Transnational Corruption in Weapons Procurement in East Asia: A Case Analysis

Article excerpt

This case study analyzes the Lafayette scandal, which alleges that up to US$760 million in bribes and kickbacks was split among French, Chinese, and Taiwanese officials for the 1992 sale of French frigates to Taiwan. The case was unique in its complexity, intrigue, and repercussions. This analysis focuses on the structural and institutional deficiencies in Taiwan and France that intersected to create opportunities for massive corruption. It also traces how Taiwan and France implemented profound preventive reforms in the aftermath of the scandal. This landmark scandal highlights the need for further global efforts to establish legal frameworks and judicial protocols to tackle corrupt practices that transcend national borders.

On December 9, 1 993, a male body was found floating off Taiwan's northeastern coast. The dead man was later identified as Captain Yin Ching-Feng of the Taiwanese Navy, whose mysterious demise was only the tip of the iceberg. When the involvement of underground multimillion-dollar transnational corruption was exposed years later, at least four lives had already been claimed, up to US$760 million in bribes and kickbacks had been expended, and suspicion and distrust were cast on the political establishment in two physically distant countries.

Transnational corruption exists when officials from more than one country illicitly collude with multinational corporations to accumulate personal gain at the expense of the interests of the nation or people they are pledged to serve (Celentani, Ganuza, and Peydto 2004; Sung 2006). It differs from local corruption in terms of magnitude, complexity, and participants' impunity. Since transnational corruption is usually facilitated by worldwide networks of multinational corporations and draws in high-ranking government representatives, it is characterized by the mishandling and laundering of large amounts of money, intricate webs of contacts and connections, and the extreme difficulties encountered in unmasking the schemes and punishing the offenders. Unfortunately, given the accelerating rate of global integration and interdependence, transnational corruption is here to stay.

The fitst task of policy analysis is to delineate the types of transnational corruption and look at concrete examples. In this study, I will present and examine the story of the "Lafayette Corruption Scandal," as the case was dubbed by the media. The intrigue has all the ingrethents of a blockbuster movie: politics, money, violence, and sex. It was perpetrated not by criminal organizations or terrorist groups, but by prestigious cotporations and well-known political leaders from democratic countries. Therefore, it has enormous political significance in that it may stand as a prototype of the kind of illicit behaviors that de-legitimize the globalization process.

RESEARCH QUESTIONS AND METHODOLOGY

In this exploratory case study there are many uncertainties about the involvement, and thus responsibility, of individual actors. I attempt, nevertheless, to highlight key factors in global and national political economies that encourage transnational corruption by analyzing the knotty idiosyncrasies of one particular case. Three simple research questions structure the study:

1. What happened in the 1992 French sale of warships to Taiwan?

2. What caused the incident of corruption?

3. What policy implications can be derived to prevent the future occurrence of similar incidents?

The first question will be addressed in the case natrative. Reports and articles from various print news media provided descriptive information about the case. As the incident was described and recounted in various forms in many news outlets, it is nearly impossible to cite each individual source in the text below. Therefore, I will first acknowledge the newspapets and magazines consulted to develop the case's narrative. I used news summaries from The China Post and The Taipei Times to reconstruct the evolution of Yin's murder case into the full-blown Lafayette corruption scandal in Taiwan. …