diplomatic failure?

Taiwan loses millions in diplomatic bungle
from CNN
* Story Highlights
* Taiwan seeks $30M lost in an apparent multi-million dollar diplomatic fraud
* Money intended for bid to earn diplomatic recognition from Papua New Guinea
* Taiwan seeks Ching Chi-ju, allegedly involved in the affair, missing since 2005
* Deputy Premier says Taipei doesn’t know what happened to the money

TAIPEI, Taiwan (AP) — Taiwan is seeking one of its citizens for his alleged role in an apparent multimillion-dollar fraud involving a failed attempt to lure Papua New Guinea to transfer diplomatic recognition from rival China, two senior officials said Friday.

Foreign Minister James Huang and Deputy Premier Chiou I-jen both made dramatic television appearances to discuss their roles in the affair after Singapore’s Lianhe Zaobao newspaper reported Taiwan was suing Ching Chi-ju and another Taiwanese man to recover $29.8 million from a Singapore bank account under their control.

The diplomatic bungle underscores the seamier side of the no-holds-barred struggle between Taiwan and Beijing to curry favor among potential foreign allies. The two sides split amid civil war in 1949, and Taipei is fighting a desperate rearguard action to bolster its stable of overseas partners as a way of asserting its claims to sovereignty.

In their televised appearances, Huang and Chiou said Ching has been missing since December 2006, when according to Taiwan’s Liberty Times newspaper, a Taiwanese Foreign Ministry official accompanied Ching and partner Wu Shih-tsai to Singapore to withdraw the money from the account.

Chiou said Friday he doesn’t know the fate of the money. “I don’t know whether it is still there,” he said.

Added Huang, “I don’t know if the money went to Papua New Guinea.”

Chiou said the affair began when an unnamed friend introduced him to Ching as a man who could deliver Papua New Guinea to the Taiwanese diplomatic column. He said after he introduced Ching to Huang, it was decided to go ahead with efforts to try to convince it to abandon Beijing.

Citing papers Taiwan’s government filed last month in a Singapore court, Lianhe Zaobao reported Taipei authorized Ching and Wu to act as intermediaries with Papua New Guinea authorities in September 2006, and it wired $29.8 million into an account they controlled.

However, the court papers showed by December of that year the Taiwan government had concluded the efforts would not succeed, and demanded the return of the money, the newspaper said.

In his remarks Friday, Huang apologized over the affair, saying it was unfortunate it had been revealed. He said the money delivered to Ching and Wu was meant to be given as economic aid to the Papua New Guinea government, providing it went ahead and switched its diplomatic recognition to Taipei.

Since Taiwan and China split nearly 60 years ago they have engaged in an all-out contest to win diplomatic allegiance from countries around the world.

In recent years, Chinese economic enticements have helped reduce the number of Taiwan’s allies to only 23, most small and impoverished nations in Latin America, Africa and the South Pacific. China has relations with more than 170 countries.

Huang said Taiwan is now looking for Ching, though he did not specify when the efforts to find him had begun. Chiou said the government has filed criminal charges against both Ching and Wu.

According to Taiwan’s Central News Agency, Wu is on the island but not in police custody.
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Taiwan manhunt over missing $30m
From BBC
Officials in Taiwan are investigating how $30m (£15m) of public money went missing during a failed bid to secure diplomatic ties with Papua New Guinea.

Deputy Prime Minister Chiu I-jen made a televised apology after the case came to light this week.

He said two men hired to broker a deal with PNG vanished in 2006 – along with the money – and were now being hunted.

China regards Taiwan as part of its territory, and the island often courts small nations in a bid for recognition.

‘Biggest responsibility’

The Papua New Guinea affair was exposed by the Chinese-language Singaporean newspaper Lianhe Zaobao.

It reported that Taiwan had begun legal proceedings to recover the assets, which were originally deposited in a Singaporean bank account.

The Taipei government, however, now has no idea where the money is.

Mr Chiu apologised on TV for the incident and later pledged to bear the brunt of responsibility.

“I feel very much to blame for such an incident, and I will take the biggest responsibility,” he said.

He declined to step down though, saying he has only a short time left in office and therefore his resignation would be “too pretentious”.

Long-running rivalry

The Taiwanese Central News Agency reported that the $30m was intended as a deposit for negotiating a “technical aid programme” with the South Pacific nation.

Officials paid the money into a Singapore bank account held jointly by Wu Shih-Tsai, an ethnic Chinese in Singapore, and Taiwan-based Ching Chi-ju, who holds a US passport.

The deal fell through, but the pair have not refunded the money. They are now being sought on charges of embezzlement.

Both China and Taiwan are often accused of using chequebook diplomacy to establish political friendships, especially in the South Pacific, Caribbean and parts of Africa.

The rivalry stems from the Chinese civil war.

After the communist victory in 1949, their defeated foes, the Kuomintang, fled to Taiwan and set up a rival government.

Initially recognised by the UN and many Western governments as the legitimate rulers of China, Taipei lost its status to Beijing during the 1970s.

Beijing now opposes any moves for greater recognition of Taiwan as a separate entity, and fewer than 30 nations have formal diplomatic ties with Taipei.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/asia-pacific/7380783.stm

Published: 2008/05/02 15:11:21 GMT

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