Taiwan presidential candidate clear of graft

TAIPEI, Aug 14 (Reuters) Taiwan presidential candidate Ma Ying-jeou was cleared of all corruption charges today removing a huge obstacle to his opposition Nationalist Party's 2008 election bid as it pushes for closer ties with China.

Scores of Ma supporters camped outside Taipei District Court cheered ''Come on, Ma Ying-jeou'' and waved Nationalist Party flags after the verdict was announced.

''Ma Ying-jeou is innocent as evidence has shown,'' one of Ma's lawyers told reporters after the announcement. ''We feel happy winning the case.'' Ma, a former mayor of Taipei traditionally known for his clean image, was charged in February on suspicion of diverting about T.176 million (339,000 dollars) in special government funds into his personal account every month for about five years.

In July, Taiwan prosecutors pressed additional charges, including breach of trust.

The case also had shown Ma to be human, said Steve Chen, director of the Conflict Study and Research Centre at Chang Jung Christian University in Taiwan.

''He was portrayed as almost equal to God, like he can walk on water,'' Chen said. ''This (case) will stop that kind of image. He is just one of the people.'' Ma, who had said he would run for office even if found guilty, stepped down as chairman of the main opposition Nationalist Party following the indictment but always denied wrongdoing.

The case has been closely watched, with analysts saying that his presidency could help thaw today's icy relations with China, which views Taiwan as sovereign territory. If Ma had been found guilty, it would have hurt his chances of election significantly.

Ma's faction of the Nationalist Party, which once ruled all of China and governed Taiwan through 2000, favours closer ties and more open trade with China which has claimed sovereignty over the island since the end of the Chinese civil war in 1949.

China has vowed to bring the island back under mainland rule, by force if necessary.

Ma is running against ruling Democratic Progressive Party candidate Frank Hsieh, who favours more distance from Beijing.

Prosecutors are now probing Hsieh for any history of corruption.

Ma's case is one of a recent string in Taiwan involving allegations of improper use of government funds by politicians.

Current President Chen Shui-bian, who must step down in May 2008 due to term limits, faces financial scandals involving his wife, son-in-law and former aides.

REUTERS SBA ND0826