On December 22, Minister of Finance Paul Chiu, responding to interpellations in the Legislative Yuan, officially announced some findings of the investigation into major securities trading by Soong Chen-yuan, the son of James Soong. Most important were revelations about accounts held in the names of Soong family members. Legislator Yang Chi-hsiung had uncovered two funds, valued at NT$140 million and $470 million, under the names of Soong Chen-yuan and James Soong's sister-in-law Chen Pi-yun. In addition, said Minister Chiu, there were other accounts, the largest of which reached as high as NT$300 million in value.

The Taipei District Prosecutor's Office then opened its own investigation. It collected evidence from the Ministry of Finance, the Bank of Taiwan, Chung Hsing Bills Finance, and other institutions. After tracing the flow of money, it then called in Chen Pi-yun and Soong Chen-yuan for questioning.

Faced with outside scepticism, James Soong then asked New Party legislator Hsieh Chi-ta to form an audit team and investigate.

On December 28, Hsieh held a press conference to relate the results of the audit, in which he explained when the accounts were opened, how they were used, and what the flow of the money was. At the press conference, Chen Pi-yun stated that there was nearly NT$1 billion from several sources, including more than NT$400 million left over from funds collected for Soong's campaign for provincial governor (which, according to the law, Soong could retain), NT$300 million provided by the provincial water conservancy authorities for a fund to train water conservancy specialists, more than NT$140 million in funds provided by the KMT for "party operations," more than NT$100 million for the purpose of looking after the descendants of the late president Chiang Ching-kuo, and more than NT$14 million in family savings.

The funds were used, according to Hsieh's audit, to support election campaigns of provincial assemblymen, to support the election campaign of current president Lee Teng-hui, to pay business expenses for James Soong, to establish a scholarship fund for students to go the University of California at Berkeley, and to support Soong Chen-yuan in his studies and business activities in the US. A final version of Hsieh's findings is to be provided to the investigating authorities.

However, Chen Pi-yun provided no reasonable explanation of the key question: Why were public funds mixed up with and deposited along with private funds in the Soong family's private accounts? Soong, who participated in Hsieh's press conference, then declared that the mixing of public and private funds was done on the orders of party chairman Lee Teng-hui for purposes of "security, reliability, secrecy, and avoiding trouble."

After the Hsieh-Chen-Soong press conference, the KMT held its own. Party spokesperson Huang Hui-chen said that the KMT had never officially authorized Soong to have or use these funds, and that Soong was suspected of embezzlement. A judicial investigation will be required to look into this.

So how did all this start? On December 9 legislator Yang Chi-hsiung held a press conference at which he stated that Soong Chen-yuan had opened a securities trading account at Chung Hsing Bills Finance, that in December of 1992, Soong Chen-yuan purchased NT$106 million in securities, and that as of the date of the press conference, there was more than NT$140 million in securities in the account. Yang wondered how Soong Chen-yuan, who had just graduated from university, could possess such a large amount of wealth.

James Soong thereafter stated that after his son had gone abroad to study and start a business, a benevolent "elder" opened an account which would allow the younger Soong to withdraw funds from the interest as needed. Over the years, there was no special need for the money, and last June NT$140 million was returned. As for who this "elder" is, Soong would not say.

But scepticism persisted. On December 15, Soong held a press conference at which he stated that the account in his son's name was set up under the direction of KMT party chairman Lee Teng-hui. He said that NT$146,460,000 was transferred from the special account of the KMT Secretary-General and deposited in accounts under the names of Soong Chen-yuan and Chen Pi-yun. The money was designated, said Soong, to take care of the descendants of former president Chiang Ching-kuo, and for "party tasks" specially designated by the chairman. Soong said that the amounts announced by Yang were inaccurate. Soong held a second press conference on December 18. This time he declared only that the money had been intended for looking after the Chiang family.

On December 21, Legislator Yang held his third press conference, in which he stated that Soong's sister-in-law, Chen Pi-yun, had, in a half-month period at the end of 1994 and the beginning of 1995, used NT$470 million in cash to purchase bonds and securities at Chung Hsing.

Under pressure from the public and legislators, on December 22 Minister of Finance Chiu announced partial results of their investigation, as mentioned above. This in turn sparked Soong to ask Hsieh Chi-ta for another audit. There have been no firm conclusions as yet.

The Chung Hsing case may or may not be fully clarified, but it has certainly greatly affected James Soong's public support. Before the scandal broke, he was getting more than 30% support in public opinion polls, but a December 20 poll by the China Times shows Soong with only 23%. This leaves him behind Chen Shui-bian (24%) and barely ahead of Lien Chan (22%). Yet, while Soong's support has fallen, that of Chen and Lien has not markedly increased. Obviously former Soong supporters are now taking a wait-and-see attitude.

There's a final point worth reflecting on: This is only the second direct election for the president in the history of the ROC. Yet the personal characters of the candidates and those around them have already become the main focus of public attention. There's little discussion of public policy. For example, there's been virtually no response to the white papers on China policy and constitutional reform issued by Chen Shui-bian. What is wrong with Taiwan's democratic culture? Do the public and media need to reassess? After all, in the new millennium, there will be many more tests facing us.

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The Chung Hsing Securities Case has seriously damaged the image of independent presidential candidate James Soong. The photo shows Soong explaining the source of the funds at a December 14 press conference.