CAMPBELL: For months now Taiwan has been rocked by a corruption scandal as complex and bizarre as any soap opera. Tonight we go behind the scenes of this long running drama and meet its larger than life characters – including an Australian woman who’s vowed to bring down the President.

It’s Taiwan’s National Day and the government is showing off its miliary might. China has a thousand missiles pointed at Taiwan, but today the President’s showing he’s got a long range missile too.

Chen Shui-bian is trying to look tough in his final months in power. Since 2000 he’s taken a muscular stance against China’s threat, asserting Taiwan’s independence from mainland rule.

CHEN SHUI-BIAN: [SUBTITLE] The government and 23 million people of Taiwan do not intend to engage in an arms race with China. We only hope to build a strong national defence capability and increase our preparedness.

CAMPBELL: But six and a half thousand kilometres away on Australia’s Gold Coast, is a far more troublesome opponent. Ligi Li is a Taiwanese-Australian fashion designer based at Sanctuary Cove. She is frail from a recent accident and nervous about travelling, never leaving home without her two female bodyguards – yet she’s done more damage to Chen Shui-bian then China’s entire military arsenal.

LIGI LI: I feel very proud of myself. I am strong enough, brave enough to say go down the President Chen Shui-bian. He is a liar.

CAMPBELL: Inside her living room is the smoking gun of Taiwan’s corruption scandal, a pile of receipts from the mother of all shopping sprees.

LIGI LI: We gave all the receipts to Chen Shui-bian’s wife through my cousin and they use it for a, you know like exchange for money, for cash.

CAMPBELL: The receipts have already led to the President’s wife being charged with fraud and they could even see Chen Shui-bian in the dock when he steps down in May.

LIGI LI: He promised to take us to a bright future, a better future and he himself is so corrupted. I cannot tolerate that.

CAMPBELL: Chen Shui-bian’s election sent shockwaves in Taiwan and the region. For half a century, these islands had been ruled by the KMT, a party of Chinese nationalists who fled the mainland after the communist revolution.

Chen was the first opposition politician to come to power and the first committed to full independence from China. It’s been a turbulent reign with a faltering economy and increasing tensions with the mainland. Chen was only narrowly re-elected in 2004 after an assassination attempt his opponents claimed he staged for sympathy, but his troubles really began when Ligi Li went shopping.

During frequent business trips staying in the Hyatt Hotel, she spent a quarter of a million dollars on items ranging from accommodation to wedding banquets to diamond rings. And there were smaller items like ipods, underwear, even mosquito zappers for her Gold Coast villa.

LIGI LI: [Looking at rings] How much is that one?

SHOP ASSISTANT: This one is 300,000.

CAMPBELL: One day her cousin asked if she could have all the receipts to give to the First Lady.

LIGI LI: Originally my cousin, Li Pi-Chun told me the President’s wife is collecting all the unwanted invoices for charity.

CAMPBELL: Anywhere else that would seem a strange request but not in Taiwan. You see people here are passionate about keeping receipts. The reason is that government holds regular receipts lotteries to discourage the black economy. Now if your receipt numbers come up in newspaper advertisements, you can win tens of thousands of dollars so people not only collect receipts, many give them to charities so they’ll have a chance of cashing in big time.

But it turned out the president’s wife wasn’t colleting for charity. Wu Shu-Chen who is wheelchair bound from an accident, was collecting receipts for herself. What’s more she was claiming reimbursement for them, saying they were items she had bought as gifts for diplomats.

So you found out the President’s wife was actually claiming money from your receipts.

LIGI LI: Right, right. They love Hyatt Hotel’s invoices – it’s exactly presidents’ specification, you know meet their dining, wining dignitaries standard. I started to doubt about, something is fishy so I questioned my cousin.

CAMPBELL: Her cousin told her not to worry.

LIGI LI: You know she told me the President, he has absolute power and we have government machine. Why you have to worry about?

CAMPBELL: But Ligi Li did worry. She asked the hotel to reprint all the receipts and amid a blaze of publicity, took them to the prosecutor’s office by the suitcase load. Sure enough she matched the receipts the First Lady had lodged as her own, right down to the mosquito zappers. The news electrified Taiwanese politics.

JOANNA LAI: Ligi inadvertently triggered the whole chain of event. If there is a tip of an iceberg, her receipts were the tip of the iceberg.

CAMPBELL: Joanna Lai is a veteran of the rough and tumble of parliament such as this recent stoush in which she was attacked by Government MPs.

JOANNA LAI: I had been pushed on the floor, dragged down, people dragged my hair. I had my finger broken.

CAMPBELL: But it wasn’t just the KMT led opposition that took up the fight, many of the president’s own supporters turned on him too.

SHIH MING-TE: [SUBTITLE] This was the most painful decision of my life.

CAMPBELL: Shih Ming-Te was a close friend and comrade of Chen’s in their struggle to bring democracy to Taiwan. Known as Taiwan’s Nelson Mandela, he spent 25 years in prison for opposing the KMT’s marshal law. Now he accuses Chen of being as bad as the dictators he replaced.

SHIH MING-TE: [SUBTITLES] When we see Chen’s government deteriorating and getting more corrupt you can imagine how painful the people who sacrificed for democracy feel – the people who were in prison for so long.

CAMPBELL: Shih has led massive protests against the President, the demonstrators wearing red shirts to express their anger.

SHIH MING-TE: [At protest to crown] [SUBTITLE] Same place, same corrupt old president still shamelessly sitting in there. I understand full well your dissatisfaction, your anger – I totally understand.

CAMPBELL: But inside the presidential palace, Chen Shui-bian told me his old comrades had lost their way.

CHEN SHUI-BIAN: [SUBTITLE] We’re reluctant to say it, but some people like Shih Ming-Te who used to be members of the democratic camp or opposition camp are being used for political reasons.

CAMPBELL: Well how do you respond to these very strong attacks? Are you a corrupt President? Did your family steal from the State?

CHEN SHUI-BIAN: [SUBTITLE] If something hasn’t happened, it hasn’t happened. For political reasons it’s easy for people to distort, to discredit and to mislead. As political figures we are quite helpless.

CAMPBELL: The prosecutor disagreed, laying charges against the First Lady and two senior presidential aides. He also warned that Chen could be charged when he loses presidential immunity.

JOANNA LAI: Chen’s legacy at this point is he is truly not democratic, totally corrupt in the eyes and minds of at least a million people who have elected to walk the streets or even sleep on the street.

CAMPBELL: So why were such leading figures using other people’s receipts? According to President Chen, it’s top secret.

CHEN SHUI-BIAN: [SUBTITLE] Were some of these matters revealed, it would immediately jeopardise national security, the national interest, and even our diplomatic work.

CAMPBELL: To understand what that means you need to look at some of Taiwan’s diplomatic work. Three years ago we followed Chen as he toured the South Pacific, showering small nations with money. It’s a way of buying diplomatic recognition for Taiwan which China insists is just a break away province.

While most aid is above board, the president also has a slush fund called the State Affairs Fund to give money in secret. He just has to provide receipts to claim the money back but Chen insists that’s not possible when the missions are hush hush.

CHEN SHUI-BIAN: [SUBTITLE] When we conduct intelligence or diplomatic work, we cannot show receipts or provide related records that correspond to the true expenditures. So, if one were to regard the discrepancy between the record and the actual purpose as fraud, then we would have to stop conducting many of our activities.

JOANNA LAI: He has a lot of funds available to him should it be deemed as truly involving state secrets.

CAMPBELL: So you see no other explanation other than fraud?

JOANNA LAI: No other explanation.

CAMPBELL: Nor did many other Taiwanese. Shih Ming-Te’s red shirts not only mobilised mass rallies, but turned them into propaganda videos to spread the rage.

Shih is now facing criminal charges and a possible four-year jail term for staging unauthorised protests. They irony is that in the old days, Chen Shui-bian was his lawyer trying to get him out of jail.

Are you surprised that you’ve now been charged with protesting in what is now a democracy?

SHIH MING-TE: [SUBTITLE] Not at all – this is something very minor in my life and I believe you will have to pay when you want to achieve your goals and ideals.

CAMPBELL: For now, he’s enjoying the comforts of freedom. He invited us to one of Taipei’s oldest restaurants to dine with his new partner in struggle, Ligi Li.

LIGI LI: [SUBTITLE] We are the, how you call it? The public enemy number one, [points to Shih] enemy number two, to Chen Shui Bian’s eyes.

CAMPBELL: Shih Ming-Te admits it was Ligi Li’s revelations that made him decide to act. When Chen was elected in 2000, Shih was happy to become chairman of his party.

SHIH MING-TE: [SUBTITLE] After the DPP took office I think my ideals and goals have already been reached and completed and I was full of joy and happiness. In the end with concrete evidence about the national secret funds, I made the very painful decision to stand up.

CAMPBELL: Shih enjoys legendary status in Taiwan both as the moral conscience of the nation and the embodiment of dissident chic.

LIGI LI: I heard everything about him through my father and my brothers. He is their hero and when I finally met him last year, I truly, I like him because he is a person who is true to himself.

CAMPBELL: But I must say you look great for someone who’s spent twenty five years in jail.

LIGI LI: Yes. Well he was beaten, his teeth were beaten. All fall out. Knock out.

CAMPBELL: Chen Shui-bian once enjoyed similar moral authority to Shih Ming-Te. As young men, they both worked on a magazine demanding democracy and independence for Taiwan. Chen spent eight months in prison for his writings. He bristles at his old comrade stepping back into the martyr’s limelight.

CHEN SHUI-BIAN: [SUBTITLE] I think we all know very well that there are no heroes in a democratic era.

CAMPBELL: Chen is determined his last months will be remembered for more than the corruption scandal. He’s announced he’ll consult the people on whether Taiwan should apply to join the UN. China has warned of serious consequences if the March referendum goes ahead.

CHEN SHUI-BIAN: [SUBTITLE] We consider Taiwan is a sovereign state. It certainly is not part of the People’s Republic of China. The million people of Taiwan have the right to participate in the UN. This is the collective voice of our people, and we want the world to hear us.

CAMPBELL: Shih Ming-Te dismisses the UN bid as a ploy to distract attention from the corruption scandal.

SHIH MING-TE: [SUBTITLE] It’s a diversion. The issue of Taiwan’s independence has been around for half a century. The issue cannot be decided by Taiwan alone.

CAMPBELL: Even so, Chen still enjoys strong support from much of the community – particularly native Taiwanese. Ligi Li took us to Snake Alley, a centuries old market where Chen remains a hero for standing up to the mainland and where whistleblowers like her can be treated with contempt.

LIGI LI: If I come here by myself, people spit on me because they are Chen Shui-bian’s supporters.

CAMPBELL: This is the real Chen heartland, is it?

LIGI LI: Yes, yes. One of the guys even told me to go home. I said where to? You know, where to? He said go back to Australia.

CAMPBELL: Some of her own family have shunned her for damaging Chen.

LIGI LI: They think no matter what he did, no matter he is a liar we support leading Taiwanese. We don’t support people from China.

CAMPBELL: So it’s caused a lot of resentment within your family for going public with the allegations?

LIGI LI: Yes, yes, yes, yes. Even now my brothers they still think I shouldn’t stand up and tell the truth.

CAMPBELL: Shih Ming-Te sees it in more epic terms. Like the typhoons that lash Taiwan each summer, he believes the crisis is essential to renew democracy.

SHIH MING-TE: [SUBTITLE] Taiwan is a very beautiful place. The beauty of it is every year it is destroyed and hurt by heavy rain and strong winds. You’re able to see the power of life after it’s been destroyed. And the disaster will bring a better future - just like our politics.

CAMPBELL: And so it was that Chen Shui-bian braced for a political storm at this year’s national celebrations. The public was locked out behind barbed wire and riot police. Even with such tight security, Chen cancelled his public address for fear red shirts would storm the stage. In the end the only heckling came from the pro-China fringe.

Shih Ming-Te walked alone through the closed off square in silent protest against his one-time friend.

SHIH MING-TE: [SUBTITLE] Actually people talk about me being Taiwan’s Mandela… we know how to forgive and how to accept. But sadly Chen’s behaviour, for me who can tolerate so much, is intolerable.

CAMPBELL: These old warhorses remain locked in conflict to the bitter end and the opposition hopes it can use the scandal to retake power in the March election. No doubt China will be watching as closely as Taiwan for the final chapter of the President versus Ligi Li.