News Analysis: FSC Chairman Should Recuse Himself, If Necessary, Says Vice Premier Chiu

News Analysis

FSC Chairman Should Recuse Himself, If Necessary, Says Vice Premier Chiu

Sources: Taipei newspapers August 28, 2008

The former First Family’s involvement in the money-laundering scandal has caused great shocks in the society. Some people even pointed out that former President Chen Shui-bian was involved in criminal acts, such as taking bribes, during the second-stage financial reform, in which many large state-owned banks and smaller banks were merged.

After Chen Shui-bian’s money-laundering scandal broke out, the Financial Supervisory Commission (FSC) launched investigations into several merger and acquisition cases in the second-stage financial reform. However, the role played by FSC chairman Gordon Chen, then Vice Minister of Finance under the Chen Shui-bian administration, was so controversial that many people believe Gordon Chen should recuse himself from participating in the investigation. Premier Liu Chao-shiuan concurred with this viewpoint in an interview with the press yesterday.

A couple of days ago, the FSC released its initial investigation report, saying that there had been no flaw in the administrative process of the second-stage financial reform. However, this was just the first-phase of the investigation. There will be further investigations in the future.

Gordon Chen was the Vice Finance Minister under the Chen Shui-bian administration. After the turnover of ruling parties in 2008, he became an independent member on the board of directors at Taishin Investment Trust, an affiliate of Taishin Financial Holding Corp. KMT Legislator Chiu Yi has criticized that his appointment was in violation of the revolving-door clause in regulatory laws, enacted to regulate public servants after leaving office to avoid conflicts of interest.

Yesterday, it was reported that FSC vice chairman Lee Jih-chu would replace Gordon Chen in the investigation of the second-stage financial reform. However, this was immediately denied by the Cabinet.

“Premier Liu has not asked FSC chairman to step away from the investigation. Rather, the Premier only wanted Gordon Chen to recuse himself from the part that was related to him (when he served as Vice Finance Minister). Therefore, it is not true that the FSC vice chairman will replace him or be in charge of the investigation,” said Vanessa Shih, director of the Government Information Office.

Shih stressed that whether Gordon Chen should recuse himself during the investigation process should be a matter to be decided by Vice Premier Chu, the convener of the review committee of the second-stage financial reform.

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