wu (吳欣盈), received more than NT$110 million (US$3.45 million) in election campaign subsidies through the TPP. At the time, the duo said that this amount would be used to maintain party operations, and any leftover funds after the elections would be donated to public welfare programs.
Taipei City Councilor Lin Yen-fung (林延鳳) blew the cover off this scandal in May, alleging that Ko spent NT$43 million on a high-rise office space. Ko initially acknowledged he had used the election campaign subsidies to buy “personal office space.” However, he later switched his story to say that he intended to use the space as the party’s leadership headquarters.
Ko has defended himself by saying that the TPP was only doing what other political parties had done with their subsidies with one-third going to the party headquarters and two-thirds going to candidates. However, Ko’s explanation is not only wrong, it might be illegal.
By comparison, the Democratic Progressive Party’s (DPP) candidate, President William Lai (賴清德), requested NT$160 million in subsidies. About one-third went to support less well-off DPP electoral candidates down-ballot. Another third was used to train campaign workers. The remaining funds were returned to the DPP’s central leadership. Similarly, the Chinese Nationalist Party’s (KMT) candidate, New Taipei City Mayor Hou You-yi (侯友宜), also returned unused subsidies to his party’s central coffers, listing them as party service expenses.
In 2020, when former president Tsai Ing-wen (蔡英文) and then-Kaohsiung mayor Han Kuo-yu (韓國瑜) were running for office, their unused subsidies also did not end up in their own pockets. Ko’s excuse that “other parties are doing it” is simply not true. What parties are he referring to?
Fundamental to this issue is the President and Vice Presidential Election Recall Act (總統副總統選舉罷免法), which states that election campaign subsidies used by candidates are applied for and collected by the political parties themselves, and the funds belong collectively to the party leadership and not to individual candidates.
If subsidies are to be used in support of candidate races, each candidate can only use up to NT$25 million. Any higher amount is a contravention of the law. Ko used NT$43 million to buy personal office space. Not only did this exceed the legal limit, but his excuses do not match up with his party’s initial statements. The process has also not been transparent. None of this is easy to explain to supporters, which makes it that much harder for the TPP to regain public trust.
These campaign fund windfalls have created other problems for Ko. He is also in hot water for nontransparent financial disputes with Muko Public Relations Marketing Ltd, after he apparently transferred a huge political contribution fund of at least NT$13 million to Muko.
After this transaction came to light, an accountant said it was an accounting error, and Ko and his colleagues demanded that Muko return the difference. This included more than NT$4 million related to merchandise that appeared to depict the two Chinese characters in the firm’s name combined to form a character in Ko’s name. These developments roused widespread suspicion that the company had a much cozier relationship with Ko than was portrayed on the surface. The situation became even more peculiar when it was reported that Muko director Lee Wen-chuan (李文娟) also served on Ko’s campaign. This has led to even more questions of financial impropriety.
The bottom line is that these political donations were made by the public. They were supposed to be for the public’s benefit, not for personal enrichment. If political campaign contributions were given to a company to perform marketing services and that company paid royalty fees to the candidate to use his name, the only sensible explanation is that there was an attempt to avoid contravening the Political Donations Act (政治獻金法).
These are just Ko and the TPP’s biggest issues with financial transparency so far. An endless stream of other issues or cases are still coming to light. They still have not provided the public with an itemized list of their campaign expenses. There is also the issue of their financial managers lacking expertise, which led to the massive bungling of their accounting records. The destination of many of their cash flow items remain unknown, and some of them are even claimed to be nonexistent.
Unused campaign funds can be a burden for candidates. When a candidate wins an election or receives a certain percentage of the vote, their political party is eligible to receive government support. Campaign finance laws and regulations state that a president and vice president’s election subsidies are the property of their political party, while subsidies for other public officials, such as legislators, are collected by the candidates themselves. Both types of candidates receive NT$30 for each vote in one lump sum. At the same time, political parties can also receive stipends in their own name. Each vote is worth NT$50, which can be used in the following election. Ko and the TPP’s funding is not transparent. After so much doubt and suspicion, voices are advocating to lower or abolish campaign subsidies and for enhanced regulations on political donations, with the aim of stopping politicians from illicitly enriching themselves.
When Taiwan was democratizing, election subsidies were necessary to create a more equal playing field and to prevent politics from being dominated by powerful financial interests.
However, politicians running for election can also receive private donations alongside government subsidies, bringing in more cash for their electoral war chests.
Being sourced from public money, election subsidies must benefit the public. They cannot be used for personal benefit or to feed political “fat cats.” Receipts and payments must be open, transparent and strictly monitored and audited. Those who abuse election subsidies must be substantially punished.
The situation is not ideal. Parties that win more than 3 percent of the vote remain eligible to obtain subsidies for several years. In addition to the possibility for corruption, this has led to a political system that benefits larger and more established parties, while creating an additional barrier to entry for smaller and newer parties. This hinders the development of a diversity of political thought. It is time to reform election subsidies and political donations.
Translated by Tim Smith
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