By Jane Rickards
Special to The Washington Post
Saturday, November 4, 2006; A18
TAIPEI, Taiwan, Nov. 3 -- The office of Taiwan's chief prosecutor announced Friday that President Chen Shui-bian's wife is being indicted on embezzlement and forgery charges, and said Chen himself is suspected of corruption but cannot be indicted because of presidential immunity.
The announcement, by Chang Wen-cheng, chief secretary of the High Prosecutor's Office, plunged Chen's beleaguered pro-independence presidency into doubt and led Taiwan's main opposition leader to demand Chen's immediate resignation. Chen's own Democratic Progressive Party -- whose support is key to his future -- demanded that he explain his role in the scandal but did not comment on appeals for his resignation.
The charges were the most serious so far in a cascade of corruption accusations leveled against Chen, his family and his aides over the last year. The accusations against Chen's wife -- and the suggestion that the president himself may be involved -- raised the scandal to the highest level of this self-governing island, placing it within the first family.
Chang said prosecutors believe the first lady, Wu Shu-chen, embezzled almost $450,000 over the last four years by using false receipts to claim expenses from a government slush fund used for secret diplomatic activities. Three former presidential aides -- Ma Yung-cheng, Lin Teh-shun and Chen Chen-hui -- were indicted on similar charges for what prosecutors said was collaboration with Wu in embezzlement.
There was no description of the slush fund. But Taiwan and mainland China frequently have been reported to pay money secretly to the governments of small countries in a bitter rivalry for diplomatic recognition.
Chang did not say specifically what crime the president was believed to have committed. But he declared, "The prosecutors have determined President Chen is suspected of involvement in corruption."
Chang said that, despite the determination, Chen will not be indicted immediately because, as president, he is constitutionally protected from criminal charges. If Chen resigns, is removed or otherwise leaves office, however, he can be charged, Chang told reporters. Chen's second four-year term runs out in May 2008.
Chen, who cannot seek a third term, made no comment Friday. But in the past, he has insisted he is innocent. His wife, Wu, also issued no comment but previously has denied the accusations against her.
The head of the opposition Nationalist Party and its likely next presidential candidate, Ma Ying-jeou, issued a statement calling on Chen to resign swiftly. "He has lost the people's trust and respect, and as he is burdened with scandals, he can no longer lead the people nor effectively represent the country," Ma said. "We urge him to resign as soon as possible. I also urge the ruling Democratic Progressive Party to be bold, brave and push the president to resign as soon as possible."
Vice President Annette Lu, another ardent pro-independence figure who would be Chen's successor in the event of his removal or resignation, was called back to Taipei from a trip in the provinces, a presidential official announced. No reason was given for the summons.
"This will be a major crisis for the president and the ruling party, but whether Chen will step down or not, we don't know," said Andrew Yang, an analyst with the Chinese Council of Advanced Policy Studies
Chen, a longtime champion of Taiwanese independence, has faced allegations of corruption and political bumbling for months. The turmoil has weakened his leadership and blunted his challenge to China, forcing him to trim the pro-independence rhetoric that boosted him to the presidency in 2000 and has been a thorn in China's side ever since.
The allegations have generated two recall attempts in the opposition-dominated legislature, unprecedented in Taiwan's young democracy. They also led to almost daily street protests in September and October, with the largest one in Taipei, the capital, attracting more than 300,000 demonstrators.
Chen's son-in-law, Chao Chien-ming, was indicted on charges of insider trading five months ago. Prosecutors recently cleared Chen's wife, Wu, in an earlier case in which she was suspected of using political influence in exchange for gift vouchers from a department store.
In response to a political uproar over those accusations -- including within his own party -- Chen last summer delegated much of his day-to-day authority to Premier Su Tseng-chang.
The prosecutor's office said in a statement that Wu and the three former aides, when confronted with evidence at the end of October, confessed to forging receipts.
According to the statement, when prosecutors questioned Chen the first time about Wu's receipts, he explained that the money had been used for three secret diplomatic missions. When questioned a second time, it said, Chen pointed to another three confidential diplomatic efforts.
Chang, who spoke at a news conference, said prosecutors believed that claimed expenses were legitimate for only two of the six diplomatic missions Chen described. The statement said investigators determined that one mission described by Chen appeared to be a fabrication while receipts for some of the others showed amounts higher than the actual costs.
Correspondent Edward Cody in Beijing contributed to this report.