US probing links between Chinese banks, Pyongyang

 

AGENCIES , NEW YORK AND BEIJING

 

The Bank of China and two banks based in Macau are under US scrutiny for possible connections to North Korea's illicit fundraising network, which Washington believes finances Pyongyang's nuclear program, the Wall Street Journal reported yesterday.

 

A Hong Kong spokeswoman for Bank of China, Clarina Man, said: "We have no know-ledge of any such investigation."

 

In a written response to faxed questions from the Journal, she added that the bank has "always been attaching great importance to anti-money-laundering activities."

 

The banks, which could face stiff sanctions, are caught up in a US operation to shut down lucrative North Korean enterprises producing narcotics, counterfeit US currency and fake cigarettes, the newspaper said.

 

It said law-enforcement officials from several countries described the wide-ranging US operation, while several North Korean defectors gave accounts of Pyongyang's financial network.

 

The operation comes as multilateral negotiations aimed at dismantling North Korea's nuclear-weapons program are set to resume next week, with China playing a key role.

 

PUBLIC OFFERING

It also comes amid plans for an initial public offering next year by Bank of China, which recently hired the Goldman Sachs Group of New York, to prepare the move. Recently, Bank of China secured a pledge of US$3.1 billion in investment from a consortium that includes Royal Bank of Scotland Group, Merrill Lynch & Co and Hong Kong billionaire Li Ka-shing.

 

The affair is also likely to reverberate in Asia because of the wealthy players behind the two Macau banks, the report said.

 

One of the Macau lenders, Banco Delta Asia, is controlled by Stanley Au (區宗傑), a major player in the Hong Kong financial markets who is also a legislator in Macau and serves as an adviser to the Chinese government.

 

The other bank, Seng Heng Bank, is controlled by billionaire gambling tycoon Stanley Ho, who started a casino in Pyongyang and has close ties to Pyongyang and Beijing.

 

The Journal said that executives at Banco Delta Asia had no comment.

 

A spokesman for Seng Heng Bank told the newspaper: "We have nothing to provide you. We have no comment."

 

UNDER SCRUTINY

Banco Delta Asia, a unit of Delta Asia Financial Group, has been under scrutiny by the US Secret Service and other US agencies since a publicly disclosed 1994 counterfeiting case by the Secret Service and Macau police that led to the arrests of North Korean officials in Macau, the Journal said.

 

The bank is a top candidate for being placed on a Treasury Department blacklist of entities allegedly involved in money laundering, people familiar with the matter said. Inclusion on the blacklist, which could be proposed shortly, could make it difficult for the bank to do business internationally.

 

Talks with North Korea on dismantling its nuclear program will resume next week, China said yesterday, but Pyongyang raised a possible obstacle to progress by renewing its demands for the withdrawal of US troops from the Korean Peninsula as a sign of good faith.

 

Talks are due to resume this Tuesday, Chinese Foreign Ministry spokesman Qin Gang said. Speaking at a regular news briefing, he appealed to all sides to be "flexible and practical" in trying to reach a settlement to the long-running dispute.

 

Yahoo defends its actions over data ‘release’ to Beijing

 

REUTERS, HONG KONG

Internet giant Yahoo defended itself yesterday against accusations that it supplied data to Chinese authorities which led to the imprisonment of a journalist, saying it must abide by local laws.

 

Press watchdogs accused Yahoo Holdings (Hong Kong) of providing details about e-mail communications that 'helped identify, and were used as evidence against, Shi Tao, who was sentenced in April to 10 years in prison for leaking state secrets abroad.

 

"Just like any other global company, Yahoo! must ensure that its local country sites must operate within a laws, regulations and customs of the country in which they are based, " Yahoo spokeswoman Mary Osako said in a statement.

 

Yahoo declined to confirm or deny that it furnished the Chinese government with the information.

 

The French group Reporters Without Borders said that Shi, a former news editor for the Contemporary Business News in Hunan Province, was convicted for e-mailing to foreign-based Web sites the text of an internal message to journalists warning of dangers during the 15th anniversary of the Tiananmen Square massacre last year.

 

The New York-based Committee to Probed Journalists said in February that China had the most journalists in prison, 42, of any country for the sixth year in a row.

 

Among these in detention are New York Times researcher Zhao Yan, arrested on charges of leaking state secrets to foreigners, and Hong Kong-based reporter Ching Cheong of the Singapore Straits Times, who China accuses of spying for Taiwan.

 

Shi's conviction sent shockwaves through the Chinese journalist community because many felt his sentence might have been heavy to serve as a warning.

 

The Committee to Protect Journalists decried Beijing's "chokehold" on the Internet.

 

"We categorically condemn the outrageous prosecution of Shi Tao," committee executive director Ann Cooper said. "We call on the Chinese government and Yahoo to provide a full explanation of the circumstances that led the company to provide account holder information."

 

In 2002, Yahoo was among the many firms to voluntarily sign the "Public Pledge on Self-Discipline for the China Internet Industry," seen by critics as a promise of self-censorship.

 

Reporters Without Borders asked how far Yahoo would go.

 

"Does the fact that this corporation operates under Chinese law free it from all ethical considerations? How far will it go to please Beijing?" it asked in a statement. "It is one thing to turn a blind eye to the Chinese government's abuses and it is quite another thing to collaborate."

 

 

Pan-blues say that invalid referendum means arms vetoed

 

BY KO SHU-LING

STAFF REPORTER

 

The Chinese Nationalist Party (KMT) legislative caucus yesterday refused to review the arms procurement budget for PAC-3 Patriot anti-missile batteries, claiming that such a review is illegal.

 

"The people vetoed the purchase of Patriot missiles in last year's referendum. We will be going against the will of the people if we agree to consider the budget," said Chinese Nationalist Party (KMT) Legislator Tseng Yung-chuan, who also serves as the executive director of the KMT's Central Policy Committee.

 

According to the Referendum Law, Tseng said that the Democratic Progressive Party (DPP) cannot hold another referendum to address the same issue until 2007, let alone purchase the Patriot missiles.

 

In the country's first nationwide referendum held in conjunction with the presidential poll, voters were asked to vote "yes" or "no" on whether they agree that the government should purchase more advanced anti-missile weapons to strengthen Taiwan's self-defense capabilities.

 

Although the vast majority of the respondents said "yes," the referendum failed to achieve the 50-percent threshold required to make it valid.

 

Tseng yesterday also expressed his caucus' firm opposition to pushing through the special bill and budget for the other two items in the arms procurement plan, unless next Tuesday's caucus meeting reverses its original decision.

 

The original NT$480 billion (US$15 billion) special arms procurement bill sought to purchase three PAC-3 Patriot anti-missile batteries, 12 P-3C maritime-patrol aircraft and eight diesel-electric submarines from the US.

 

At the request of opposition parties, the Executive Yuan has removed the NT$133 billion Patriot batteries from the proposal, and included them in the Ministry of National Defense's (MND) annual budget instead, decreasing the total amount of the special budget from NT$480 billion to around NT$350 million.

 

While Legislative Speaker Wang Jin-pyng has proposed pushing the bill through to the legislature's National Defense Committee for review, he agreed with KMT Chairman Ma Ying-jeou that the government has to deal with the failed proposal in the referendum before it can discuss the budget for the procurement of the Patriot batteries.

 

On the referendum question, 7,452,340 people picked up the ballots, or 45.17 percent of the eligible ballots. However, among the valid ballots, 6,511,216 people, or about 92 percent, voted "yes," while 581,413, or 8 percent, voted "no."

 

`Independence' marked in flag-raising celebration

 

THE RED, GREEN AND BLUE: A group of supporters of Taiwan's independence gathered near the Presidential Office to commemorate the San Francisco Peace Treaty

 

BY JEWEL HUANG

STAFF REPORTER

As a baritone sang Taiwan the Green and about 500 people gazed on, a green, blue and red flag with the characters "Republic of Taiwan" as it was raised slowly against the backdrop of the cinnamon-and-white Presidential Office yesterday to commemorate Taiwan's Independence Day, as recognized by pro-independence activists.

 

Organized by pro-independence stalwart Peter Wang, who is also the leader of the 908 Taiwan Republic Campaign, the flag-raising ceremony was launched on Ketagelan Boulevard in front of the Presidential Office at 9:08am yesterday, in memory of a day 44 years ago.

 

September 8 should be set aside as "Taiwan's Independence Day" to mark Taiwan's de facto independence, since the date recalls Japan's signing of the San Francisco Peace Treaty in 1951, in which it relinquished its claim to Taiwan, Wang said yesterday, before the flag was raised.

 

 

 

 

The campaign organization set up a flag-raising platform on a truck that parked on Ketagalan Boulevard, and about 500 participants coming from Tainan, Hsinchu and Taichung gathered in front of the platform to attend the ritual. Most of the participants were Taiwan Solidarity Union supporters, although three Democratic Progressive Party (DPP) lawmakers also attended the event.

 

Gazing at the flag fluttering in the wind on the sunny day, five young women recited a declaration of Taiwan's independence in Hoklo, Hakka, Mandarin, Amis and English, while a Presbyterian Church minister said a prayer for Taiwan. The song Taiwan the Green was one of the event's theme songs, composed by musician Hsiao Tyzen  and theologian Chen Er-yu.

"I think this ceremony is meaningful and young people should know this date that is significant for Taiwan's destiny," a 60 year-old old woman from Tainan City said yesterday.

 

After the ceremony, Wang also announced an agenda for Taiwan's independence movement, saying that the alliance would unveil the Constitution of the Republic of Taiwan in 2007 and call on 3 million people to endorse the content of the new constitution on Feb.28, 2008. Pro-independence groups will request the new president in 2008 to promulgate the new constitution. A flag-raising ceremony will be held again on Sept. 8 in 2008, and 8,000 young people will take the new constitution and parade around the UN in the US to appeal for Taiwan to become a member of the world body.

 

"Hopefully the flag of Republic of Taiwan will actually rise above the Presidential Office in 2008," Wang said.

 

 

Sex, scandal and accountability

 

The past week has seen a number of surveys, reports and comments blasting Taiwan's media. Media organizations were told not to try to generate interest in their news stories by using catchy headlines or being sensational. Such practices, some warned, would create a "culture of smearing" in which human rights would be threatened by spurious allegations.

 

This line of reasoning is a welcome reminder of how low a caliber of person it takes to make a politician. Taiwan's media is considered one of the most free and vigorous in the region, and for good reason. For example, the BBC's online country profile for Taiwan notes: "The media environment in Taiwan is among the freest in Asia, and extremely competitive. There are hundreds of newspapers, all privately owned and reflecting a wide range of views."

 

Politicians and academics may find tabloid-style journalism distasteful -- and often libelous -- but that is a fact of life for any public figure. If someone is caught walking out of a love hotel with his or her companion after an extramarital tryst, then he or she is fair game for the pages of certain magazines and newspapers. If the allegations are untrue, the victims can take legal recourse. But there is no use whining that a news item made you look bad.

 

More importantly, if a public official's graft or malfeasance is uncovered and publicized by a media organization, then that organization has performed a very real public service. The name of the game is accountability, and independent means of oversight are crucial in that regard. If politicians merely want a forum in which they can distribute their press releases, then they should hire a public relations firm.

 

The truth -- here as anywhere else in the world -- is that the vast bulk of politicians make their careers through backroom maneuvering and playing dirty. Such characters need a rabid pack of media hounds nipping at their heels to keep them honest -- or catch them in their lies.

 

Media organizations are businesses, and as such they must try to generate interest in their product -- the news. Who wants to read boring stories?

 

Even so, scrupulous organizations adhere to ethical standards in an effort to weed out biased or mistaken reporting. But the beauty of the system is that it does not rely on an organization's ethical purity. It relies on a far more certain standard: self-interest.

 

Every media organization has an interest in making its competitors look incompetent, untruthful or foolish. Thus, by having a diverse and broad set of interests investigate an issue, something close to the "truth" can be approached.

 

The problem with the media in Taiwan is not lack of regulation, as some officials appear to believe. It is the opposite -- too much government interference, and a culture of complicity that exists between many in the media and the political elite. Reducing government interference is quite easy. Simply ask: Why does Taiwan need the Government Information Office (GIO)? Many experts could offer glib explanations about the importance of oversight and the need to distribute "accurate" information, but that does not answer the basic question: Why does Taiwan need an agency whose purpose is to allow the government to interfere with the news-gathering process?

 

Of course, the GIO is hardly some Brazil-esque Ministry of Information. But it is enough of a nuisance and a throwback to the days of Chinese Nationalist Party (KMT) authoritarianism that the current administration, when it came to power in 2000, called for the GIO's dissolution. President Chen Shui-bian promised some time ago to get rid of the GIO, and now the matter is before the legislature.

 

Lawmakers should do the honest thing and approve the bill. Because if they aren't honest, they'll find themselves being called a liar in bold print.

 

 

NOT WELCOME? Linda Gail Arrigo, a long-time activist and ex-wife of former Democratic Progressive Party chairman Shih Ming-teh, yesterday displays her passport and alien residence certificates at a press conference to protest her likely deportation on Sept. 23 following her constant failure to renew these papers. She is accusing the American Institute in Taiwan of being so disturbed with her criticism of the US war on Iraq, that it forced Taiwan's government to drive her out of the nation.