The KMT is on the run. Vice President Lien Chan, the party’s candidate for the March presidential election, sits at the bottom of the polls. When Lien attacked the front runner, James Soong–a former KMT leader now running independently–over financial improprieties last month, the tactic merely reminded people of the huge privileges the ruling party has exercised to amass an empire of wealth and power. In return, Soong said $4.5 million in mysterious funds he allegedly controlled had come directly from President Lee Teng-hui. Hoping to mop up the mess, Lien days later vowed to get the party out of business and “nationalize” the KMT’s assets, valued by the opposition at as much as $30 billion, by putting them in a national trust fund. He promised to “create a level playing field” for all political parties. Some party elders worry that without vast funds for election campaigning, the party would lose future elections. Says Eric Chu, a Lien adviser, “Reform is the only way to survive.”
KMT reformers are already struggling to keep the party together. For decades, the party has been widely viewed to have encouraged loyalty through payoffs, sinecures and business bailouts. Military service is often rewarded with lucrative positions in the 300-odd party-run companies–which could soon be divested. President Lee last week seemed almost to backtrack from his earlier endorsement of Lien’s plan for reform. “By putting the assets into trust, the party is not giving them up,” he told the KMT’s central standing committee. “There is nothing wrong with party assets.”
The Taiwanese people may not agree. Financial favors that once seemed to be smart investments now look like dirty politics. Cronyism, admits the partner of an industrialist close to the KMT, “has become like a cancer in an otherwise successful economy.” Chen Shui-bian, the candidate for the opposition Democratic Progressive Party (DPP), has used the dirty-money issue to rise to the top in the polls in recent weeks. “It’s not just that [the KMT’s] skin or flesh is dirty, it’s dirty to the bone,” says Chen. In preparation for life without the party’s backing, the KMT radio station is considering opening a BMW dealership on the ground floor to make some money. You might call it the beginning of real democracy.
