DEFENSE/Taiwan asks U.S. to probe arms sales packages involving Raytheon

Taipei, Oct. 7 (CNA) Taiwan's government has asked the United States government to thoroughly probe all defense procurement deals involving defense contractor RTX to ensure there are no other similar overpricing cases, the nation's defense chief said Monday.

During the Legislative hearing where Defense Minister Wellington Koo (顧立雄) briefed lawmakers on the scandal when RTX was found to have engaged in price gouging, and Taiwan was among the buyers affected, lawmakers across party lines asked the defense chief what Taiwan can do to prevent any re-occurrence.

In response, Koo and a senior defense official in charge of foreign arms sales admitted to lawmakers that Taiwan does not have sufficient capability or experience to individually audit each arms sale case and determine whether it is overpriced.

However, Koo said all the defense ministry can do is look into the procurement prices other governments have previously paid when buying similar packages.

He also said that Taiwan and the U.S. are sealing arms sales based on the U.S. Foreign Military Sales (FMS) program, meaning Taiwan signed all such deal with the U.S. government itself not an individual, defense contractor.

Such government-to-government contracts mean that Washington is fully responsible for such deals, the minister added.

In fact, Koo said the U.S. government is also a victim in the latest-overpricing scandal involving RTX, formerly known as Raytheon Technologies.

Asked if Taiwan's government is looking into all similar arms packages provided by RTX to make sure no irregularities are involved, Koo said Taipei has asked Washington to do so.

The ongoing probes on the U.S. side has so far found no Taiwanese involved in the price gouging, he added.

Bloomberg reported earlier this year that a U.S. federal audit uncovered price gouging by defense contractor RTX in foreign military sales, resulting in significant losses for allied nations.

Following an investigation by the U.S. Department of Justice, RTX reached a settlement with the U.S. government, agreeing to pay US$1.24 billion in restitution and return profits gained from inflated prices to affected parties.

At the time, the countries impacted by the incident were unnamed.

However, it has since come to light that Taiwan was one of the affected buyers, having been overcharged by roughly US$250 million in two procurement deals: a radar system in 2013, and the Patriot missile system in 2017, which is a key component of Taiwan's surface to air defense.

Taiwan has procured various military equipment from RTX over the years, which raises questions about whether there are other overcharging incidents.

Koo and his ministry has said over the past week that the amount RTX Corp. overcharged Taiwan for weapons will be fully compensated.

A defense ministry statement also said Taipei and Washington is now working hand in hand to prevent such "price-gouging" case from happening in the future, without elaborating.