US embassy cable - 04TAIPEI4007

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 004007 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 12/17/2014 
TAGS: PGOV, PREL, TW 
SUBJECT: KMT LEADERSHIP TRANSITION IN THE MIST 
 
REF: A. TAIPEI 00909 
     B. TAIPEI 01150 
     C. TAIPEI 01170 
     D. TAIPEI 03865 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary:  The KMT's stronger than expected performance 
in the LY election will bring more uncertainty to the party's 
leadership question.  While KMT Secretary General Lin 
Fong-cheng told local media on December 12 that Lien Chan 
would step down as party Chairman at the end of his term next 
July, there are some still in the KMT that would rather keep 
Lien than make a choice between Taipei Mayor Ma Ying-jeou and 
LY President Wang Jin-pyng.  While both Ma and Wang have 
expressed interest in the job, neither has been willing to 
challenge Lien explicitly.  Both PFP Chairman James Soong's 
role in the Pan-Blue alliance, and plans to merge the KMT and 
PFP now appear even more tenuous.  KMT reformers fear that 
the KMT's LY electoral victory might prove counter-productive 
and actually undercut the prospects for longterm reform and 
leadership change.  End Summary. 
 
Will he go or will he stay? 
--------------------------- 
 
2. (C) Following the Pan-Blue alliance winning a 114-seat 
majority in the December 11 Legislative Yuan (LY) election 
and the KMT performing better than expected, the KMT must 
once again turn its attention to the twin challenges of 
leadership change and its relationship to the People First 
Party (PFP).  KMT Secretary General Lin Fong-cheng told local 
media on December 12 that Lien Chan will resign as the party 
Chairman at the end of his term in July 2005.  (Note:  A 
Chairman may serve for two terms.  Lien is currently serving 
out his first term and therefore is qualified to stand for 
reelection.  End note)  Lien himself has been more ambiguous 
about his plans.  In a press conference on election night, 
Lien merely repeated his earlier statement that the KMT would 
handle this question according to its Charter.  LY President 
Wang Jin-pyng told the AIT Acting Director on December 16 
that it was his judgement Lien will resign around August 
2005.  (Note:  According to the KMT Charter, the Party holds 
an election for Chairman every four years, three months (i.e. 
in April) prior to its (biannual) Party Congress meeting -- 
next in July 2005.    Wang told AIT that the Chairman 
election might be delayed until May or June.  End note) 
 
Deja Vu? 
-------- 
 
3. (C) After the March 2004 presidential election, many KMT 
officials told AIT that to avoid a divisive internal struggle 
between supporters for Taipei Mayor Ma Ying-jeou and LY 
President Wang Jin-pyng, Lien had to stay.  Some KMT 
legislators argued at that time that given the choice between 
splitting the party and keeping Lien, the latter was the 
lesser evil.  Others even said that Lien was the only person 
who could unify the KMT (Refs A, B, C).  Eight months later, 
however, on the eve of the LY election, most KMT officials, 
including some close to Lien, were telling AIT that Lien had 
to go.  Former Mainland Affairs Council (MAC) Chairman Su 
Chi, for example, told the AIT Deputy Director on December 9 
that after losing the 2000 and 2004 presidential elections 
and running a poor LY election campaign, Lien should resign. 
Taichung City Mayor Jason Hu told the AIT Deputy Director 
that he would urge Lien to step down (Ref D).  Veteran KMT 
Legislator Shyu Jong-shyong went one step further, telling 
AIT that once the LY election was over, he will focus his 
energy on removing Lien.  The urgency behind the effort to 
dump Lien may have faded now that the KMT has survived the 
election with its LY majority intact. 
 
Ma and Wang on Deck? 
-------------------- 
 
4. (C) As difficult as it is to determine if and when Lien 
will resign, it is just as difficult to assess who his 
successor would be.  All political observers agree that there 
are only two real choices -- Ma or Wang.  Over the last nine 
months, both men have indicated that they are candidates for 
the Chairmanship -- Wang in his usual oblique statements and 
Ma more deftly through his subordinates.  Both have gone out 
of their way not to appear to be directly challenging Lien. 
KMT officials repeatedly told AIT that KMT culture does not 
allow subordinates to challenge leaders and that this value 
is strongly imbued in both Ma and Wang.  Perhaps nothing 
epitomizes the situation more clearly than when Wang 
Jin-pyng, with a straight face, told the AIT Acting Director 
on December 16 that no one has yet expressed an interest in 
being Chairman. 
 
5. (C) Ma and Wang's respective popularities have ebbed and 
risen over time.  In the immediate aftermath of March 20, KMT 
insiders favored Ma.  Then as the party quarreled internally 
over the KMT role in the PFP-led street demonstrations 
protesting Chen's election, and Ma came under attack from 
James Soong and PFP for not being more supportive of the 
demonstrations, support shifted away from Ma to Wang. 
However, as the LY election campaigns got underway, Ma, with 
his telegenic popular appeal, began again to outshine Wang. 
KMT Legislator Hung Chao-nan from Taichung City told AIT that 
legislators across Taiwan invited Ma to stump for them.  Hung 
said that Wang had not been nearly as popular on the campaign 
trial.  Publicly however, few have been willing to commit to 
either man.  KMT Legislators Alex Tsai and Apollo Chen 
typified this wait-and-see attitude among KMT members when 
each recently told AIT, "I am staying neutral." 
 
6. (C) Differences between Ma and Wang have been repeated ad 
nauseam -- Ma is a Northerner, a Mainlander, and a media star 
who cut his political teeth as an administrator/executive. 
Wang is a Southerner, ethnic Taiwanese, backroom 
wheeler-dealer, and a master of the legislative process. 
Their strengths and weaknesses are equally well known.  Party 
members criticize Ma for being indecisive and lacking the 
stomach for rough and dirty politics.  KMT elder Hsu Li-teh 
told AIT Deputy Director on December 7 that even Ma's own 
father acknowledged his son lacked leadership skills and was 
nothing more than a technocrat.  Ethnic Taiwanese KMT members 
(bentupai) have told AIT it is unlikely that a Mainlander 
could be elected President and that KMT bentupai would insist 
the next Chairman be Taiwanese. 
 
7. (C) Despite Ma's reported shortcomings, many KMT insiders 
feel Wang's feet of clay are even worse.  KMT Legislator Hung 
Chao-nan told AIT that Wang is the very symbol of "black 
gold" (money) politics and has little appeal among the 
electorate.  While acknowledging that so far no one has 
produced any evidence about Wang's rumored "legal problems," 
Su Chi explained that many in the KMT fear that if they 
supported Wang for Chairman and later President, at the 
eleventh hour, the DPP might expose a scandal destroying Wang 
and the KMT along with him.  Ironically, this would replicate 
the KMT's eleventh hour tarring of James Soong in 2000 for 
being Lee Teng-hui's bagman.  Moreover, Su added, "Wang is a 
poor public orator who puts people asleep as quickly as Lien 
Chan does." 
 
Procedural Gremlins 
------------------- 
 
8. (C) Another complicating factor is the mechanism by which 
the next Chairman will be selected.  In 2001 the KMT revised 
the Party Charter to allow for direct election of the 
Chairman.  Despite these "democratic" reforms, Su Chi told 
AIT that it is quite possible that Party elites might still 
be able to control the decision and impose their choice on 
the rest of the Party.  If this were the case, Su said, Wang 
would be at a great advantage because he excels in backroom 
deals.  However, if the decision were left to the Party 
Congress of some 800 members, Su expected Ma would be the 
choice.  And yet, Su mused, if the rules were interpreted to 
allow every "card-holding" KMT member to vote, Wang would 
know how to manipulate the balloting to his favor. 
 
You Can't Go Home Again 
----------------------- 
 
9. (C) Another unresolved question is whether there is a 
place in the KMT for James Soong, who has publicly made it 
clear he is unwilling to be relegated to "Number Two." 
During LY campaign, Soong went into high gear and appeared to 
be plotting his return.  Longtime Soong confidant Daniel 
Hwang (Yih-jiau) told AIT on November 15 that Lien and Soong 
had worked out a secret agreement in which the two parties 
would merge in February 2005, Lien would remain chairman, and 
Soong would be appointed to a newly created position of 
Deputy Chairman.  As part of the pact, Ma would be the 2008 
presidential nominee with the understanding that Soong would 
be appointed Premier in a Ma Presidency.  Hwang said that 
Wang does not have a role in this new arrangement because 
Lien and Soong decided that Wang lacked charisma. 
 
10. (C) However, as relations between the PFP and KMT 
continued to sour during the course of the LY campaign, the 
alleged secret agreement apparently fell by the wayside.  The 
terms of the secret agreement clearly illustrate that the 
primary dilemma for Lien in his push for merger is finding an 
appropriate role for Soong in a reconstituted KMT-PFP.  PFP 
elder and former Taipei City Council Speaker Luo Bin told AIT 
on December 8 that the greatest stumbling block to a merger 
was James Soong himself.  A KMT official told AIT that there 
had been no progress in merger talks before the election 
because Soong was dissatisfied with becoming just one more 
KMT vice chairman.  The KMT official pointed out that if the 
KMT had offered Soong the Chairmanship, "he would be back 
quicker than greased lightning." 
11. (C) The day after the PFP's poor showing in the December 
11 LY race, Soong ruled out the possibility of a merger.  On 
December 13, he publicly blamed the KMT for his party's poor 
election showing, bitterly lamenting that many outstanding 
PFP candidates did not win because the KMT had withdrawn its 
support for them.  Soong also criticized Wang Jin-pyng for 
not being more supportive of PFP causes in the LY and 
suggested that the PFP might not support Wang's bid for LY 
presidency in the next session.  PFP Legislator Sun Ta-chien 
told AIT on December 13 that "too many conflicts happened in 
this campaign," and the KMT was "not our friend and did 
everything it could to push us out."  Even if the KMT and PFP 
were to merge, he added, he would not cooperate with the KMT. 
 
 
Comment: A Bad Ending 
--------------------- 
 
12. (C) The surprise outcome of December 11 election has not 
eased the internal tension that existed within either in the 
KMT or the Pan-Blue prior to the election.  In many ways the 
KMT's stronger than expected showing has complicated matters. 
 Lien's advisors are urging him to stay on as Chairman.  The 
ongoing divide between Ma and Wang will enhance the 
likelihood that Lien can remain as Chairman if he so chooses. 
 As the KMT's James Chen pointed out, keeping Lien Chan as 
Chairman serves the important purpose of keeping the party 
together.  The choice between Ma Ying-jeou and Wang Jin-pyng 
is actually symbolic of deep splits within the KMT between 
the Mainlander and the Bentu wings.  While Ma clearly has 
greater popular appeal, the KMT's LY electoral success will 
give Wang a boost in the upcoming leadership battle.  The 
PFP's poor performance will put enormous pressures on James 
Soong.  Already a volatile personality in the best of times, 
Soong might well make statements in the days ahead that will 
aggravate the KMT's problems.  The issue of leadership 
transition is crucial for the KMT and its viability as a 
political force.  After 2004 presidential election, several 
KMT reformists told AIT that they secretly wished their Party 
could suffer more small defeats so that the Old Guard would 
leave the scene and allow them to commence the much needed 
internal reforms.  Paradoxically, from that viewpoint, the 
KMT's December 11 "victory" might have been the worst thing 
that could have happened. 
PAAL