Taiwan deputy quits after $30M goes missing

TAIPEI, Taiwan (AP) -- Taiwan's vice-premier quit the ruling party Monday to take responsibility for a diplomatic bungle that cost the government millions of dollars.

Chiou I-jen's announcement came three days after he acknowledged arranging for the Foreign Ministry to transfer $29.8 million to a Taiwanese man acting as intermediary in a deal to try to get Papua New Guinea to officially recognize the formerly China-ruled territory.

Both the man, Ching Chi-ju, and the money have since disappeared.

"I feel deeply ashamed in the face of my country and people," Chiou said in a brief statement. "In addition to helping with judicial investigations, I will withdraw from my beloved Democratic Progressive Party."

After questioning Chiou on Monday, prosecutors barred him from leaving Taiwan pending a corruption probe.

"I believe the investigations will prove my innocence," Chiou told reporters, adding he did not take any bribes.

Foreign Minister James Huang said Friday that the missing funds were intended to be used as economic aid for Papua New Guinea, once it agreed to switch diplomatic relations from China to Taiwan.

The effort was abandoned after only a few months in late 2006 after the Taiwan government concluded Papua New Guinea was unlikely to do so.

Taiwan and China have been engaged in fierce competition to win diplomatic allies since the two split amid civil war nearly 60 years ago.

China, which considers Taiwan part of its territory, has used its rising economic clout to systematically reduce the number of Taiwan's allies.

In turn, Taiwan has tried to use economic enticements to lure some of them back and to maintain the ones it has. E-mail to a friend

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