Friday, July 20, 2007

Financial Oversight becomes Financial Plunder

Financial Oversight becomes Financial Plunder
The Man behind the Curtain and the Scarecrow
United Daily News editorial
translated by Bevin Chu
July 19, 2007

Financial Supervisory Commissioners

The Rebar Asia Pacific Group is currently tens of bilions of dollars in debt. A judge has discovered that the Financial Supervisory Commission (FSC) has been covering up the Rebar Asia Pacific Group's illegal loans. Officials were derelict in their duty. They abused state power to ingratiate themselves with company officials, covering up for them, helping them out of their jam.

Question and answer sessions between judges and company officials over the past two days have revealed just how hollow the nation's financial oversight mechanisms are. Not only were FSC officials arrogant, passing the buck whenever they could, they were completely unwilling to engage in self-introspection. Taipei District Court Judge Tseng Cheng-lung characterized the manner in which the FSC dealt with the Great Chinese Bills Finance Corporation's illegal loans as: catching a thief but letting him go, allowing him to keep half the loot and pay back the rest on the installment plan. No wonder District Court Presiding Judge Lee Ying-hao reprimanded FSC officials, saying that "You have totally undermined public trust in the government!"

The judges were hardly alone. The public knew exactly how they felt. The difference between the FSC and the other machinery of the central government, is that financial oversight is its central responsibility, its basic duty, Its goal is to nip corruption in the bud, in order to maintain the nation's financial stability. As matters stand, it has abandoned its oversight responsibility and disregarded laws and regulations in order to assist business cronies evade the law. Are officials nothing more than scarecrows wielding state power? Wang You-theng emptied out Rebar Asia Pacific Group's coffers. The FSC inititially tried to cover up the scandal. To quote District Court Presiding Judge Lee Ying-hao: "Do we really need officials like this?"

Such officials can be described as scarecrows, because they neglect their duties by shelving their authority instead of exercising it. One moment Bank Bureau Assistant Commissioner Lin Tung-liang says "We cannot concern ourselves only with the law, and not concern ourselves wtih business management." The next moment he says "We have no authority to investigate shell companies." The moment after that he says "Our manpower was inadequate." What we would like to know is, what exactly does he think his responsibilities ought to be?

FSC Vice Chairperson Susan Chang said, "if only we had known sooner" that the Rebar Asia Pacific Group had problems, we would have aggressively prosecuted the case. Her response merely revealed her buck-passing mentality. The public has never expected officials to be prophets. They merely expect officials to administer in accordance with the law. The FSC can't even manage to "paint by the numbers." Yet it wants to talk about "looking after the nation's businesses" and "stabilizing the nation's finances?" We really can't think of any reason why the government should pay these Financial Supervisory Commission officials their inflated salaries.

Whether the reason is plain and simple incompetence, or criminal complicity, the emergence of one FSC scandal after another shows that the nation's highest financial supervisory body is completely ineffective and has lost all credibility. Lest we forget, among the many "independent" agencies established during the Chen regime's term of office, the FSC is the one most closely controlled by the ruling DPP regime, the one that has shouldered the most vital responsibilities, and the one responsible for the most outrageous scandals. In three short years, its committee chairman, vice-committee chairman, bureau chief, and numerous committee members have all been thrown in prison. Rather than argue that its director is a "bad judge of character," it would be more accurate to say that from the day of its inception, this agency was deprived of its independent status due to political considerations, resulting in the loss of its financial oversight function.

The current Great Chinese Bills Finance Corp case involves illegal loans as long as seven or eight years, repeatedly exposed by lower echelon whistle-blowers. The FSC repeatedly bent the rules. Officials testified in court, acknowledging that they received "instructions from the Executive Yuan." Some indicated that they were ordered to comply with President Chen's requests to relieve the effects of the financial crunch. Obviously, the FSC abetted Great Chinese Bills Finance Corp. wrongdoing. On the one hand the president issued his imperial decree. On the other hand, high level senior officials issued detailed instructions. Judges have uncovered a row of scarecrows. But if they can't uncover the "Man behind the Curtain," then aren't they wasting their time?

If we want to discuss the erosion of public trust in government over the past several years, FSC collusion and abuse of power is merely the tip of the iceberg. It is merely an isolated example of an across the board loss of government effectiveness. The Chen regime cares only whether its personnel are friends and relations, not whether they are professional and capable. It has destroyed the civil service system's neutrality and stability. It has destroyed its automatic checks and balances. In the past, financial oversight authority and responsibility were divided among the Central Bank, the Ministry of Finance, and a number of other agencies, each of which checked and balanced the other. The concentration of authority in the FSC has paradoxically allowed financial irregularities to sprout like mushrooms. The main reason of course is that given such concentration of authority, the "Man behind the Curtain" need only issue a single command to implement his goal.

One after another, Kong Jaw-sheng, Lin Chung-cheng, and Lee Chin-cheng were indicted. These politically connected nouveau riches were corrupted by power. But Susan Chang, Gary Tseng and other experienced, long time civil servants have also found themselves knee deep in corruption. Obviously Green Dynasty political toxins have spread to the very heart of the administration.

State power has been transformed into political tool. An independent agency entrusted with financial oversight has degenerated into a criminal gang dedicated to financial plunder. Who bears greater responsibility? The "Man behind the Curtain" or the "Scarecrow?"

2007.07.19 03:31 am











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