The story of Taiwan and the Lafayette frigates begins in 1989 when the Taipei government was casting around for a new generation of light warships to join its defensive network against threatened invasion by China.
The favourite was a highly capable brand of frigate from South Korea. But in Paris the military-industrial-governmental complex decided to make a strong bid for the contract, even though the Lafayette frigates would cost twice as much as those available from South Korea.
According to Roland Dumas, who was French foreign minister at the time, in 1991 French President Francois Mitterrand authorized $500 million to be spent in bribes and inducements to ensure that Thomson-CSF and the government-owned naval manufacturer DCN got the frigate contract.
Of this, Dumas said in 2003 in an interview with the newspaper Le Figaro and later in his book Evidence, Evidence, $100 million went to "the central leadership of the Chinese Communist Party." This was to stop Beijing expressing, as it usually does, public outrage or threatening sanctions against countries that sell arms to Taiwan, which it claims to own.
Buying off Beijing was an essential part of the project and to get foreign minister Dumas on board, large amounts of money and lavish gifts were funnelled to him via his mistress, Christine Deviers-Joncour, who later wrote a book about the whole affair called Whore of the Republic.
Deviers-Joncour was employed as a public relations representative for the state-owned oil company Elf Aquitaine, from where much of the bribe money for the frigate deal came.
The additional $400 million in bribes authorized by Mitterrand, according to Dumas, were paid to the secretary-general of Taiwan's then and now ruling party, the Kuomintang (KMT).
The inference was that the secretary-general would act as paymaster and distribute the largesse where necessary in order to ensure Thomson-CSF and DCN got the frigate contract.
Well, the KMT secretary-general at the time was James Soong, who fell out with the party when it failed to make him its candidate for the presidency in 2000. He has since formed his own party, the People First Party, and remains a significant figure in Taiwan politics who strongly promotes reconciliation with the other recipients of French bribes, the Chinese Communist Party.
Soong vehemently denies that he was the bagman who distributed the French bribes and none of the formal inquiries has revealed a paper trail leading to him.
The story of the Lafayette frigate scandal began to unfold when a body was found floating off the east coast of Taiwan near a major naval base in December 1993.
The body was that of naval captain Yin Ching-feng, who had recently taken over as head of the navy procurement office.
He had also just come back from a trip to France and had intimated to colleagues he had gathered information about the Lafayette contract on which he intended to report to superiors.
At first, Yin's death was dismissed as an accidental drowning, but his wife insisted on a post-mortem examination and this showed he had been battered to death.
Police soon arrested one of Yin's colleagues in the weapons procurement department, Capt. Kuo Li-heng.
When interviewed, Kuo named many names, but without supporting evidence and he is now serving a life sentence for an unrelated conviction for taking bribes.
Police attention soon turned to Thomson's agent in Taiwan, Andrew Wang, who fled the country the day after Capt. Yin's murder. He has since been charged in absentia with Capt. Yin's murder.
Wang and his family are now in hiding, perhaps in Europe. But he, his wife and four children have all been indicted by Taiwan prosecutors for involvement in bribery.
Taiwan also persuaded Swiss banks to freeze Wang's 46 bank accounts and the $520 million they contained. The banks also provided crates of documents that formed much of the basis for the case heard by the arbitration court.
Among those who have died since 1993 are a Taiwanese bank official who acted for the naval dockyards; a French intelligence agent, Thierry Imbot, assigned to watch the frigate deal for the French secret service, who fell to his death from his Paris apartment; a former Taiwan-based Thomson employee named Jacques Morrison, and Yin's nephew.
In an unprecedented judgment, an international court has told a leading French arms dealer to pay the government of Taiwan over $860 million in compensation for bribes and kickbacks involved in the island nation's 1991 purchase of six naval frigates.
The Paris-based International Court of Arbitration, an offshoot of the International Chamber of Commerce, found earlier this month that the French company Thomson-CSF, which has since changed its name to Thales SA, spent over $500 million on bribes to secure the $2.5-billion deal to sell six Lafayette class frigates to Taiwan.
Taiwan's navy filed for arbitration with the court in 2001 and the judgment includes nearly $600 million over the unlawful kickbacks, $250 million in interest and $20 million for legal fees.
If and how Thales will pay the restitution remains to be seen.
But although the Taiwan government welcomed the judgment, this arbitration has done nothing to bring judicial closure to a scandal that has roiled both Taiwanese and French politics for nearly two decades.
At least one person was murdered in an apparent attempt to cover up the massive bribery and fraud involved in the frigate deal. Another eight people associated with the story have died under strange or mysterious circumstances.
No one has been charged over the murder, though 13 military officers and 15 arms dealers have been jailed in Taiwan over bribery and leaking military secrets.
But despite these investigations and court cases in both France and Taiwan, there is still no clear picture that the political leaders who oversaw the bribery and fraud have been identified and called to account.
Warranted or not, French arms manufacturers have long held the reputation of bowing to local customs regarding bribery and kickbacks in order to gain contracts.
UNFOLDING EVENTS
- Feb. 1, 1993: Taiwan Signs A $2.8-Billion Contract For Six Modified Lafayette Class Frigates, Which Are To Be Assembled In Taiwan By China Ship Building Corp (CSBC). Because Of Pressure From Mainland China, The Original Contract Only Provides For The Sale Of The Frigates And Their Engines, Without Any Arms, Surveillance Equipment Or Combat-Management Systems.
- Dec. 9, 1993: Naval Captain Yin Ching-Feng Disappears. His Body Is Later Found Floating In The Water And An Independent Autopsy Demanded By His Widow Points Out That His Head Had Been Bashed In.
- Dec. 20, 1993: Andrew Wang, The Taiwanese Agent For Thomson-CSF, Leaves Taiwan.
- May 24, 1996: The First Assembled Frigate Is Delivered To Taiwan.
- Sept. 26, 2000: Andrew Wang Is Charged In Absentia With Captain Yin Ching-Feng's Murder.
- Oct. 25, 2000: Former Taiwanese Naval Commander-In-Chief Yeh Changtung, Plus Lei Hsueh-Ming (In Charge Of Vessels Management) And Yao Nungchung (In Charge Of Weapons Procurement) Are Formally Reprimanded Over The Frigate Scandal, In The Wake Of Documents Released By Taiwan's Government Watchdog Agency, The Control Yuan.
- March 2002: Taiwanese Control Yuan Investigators Release Their Report. It Found That The Price Of The Frigate Deal Had Been Inflated To $2 Billion From The Original Quote Of $1 Billion, And That Taiwanese Politicians And Military Leaders Pocketed $26.75 Million In Kickbacks From The Sale.
- March 1, 2003: France's Former Foreign Minister, Roland Dumas, Tells Le Figaro Newspaper That France Paid $500 Million In Bribes For The Frigate Deal. Dumas Says That The Sum Was Approved By Former President Francois Mitterrand, That $400 Million Was Paid To The Secretary-General Of Taiwan's Ruling KMT Party, And $100 Million Went To The Chinese Communist Party's Central Committee In Beijing.
- Oct. 6, 2005: The Swiss Federal Commission Approves The Handover Of Bank Files To Foreign Judicial Authorities Concerning The Sale Of The Warships, Rejecting An Appeal By Fugitive Wang To Stop Judicial Cooperation With Taiwan, France, And Liechtenstein.
- Oct. 28, 2005: Taiwanese State Public Prosecutor-General Wu Ying-Chao Orders The Unsealing Of Swiss Bank Files Related To The Scandal.
- August 6, 2008: French Prosecutors In The Taiwan Frigate Scandal Dismiss The Case After Seven Years, For "Lack Of Evidence."
- May 3, 2010: An International Court Of Arbitration Rules That Thales, Previously Called Thomson-CSF, And French State-Owned Shipbuilder DCN Violated The Anti-Corruption Clause In Its 1991 Contract To Sell Frigates To Taiwan. Damages Are Set At $861 Million.
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