Heijin

Organized Crime, Business, and Politics in Taiwan

Ko-Lin Chin

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781315498270
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

This work examines the structure and illegal activities of organized crime groups in Taiwan and explores the infiltration of crime groups into the business and political arenas. It looks at the intricate relationship among government officials, elected deputies, businessmen, and underworld figures.

Part II

The Transformation

4

From Big Brother to Entrepreneur

One of the main purposes of this study is to explore how and why crime groups in Taiwan have moved into legitimate commercial businesses. Jiaotou and gang leaders are reported to be owners of restaurants, coffee shops, nightclubs, movie companies, cable television companies, magazine publishers, and construction companies (Chi Chung-shien 1985). Some of them are actively involved in futures trading, the stock market, and other commercial activities (Ta Tou Chen 1986). Since the mid-1980s, it has been alleged that these crime groups have become active in collusive bidding for government projects and other sophisticated crimes (Lin Ching-lung 1998). This chapter examines the changing patterns of organized crime involvement in commercial activities in Taiwan.

The Judicial Yuan of Taiwan (1998: 115) suggested that the involvement of heidao in business is a serious problem:

Hoodlums and gangsters have become more active in establishing business firms that conceal their illegal activities, and they have expanded their operations from extortion and operating gambling and prostitution houses to goods and drug smuggling, loan sharking, construction, and bid rigging.

According to Tung Shi-jie (1996), by 1996, about 106 of the more than 360 major firms or almost one-third of the major firms in the country were infiltrated by corrupt politicians and heidao figures. Tung Shi-jie (1996: 74) estimated that:

If we calculate the impact from the overall capital of the penetrated firms, then the amount of capital is as high as NT$610 billion, about 38 percent of the total capital of all well-established firms. And if we look at the market value of the penetrated firms, then it involves about NT$2,970 billion, more than half of the market value of all the major firms.

There are several explanations and reasons for heidao penetration into the legitimate business community. According to a Bamboo United leader, the involvement of heidao was made possible by legitimate businessmen and politicians who were eager to use the “services” of heidao figures: “When the Taiwan economy began to take off, a close tie developed between government officials and businessmen. Soon after, when there were business conflicts, brothers were invited to settle the disputes. Gradually, brothers entered the business world.”

On the other hand, brothers were also willing participants in the business sector. As gang and jiaotou leaders matured and married and had families, they became more interested in making a living rather than just maintaining their tough reputations. As a Bamboo United leader said:

There are pathways and turning points among brothers as well. When we were young, we were mainly concerned with our macho image and tried to show that we were fair and just. That’s why we were often involved in fighting. After we grew up and married, we were more concerned with making a living. That’s why we constantly look for business opportunities.

Some observers assume that the penetration of heidao into the legitimate business world was first caused by Operation Cleansweep in 1984:

Operation Cleansweep destroyed the major gangs’ leadership structure; moreover, it forced many gang leaders to change their ways of survival, that is, to penetrate the legitimate business sector. As a result, the larger gangs gave up their traditional way of making money, which was extortion. Nowadays, these gangs are more interested in establishing their own business firms and staffing their firms with their own little brothers. (Jin Shi 1989: 31)

According to a jiaotou, “Most heidao leaders are now smart enough to have their own companies to protect them from being sent to prisons; they use their businesses as fronts for their illegal operations” (Ta Tou Chen 1986: 302). This chapter will explore some of the legitimate businesses in Taiwan that are mostly likely to be affiliated with, or be penetrated by, jiaotou and gang leaders.

Restaurants and Bars

In the early 1980s, even before Operation Cleansweep was launched, a substantial number of restaurants and bars in Taiwan were owned and operated by gang and jiaotou members (Lin Cheng-tian 1982). During Operation Cleansweep, law enforcement authorities raided restaurants, bars, and barbershops that belonged to Bamboo United members. The police found that these establishments were gathering places for the gang’s various branches. Chen Yung-ho, a leader of the Four Seas, was gunned down inside his restaurant located in Taipei City.

The Ming Sun Club, a gathering place for gangsters, businessmen, and former police officers, was another Bamboo United investment. The president of the club, Chu Kuo-liang, was a former intelligence staff officer and senior police officer. Chu had connections with triad members in Hong Kong and was alleged to have been involved in extortion rackets while serving as a police officer. The Ming Sun Club was a joint venture of Chu and Chen Chi-li (the highest leader of the Bamboo United), and it was the gang’s favorite spot. Businessmen were “invited” to join the club for a fee of NT$1 million per person (Chi Chung-shien 1985). The club was shut down in the crackdown of 1984, and Chu was arrested and incarcerated.

Large numbers of underground bars exist in Taiwan because of the government’s policy of discouraging the establishment of bars through an unreasonably high license tax. In 1973, the annual tax for bars increased five-fold, from NT$300,000 to NT$1.5 million. In 1979, the annual tax for bars increased another three-fold to NT$4.5 million. The policy of “denial through heavy tax” also stipulated that the bars could not move to another location, could not be sold to another person, and that ownership could only be transferred to other family members. Government employees were not allowed to go to bars, but they would go to underground bars because they could always say they did not know it was a bar, or that they thought it was a restaurant. Many gang members who used to work as bouncers in the underground bars moved up to become shareholders or even owners (Chen Ji-fang 1983b).

The involvement of heidao figures in restaurants and bars later enabled them to expand their operations to show business. According to a police officer:

Later on, the gangs began to expand their activities into managing shows for well-established western-style restaurants. They were responsible for arranging to have famous singers to perform in these restaurants. The singers had to accept the arrangements, but often entertainers were not paid. That way, the gangs were able to make a lot of money. With the kind of money they have, they decided to buy out some of the original shareholders and, eventually, they became the owners of these restaurants, or, at the very least, major shareholders.

From restaurant entertainment, the gangs turned to other businesses such as bid rigging and the stock market, which will be discussed later in this chapter.

The Music and Movie Industries

Show business in Taiwan is tightly managed by organized gangs and jiaotou groups. The control was particularly intense during the 1980s when celebrity performances in well-established clubs and theaters were popular. During that time, famous singers, actors, and actresses were often invited by owners of music halls and western-style restaurants to perform special shows. Since popular entertainers were usually committed to several television shows and movie projects simultaneously, owners of music halls and restaurants had great difficulty in arranging for popular entertainers to perform in their establishments. Because an entertainer’s special live show was a guaranteed financial success, gang and jiaotou figures gradually moved into the show business. Crime bosses transformed themselves into show-business agents because that’s where the money was.

If a crime figure owns a restaurant or music hall, he will arrange for the entertainer to perform in his establishment; or he can arrange to rent a restaurant for several days. Once approached, entertainers rarely turn down such invitations. The entertainers are paid a lump-sum amount for their appearance, while the crime bosses sponsoring the show pocket all the revenue. More often than not, entertainers are also being extorted by local criminals whenever they perform in shows not sponsored by a crime group.

Contract disputes between entertainers and heidao figures are not uncommon. A few famous entertainers were assaulted by gangsters because they may have refused to sign a show contract or did not appear as scheduled. Those who were physically assaulted include Pai Ping-ping (show business), Shan Kuan Ming-li (actress), Chu Chen (singer), Hung Lung-hung (actor), Hsui Pu-liao (actor), Ju Kor-liang (television star), Kao Ling-fung (singer), and Hu Ying-mong (actress), all considered to be among the top entertainers in Taiwan (Chen Nien 1983).

According to a media report, a famous singer was paid only about one-third of what he expected to receive from show organizers:

Yang Fang, after he became a big star, was paid NT$28,000 per show. However, he only pocketed NT$8,000. Where did the NT$20,000 go? An agent company collected NT$ 10,000 per show as commission, and because the company was not “powerful” enough [to shield Yang from the heidao], the company had to rely on another heidao company to function [as a protector] and that company also had to be paid NT$ 10,000 per show. (China Times 1983: 3)

Despite these salary manipulations, show business needs heidao figures to survive. An experienced show business producer pointed out: “The key to show business is the selling of advance tickets. And it is mainly done by heidao members.” Because many businesses have to have good relations with the public, when brothers show up to sell advance tickets, the business owners are unlikely to refuse and they cooperate. They buy tickets by the hundreds and consider the outlay to be “public relations expenses” (Teng Chi-jer et al. 1992: 27).

Infiltration by organized crime into the movie industry is even worse. At the trial of Henry Liu’s murderer, it was revealed that the accused and witnesses were all, in one way or the other, involved in the movie industry. Chen Chi-li, the top leader of the Bamboo United, was a co-owner of a music producing company; Wu Tun, the enforcer of the Bamboo United, was a producer of a major film production company; and Swei Yi-fung, the adviser of the Bamboo United, was owner of a film company (International Daily News 1985). Two of the witnesses were a director and an assistant director.

In the 1970s, movie producers in Taiwan were often victims of extortion, and consequently, they recruited gangsters as partners and hired their little brothers as extras and protectors. Some big-name movie stars also associated with gangsters for protection (Mo Shi 1979). The penetration of heidao into the movie industry began in 1967 when Wang Yi, a Hong Kong actor, came to Taiwan to play the lead role in a martial arts movie. In order to avoid extortion from local crime groups, the actor hired some local thugs for protection and also used them as extras in the film. Soon, the producer and his associates realized that the criminals were helpful in a number of ways. For instance, they were very effective in negotiating with studio owners and in ensuring that other performers would show up on time for work. Today, most film producing companies are now somehow connected to criminal organizations for the sake of running their businesses efficiently. The Hong Kong actor later became a close associate of the Bamboo United, and when he was stabbed inside a restaurant in Taipei in 1981, allegedly by members of the Four Seas, an all-out war almost broke out between the two gangs (Lin Cheng-tian 1981).

By working as peripheral staff for movie companies, gang members obtained first-hand knowledge about the industry. Eventually, some of them established their own companies and became producers, with all personnel, from top to bottom, recruited from members of criminal organizations. According to a news report, criminals involved in the film world relied upon their underworld connections to exploit others in the industry:

Since investment in the movie industry can produce high profits, many gangsters are now flocking into this profession. Companies owned by crime bosses have no problem signing contracts with popular directors and performers. Not only do directors and performers dare not reject a contract, they also have to accept whatever deal the company offers them. In the past, when a film company went out to shoot outdoor scenes, the company was extorted by jiaotou groups for permission to work on the latter’s turf. Over the years, many film companies hired criminal elements to participate in film-making; these criminals not only played the role of the producer, but also took on the responsibility for settling disputes, signing contracts with performers, and negotiating deals with directors and performers. At the moment, it is hard to imagine how a film company could produce a movie without the help of staff members who are also members of a crime group. (World Journal 1985a: 5)

One of the major figures in the Taiwan movie industry is Yang Teng-kwei. Yang, a former gang member from Kaohsiung who is alleged to be the “adviser” of the Celestial Alliance, was arrested during Operation Cleansweep and Operation Thunderbolt for his affiliation with the Kaohsiung-based Northwest jiaotou group. Yang had become a big brother in the early 1960s after he killed a gang boss in Kaohsiung. He was active in the music business when it was at its peak in the late 1970s and early 1980s. His gang background helped him to make sure his shows would not be disturbed by heidao figures and also that performers who worked for him would not be harassed. Yang was arrested in the 1984 Operation Cleansweep as a hooligan; after his release in 1987, Yang began to move into the movie industry. Some of the movies he produced received international recognition, including City of Sadness, which earned the best foreign picture at the 1989 Venice Film Festival (China Times Weekly 1990).

Yang was again arrested in the 1989 Operation Thunderbolt on the same charge (i.e., for being a hooligan). He served about two years in prison. Immediately upon his release in 1992, Yang signed a HK$30 million (approximately US$3.9 million) contract with Lee Lian-jer, a famous Hong Kong movie star, to appear in three movies (Ker Su-len et al. 1992).

Yang Teng-kwei has unrivaled influence in the movie industry. He is not only well connected to almost all the successful entertainers in Taiwan and Hong Kong, but he is also believed to control 20 percent of the market share of the NT$30 billion cable industry in Taiwan (Ching Mu-len 1996). Heidao involvement in the Taiwan cable industry is an open secret (Chou Kuan-yin 1996b), and some observers believe that Four Seas leader Chen Yung-ho was killed not because of his conflict with the Pine Union gang, but because he was implicated in a cable television business fallout (Lin Chao-hsin 1996a).

The cable industry in Taiwan was essentially established...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Tables and Figures
• Acknowledgments
• I. The Underworld
• II. The Transformation
• III. Suppression and Reaction
• Appendix: Research Methods
• Notes
• Glossary
• References
• Index