Lee Teng-hui denies claim he used state funds to bankroll clandestine diplomacy Taiwanese President Chen Shui-bian received another slap in the face yesterday when former president Lee Teng-hui denied using state funds in secretive diplomatic missions during his term in office - contradicting earlier claims by Mr Chen. Prosecutors did not rule out the possibility they might question Mr Chen and his wife, Wu Shu-chen, again to check discrepancies in testimony from various witnesses. As part of his defence against allegations that he embezzled NT$36 million (HK$8.5 million) from the Special State Affairs Fund, Mr Chen said in August that Mr Lee had also used the fund to support secretive diplomatic missions. Taiwan has been engaged in clandestine activities since the 1970s as it attempts to stem defections to Beijing from its dwindling number of diplomatic allies. But Mr Lee told prosecutors the diplomatic missions were paid for with specially designated funds and did not require the use of the state fund, Taiwanese cable network TVBS reported. The former president was questioned at his residence on September 15, but the interview was only confirmed by the High Court Prosecutors' Office yesterday. The timing of the questioning coincided with a mass protest that saw more than 300,000 red-clad protesters encircle the Presidential Office and the president's nearby residence, urging Mr Chen to resign. A prosecutors' office spokesman said a prosecutor from the Black Gold Investigation Centre - Taiwan's equivalent of the Independent Commission Against Corruption - questioned Mr Lee on the use of the state fund during his term and whether secretive diplomatic missions had continued in Mr Chen's term. 'The prosecutor on this case questioned Mr Lee Teng-hui from 4pm to 8pm on September 15. It went very smoothly,' TVBS quoted the spokesman as saying. Mr Lee confirmed some diplomatic missions were passed on to Mr Chen's term because of unfulfilled contracts, such as one with Cassidy & Associates on improving the American-Taiwan relationship, which were financed by Taiwan's National Security Bureau during his term. He denied any knowledge of how the missions operated during Mr Chen's presidency. Mr Chen is under increasing pressure to step down over corruption allegations tied to his office and family. He has been accused of wrongly using receipts to account for how part of the state fund was spent. The fund is divided into secret diplomatic spending, which does not require receipts, and special funding. The law states the president must provide receipts for funds from the special pool. In August, Mr Chen acknowledged he had approved the use of bogus invoices to account for money paid to agents from the fund but said it was necessary because it was a secret fund. His wife was also questioned about allegations she provided some of the bogus invoices. They both denied having pocketed any money from the fund. Mr Chen has repeatedly declared his innocence and insisted he will see out his term, which ends in May 2008.