Thu, May 15, 2008 - Page 3 News List

Officials may have to return lost funds: official

By Ko Shu-ling  /  STAFF REPORTER, WITH CNA

Government officials may have to reimburse lost state funds if they are found to have been negligent in handling their duties, the head of the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

DGBAS Director-General Hsu Chang-yao (許璋瑤) made the remarks in response to questions on whether former minister of foreign affairs James Huang (黃志芳) and former vice premier Chiou I-jen (邱義仁) would have to take responsibility for US$30 million in government funds that went missing after being used in an initiative the two men led in 2006 to establish diplomatic relations with Papua New Guinea.

The money was remitted by the Ministry of Foreign Affairs in September 2006 to an account in Singapore jointly held by two middlemen brokering the deal.

Hsu said that if Chiou and Huang were found to be negligent, they would have to reimburse the US$30 million to the government in compliance with the Audit Law.

The whereabouts of the funds remain unknown. Chiou and Huang contend that the money was embezzled by the middlemen — Ching Chi-ju (金紀玖) and Wu Shih-tsai (吳思材) — who were commissioned to help set up ties with Papua New Guinea.

Ching, who has a US passport, is believed to be hiding in California. Wu, a Singaporean who held Republic of China citizenship until 2006, is being held incommunicado in Taipei.

The case was brought to light by Huang at a news conference in Taipei on May 1 following a report on the case by a Singapore-based newspaper a day earlier.

Huang said that the middlemen were introduced to him in 2006 by Chiou, then the secretary-general of the National Security Council, to help facilitate negotiations with Papua New Guinea.

Chiou has been banned by prosecutors from leaving the country since early last week. Chiou, Huang and then deputy minister of national defense Ko Cheng-heng (柯承亨) resigned from their government posts on May 6.

Meanwhile, the Democratic Progressive Party (DPP), which had earlier described the Papua New Guinea fund scandal as a botched diplomatic deal, yesterday urged the public to stop attacking secret diplomacy and defended the innocence of the three key government players.

DPP Secretary-General Lee Ying-yuan (李應元) told reporters after the party’s Central Standing Committee that the party had set up a task force to investigate the controversy and had interviewed Chiou and Huang, but not Ko, who is mourning the death of his father.

The task force yesterday briefed the committee on the first-stage investigation of the scandal. The report concluded that Chiou, Huang and Ko were innocent and they were only trying to secure one more diplomatic ally for the country.

Lee said that progress was made during the process, but the party regretted that the money had disappeared when Huang asked the two intermediaries, Ching and Wu, to return it.

The party will leave it to the judiciary to recover the money and appropriate blame, Lee said.

Lee dismissed allegations that Huang had said Chiou should be mainly held responsible for the incident.

He said “there was no such thing” and that Chiou, Huang and Ko trusted each other.

Expressing regret and apologizing for the failed attempt to forge an ally for Taiwan, Lee said the DPP would correct any wrongs if it had made mistakes, but he hoped the public would refrain from unnecessarily attacking the party.

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