Taiwan's Ex-Security Chief Accused of Hiding Presidential Cash Scheme

TAIPEI, Taiwan, Aug. 28 -- Taiwan's former security chief was indicted Thursday for allegedly covering up suspected money-laundering activities by former president Chen Shui-bian and his family.

The indictment was the latest in a series of scandals and corruption cases that have beset Chen, his family and his government aides. The allegations have tarnished Chen's pro-independence Democratic Progressive Party and contributed to its loss to the Nationalist Party in the presidential election in March.

The latest investigation involves $20 million allegedly wired by the former president and his wife to their daughter-in-law's Swiss bank account via accounts in other nations.

Prosecutors are seeking 2 1/2 years' imprisonment for Yeh Sheng-mao, chief of the Bureau of Investigation under Chen, for allegedly concealing documents given to his bureau by the Egmont Group, an international organization that collects data on suspicious financial activity. The Egmont documents expressed suspicion that the money wired into a Swiss bank account belonging to the daughter-in-law involved money laundering.

That the judiciary is willing to go after senior politicians such as Yeh was seen by some foreign observers as another sign of the strengthening democratization of Taiwan's political system.

Subordinates at Yeh's bureau, which deals with white-collar crime and internal security, notified Yeh when they received the Egmont documents in January and recommended that the bureau take legal action, the Taipei District Prosecutor's Office said in a statement.

But Yeh reportedly told them the matter was so confidential and sensitive that only he was equipped to deal with it. He then concealed the documents, quashing any possible investigation, the statement said. Yeh retired at the end of Chen's second four-year term as Taiwan's president in May.

Prosecutors are investigating whether the $20 million was obtained from bribes or other corrupt means and are trying to determine if the transfer amounts to money laundering.

Chen, former first lady Wu Shu-chen and other relatives have been listed as suspects in the case and are barred from leaving the island but have not been formally indicted.

Chen earlier said the money was remitted overseas by his wife but insisted that the funds were leftover donations to political campaigns. He admitted breaking the law by not fully declaring the campaign donations but denied that any corruption was involved. Under Taiwanese law, illegally declaring campaign funds involves a stiff fine, but money laundering carries the possibility of a prison sentence.

Two years ago, prosecutors in a separate case indicted Wu on charges of embezzling $450,000 from government accounts. Chen, who lost his presidential immunity on leaving office, is now under investigation in that case.