Cablegate: Taiwan Prosecutors Detain Former President Chen's

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OO RUEHCN RUEHGH
DE RUEHIN #1545 3051009
ZNR UUUUU ZZH
O 311009Z OCT 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0240
INFO RUEHBJ/AMEMBASSY BEIJING 8691
RUEHGP/AMEMBASSY SINGAPORE 7485
RUEHUL/AMEMBASSY SEOUL 9851
RUEHKO/AMEMBASSY TOKYO 0317
RUEHCN/AMCONSUL CHENGDU 2879
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RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHHJJAA/JICPAC HONOLULU HI
RUEKJCS/SECDEF WASHINGTON DC
RHHMUNA/USPACOM HONOLULU HI

UNCLAS TAIPEI 001545

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL TW
SUBJECT: TAIWAN PROSECUTORS DETAIN FORMER PRESIDENT CHEN'S
TOP ADVISOR CHIOU I-JEN

REF: TAIPEI 0626

SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY.

1. (SBU) Summary: Former Vice Premier Chiou I-jen today
(Oct. 31) became the latest Taiwan political figure to be
detained on alleged embezzling charges. Chiou was former
President Chen Shui-bian's top advisor and was a founding
member of the Democratic Progressive Party (DPP). Chiou's
arrest does not help the DPP and comes at a sensitive time as
Taiwan prepares PRC Association for Relations Across the
Taiwan Strait (ARATS) Chairman Chen Yunlin's visit next week
(Nov. 3-7), which the party plans to protest. End Summary.

2. (SBU) The Special Investigation Division of Taiwan's
Supreme Prosecutor's Office apprehended Chiou on October 31
to prevent him from colluding with other accomplices in a
case prosecutors uncovered while investigating
money-laundering activities involving Chen Shui-bian's
family. As Secretary-General of the National Security
Council in 2004, Chiou reportedly lied to Taiwan's Ministry
of Foreign Affairs (MFA) and requested $500,000 for
"operation Anya" although the operation had already been
terminated. MFA issued Chiou traveler's checks and Chiou
cashed some of the checks in a casino overseas. Prosecutors
suspect Chiou remitted some money into overseas bank
accounts. Though unclear, "operation Anya" may involve MOFA
funds used to support Taiwan's African and Latin American
allies.

3. (SBU) This is not Chiou's first entanglement involving
MFA funds. Last spring, Chiou took responsibility for the
botched attempt in 2006 to get Papua New Guinea to switch its
diplomatic allegiance from China to Taiwan (reftel). Then
Secretary-General of the National Security Council, Chiou
introduced middlemen Ching Chi-ju and Wu Shih-tsai to then
Foreign Minister James Huang. Taiwan's Ministry of Foreign
Affairs commissioned the middlemen to negotiate a deal to win
diplomatic recognition from Papua New Guinea but talks broke
down and the money vanished. Chiou admitted his involvement
in the case in which the MFA transferred $30 million to the
middlemen's accounts in Singapore. Chiou accepted
responsibility in the debacle, resigned as vice premier in
May - before former President Chen's term ended - and quit
the DPP. Huang and former Vice Defense Minister Ko
Cheng-heng, who also was involved in the scandal, also
resigned from their posts. While Ching remains at large, the
Taipei District Court on October 23 sentenced Wu to two years
and four months in prison for forging bank records and making
false accusations. Wu has the right of appeal.

4. (SBU) Chiou's arrest comes as prosecutors appear to be
closing the net on Chen Shui-bian. According to local press
reports, prosecutors plan to wrap up the Chen case in late
November.
SYOUNG

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