Taiwan’s KMT taking out loans to pay salaries (Donovan’s quick take)

The KMT’s woes are continuing to mount on pretty much all fronts, largely due to an institutional culture and product of that culture and current party Chairman Wu Den-yih. The KMT brought massive wealth to Taiwan from China in the late 1940s, seized many assets that belonged to Japanese colonial government after their surrender, and engaged in many business and other fund-raising activities: So much so for years the KMT was frequently referred to in the press as “the world’s richest political party”.  When the DPP passed the ill-gotten assets law, it was intended to remove those assets the party accrued using the machinery of the (one party) authoritarian government era.

After years of not having to worry about money, culturally and institutionally the KMT has been struggling to adapt.  Years of using party positions for patronage tapping into the huge resources that used to be at their disposal left the party with too much staff, and huge severance and pension liabilities.  The significant state subsidies to major political parties and the KMT’s fundraising efforts appear not to have raised enough to cover all their liabilities as well as supporting their candidates in this election, according to Reuters:

From Reuters:

“Taiwan’s main opposition party the Kuomintang said on Friday it is struggling to pay staff a month away from presidential and parliamentary elections, due to an asset freeze previously put in place by the government investigating ill-gotten gains.

“In spite of this, the party center is still trying its best to assist the presidential and legislative candidates with its limited resources,” the Kuomintang said in a statement.

The Kuomintang said it was having to rely on loans to pay salaries, adding that it had yet to be able to pay December salaries, but that it had succeeded in finding people to support its presidential candidate Han Kuo-yu on the campaign trail.

The government committee handling the investigation into ill-gotten assets issued a statement on its Facebook page responding to what it said was “fake information”.

It said the Kuomintang had income last year of T$420 million ($13.74 million) that had not been frozen.”

Much of the problem, however, is Chairman Wu Den-yih, who took office in August 2017.  The current financial crisis facing the party clearly hasn’t been addressed, either through cost-cutting or fund-raising, in spite of the party’s traditionally close ties to the business community and the considerable wealth of the party’s leading figures.  When the ill-gotten assets law took effect and started to hurt, his predecessor Hung Hsiu-chu had to move decisively to keep the party afloat, taking out loans in her own name and borrowing vast sums from Hon Hai (Foxconn) founder Terry Gou, via his mother.  Wu, however, not only hasn’t solved the financial problems–he rigged the KMT party primary to favour Han Kuo-yu, infuriating two key people who could help the party with fund raising, former president (speaker) of the legislature Wang Jin-pyng and the very man whose fortune saved the party once before: Terry Gou.  Gou has since left the party in a huff, and thrown his support behind other parties, and Wang has refused to have anything to do with supporting the party’s presidential candidate, Han Kuo-yu.

Image courtesy of Wu Den-yih’s Facebook

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