US embassy cable - 04TAIPEI3988

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003988 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 12/15/2014 
TAGS: PGOV, PREL, TW 
SUBJECT: CHEN TAKES THE FALL FOR DPP LY SETBACK 
 
 
Classified By: AIT Acting Director David J. Keegan, Reason: 1.4 (B/D) 
 
1. (C) Summary: President Chen Shui-bian resigned his 
position as Democratic Progressive Party (DPP) Chairman 
December 14 to accept full responsibility for the worse than 
expected showing in the December 11 Legislative Yuan (LY) 
election.  In a speech to the DPP's Central Standing 
Committee (CSC), Chen said he would withdraw from party 
operations in order to serve all Taiwan's people.  The same 
day, the DPP's party headquarters issued a report blaming the 
party's provocative campaign rhetoric and over-aggressive 
nominations for its poor election showing.  Although 
disappointed by the December 11 results, party moderates say 
the failure of Chen's campaign strategy and the electoral 
defeat for Lee Teng-hui's Taiwan Solidarity Union (TSU) 
together strengthen their hand within the DPP government. 
DPP officials say that the President appears to be looking 
for a more conciliatory approach to working with the 
opposition camp, but how far he is prepared to compromise on 
issues like personnel appointments and policy priorities may 
depend on whether the Pan-Blue coalition is able to maintain 
the increasingly shaky KMT-People First Party (PFP) alliance. 
 End Summary. 
 
Chen Takes Full Responsibility 
------------------------------ 
 
2. (C) President Chen Shui-bian announced his resignation as 
DPP Chairman December 14 to take responsibility for the 
party's worse than expected performance in the December 11 LY 
election.  Chen said that he was removing himself from his 
party role in order to be the president of "all of Taiwan's 
23 million people."  The president promised to rule "with 
humility" over the coming four years, and urged the 
opposition to cooperate with the ruling coalition on issues 
of governance.  Chen told the party's CSC that the election 
results represented a setback for himself personally, but not 
a defeat for the DPP, which he noted was the only party in 
the December 11 election that increased its vote share over 
2001. 
 
3. (C) DPP officials publicly welcomed Chen's decision to 
accept full responsibility for the election disappointment. 
DPP Secretary General Chang Chun-hsiung, who was asked by 
Chen to remain in his post, submitted a report to the CSC on 
December 14 analyzing the DPP's performance.  The report 
assessed that the DPP failed to reach its pre-election 
targets due to a combination of overly aggressive nominations 
and use of provocative campaign themes that alienated 
centrist voters.  DPP Taipei County Magistrate Lin Hsi-yao, a 
ranking New Tide faction member, told AIT that both the 
nomination strategy and the choice of campaign slogans were 
formulated by the president personally.  "We warned him 
repeatedly during the campaign about these things," Lin told 
AIT on December 14, "but since he chose to ignore us, he will 
have to bear the responsibility." 
 
Moderates Re-energized 
---------------------- 
 
4. (C) Although disappointed by the party's poor showing, DPP 
moderates say they do see a silver lining.  The New Tide 
faction increased its representation from 17 to 22 seats in 
the LY, and expects to recruit more newly elected DPP 
legislators into the faction over the coming weeks.  Taipei 
County's Lin said the failure of Chen's hard-line campaign 
strategy and the poor showing by Lee Teng-hui's TSU has also 
bolstered DPP moderates.  "We will be much more forceful in 
the future in standing up to Chen when we think he's wrong," 
Lin asserted.  Lin added that the TSU's poor performance will 
undermine Lee Teng-hui's influence, and likely marks the 
beginning of the end for his party.  "At some point in the 
coming months, we will start talking about how to absorb the 
TSU into the DPP," Lin commented. 
 
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Who Wants to Be DPP Chairman? 
----------------------------- 
 
5. (C) Following Chen's resignation, the DPP's CSC appointed 
party LY Caucus Leader Ker Chien-ming as interim Chairman 
pending a party election for a permanent replacement. 
President Chen reportedly had urged Vice President Annette Lu 
to take the position, but she and the other three DPP 
presidential hopefuls (Presidential Office Secretary General 
Su Tseng-chang, Kaohsiung Mayor Frank Hsieh, and Premier Yu 
Shyi-kun) have all ruled out taking the job.  Many DPP 
officials tell AIT privately that the Chairman post is seen 
as a consolation prize for the first candidate eliminated 
from contention for the 2008 presidential race.  DPP 
Secretary General Chang Chun-hsiung and other senior party 
 
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officials are expected to keep their current jobs until the 
new Chairman is announced, likely at a party conference on 
February 1, 2005. 
 
Cabinet Changes Ahead 
--------------------- 
 
6. (C) While party personnel will remain in place for the 
time being, Chen administration officials tell AIT to expect 
major Cabinet changes in the coming weeks as President Chen 
considers ways to improve relations with the 
opposition-controlled LY.  Given Premier Yu's difficult 
relationship with the LY, especially since March 20, he is 
almost certain to be replaced before the new LY convenes in 
February.  Officials say that Chen has not yet decided 
whether to appoint a DPP heavyweight like Su or Hsieh, or 
choose a less partisan technocrat, such as former MAC Chair 
Tsai Ing-wen or former Vice Premier Lin Hsin-yi.  How Chen 
 
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handles personnel assignments, both for the Cabinet and for 
the upcoming round of Control Yuan (CY) appointments, could 
offer an insight into his approach to policymaking in the 
coming years.  Taipei County Magistrate Lin commented that if 
Chen allows Pan-Blue leaders input into his upcoming 
personnel decisions, it will indicate that he is sincere 
about staying above the political fray.  National Security 
Council (NSC) Senior Advisor Chen Chung-hsin told AIT that 
the mood inside the Presidential Office has clearly shifted 
since December 11.  Chen said that NSC officials were 
instructed on December 13 to prepare for a more bipartisan 
approach to policymaking in the coming four years. 
 
Temporary Setback 
----------------- 
 
7. (C) Nevertheless, some in the DPP say that the president's 
conciliatory rhetoric is only a passing phenomenon.  DPP 
Deputy Secretary General Lee Ying-yuan told AIT that Chen's 
actions over the past several days have been largely symbolic 
and asserted that he will remain very much in control of the 
DPP and the political agenda.  Lee also disputed his own 
party's official assessment of its election performance. 
Lee, a polished spokesman for the fundamentalist wing of the 
party, argued that tactical errors and general voter fatigue 
rather than overly provocative rhetoric accounted for the 
DPP's December 11 setback. 
 
Comment: A New Era or More of the Same? 
--------------------------------------- 
 
8. (C) Chen's resignation from the DPP Chairmanship was 
expected regardless of the party's December 11 performance. 
Nonetheless, the fact that Chen was willing to accept full 
responsibility for the election setback should help reduce 
the backlash within the DPP against his heavy-handed role in 
the campaign.  Whether Chen will fulfill his promise to 
remain above the political fray is less clear.  Many will be 
inclined to say that Chen has gone through such cycles of 
reconciliation before and come out swinging.  The Pan-Blue 
majority is not as solid as it may appear from the outside, 
and leading KMT figures like Ma Ying-jeou have warned that 
the Pan-Blue's small victory could quickly turn into a large 
defeat if post-election internal squabbles lead to splits in 
the opposition ranks.  Given this prospect, Chen may look for 
opportunities to exploit internal divisions in the Pan-Blue. 
This may mean a return to the all too familiar mud-slinging 
of the past four years, or it may provide opportunities for 
the DPP to move forward on reform by building coalitions 
across the Blue-Green divide. 
PAAL