TAIPEI, Taiwan (AP) – Taiwanese President Chen Shui-bian on Sunday apologized for causing political turmoil that hurt “the nation’s image,” but he denied prosecutors’ allegations that he was involved in embezzling money from a special fund for diplomacy.

The president also refused to resign in his first public comments since prosecutors indicted first lady Wu Shu-chen on embezzlement, forgery and perjury charges on Friday. She was accused of taking $450,000 from a special diplomacy fund in 2002-06.

Prosecutors said Chen could be implicated in the case, but he cannot be indicted as a sitting president.

The graft allegations have re-energized an opposition campaign to topple Chen, who has served for six rocky years and has 18 months left in his term. Thousands of protesters marched in the streets this weekend in Taiwan’s two biggest cities. They honked air horns and carried signs saying, “End Corruption.”

Chen said the accusations announced Friday were painful and felt like a “political death sentence.”

“How can Chen Shui-bian be that kind of person, collecting false invoices to embezzle money?” he said Sunday in an hourlong televised address from the Presidential Office.

He refused calls to resign immediately but said: “If my wife is convicted, then because the prosecutors believe my wife and I act together, I cannot escape. I’m willing to resign before my term is up.”

The president and his family have been dogged by corruption rumors for months, but the latest scandal blew up with Friday’s indictment.

Some 4,000 protesters gathered earlier Sunday to demand Chen’s resignation, and the deafening sound of blaring air horns rose from the crowd marching through downtown Taipei toward the wide boulevard in front of the Presidential Office.

“The prosecutor’s report was crystal clear,” said Tsai Wen-chih, a computer engineer. “Without concrete evidence, would any prosecutor dare to accuse the president of corruption?”

“Chen had better admit his errors,” said Peter Huang, a businessman. “The longer he tries to hang on, the more catastrophic his outcome will be.”

In his address, Chen denied that he or his wife pocketed money from the special diplomatic fund.

and complained that the regulations for the fund were “confusing and difficult to follow.” He then launched into a long, technical explanation about how the fund works, and he argued that the rules for using it needed to be more flexible.

Chen failed to convince the Nationalists, the biggest opposition party. The party’s spokesman, Huang Yu-chen, said: “It sounded like a lawyer’s, not a president’s defense. We still want him to resign immediately.”

Opposition lawmakers said they planned Monday to launch their third attempt to recall Chen. They made a similar attempt in June and in October, but failed to muster the required two-thirds majority.

The opposition is hoping that ruling party lawmakers will begin defecting to their cause and give them enough votes to pass the recall measure later this month. If the proposal passes, it would set up an island-wide referendum to determine Chen’s fate.

Already, the small pro-Chen Taiwan Solidarity Union announced its 12 lawmakers would be encouraged to vote for the recall measure.

Chen’s fate is in the hands of his Democratic Progressive Party, said Philip Yang, a political scientist at the elite National Taiwan University in Taipei.

“The party leadership has to decide whether they will allow DPP members to vote individually on the recall,” Yang said. “If you allow them to vote individually there will be defectors.”

After the president’s speech, DPP chairman Yu Shyi-kun said he was pleased with Chen’s pledge to quit if his wife is convicted.

“The president is extremely confident about his innocence,” Yu said.

AP-ES-11-05-06 1018EST

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