US$30 million by claiming that they could help Taiwan broker formal ties with Papua New Guinea (PNG). Vice Premier Chiou I-jen yesterday said he would take full responsibility for trusting the two men, Ching Chi-ju and Wu Si-tsai, to act as middlemen in the talks between the two countries.
"I feel like I am to blame for this incident, and I take the highest responsibility," Chiou told a press conference. "It was hard already to form diplomatic ties."
Chiou said Taiwan has already taken legal actions to have the pair's bank account in Singapore frozen.
The US$30 million, which was meant to be cash aide for PNG, had been remitted to the bank account, but it remained uncertain how much was left in it, Chiou said.
Ching, who owns both Taiwan and US citizenships, is missing. He is a former vice chairman of the Taipei-based BES Engineering Corp.
Wu, a Taiwan citizen from Singapore, has been banned from leaving Taiwan amid an investigation by prosecutors.
The news broke after a Singaporean newspaper obtained court documents concerning the legal actions that Foreign Ministry had taken in Singapore against the duo.
Foreign Minister James Huang apologized to the nation over the scandal.
But he stressed that it was not his ministry that was at fault, blaming the people to whom the vice premier had entrusted the mission.
According to Chiou, a close friend of his in 2006 introduced him to Ching, who was believed to be able to broker diplomatic ties between Taiwan and PNG.
At the time Chiou was secretary general of the National Security Council.
Chin then linked up with Wu to act as middlemen in the under-the-table talks between the two countries.
After the money had been remitted to their bank account, the Taiwan side started to feel something wrong in early 2007.
Chiou said he had tried to contact Chin through various channels, but failed to get a response from him.
Chiou did not identify the friend that introduced him to Chin, but said President Chen Shui-bian also knew his friend.
Although Chen was told that some actions were being taken to try to establish ties with PNG, Chiou maintained that the president was not aware of all the details.
Chiou said the remitting of the money did not need the president's authorization.
Legislators from the Kuomintang demanded a full probe into the scandal to see whether Chiou was involved in pocketing the money.
KMT Legislator Wu Ching-chi alleged that Chiou was using secret diplomacy to embezzle from the national coffers.
While taking full responsibility, Chiou said he would not choose to resign, because it wouldn't be of any significance now that his term would end in less than three weeks.
He said he will fully cooperate with any investigation.
"I apologize to the people for what happened ... we have exhausted all means possible to resolve the matter privately to avoid damaging Taiwan's image and diplomatic efforts," said Foreign Minister Huang.
But he insisted that Taipei had not sought to lure allies with "checkbook diplomacy," insisting the money was to be used for development projects in the poor island nation.
"Our diplomatic situation is very difficult and we will not give up any chance to improve it ... We stopped (the PNG plan) after we evaluated that it did not meet the conditions for long-term, stable ties," he said.
Only 23 countries in the world formally recognize Taiwan over China. Beijing still sees the island as part of its territory awaiting reunification, if necessary by force.
"Taiwan is a small country that has suffered diplomatic isolation in the past few decades, so this has a tremendous adverse impact on our international image," Raymond Wu, a former government official and a professor at Fu-Jen Catholic University in Taipei, was cited by Reuters as commenting on the latest scandal.
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