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Outgoing Taiwanese President Chen Shui-bian's  government has lost US$30 million it paid two men who said they could lure Papua New Guinea into becoming a diplomatic ally of Taiwan.
The scandal emerged yesterday, 18 days before Mr Chen steps down as president, after a Singaporean court granted an injunction at Taiwan's request to bar two Taiwanese businessmen from disposing of assets worth about US$30 million in the city state.
The two - identified as Ching Chi-ju,  a US passport holder, and Wu Shih-tsai, who is also a Singaporean citizen - claimed they could secure the forging of ties between Taiwan and PNG in exchange for US$30 million. The Pacific Island nation recognises Beijing, not Taipei.
Taiwan's foreign ministry paid the money in August 2006 into a bank account the pair had set up in Singapore. The men did not deliver on their pledge, and the ministry has been unable to get the money back.
Taiwanese Vice-Premier Chiou  I-jen  admitted yesterday  that he had hired the two to do the job.
'I believe I should be the one to take the blame for this incident, and I must shoulder full responsibility,' he said at a news conference in Taipei.
Mr Chiou said a friend, with whom Mr Chen was also familiar, had introduced him to the two brokers.  Believing that they could indeed do the job, he had instructed Foreign Minister James Huang Chih-fang  to contact the pair to make arrangements to pay the money.  The instruction was given when Mr Chiou was secretary general of the island's National Security Council.
Mr Chiou, who refused to identify the friend, said the ministry had remitted the funds to the two in Singapore at their request. But after six months it grew suspicious and tried in vain to contact the men.
He said he had no idea whether the money was still in Singapore.
Mr Chiou said he should have resigned to take responsibility for what had happened  but thought that doing so now would be pretentious given that he, Mr Chen and the rest of the government will step down on May 20.
Mr Huang apologised publicly yesterday for losing the money and said he  shared  responsibility for what had happened.
He said he had originally asked that the money be paid into the Singapore account only after the official ties were forged with PNG, but he compromised after the men insisted that the funds be sent in advance.
He said people claiming to represent PNG's government had talked with him but did not produce official identification. At the end of 2006, he had learned from the then Taiwanese premier that it would be impossible for the two sides to forge official ties. He had then asked the two to return the money, but they had refused.
The money had come from his ministry's confidential budget - funds whose use it does not need to account for.
Ministry officials said Taiwanese diplomats had later tracked down Mr Ching in Singapore and taken him to the bank to withdraw the money, but that he had fled from a hotel. He has not been found since.
Another man, surnamed Wu, had been arrested last month when he returned to Taiwan but a court had released him for lack of evidence, while ordering him not to leave the island.
Taiwan has official ties with just 23 countries as a result of a diplomatic squeeze by Beijing.



Taipei loses US$30m to pair in PNG ties scandal