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Thursday, December 28, 2006

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Dr. Hsieh and the Pro-Blue Prosecutors

The recent case of "corruption" in the Tainan Science Park vibration damping technology bid isn't what it looks like on the surface. What's really going on? Well, the defendant is Green, and the prosecutors are Blue.... Taipei Times gave the bare facts (AP gave a report here, with no suggestion, of course, of what is actually going on). Read carefully:

Former National Science Council deputy minister Hsieh Ching-chih (謝清志) has been indicted on corruption charges for allegedly collaborating with a private company to profit from a construction project, prosecutors said yesterday.

Hsieh was accused of helping his friend Hsu Hung-chang (徐宏彰) win a contract for a construction project in an industrial park in southern Tainan County to reduce vibration from the high-speed rail line affecting the park.

Prosecutors sought a 15-year jail term and a NT$30 million (US$920,000) fine for Hsieh and a 12-year jail term and a NT$500 million fine for Hsu, who was charged with violation of company law.

Hsu was also asked to return the NT$3.4 billion of illegal profit.

Eight others were also indicted for graft and bribery in the case, including another council official and the seven members of the project's evaluation committee.

Hsu's firm won the bidding for the NT$8 billion project in 2002 and later contracted other firms to carry out the construction, which cost him NT$4.6 billion.

However, the project, aimed at reducing the impact of the high-speed bullet train when it passes by the industrial park occupied mainly by high-tech companies, was criticized as ineffective.

What's actually going on? More political prosecutions, apparently. Taiwan's prosecutors are pro-Blue, and Hsieh is a Green appointee. Taiwan News has a formal commentary lamenting the politicization of the prosecutorial offices:

A notable example is the indictment handed down by Tainan District Prosecutor Kao Feng-chi against former National Science Council vice chairman Hsieh Ching-chih for "corruption" in relation to an NT$8.4 billion "vibration reduction" for the section of the North-South High Speed Railway that passes through the Tainan Science-Based Industrial Park.

According to Tainan District Prosecutor Kao Feng-chi, the project was "unnecessary" and the cost of the US$250 million bid awarded to the Hong Hua Company was "exorbitant." Citing an evaluation by the Taiwan Semiconductor Manufacturing Corp that showed that the vibrations would be a problem and that several other semiconductor companies that moved into the Tainan Science-Based Industrial Park had built their own vibration reduction or protection systems, the prosecutor claimed that Hsieh and his "accomplices" had "created a totally unnecessary project."

Even though the prosecution offered no evidence of bribery, its indictment maintains that Hsieh had "illicitly passed favors" to Hong Hua, whose owner was also indicted with a requested 12-year sentence through the "exorbitant" price granted to the company to implement its solution to the vibration problem. The indictment alleged that Hsieh agreed to changes in the construction method and allowed Hong Hua Technologies, whose owner was also indicted and which allegedly had no professional experience in civil engineering, to win an NT$35 million contract.

The former National Science Council vice chairman, who has impressive academic and professional credentials and experience in civil and aeronautical engineering, maintains that there was a real problem, that Hong Hua had been chosen because it found the best solution to the complex and unique engineering problem, and the company's NT$8 billion price tag was higher than an alternative firm's NT$1.8 billion because of its unique solution, the success of which was not guaranteed, and that the key price determinate was an estimate of the value of Hong Hua's intellectual property, not the physical construction costs.


You have to read the whole editorial to really get the flavor of how complex the case actually is.

An extremely well-connected and knowledgeable Taiwan advocate had this to say in a recent discussion of the issue:

The decisionmnaking process within NSC on the vibration reduction for the Tainan Science Park was a long and drawn-out process. It had been lingering aimlessly for some 7-10 years before Dr. Shieh picked it up in 1999, and decided to make it work. He went through all the hoops of decisionmaking (Advisory Committees, consultants etc) required by the NSC.

It is true that the winning bid was considerably higher than the losing bid, but several technical studies had shown that the losing bid was not technically feasible....

Interestingly, the original charges in June (never formally stated, but leaked by the prosecutor to the press -- interesting way of carrying out justice....) was that Shieh himself had pocketed money. But now the prosecutor apparently cannot make that stick, so he is indicting him and the whole evaluation committee of "helping the winning company make enormous illicit profits". I am sure the company made profits, but it was a very high-risk project. In addition, the price for the contract was set by a separate financial/technical committee... not by Shieh and the evaluation committee.

The case is thus a rather transparent attempt by the pan-blue prosecutors to get rid of another high-profile green civil servant.

The prosecutor, Kao Feng-chi, was last heard of in 2004 when he investigated the assassination attempt by a Blue supporter on Chen Shui-bian.

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