Sat, May 03, 2008 - Page 1 News List

Huang apologizes for PNG fund scandal

MISSING MONEYUS$30 million was sent to a bank account in Singapore to be used to establish ties with Papua New Guinea in 2006. No one knows what’s left

STAFF REPORTER , By Jenny W. Hsu, Shih hsiu-chuan, Mo Yan-chih and Jimmy Chuang

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.


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.

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