Taiwan’s transition from one-party rule to democracy is a move that seems out of character for the Chinese Nationalist Party (KMT), who had maintained martial law and an iron grip on the country for decades. This deviation was not a sudden shift in the ideology of the party, but rather a tactic to increase legitimacy without limiting their corruption-filled practices.

There were a number of forces pressuring the KMT to democratize; between internal societal pressures, external pressure from the United States, and growing democratic movements worldwide, the KMT didn’t want to lose power and recognized that a democratic transition would allow them to maintain power. The way they did this was through maintaining a system of networks rooted in local power. They changed the formal structures of the country with the expectation that their networks, supported by corruption-filled practices, would protect their political and economic control.

Throughout Taiwan’s transition to a democratic state, corruption has remained an issue present in the country’s political machinery. Although one of the most commonly deployed terms involved in political discussions, there is no clear consensus on what constitutes corruption.

What is clear, however, is that when a political duty is intentionally violated for personal gain, often in the form of money, marks a deviation from established standards of behavior. An issue arises regarding how those standards are determined; usually it is a combination of the law and public interest, and in many cases, including that of Taiwan, it can change based on the time period in which the corruption occurs.

In Taiwan, people’s perception of corruption changed throughout the Martial Law Period and Democratization, and is still changing today. This continuously changing public opinion contributed to why the KMT’s abuses of power were not opposed for a large stretch of time. The grip the KMT had on the country under one party rule through their patronage system transformed as Taiwan moved towards and through a shift to democracy, and allowed them to keep a skeptical majority relatively loyal. The effects of reliance on the KMT as a result of the centrality of their patronage networks can still be seen in modern Taiwanese politics.

Martial law

After 50 years of Japanese colonial rule, in October 1945 the KMT took over control of Taiwan. When they arrived from the Chinese mainland in the aftermath of the Second World War, they needed grassroots support to secure their power. One party rule was established and the KMT began to link structures that combined state, society, big business, and politics; not to each other, but separately, which allowed them to exist under their umbrella. There was state-led modernization but they also controlled the financial sector, property, and industrial conglomerates. This monopoly on resources and the economy let them channel money how they pleased. Because there was no separation of party and state, the KMT enjoyed unfettered political and economic control.

The system through which the KMT maintained this control revolved around the “local factions”. Most counties had two or three factions of local influencers and power brokers that would compete for power and resources. The KMT relied on these factions to mobilize voters in order to win elections: from 1954 to 1989, around 63% of KMT provincial assembly candidates came from local factions, and those candidates had an election rate of 92.6 versus 74.41 for non-factional ones.

Essentially, the KMT turned a blind-eye toward corruption at the local level while the central government outwardly presented as being somewhat clean. This was the result of an economic alliance that formed in which both the local factions and central government benefited. The factions received local monopolies, special loans and credits from state owned banks, and local government contracts. The central government disregarded factions with links to organized crime and other illegal business (gambling houses, brothels, and more). Local politicians wanted to be elected to reap benefits, and in turn fought to be elected against each other, rather than form alliances with each other against the KMT. This system remained intact and unopposed until democratization occurred.

During the Martial Law Period, the KMT used their position to gain a real estate and business empire. They became one of the richest political parties in the world. Through holding companies, they invested in companies in areas like cement, construction, insurance, finance, and media. These profits gave them the capital necessary to outspend their competition in local elections.

In addition to the local faction and monopolistic systems, the restriction of media also helped the KMT retain power. Criticism of the party couldn’t reach the people, and dissidents were arrested. The KMT owned the Broadcasting Corporation of China, a popular radio network, three television stations, and newspapers. Political advertising was also banned. Until the liberalization of the media and national elections in the 1990s, corruption and martial law were not challenged. Opposition movements were rendered powerless not only to get their general message out, but specifically to call out KMT corruption.

Many of the areas of corruption in Taiwan during this period were not explicitly disputed because corruption had effectively become normalized. Between election banquets, allocation of party assets, faction candidates and local level corruption, and government collusion, none of those areas were regarded as explicit corruption. Instead, there was a passive buy-in of sorts. Additionally, vote buying ran rampant within KMT factional politics. The party’s own Wu Den-yih, a former Kaohsiung mayor, said that “the level of Taipei voters is a little higher than other places, but of course vote buying was common. Each constituency elected about ten councillors and in each constituency only three people didn’t need to buy votes.” There were some actions undertaken by the KMT to restrict these practices, like the 1980 Public Officials Election and Recall Law, but enforcement of regulatory election law was selective. This further played into the notion that the KMT defined the framework that legitimized their corruption.

The KMT certainly displayed explicit usage of force, like the 228 Massacre and the Kaohsiung Incident in 1947 and 1979, respectively. However the norm was much more that of soft power. The underlying systems that kept the KMT in power were how they controlled the day-to-day aspects of life like social mobility, and economic success, while at the same time not allowing public discussion about those acts of corruption. The violent outbursts came when the soft power system came under threat.

Democratization

Through a shift towards democracy, the KMT’s relationship with economic actors and the local factions underwent a dramatic change. Liberalization (both economic and political) granted agency to the local factions and the business world, allowing them to expand and form alliances. What was once an umbrella of individual relationships became more of an interdependent web of connections.

The KMT executed land-based economic projects through construction and real-estate which became central to the financial world. Private companies that had been under complete KMT control under the authoritarian era began thriving, and a lack of business regulations combined with a need for funding for political candidates led to the formation of new relationships. Intuitively, because the number of candidates went up after democratization, so too did total campaign costs. As a result, business groups began to sponsor candidates in return for political influence.

The role of the local factions also changed as they diversified and formed new partnerships, including with the DPP. Land and real estate monopolies that had been handed to the local factions in the martial law period were making them money, and they were able to expand their focus. The Legislative Yuan became the playing field for these associations, which led to a rise in faction representation as well as corruption.

Additionally, political alliances were no longer just for the KMT. 1997 county level elections for the Democratic Progressive Party (DPP) connected them with local factions, who then were able to play parties against each other. The DPP had less capital than the KMT, so they supported local politicians by promising public projects if elected, instead of money. Vote buying was also present in this period, from both parties. It was more centrally permitted and systematic in the KMT than the DPP, but was still present in the DPP as well.

The DPP’s hands are not entirely clean when discussing corruption, and that held true for the DPP’s first administration under President Chen Shui-bian, which had its own corruption issues. Chen was convicted on six charges related to bribery and corruption, received jail time, and was fined NTD$200 million. He embezzled money from government funds, took bribes and kickbacks, and more. Corruption is often an economic factor in politics, and in Taiwan, is a bi-partisan issue.

As time went on, costs to stay legitimate became higher and higher, but there were some actions taken by the KMT to try and present as being clean. In 1993, the Public Functionary Assets Disclosure Law was passed, in opposition from the central KMT party, but lacked any true enforcement. Sanctions were light, there was no follow up, and the Control Yuan simply did not have the resources to review reports they received. Similarly, the Organized Crime Prevention Law was passed in 1996, which gave fines for involvement with organized crime, but had poor implementation.

Many of these early anti-corruption initiatives were unsuccessful because of institutional challenges. When the DPP took power in 2000, they enacted plans to combat organized crime and corruption, but struggled. The Ministry of Justice’s Investigation Bureau (MJIB) had merged with the Government Ethics Department; the MJIB, which had previously been responsible for the KMT’s internal security, had enough institutional power to resist reform. Overall, the legal framework didn’t address practices that were not aligned with democracy because the KMT designed it that way and the Legislative Yuan was still filled with members who held traditional views.

The author would like to express his sincere appreciation to Dr. Gerald Blaney for the invaluable guidance and assistance he provided in editing this paper.

(To be continued)

(Feature photo by Soloman Soh from Pexels)