Taiwan foreign minister questioned over diplomatic scandal (Roundup)

May 2, 2008, 14:43 GMT

Taipei - Taiwanese Foreign Minister James Huang was questioned over 30 million US dollars meant to win diplomatic recognition from Papua New Guinea (PNG) but was embezzled instead.

Prosecutor Huang Mou-hsin questioned Huang for five hours and plans also to question Vice Premier Chiou I-jen, who in 2006 recommended to Huang the two intermediaries who received to the money, the Central News Agency reported.

The scandal, which came to light 18 days before President Chen Shui-bian steps down, is the latest of a string of scandals concerning Taiwan's secret diplomacy, labelled chequebook diplomacy by China.

Chen has defended Taiwan's secret diplomacy and the 'secret diplomacy fund' on the grounds they were state secrets.

Early Friday, Huang apologized for the scandal at a news conference and accused the two middlemen of betraying Taiwan.

Taiwan is trying to break its diplomatic isolation by launching ties with foreign countries. Currently only 23 countries recognize Taiwan and more than 170 countries recognize China, which sees Taiwan as a Chinese province.

Due to Taiwan's delicate situation, most of Taiwan's talks on opening ties with foreign countries are conducted secretly and sometimes through businessmen.

Taipei made the attempt to launch ties with PNG, an island state in the South Pacific, because in 1999 PNG, still recognizing China, signed a joint communique with Taiwan on mutual recognition.

PNG annulled the decision after Mekere Morauta had became prime minister on July 21 the same year.

Taiwan restarted the secret diplomacy talks in 2006 by hiring as middlemen Ching Chi-ju and Wu Shih-tsai to persuade PNG to ditch China and recognize Taiwan.

Ching, a US passport holder, and Wu, a Singaporean of Chinese origin, supposedly had good ties with PNG politicians.

Under the deal, Taiwan's Foreign Ministry would send 30 million US dollars intended as aid to PNG to a joint account opened by Ching and Wu in the OCBC bank in Singapore.

Ching and Wu were to withdraw the cash only after talks on establishing diplomatic ties with PNG had succeeded, and had to return the fund to Taipei should the talks fail.

On September 14, 2006, Taiwan's Foreign Ministry remitted 29.8 million US dollars into the bank account - 200,000 US dollars had been deducted from the sum as a working fund for Ching and Wu.

In December 2006, Taipei questioned the pair's loyalty and decided to end the talks, asking them to return the money.

When Taiwanese diplomats took Ching and Wu from Taipei to Singapore to withdraw the money, Ching fled from a Singapore hotel and Wu was brought back to Taiwan to face prosecution.

Ching's whereabouts are unknown, and Wu is being investigated by prosecutors and barred from leaving Taiwan.

Taiwan's Foreign Ministry had kept the scandal secret until Thursday, when Singapore daily Lianhe Zaobao reported that Taiwan was seeking the return of the cash from Ching and Wu via a Singapore High Court.

Lianhe Zaobao said Taiwan's Foreign Ministry has successfully applied for an injunction from Singapore High Court to freeze Ching and Wu's assets.