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By Jane Rickards
Special to The Washington Post
Friday, November 3, 2006; 7:58 AM

TAIPEI, Nov. 3 -- The wife of Taiwanese President Chen Shui-bian is being indicted on embezzlement and forgery charges, the country's chief prosecutor said Friday, and Chen himself is suspected of corruption but cannot be indicted because of presidential immunity.

The announcement plunged Chen's already beleaguered presidency into doubt and led Taiwan's main opposition leader to demand an immediate resignation. Chen's own Democratic Progressive Party -- whose support is key to his future--did not reveal its stand immediately.

It was the most serious charge so far in a cascade of corruption accusations leveled against Chen, his family and his aides over the last year. Chang Wen-cheng, chief secretary of the High Prosecutor's Office, said prosecutors believe 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 presidential aides were also indicted on similar charges.

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, 55, 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 terms runs out in May 2008.

The head of the opposition Nationalist party, 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."

Vice president Annette Lu, who would succeed Chen for the rest of his term, was called back to Taipei from a trip in the provinces, the presidential official announced. No reason was given for the summons.

Correspondent Edward Cody in Beijing contributed to this report.