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Huang apologizes for PNG fund scandal

Minister of Foreign Affairs James Huang bows in apology at a press conference in Taipei yesterday over the disappearance of diplomatic funds intended to facilitate ties between Taiwan and Papua New Guinea. PHOTO: CHIEN JUNG-FONG, TAIPEI TIMES

Minister of Foreign Affairs James Huang (黃志芳) and Vice Premier Chiou I-jen (邱義仁) apologized yesterday for the disappearance of US$30 million purportedly pocketed a year and a half ago by two brokers who had been expected to help forge diplomatic relations between Taiwan and Papua New Guinea (PNG) in 2006.

The intermediaries were supposed to hand over US$29.8 million that Huang described as “foreign aid” to the Papua New Guinean government once the country agreed to dump Beijing for Taiwan.

The deal broke down at the end of 2006 when the Ministry of Foreign Affairs concluded that bilateral ties would not be sustainable.

The government has no idea what happened to the money, which was wired to a joint account held by the two brokers at the OCBC Bank in Singapore.

One of the men, Wu Shih-tsai (吳思材), a Singaporean national, is in Taiwan and under travel restrictions, but his partner Ching Chi-ju (金紀玖), a naturalized US citizen, is still at large.

A ministry official said Wu has given mixed accounts of the funds and refused to provide an up-to-date bank statement to show how much money is left in the account.

“I know how this scandal has tarnished the image of the ministry and the nation and this is precisely why the ministry did not go public with the information when it first occurred,” Huang told a press conference yesterday.

He said he would shoulder all responsibility for the scandal but could not step down immediately because he had “other important matters to take care of” before he could resign.

The ministry had made numerous attempts to retrieve the money but was finally forced to seek legal recourse last month, Huang said.

He repeatedly said the scandal was not a result of “checkbook diplomacy” and pleaded with the public to trust the ministry’s professional judgment despite the blunder.

The scandal came to light on Thursday morning when a Singaporean newspaper reported the ministry had requested that a court in the city-state investigate the bank account.

The Straits Times reported yesterday that the Singaporean High Court had issued an injunction at Taiwan’s request to prevent the two men from disposing of the remainder of the money in the account.

The Chinese-language Liberty Times (the Taipei Times’ sister paper) reported yesterday that the deal originated in August 2006 when Chiou, then National Security Bureau chief, told Huang that he had connections that could help Taiwan rekindle relations with PNG.

The connections were Wu and Ching, who were introduced by a “well-trusted friend” of Chiou’s.

The Liberty Times said the two men were supposed to return the entire sum to the ministry if the deal fell through. But when Taiwan withdrew from the negotiations, Ching allegedly reneged on his word.

“We have been trying to track Ching down for the past year and a half. We have even dispatched people to visit his wife in Los Angeles several times to determine his whereabouts,” Huang said.

Huang said he was not sure if Ching had been listed as a missing person in the US or how much assistance could be expected from Washington.

He would not say whether there were more “secret diplomacy” projects under way because this was “a confidential matter.”

The missing money was part of the ministry’s annual budget, he said.

Huang said President Chen Shui-bian (陳水扁) had been informed of the arrangement from the beginning, but was never directly involved in the matter.

Chiou remained tight-lipped yesterday about the “friend” who introduced the pair to him, saying, “I will bear the greatest responsibility [for the scandal.]”

Chiou said the go-between was a friend whom he “trusted very much,” and that was why he decided to try to establish ties with Papua New Guinea as Ching suggested.

“The friend and I have known each other for years and we have established a trusting relationship ... I extended the trust to Ching, and that was my fault,” Chiou said.

Chiou said he didn’t ask security agencies to run background checks on the two brokers because of his trust in his friend. He said Chen also knew the friend.

At a press conference at the Government Information Office, Chiou said he felt “guilty” over the incident and apologized to the public.

He said he thought there might be a chance for Taiwan to talk to Papua New Guinea about diplomatic ties after meeting Ching in 2006 and so he introduced Ching to Huang.

He said he had no idea where the missing funds were or how much was still in the account in Singapore.

“I will prepare for the worst,” he said.

“As far as I know, there was no corruption or irregularity involved. I will cooperate with the judiciary in its investigation and accept both judicial and political responsibility,” Chiou said.

He said he would not resign because there were less than 20 days before the administration hands over power to the incoming Chinese Nationalist Party (KMT) government on May 20.

The KMT caucus accused Chiou yesterday of bypassing formal procedures in seeking ties and demanded the Special Investigative Unit investigate the case.

KMT Legislator Chang Hsien-yao (張顯耀) said the Prosecutor General’s Office should initiate an investigation immediately, and the legislature’s Diplomacy and National Defense Committee would also examine government budgets for other secret diplomatic efforts.

“The two middlemen are friends of Chiou, and the case was arranged by the National Security Council without following formal procedures. Chiou should be held responsible for the nation’s loss,” Chang said at the caucus’ office.

The Democratic Progressive Party (DPP) caucus said that it supported Chiou’s decision to bear responsibility for the missing funds.

“It reflects the fact that there are always difficulties and obstacles in terms of Taiwan’s diplomatic efforts,” caucus whip William Lai (賴清德) said. “I hope that the same mistakes will not be repeated after the KMT takes power.”

Lai mentioned Papua New Guinea’s three-day diplomatic relationship with Taiwan in 1999, when Taichung Mayor Jason Hu (胡志強) was minister of foreign affairs. Hu helped Papua New Guinea financially, but the country then terminated the relationship immediately.

“We could not have imagined that somebody would have done this, betray their own country,” Lai said.

Minister of Foreign Affairs James Huang (黃志芳) spent five hours at the Taipei District Prosecutors’ Office yesterday afternoon explaining why the ministry decided to employ Chin and Wu as brokers.

Prosecutor Huang Mo-hsin (黃謀信) said that the minister visited Prosecutor-General Wang Tien-sheng (王添盛) yesterday morning and told him that he would help prosecutors investigate the case so he decided to summon the minister in the afternoon.

Chiou was also summoned for questioning at 10:30pm last night.

 ADDITIONAL REPORTING BY CNA
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