Three resign over Taiwan diplomatic scandal

TAIPEI, Taiwan (AP) -- Three senior Taiwanese officials resigned Tuesday over the loss of millions of dollars in a failed attempt to lure Papua New Guinea to officially recognize Taiwan.

Foreign Minister James Huang, Deputy Premier Chiou I-jen and Vice Defense Minister Ko Cheng-heng said they were leaving their posts.

While the resignations had little practical impact -- the entire government leaves on May 20 when President-elect Ma Ying-jeou is inaugurated -- they underscore the depth of the Papua New Guinea scandal, the most severe during outgoing President Chen Shui-bian's eight years in office.

The resignations follow last week's revelations that Taiwan lost $29.8 million in a failed 2006 attempt to establish ties with Papua New Guinea.

The money was intended as economic aid for Papua New Guinea, providing it switched its recognition from rival China.

It was given to two middlemen in 2006 on the assumption they could induce the impoverished Pacific nation to abandon Beijing. The attempt was abandoned after only several months, when Taiwanese authorities concluded they could not convince Papua New Guinea to cross over into the Taiwanese diplomatic column.

One of the middlemen, Ching Chi-ju, has since disappeared, along with the money.

Announcing his decision Tuesday, Chiou said he was deeply sorry for his role in the fiasco.

"I have trusted the wrong people with the Papua New Guinea project and caused great damage and turmoil to the country, so I am resigning from my post," he said.

Huang, Chiou and Ko have acknowledged their involvement with the middlemen but denied any criminal wrongdoing. Their homes were searched early Tuesday for evidence.

The diplomatic bungle underscores the seamier side of the no-holds-barred struggle between Taipei and Beijing to curry favor among potential foreign allies.

The two sides split amid civil war in 1949. Taipei is fighting a desperate rearguard action to bolster its stable of overseas partners as a way of asserting its claims to sovereignty.

The president also apologized for the affair earlier Tuesday, saying it had brought disrepute to Taiwan.

"I am deeply sorry about how the Papua New Guinea project has hurt the image of the country and the government," Chen said.

The president also said he had no part in the execution of the project.

"I neither directed nor participated," he said.

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