TARAWA, Kiribati - Harry Tong was planning to run for president of this tiny republic in the middle of the Pacific, so of course he appreciated the gesture made by an official from Taiwan. As Tong remembers it, the official placed a black satchel filled with cash on the coffee table in front of him.
It was late 2002, and Tong was meeting with a Taiwanese trade representative, Fu-tien Liu, whose government had expressed considerable interest in his presidential ambitions. Tong said Liu told him that the cash - $80,000, according to Tong's campaign manager - was a contribution to his campaign.
"Unbelievable," Tong recalls thinking. Then he told himself, quickly sliding the money over to his campaign manager, "Now we have a chance to compete."
But nagging at Harry Tong's mind was a fundamental question: Why on earth is Taiwan so interested in our little country?
The explanation for Taiwan's interest is both obvious and mystifying. Kiribati (pronounced "Kiribas") is the latest pawn in the decades-old diplomatic feud between China and Taiwan, in which the worth of a country is measured not so much by its gross domestic product as by its membership in the United Nations, something Taiwan has lost and desperately wants to regain.
Taiwan has since won full diplomatic relations with Kiribati, a hard-to-reach collection of coral atolls, population about 90,000, that straddles the equator just west of the international date line. It is one of 27 nations that recognize the "Republic of China."
How Kiribati became Taiwan's latest prize is a tale of two brothers who ran against each other for president, their rivalry becoming a proxy for a diplomatic battle between two Chinas.
And it is a story about money, about how one of the two Chinas managed to buy its way into this impoverished nation's favor, with as much as $8 million a year in aid and, critics contend, with satchels of cash for one brother and then the other.
Harry Tong, 53, narrowly lost his bid for the presidency in July to his younger brother, Anote Tong, who acknowledges receiving bags of campaign cash from outside the country last spring. Anote Tong, 51, won't say who gave him the money - he said he doesn't even know who some of the donors were - but he said he doesn't believe any of it came from Taiwan.
Anote Tong, however, says happily that money was the deciding factor in recognizing Taiwan.
"People accuse me of engaging in dollar diplomacy. In what country's diplomacy is there not some sort of gain involved?" said the president, who was in Taipei with his wife for a state visit, all expenses paid by Taiwan. "Had we told the people that this assistance had been offered and we had rejected it, then we would have been rejected by the people."
President Tong and his appointed Cabinet agreed in October to recognize Taiwan without public debate, announcing the decision after Tong signed the final agreement with Taiwan on Nov. 7. China cut its ties weeks later.
China regards Taiwan, an island of 23 million people off the southeast China coast, as a renegade province of the People's Republic, not a sovereign nation. It expends tremendous energy to keep other countries from recognizing Taiwan and international organizations from accepting Taiwan as a member.
Now, two Chinese embassies on Tarawa, one occupied only by caretakers from Beijing, the other flying the flag of the Republic of China, are little more than 100 yards apart, their occupants never meeting.
That Taiwan successfully wooed Kiribati was a rare setback for China. But the courtship also reflects how the roles of China and Taiwan have reversed in the past 30 years.
For more than two decades after Chiang Kai-shek set up his government-in-exile on Taiwan in 1949, the United States and the United Nations chose to recognize the Taiwan government as the legitimate representative of the mainland.
Taiwan lost its permanent seat on the U.N. Security Council to Beijing in 1971 and suffered another blow in 1979, when the United States normalized relations with Beijing and cut formal ties with Taipei.
Thus the United Nations and the United States affirmed the "one China" principle, which holds that there is one China, represented by Beijing, and that Taiwan is part of it.
Since then, with its strict insistence on the "one China" policy, Beijing has pushed this second China almost literally to the ends of the earth looking for friends, money in hand.
In Kiribati, Taiwan has found a place that certainly needs the money.
Under other circumstances, Kiribati would hardly seem much of a prize. Situated between Australia and Hawaii in the vast expanse of Oceania, the country is a string of coral atolls spread out over thousands of miles.
It was last of any strategic significance during World War II, when the Americans defeated the Japanese here in one of the bloodier - and, critics have said, unnecessary - battles of World War II, leaving thousands dead on both sides.
Today, the country they fought over has no farmable soil. Its only worthwhile asset is territorial fishing rights, and its only valuable export - phosphate from fossilized bird droppings - was exhausted 25 years ago.
An estimated 60 percent to 70 percent of the islanders are jobless or severely underemployed, and the per capita income is less than $1,000 a year.
Most people live without electricity or running water, their garbage is strewn in ubiquitous piles, and Tarawa's deceptively beautiful ocean lagoon is the island latrine.
With the population's average age at about 20, most of the jobless are young and have little to occupy their time. Some on the outer islands live by subsistence fishing, but many migrate to the only developed island, crowded Tarawa, looking for jobs that don't exist.
Young men line up on mornings for a chance at manual labor, such as hauling coconut meat when the occasional shipment comes in from other islands. A few scavenge for coral to sell to builders for about 80 cents a bag. Some can gain a posting on a merchant ship.
In families and extended families of as many as 10 members, it is not uncommon for one paycheck to support everyone. The rest of the young and old of Kiribati idle in the sweltering heat and shadows most days. Alcohol abuse is rampant.
Without generous foreign aid - roughly $50 million a year, mostly in in-kind contributions - Kiribati could hardly survive the independence it gained from Britain in 1979. But the allegiance that an independent Kiribati could offer was attractive to Taiwan, and Kiribati's poverty made that attainable.
If there was to be a Taiwanese courtship of Kiribati, Harry Tong would have been a sensible beginning for it.
Until recent years, the Tongs had been on good terms with China. Tong's father, a Chinese immigrant, had helped the Chinese get settled on the island when diplomatic relations were established in 1980. The Chinese ambassador occasionally invited the Tongs, including Harry and Anote, over for dinner.
The last dinner was a couple of years ago, after Harry Tong, a longtime member of Parliament, began calling for China to dismantle its satellite tracking station on Tarawa. China built the station seven years ago, ostensibly to monitor its satellite launches.
Defense analysts, U.S. officials and critics here argued that China might also be using it to spy on the Ronald Reagan Ballistic Missile Defense Test Site in the Marshall Islands, where the United States conducts tests of its missile shield program, which China opposes.
At the Tong family's final dinner together at the Chinese Embassy, Harry repeated his criticism of the station, and the Chinese ambassador pointedly reminded him of his heritage.
"He compared the Chinese people to one big tree," Harry Tong said. "When the leaves fall down, they end up by the root, which is China."
Instead, Harry Tong soon drifted closer to Taiwan.
The relationship might have begun in the spring of 2002, with a trip to nearby Fiji by Brian Orme, Harry Tong's longtime friend and campaign manager.
The Irish-born Orme, 72, left home as a teen-age merchant seaman and arrived in Kiribati in the late 1960s. Covered in tattoos from his merchant marine days, he is fond of drink and conversation, and might unsheathe a long knife to accentuate a point.
Orme said he met representatives of the Taiwanese trade mission in Fiji by chance. It would be a fortunate match of interests, he said: He was looking for funds for Harry Tong's presidential bid, and the Taiwanese trade representative, Fu-tien Liu, was intrigued to learn of Orme's connection to the future candidate.
Orme returned to Fiji on Aug. 19, 2002, at Taiwan's invitation and expense, this time with Harry Tong, whom Liu then introduced to members of a Taiwanese delegation at a regional conference.
On a subsequent trip to Fiji, "they came up with the money," Tong said, describing the satchel. "I couldn't believe it. I saw it was hard cash." Tong and Orme said they received two more bags the next spring, each containing $30,000. Orme said all of the money was spent on campaigning.
Liu asked for something in return April 17 last year during one of the bag pickups in Fiji, Tong said. He said Liu persuaded him to sign a memorandum of understanding that, if elected, he would recognize Taiwan. Copies were provided to a reporter.
Denial from Taiwan
In e-mail exchanges, Liu denied that Taiwanese money was given to candidates in Kiribati. He chose not to answer specific questions addressing the rest of Tong and Orme's account, including the memorandum, or whether he had met with Anote Tong before the election, except to say generally that Taiwan's policy is not to intervene in any country's domestic matters, including elections.
"This office or myself will not and did not provide money to certain candidates in the Kiribati election last year," Liu said in his most specific statements by e-mail last week. "The claims and related accusations you heard from someone are ridiculous and baseless. The motivating force behind it is very ill-minded."
Harry Tong, passed over by his own party in the jostling for president, switched parties to run for president in last year's July 4 election. Anote, who remained in Harry's old party, decided to run against him.
Anote Tong had not seemed the likelier of the two brothers to warm to Taiwan, but his party - Harry Tong's former party - had been critical of China's tracking station. When Anote Tong and two associates returned last spring from a trip to the Marshall Islands - another ally of Taiwan - with bags of cash, political opponents began speculating that Taiwan was backing him.
Harry Tong said he was among the suspicious. Harry had been reluctant about signing Liu's memorandum, and he and Orme thought the Taiwanese were hedging their bets.
Anote Tong said the cash from his trip to the Marshall Islands - $35,000 to $40,000 - came from friends, business interests and, in some cases, people he didn't know. He declined to identify the sources he did know.
"As far as I know," he said, "there was no funding by any foreign government."
Some news media accounts, including in China's state-run media, have since reported that Tong and his party received far larger sums, more than $1 million total, which the president denies. Harry Tong said the Taiwanese offered to "take care" of his family and that he thinks Anote also might have profited that way.
In Parliament in November, Harry Tong called for an investigation. He said he suspects his younger brother, whose party quashed the proposal, has something to hide: "He sold our country to the Taiwanese."
A graduate of the London School of Economics, Anote held forth in his second-floor presidential office recently in shorts, flip-flops and a short-sleeved shirt. He accused China of interfering in an earlier election last year and said, somewhat elliptically, that Taiwan had never had any "formal" contact with him before his July 4 victory.
Anote Tong said Taiwanese officials first approached him months after the election, in October, and that the only money they promised was for his people: $8 million a year for four years, mostly through projects such as upgrading an airport and possibly starting a fish-processing plant.
The figure equates to about $90 a year for each man, woman and child on Kiribati, and compares favorably to the $1 million to $2 million in annual aid from China. "It was a good package," Tong said.
Things moved quickly from there. Late on the evening of Oct. 24, just days before Tong's Cabinet would meet to approve the Taiwan offer, Chinese Ambassador Ma Shuxue heard what was coming, Tong said, and called him at home several times, into the early hours of the morning. Tong, angry, finally agreed to get on the telephone and had a brief, "heated" conversation.
"I slammed the phone down," Tong said, adding that the ambassador did not use "diplomatic language" in addressing him. "Maybe he was very nervous. I can understand that."
A senior Chinese diplomat then rushed down from Beijing in a last-minute effort to rescue the situation, Tong said. Tong had dinner with him, during which the topic of Taiwan glaringly never came up. After the meal, while returning from the toilet, Tong found himself cornered.
"So what do I say to my president when I get back?" the senior diplomat asked, leaving no doubt about what he meant. Tong said he replied with an obvious air of finality, "Give him my regards." The deal with Taiwan was signed days later.
In leaving weeks later, China dismantled the tracking station, left behind an unfinished sports stadium, pulled out six doctors on loan to the hospital and cut short the free university education some Kiribati students had been getting in China. Taiwan has agreed to fill the gaps left by China's departure, Anote Tong said.
"As far as the people of Kiribati are concerned, they don't really care whether it's Taiwan or China," he said, reflecting the sort of pragmatism refined from a century of foreign influence. "But they do care how it affects them, how it impacts their lives."
That Taiwan managed to turn Kiribati's poor position in the world to its advantage could be seen as an embarrassing diplomatic failure for China; Taiwanese officials feel full recognition from other countries in the United Nations, even if they're small countries, gives Taiwan something of a toehold on sovereignty.
But the wooing of Kiribati is a confirmation of China's near-complete success in its decades-long quest to isolate Taiwan on the international stage, impeding its relations with other countries and blocking its entry into bodies such as the United Nations and the World Health Organization.
The success of China's zealous pursuit of the "one China" policy is evident in microcosm even on Kiribati. Other foreign commissions here keep their distance from their new colleagues in the diplomatic corps.
"I haven't had any dealings with them," said one senior diplomat here, on condition of anonymity. "We don't go to their receptions, and they don't come to ours, because we don't invite them."
The awkwardness extends to Taiwan's reclusive neighbors at the former embassy complex. The Taiwanese diplomats have yet to see any of the Chinese caretakers residing there, and suspect they might be looking after more than their own buildings.
After years of watching China use its muscle to marginalize their island government, the Taiwanese are deeply suspicious that China will use whatever means necessary to undermine any of their diplomatic victories.
"We must still be careful. China is like an invisible hand," Taiwan's ambassador to Kiribati, Samuel Chen, said in a low, soft voice. "I've never seen their people because they always hide, hide in the dark. We are in the bright, but they are in the dark."