US embassy cable - 05TAIPEI332

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 000332 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 01/26/2015 
TAGS: PGOV, PREL, CH, TW, Cross Strait Politics 
SUBJECT: NEW PM HSIEH CHANG-TING:  THE VIEW FROM KAOHSIUNG 
 
 
Classified By: AIT Director Douglas H. Paal.  Reason: 1.4 (B,D) 
 
Summary 
------- 
 
1. (C) Begin Summary.  The January 25 appointment of 
Kaohsiung Mayor Frank Hsieh (Chang-ting) as Taiwan's new 
Premier was long-rumored, but still surprised some in the 
South who saw Hsieh as one of President Chen's chief 
competitors.  The move was a natural step for Hsieh, however, 
who had served previously as Democratic Progressive Party 
(DPP) Chairman, legislator and Taipei City Councilor, was the 
DPP's first vice presidential candidate in 1996, and is 
positioning himself to run for president in 2008.  Local 
analysts see Chen's selection of Hsieh for the premiership as 
intended to balance internal DPP factions, especially to 
offset the rising strength of the "New Tide" faction, as well 
as to capitalize on Hsieh's moderate views and pragmatic 
style as the government faces a new legislature next month 
dominated by the opposition. 
 
2. (C) More moderate and pragmatic than President Chen, Hsieh 
is nevertheless a strong advocate of core DPP tenets.  He 
supports maintenance of Taiwan's "de facto independence," but 
opposes constitutional reform as a way to codify Taiwan's 
status.  He discounts threats from the PRC as mostly 
rhetoric, but opposes DPP extremists' (and Chen's) efforts to 
"push the envelope" with Beijing.  Hsieh also has been an 
advocate of expanded cross-Strait economic ties.  Hsieh has 
built a solid record of achievement in Kaohsiung and 
demonstrated a style that stressed coalition-building and 
compromise, often working quietly through intermediaries to 
build support for his policies from local powerbrokers, even 
ones affiliated with the opposition or local organized crime. 
 It remains to be seen, however, whether Hsieh's talents as a 
manager and political coalition-builder will help the central 
government develop a better working relationship with the 
opposition-controlled legislature.  Hsieh's success with the 
legislature and his ability to influence policy will depend 
heavily on how well he works with his long-time colleague and 
rival, President Chen.  And, ultimately, will determine 
whether he emerges as the DPP's front-runner to succeed Chen 
in 2008.  End Summary. 
 
Frank Hsieh Appointed Premier 
----------------------------- 
 
3. (C) While Kaohsiung Mayor Frank Hsieh was long-considered 
a possible candidate to succeed Yu Shyi-kun as Premier, and 
the media had been rife with rumors that his appointment was 
imminent, many local analysts were surprised with Chen's 
decision to choose Hsieh.  Hsieh, a long-time DPP figure, had 
been seen as more rival than colleague of President Chen's 
for many years.  While the two launched their political 
careers together during the 1979 "Formosa Incident" trials, 
in which both served as defense counsel, they subsequently 
vied with each other for leadership of the DPP.  Both 
National Taiwan University (NTU) Law School graduates, who in 
different years ranked number one on Taiwan's bar exam, Hsieh 
and Chen followed parallel political paths, rising through 
the ranks of local city council positions to become 
legislators in the 1980's and early 1990's.  In 1994, the two 
competed for the DPP Taipei Mayoral nomination, with Chen 
winning the nomination as well as the election, which in turn 
served as his springboard to the Presidency.  Meanwhile, 
Hsieh joined his former law professor, Peng Ming-min, on the 
DPP's first vice-presidential/presidential (respectively) 
ticket in 1996, losing by a large margin to the KMT's Lee 
Teng-hui/Lien Chan ticket. 
 
4. (C) Hsieh's career received a boost in 1997, however, from 
his high-profile intervention to resolve a tense hostage 
situation in which a criminal held the South African military 
attache and his family hostage.  Hsieh moved to Kaohsiung in 
1998 and ran successfully for Mayor of Taiwan's second 
largest city, winning by a narrow margin.  He was re-elected 
in 2002, and will be resigning with just over half his second 
four-year-term completed.  Under Taiwan election laws, the 
Premier will appoint an acting Mayor to fill out the 
remainder of Hsieh's term. 
 
5. (C) Hsieh is well-known to AIT and was a 1982 AIT 
International Visitor (IV) program participant.  During his 
time as Mayor, Hsieh has visited the U.S. frequently, both 
for business and to visit his son who is studying at 
California State University at Northridge, just outside Los 
Angeles (Hsieh's only other child, a daughter married to a 
doctor, lives in Taiwan).  In AIT's contacts with Hsieh, he 
has demonstrated a strongly positive view of the U.S. and has 
often acknowledged to AIT how important he believes U.S. 
support is for maintaining Taiwan's security.  He speaks a 
little English, with slightly better listening comprehension 
and reading (perhaps a 1 /2 on the FSI scale), but has been 
quietly working with an American English teacher over the 
past year and a half in an attempt to improve.  Hsieh's ties 
to Japan are stronger.  He completed a Master's Degree in Law 
at Kyoto University in the mid-1970's, speaks fairly good 
Japanese and visits Japan almost as often as the U.S. 
 
More Moderate and Pragmatic than President Chen 
--------------------------------------------- -- 
 
6. (C) While Hsieh is a strong subscriber to core DPP tenets, 
he is more pragmatic and moderate than President Chen on most 
issues.  Hsieh told AIT that he supports maintenance of 
Taiwan's "de facto independence" but opposes Chen's calls for 
constitutional revision and efforts to codify Taiwan's status 
into law, because he believes the risks outweigh the 
benefits.  Hsieh is proud of his role while DPP Chairman in 
2000-01 in revising the DPP charter to drop language calling 
for a declaration of Taiwan independence in favor of more 
"moderate" language stating that no declaration is necessary 
since Taiwan, under the title "Republic of China" is already 
an independent country.  Like many in the Pan-Green camp, 
Hsieh often discounts PRC threats as "mostly rhetoric," but 
he opposes efforts by DPP extremists (and by Chen) to "push 
the envelope" with Beijing.  Hsieh has advocated expanded 
cross-Strait economic ties, even pushing to lead a delegation 
to the Mainland while he was Kaohsiung Mayor, before 
President Chen quashed the initiative. 
 
7. (C) On Taiwan's political scene, Hsieh has displayed 
moderation and pragmatism in his positions and tactics.  With 
a less charismatic and more intellectual style than President 
Chen, Hsieh has proven better at political deal making than 
at campaigning.  While he is praised by many as 
intellectually sharp with a cutting wit, he has suffered 
sometimes in the traditional politics of Southern Taiwan from 
criticism that he comes across as &too lawyerly," 
overly-critical and sometimes arrogant.  At the same time, 
Hsieh has proven adept at winning elections through careful 
and meticulous planning and good strategy.  As DPP Chairman 
in 2001, he led the DPP to a surprisingly strong showing in 
the LY election.  In the lead-up to the March 2004 
Presidential election, Hsieh was widely criticized in the 
"green" media for running a passive campaign for President 
Chen in Southern Taiwan, with some questioning his loyalty to 
the President's re-election cause.  Hsieh argued that his 
lower-key strategy was based on a careful analysis of the 
electorate and polling.  In the end, Hsieh was proven right 
as Southern Taiwan, including Kaohsiung, produced much higher 
than expected results for the President.  Similarly, the 
results in the December 2004 LY election in Kaohsiung, with 
the DPP campaign led by Hsieh, achieved DPP targets, unlike 
most other areas of the island.  Many local analysts cite 
Hsieh's success in leading these DPP campaigns as a major 
reason Chen chose to elevate Hsieh to Premier. 
 
Why Hsieh? 
---------- 
 
8. (C) It is Hsieh's record of managing Kaohsiung City, 
however, that other observers say led Chen to select him. 
When he won a surprise victory in the 1998 Kaohsiung Mayoral 
race, Hsieh had no management experience, had no seasoned 
political staff to assist in running the city, and faced a 
hostile KMT-dominated City Council.  While Hsieh initially 
stumbled and had a number of difficult conflicts with the 
City Council, he eventually developed a solid City 
Administration and worked adeptly to peel off key City 
Councilors by working through local well-connected 
intermediaries.  While leaving long-time city department 
chiefs in place, he placed reliable, young supporters in key 
deputy positions.  These gave Hsieh independent eyes on the 
internal workings of the City government and allowed him to 
begin development of a core of qualified administrators. 
After several years, Hsieh's approach paid off and he has 
drawn high marks for his success in cleaning up Kaohsiung and 
developing its infrastructure.  Ironically, Hsieh's very 
success in cutting backroom political deals almost cost him 
his career when a major vote-buying scandal hit the Kaohsiung 
City Council in 2003.  Hsieh emerged clean, but not before 
sacrificing his closest political advisor who, while serving 
as the City Civil Affairs Director, was proven to have 
supervised handoffs of bags of cash to City Councilors. 
While Hsieh has earned high praise from many for his ability 
to cut deals to benefit the city, others have condemned Hsieh 
for his willingness to work with the opposition and corrupt 
local powerbrokers. 
 
Balancing the New Tide and the Presidential Contenders 
--------------------------------------------- --------- 
 
9. (C) Some local analysts also believe the choice of Hsieh 
for Premier helps Chen offset what many in the DPP have 
complained is the rising power of the DPP's "New Tide" 
faction.  Unlike President Chen's "Justice Alliance" faction 
or Frank Hsieh's "Welfare Nation" faction, the New Tide 
faction is a tightly-organized internal DPP coalition that 
holds regular meetings, tightly controls membership, requires 
membership dues and maintains strong discipline.  National 
Security Council (NSC) Secretary General Chiou I-jen and 
Taiwan Stock Exchange Chairman Wu Nai-jen are leading New 
Tide figures, but reportedly both have vowed never to seek 
elected positions.  Instead, the faction made public -- 
prematurely -- its support for soon-to-be DPP Party Chairman 
Su Tseng-chang to prepare to run as the DPP's 2008 
Presidential candidate.  While members of the faction, 
especially Chiou I-jen, were seen as key to President Chen's 
March 2004 re-election effort, many in the DPP complained 
that the New Tide was becoming a "secret organization" in the 
DPP that should be taken down a few notches.  In Kaohsiung, 
local DPP party officials went so far as to describe to AIT/K 
the New Tide faction as the "communist party" of the DPP, 
citing its almost Leninist-style party organization and the 
"socialist-leanings" of some of its members.  Local political 
pundits speculate that Chen may feel Frank Hsieh is the only 
DPP figure of sufficient stature that Chen can use to help 
offset the New Tide's rise. 
 
10. (C) While the "threat" posed by the New Tide faction may 
be overstated by some, most local analysts as well as DPP 
party contacts do believe President Chen is seeking to create 
a balance between the two most likely contenders for the 2008 
DPP nomination for President -- Frank Hsieh and Su 
Tseng-chang.  By supporting Su for DPP Party Chairman and 
 
SIPDIS 
Hsieh for Premier, political analyst Liao Da-chi told AIT/K, 
Chen has set them up to compete with one another and provided 
each with a test.  Hsieh will be tested by his ability to 
develop a positive working relationship with the 
opposition-controlled LY and how successful he is in getting 
President Chen's legislative agenda passed and implemented. 
Su will be tested by his ability to achieve a strong victory 
for the DPP in the year-end County Magistrate and Mayor 
election. 
 
Hsieh's Vulnerabilities 
----------------------- 
 
11. (C) Hsieh has built a strong record as local and central 
level legislator, party chairman, political campaigner and 
city mayor.  He has, however, never served in a central 
government position and, as LY Speaker Wang Jyn-ping argued 
to AIT/K Branch Chief in a recent encounter, Hsieh's local 
experience may not translate to the "national" scene.  Hsieh, 
of course, also will face uncertainty in his relations with 
President Chen, which have traditionally shifted between 
comradely and competitive.  In a December 1 meeting with AIT, 
Hsieh himself noted that he had always worked "side-by-side 
with Chen" and had never actually worked as a subordinate to 
Chen.  Yet, as Premier, Hsieh will be pushed to implement 
President Chen's policy. 
 
12. (C) Hsieh also has some political vulnerabilities that 
could hurt him in the competition to succeed Chen in 2008. 
Hsieh has been hit in all of his political campaigns with 
assertion of his ties to various scandals.  In both the 1998 
and 2002 mayoral campaigns, Hsieh was accused of profiting 
from decisions or interventions he had made with respect to 
various land development projects, including the Zanadau 
project in Kaohsiung County.  His opponents have also claimed 
he has taken illegal campaign donations from Buddhist temples 
and other organizations.  Thus far, Hsieh has managed to fend 
off the charges without losing too many votes, but the lack 
of complete proof vindicating him in each case leaves him 
vulnerable to them coming back. 
 
13. (C) More problematic is Hsieh's involvement with a 
"religion," or "cult" led by Sung Chi-li, who claims 
supernatural powers.  Sung was unsuccessfully prosecuted for 
defrauding his followers of millions of U.S. dollars.  While 
Hsieh's wife openly supports Sung and even helped edit his 
writings, Hsieh has tried to maintain a low profile, but 
refuses to retract earlier statements that he too believed 
and followed Sung.  In Hsieh's most recent political 
campaigns he has been quick to cite "the privacy and freedom 
of religion" in response to questions about his views on 
Sung, leaving most with the impression that he remains a 
follower of the group. 
PAAL