THE CHINA POST | AP
TWO SENIOR TAIWANESE OFFICIALS resigned last week over the loss of millions of dollars in a failed attempt to lure Papua New Guinea to officially recognise Taiwan.
The government said Foreign Minister James Huang and Deputy Premier Chiou I-jen were leaving their posts.
The resignations follow revelations that Taiwan lost US$29.8 million in a failed 2006 attempt to establish ties with Papua New Guinea.
The money was intended as economic aid for PNG 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 PNG project and caused great damage and turmoil to the country, so I am resigning from my post," he said.
Huang and Chiou have acknowledged their involvement with the middlemen but denied any criminal wrongdoing. Their homes were searched early Tuesday for evidence linked to the fraud.
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.
President Chen Shui-bian 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.