James Soong - 2006 Taipei Mayoral Election

2006 Taipei Mayoral Election

Tax issue

On August 17, 2006, Taiwan's Administrative Supreme Court handed down a ruling against Soong in a case of tax evasion. He was charged gift taxes by the National Tax Administration from events in 1994 when he wired NT$42 million from his election campaign account to that of his daughterinlaw in the United States. Soong's argument was that he had wired the money to his daughterinlaw in order to pay off remaining campaign debts and to establish a Foundation, and that he was not simply "gifting" the money to her. The Court however found that the first money was not given to the Foundation until December 2001, and ruled that the money had been used as his private assets and that therefore gift tax was payable. He was assessed NT$13 million in gift tax, with fine also of NT$13 million, for a total sum of NT$26 million.

Taipei campaign

On Wednesday October 18, 2006 Soong formally announced and registered his candidacy for the Mayoralty of Taipei City, Taiwan's capital and largest city, in the local government elections to be held in December 2006. Soong registered as a "non-partisan" candidate without a party affiliation, declaring that he had taken a leave of absence from his post as Chairman of the PFP.

After his defeat in Taipei Mayoral Election on the 9th of December, 2006, he won only 4% of cast ballots, James Soong announced that he will retire from politics, which entailed giving up the chairmanship of his party, the PFP. With this announcement and with no clear goal, the PFP face an uncertain future which could speed up any merger with the Kuomintang.

Chen's claims

Chen claimed in an interview with a cable TV channel in May 2005 that Soong met Chen Yunlin in the United States in February that year.

Following this claim, on February 15, 2007 Taipei District Court ruled Thursday that President Chen Shui-bian must pay James Soong NT$3 million (US$91,183) in damages and apologize in the top three newspapers for his allegation that Soong met secretly with China's State Council Taiwan Affairs Office Director Chen Yunlin in 2005. The court said President Chen failed to carry out necessary verification before making his allegation. "The president exercises overall control over the executive sector resources and his responsibility to verify information must be weighted," a court spokesman said.

PFP spokesman Lee Hung-Chun called the judgment "comforting" but said it came too late. "It took more than a year for the first judgment to come out," he said, adding that this meant the public did not get the chance to learn the truth during a time when the political situation was changing rapidly. Chen's counsel said he will appeal to the High Court.

Claiming that his remarks were based on "intelligence," Chen also said Soong promised during the meeting to oppose a proposed constitutional amendment that would allow for popular referendums on future constitutional amendments, in exchange for Beijing's approval for Soong to visit China.

Soong filed a defamation suit against Chen in June 2005, demanding a symbolic NT$1 in compensation and a published apology in four major local newspapers for three consecutive days. After Chen repeated his claim in another TV interview in October that same year. Soong later extended his compensation demand to NT$50 million and asked Chen to publish an apology in four internationally famous newspapers in the United States, the United Kingdom, France and Japan, as well as in three local ones.

According to the written judgment, Chen said that the intelligence about Soong's activity was submitted to him by Bureau of Investigation Director-General Yeh Cherng-maw. However, Yeh told the court that he had warned Chen that the intelligence, some of which he admitted was drawn from media speculation, was difficult to check.

The judgment said that as president, Chen must have understood the weakness of the information and could have ordered the national security system to conduct further verification, but decided not to bother.