Chen Shui-bian Corruption Charges - Alleged Money Laundering

Alleged Money Laundering

On August 14, 2008, shortly following rival party KMT legislator's press conference announcing the existence of a request for money laundering investigation assistance letter from the Swiss government, the former president called an evening press conference and admitted that his past election campaigns had misstated election finance expenses, and had leftover monies in campaign coffers forwarded to overseas accounts. Chen stated during the conference, "My conscience has told me that I cannot continue to lie to myself or to others, so I will choose to be bluntly honest: I have, in the past, committed deeds that are against the rule of law, and I am willing, for all campaign finance dishonesty from my four elections for mayor and for president, to apologize to the people".

Chen claims that the money was wired overseas by his wife and without his knowing. There is also an investigation launched by Swiss authorities over a Swiss bank account bearing Chen's daughter-in-law's name: roughly US$31 million were wired to the account from Taiwan and was then forwarded again to an account in the Cayman Islands. Swiss and Taiwan authorities are cooperating in investigating whether or not there are instances of money laundering committed by members of the former first family. It is unknown whether or not the wiring of the Swiss accounts and the wiring of campaign money overseas by Mrs. Chen are related. Chen and his wife are currently restricted from leaving Taiwan.

Chen's August 14 admission was a reversal of his position just one day earlier, when he vehemently denied a Next Magazine report of the same story.

The following day, August 15, Chen announced that both he and his wife will leave the Democratic Progressive Party for good from the fallout of the previous day's admission.

Reaction to Chen's admission was negative. Former DPP chairman Shih Ming-teh (1994–96), claimed to have been eating while Chen called his press conference, and threw his chopsticks down in anger upon hearing his confession. Chen's vice-president for throughout his eight years, Annette Lu, has said, "If I had not heard it with my own ears, I would not have believed it; I am still in disbelief. Any person who genuinely loves Taiwan will not wire money of contributors and of the people overseas. The former first family have affronted Taiwan and the Taiwanese people"

Chen Shui-bian and his wife Wu Shu-jen, on August 15, resigned from the Democratic Progressive Party and apologized, thus: “Today I have to say sorry to all of the DPP members and supporters. I let everyone down, caused you humiliation and failed to meet your expectations. My acts have caused irreparable damage to the party. I love the DPP deeply and am proud of being a DPP member. To express my deepest regrets to all DPP members and supporters, I announce my withdrawal from the DPP immediately. My wife Wu Shu-jen is also withdrawing from the party.” DPP Chairwoman Tsai Ing-wen also apologized to the public on behalf of the party: “In regard to Chen and his wife’s decision to withdraw from the party and his desire to shoulder responsibility for his actions as well as to undergo an investigation by the party’s anti-corruption committee, we respect his decision and accept it.” Taiwan prosecutors on August 16 interrogated Wu Shu-jen and asked her to explain overseas money transactions. A Kuomintang (KMT) party member alleged that Chen's wife bought jewelry to launder money. Hung Hsiu-chu, a member of the ruling KMT, charged that Chen's family opened four bank accounts in Switzerland, with total deposits of US$32 million, which Chen remitted through his daughter-in-law, Huang Jui-ching.

On August 17, Supreme Court Prosecutor's Office announced Taiwanese investigators took away boxes of documents, after search of Chen's home in Taipei City, his office, and in Tainan, at the home of his wife's brother Wu Ching-mao. Chen was prohibited by prosecutors from leaving Taiwan. Chen has (US?/NT?)$21 million at overseas banks held in the name of family members. Shih Ming-teh, a former leader of Chen's Democratic Progressive Party accused Chen of laundering at least (US?/NT?)$85 million from an entrepreneur bidding for bank ownership in 2005. Coast Guard Administration spokesman Hsieh Ching-chin said: "We received the order from the special investigation unit around 9:20 p.m. last night saying former president Chen was barred from leaving the country." Chen's probe concerns NT$14.8 million (US$480,500) in special expenses from the government, while he was president, and his wife is on trial for corruption and document forgery. Prosecutors found at least NT$1.5 million had been spent on diamond rings and other luxury items for his wife. Upon his return to Taiwan, Chen's son claimed that he was a mere "figurehead," and was not directly involved in the transfer of money.

Chen commented upon the public's suspicions that he had engaged in money laundering by colorfully stating: "Money is dry, it cannot be washed (laundered); money is clean, not dirty, it does not need to be washed (laundered)."

On October 31, 2008, Chiou I-jen was arrested and detained incommunicado, by Supreme Prosecutors Office's Special Investigation Division Prosecutors, for alleged embezzlement of about US$500,000 (£308,000) from diplomatic funds, in 2004, as secretary-general of the National Security Council. Chen Shui-bian called his arrest a "political persecution" by the Beijing-friendly Kuomintang government amid and after another senior DPP member -- Chiayi County magistrate Chen Ming-wen's detention on corruption charges: "The government abused the laws and its powers to persecute and humiliate us but the people and the history will return justice to us and prove our innocence. The government of President Ma Ying-jeou is settling old scores in the name of a campaign against corruption. The Special Investigation Division (SID), in order to indict and convict me, has been taking high-profile actions, locking up members of the former government team one by one." Chiou I-jen is the 8th suspect in spin-offs of Chen Shui-bian's money laundering probes under the jurisdiction of the Taipei District Court.