Washington rejects claims of graft and sex scandals

PUBLISHED : Wednesday, 26 February, 1997, 12:00am
UPDATED : Wednesday, 26 February, 1997, 12:00am

US officials have dismissed allegations of corruption and sexual harassment at America's de facto embassy in Taiwan, but admitted sloppy accounting and other problems.

The administration yesterday said the man hired to run the American Institute in Taiwan was fired recently not because he revealed the alleged scandal, but for failing to do his job.

Allegations by dismissed institute director James Wood, published in the Taiwan media at the weekend, were 'overstated, based on highly questionable evidence, and often they are just plain wrong', State Department spokesman Glyn Davies said.

However, the department's prompt response to the scandal is unlikely to quell the growing controversy surrounding the institute.

The Justice Department is also investigating allegations that Mr Wood pressurised Taiwanese nationals to make donations to the Democratic Party.

Even the admission that he was fired for doing a bad job will bring embarrassment to President Bill Clinton, who was instrumental in getting the Arkansas businessman the job, despite his lack of diplomatic credentials.

The source of allegations of demands by institute officials for sex or cash in return for issuing visas to Taiwanese, could be traced to a former Taiwanese staff member at the institute, Mr Davies said.

The official, whose job was to investigate the backgrounds of visa applicants, was sacked in 1990 for misconduct, he said, and went on to make wide-ranging allegations of visas being sold for as much as US$25,000 (HK$193,250).

However, the spokesman said department officials charged with looking into his claims 'concluded that the accusations were baseless and may have been made with the specific purpose of discrediting honest officers'.

Only one case of sexual harassment by an institute official had arisen, Mr Davies said, and that was in 1989.

He said the probe failed to bear fruit after the employee denied the incident and the woman filed no charges.

Mr Davies admitted an independent audit of institute finances between 1992 and 1995 stated that US$5 million in visa fees could not be accounted for, but he denied this money had disappeared through fraud.

On Mr Wood's sacking, the spokesman said: 'The department decided Mr Wood's performance failed to meet the basic needs of US foreign policy.'