The Henry Liu Murder and the Tenth Credit Collapse
On the morning of October 15, 1984, in Daly City, California, the writer Liu Yi-liang — who published under the pen name Chiang Nan and was known in the United States as Henry Liu — was shot dead in the garage of his own home. He was fifty-two. He had been a Taiwanese newspaper's US correspondent before taking American citizenship, but what made him a target was his biography of Chiang Ching-kuo, serialized from 1975 and published in the United States in 1984. The book was not especially savage. Its offense was to treat a sitting head of state as a man who could be written about at all. That the killing happened on American soil, and that the victim held an American passport, determined everything that followed.
The investigation pointed back to Taiwan almost at once. The shots were fired by Wu Tun and Tung Kuei-sen of the Bamboo Union; the man who led them was the gang's leader, Chen Chi-li; and the order came from Vice Admiral Wang Hsi-ling, director of the Intelligence Bureau of the Ministry of National Defense, with his deputy Hu Yi-min and section deputy chief Chen Hu-men involved. Before leaving, Chen Chi-li recorded a tape and left it with someone he trusted — a gangster's insurance against the state that had hired him. In November 1984 Taiwan launched Operation Clean Sweep, an island-wide crackdown on organized crime; Chen was arrested, and the tape surfaced. A killing carried out abroad was thus exposed by the government's own hand.
Once the FBI had the evidence, the case stopped being a homicide and became a diplomatic event. Stephen Solarz, chairman of the House subcommittee on Asian and Pacific affairs, held hearings in 1985 where the charge was put plainly: a government protected by American security commitments had sent gangsters to kill an American citizen on American soil. Taipei was forced to try its own intelligence chief in its own military court. In April 1985 Wang Hsi-ling was sentenced to life imprisonment, Hu Yi-min and Chen Hu-men to fixed terms, and Chen Chi-li and Wu Tun to life as well. The official account was that a few officers had exceeded their authority. Nobody believed responsibility actually stopped at the level where the verdicts did.
While the trial was under way, a second collapse arrived from the financial side. On February 9, 1985, a run began on th…
While the trial was under way, a second collapse arrived from the financial side. On February 9, 1985, a run began on the Tenth Credit Cooperative of Taipei, and depositors queued down the street outside its branches. The Ministry of Finance ordered it suspended, inspectors found illegal over-lending exceeding fifteen billion New Taiwan dollars, and the run spread to Cathay Trust within the same group. The cooperative's chairman, Tsai Chen-chou, was both a member of the Cathay Tsai family and a sitting member of the Legislative Yuan, where he ran a network of finance allies known as the Thirteen Brothers. Finance Minister Lu Jun-kang resigned and several economic officials went with him; Tsai received a heavy sentence and died in 1987 while serving it. The unspoken line between political power and family capital was printed, for the first time, on the front page.
The two cases landed in the same year, and together they did more damage than any opposition rally: the first showed that the state could export violence beyond its own borders, the second that it could not hold its own fiscal discipline. In August 1985 Chiang Ching-kuo told Time magazine that no member of his family could or would run for the next presidency; on December 25 of the same year he repeated it publicly at the constitutional anniversary assembly, adding that a military government was equally out of the question. It was a ruling family announcing its own terminus.
After that year the succession question changed from who belonged to the Chiang family to who could be accepted by an institution. The Democratic Progressive Party was founded at the Grand Hotel a year later; martial law was lifted two years later. Some of the room those decisions required had been cleared in 1985. The Henry Liu case overturned no institution. It merely forced the institution to admit something about itself: certain instruments, once seen, can never be used again.
In the Bureau's assessment, Liu Yi-liang was not a writer but a man filing to three parties at once: he had worked for Taiwan's intelligence services, he had contacts on the mainland, and he passed information to the FBI. The biography of Chiang Ching-kuo was not read internally as a book but as commissioned defamation. The judgment followed from that: a subject who knew the internal personnel and answered to no one was himself the breach. In 1984 the director, Wang Hsi-ling, decided on "sanction," and chose to borrow the hands of the Bamboo Union — using no one on the payroll precisely so that any trail would break outside the institution. The calculation proved completely wrong. The tape reconnected the whole line, and American jurisdiction left Taipei no room to maneuver. The Bureau's officers held the line of "acting under orders" in court and let responsibility stop with Wang; Wang served just over six years and was released in 1991, and stayed silent for the rest of his life. By the internal logic of intelligence work, this was an operation successfully executed and then lost control of. From the standpoint of the state, it was the moment a government forfeited its right to explain itself to its most important ally.
Isle of Time