Chen denies involvement in Palau mystery fund

In a statement issued through his office, Chen disputed speculations that the reported US$41 million, which had been transferred from a now-defunct Palauan bank, the Pacific Saving Bank, to an unspecified bank outside Palau in 2005, had anything to do with him.

The statement reiterated Chen's denial that he had ever carried huge amounts of cash to other countries during his official overseas visits while he served as Taiwan's president from 2000 to 2008.

However, the statement said, Chen cannot rule out the possibility that Taiwan's foreign ministry, which arranged Chen's overseas visits, may have used Chen's plane to carry cash intended as grants for the host countries.

“The Foreign Ministry owes the country an explanation,” the statement said.

Noting that the Special Investigation Division under the Ministry of Justice has led a probe into Chen's alleged misappropriation of state funds for secret diplomatic works for two years, the press release said the country's Prosecutor General Chen Tsung-ming would have failed to do his duty if he cannot explain to the public where the fund came from and went.

Speculations that the fund is Chen's ill-gotten gains during his eight years in office have put the ex-president on the spot as he is prohibited by law from disclosing any information concerning secret diplomacy during his defense in court, according to the statement.

Ruling Kuomintang party lawmaker Chou Yi has claimed that Chen, who is appealing a conviction of alleged embezzlement of state funds, had carried US$40 million to Palau during his official visit to that Pacific country in September 2006 and had deposited the money in a local bank.

The lawmaker said that the fund, part of Chen's illegal gains, was then transferred from Palau to Chen's other overseas bank accounts.

The claims, which died down after Chou failed to substantiate them with evidence, gained some credibility after Palau President Johnson Toribiong confirmed in an interview with a local television channel, TVBS, on Monday that a fund of US$41 million had been remitted from his country's Pacific Saving Bank to an unspecified overseas bank in 2005.

That bank went bankrupt in 2007 after running up a debt of US$12 million.

Although Toribiong said he was not sure whether the fund, which was deposited into that bank one year before Chen's visit to Palau, has anything to do with Chen, Taiwanese media have suggested that there might be a connection.

Chen Yun-nan, a prosecutor who led the probe into Chen's case, said Monday that his office is looking into this information.

Chen Shui-bian and his wife Wu Shu-jen were each given a life sentence on Sept. 7 for corruption and money laundering charges by a Taipei court. They are both appealing the convictions.

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