US embassy cable - 05TAIPEI2510

S E C R E T SECTION 01 OF 02 TAIPEI 002510 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 02/01/2015 
TAGS: PREL, PGOV, MARR, CH, TW, Cross Strait Politics 
SUBJECT: SPECIAL DEFENSE BUDGET UNDER THREAT FROM PFP 
BOYCOTT 
 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary: The People First Party (PFP) is threatening 
to derail all Legislative Yuan (LY) deliberations, including 
action on the Special Defense Procurement Budget, until 
President Chen Shui-bian formally apologizes for accusing PFP 
Chairman James Soong of meeting with a PRC official in the 
United States.  LY President Wang Jin-pyng and National 
Security Council (NSC) Deputy Secretary General Henry Ko 
separately expressed strong concern to AIT that the PFP's 
obstructionism could delay LY deliberations on the budget 
until 2006.  While the PFP maintains that a Chen apology will 
break the logjam, officials in both the KMT and NSC believe 
that Soong's recent actions reflect desperation following the 
party's March 14 National Assembly (NA) electoral defeat. 
The NSC also claims to have information that Beijing had 
pressured Soong to stop cooperating with the Chen 
administration, an allegation the PFP admits has some 
validity.  The NA's June 7 passage of legislative reforms and 
the July 16 KMT elections are likely to further increase 
pressure on PFP members to return to the KMT fold, and thus 
make Soong even less likely to cooperate with either the KMT 
or the Chen administration.  Both the KMT and DPP appear to 
have no plan to address PFP obstructionism, other than to 
simply wait for the party to collapse under its own weight. 
End Summary. 
 
Soong Holds Special Budget Hostage 
---------------------------------- 
 
2. (C) In recent days, KMT LY President Wang Jin-pyng and NSC 
Deputy Secretary General Henry Ko have privately expressed 
deep misgivings to AIT over the potential for James Soong and 
his PFP to derail the Special Defense Procurement Budget in 
the LY.  Soong has publicly stated that the PFP will boycott 
(effectively vetoing action) on all legislation until 
President Chen issues a public apology for his early May 
charge that Soong met secretly with PRC State Council Taiwan 
Affair Office (TAO) Director Chen Yunlin in the United States 
in January.  Wang told AIT on June 4 that the PFP could 
effectively kill prospects for a summer special LY session to 
pass the Special Defense Procurement Budget package by 
vetoing consultations on the session's agenda (Note: while a 
special session can be called by a petition by one quarter of 
the LY membership, all four party caucuses must agree on the 
agenda in order for the session to operate).  Wang warned 
that if the budget is not addressed in a summer special 
session, action will be difficult in the Autumn regular 
session due to political friction surrounding the December 3 
local magistrate/mayor election campaign. 
 
3. (C) PFP Policy Chief, and Soong lieutenant, Vincent Chang 
(Hsien-yao) confirmed to AIT that Soong has ordered a total 
boycott of all legislation pending a formal apology from the 
President.  Chang asserted that Chen's allegations have 
provoked a serious outcry within the PFP and left Soong 
feeling personally betrayed.  Chang said the PFP is prepared 
to derail the proposed summer special session and use its 
veto power over legislation to block the government's agenda 
in the Autumn regular session.  "Chen may think Soong's anger 
will pass with time," Chang asserted, "he is mistaken." 
Chang said the longer Chen delays in responding to Soong's 
concerns, the more obstructionist the PFP will become. 
 
Hell Hath No Fury Like a Party Scorned 
-------------------------------------- 
 
4. (C) Officials from the Democratic Progressive Party (DPP) 
and KMT say that Soong's recent actions are driven by 
desperation over his party's plummeting morale following the 
May 14 NA election fiasco.  The NSC's Ko said that even if 
Chen patches up his personal relationship with Soong, the PFP 
Chairman would be unable to convince his party's independent 
minded LY Caucus to drop its boycott of the Special Defense 
Budget bill.  Veteran KMT legislator Wu Ten-yi said that 
Soong realizes the upcoming leadership transition within the 
KMT and the passage of legislative reforms by the NA mean 
that pressure will only grow on PFP legislators to abandon 
the party for the KMT.  The PFP's Chang told AIT that this 
sort of "KMT arrogance" is why the PFP, in addition to 
boycotting DPP legislation, is also planning to undermine the 
KMT by running nuisance PFP candidates in six counties and 
cities in the December 3 local election. 
Soong's Political Death Throes 
------------------------------ 
 
5. (C) DPP officials say they empathize with Soong's 
situation, but do not see any easy way out for him. 
"President Chen has treated Soong pretty poorly these past 
few weeks," commented DPP Secretary General Lee Ying-yang, 
"maybe it's time to throw a few favors his way."  The NSC's 
Ko said the Chen administration will maintain staff-level 
communications with the PFP in an attempt to bring Soong 
around, but he was pessimistic over the possibility that Chen 
would offer a full public apology over his TAO accusations. 
Ko said that the government's hope is that the 32 member PFP 
Caucus will quickly collapse, leaving Soong greater 
flexibility to deliver the votes of the rump 11-12 PFP 
legislators who remain loyal to Soong.  KMT Speaker Wang told 
AIT he will continue to try to engage Soong on the Special 
Defense Budget, but noted that Soong remains unwilling to 
talk to Wang on the subject.  Wang resisted AIT's suggestion 
that he communicate directly with the PFP's LY Caucus 
leadership on the budget, asserting that he is reluctant to 
get involved in internal PFP politics. 
 
A PRC Angle? 
------------ 
 
6. (S) The NSC's Ko said that while the Chen administration 
will try to repair its relationship with Soong, the 
government remains concerned that Soong may have promised 
Beijing that the PFP will block the Special Budget.  Ko 
claimed that during their briefing to the Chen administration 
following Soong's return from Beijing, PFP officials stated 
that in a small pull-aside meeting in Beijing, Hu asked Soong 
to block the Special Defense Procurement Budget in order to 
create conditions that would allow Beijing to announce the 
withdrawal of missiles from coastal regions opposite Taiwan. 
The PFP's Chang confirmed that Hu and Soong did have a 
pull-aside meeting to discuss cross-Strait and foreign policy 
issues, but denied that missiles or the Special Defense 
Budget came up in the meeting.  However, Chang said that a 
Politburo-level PRC leader (Note: Soong reportedly met with 
Politburo members Zeng Qinghong and Jia Qingling) warned 
Soong that "we consider Chen Shui-bian a traitor to the 
(Chinese) nation and anyone who cooperates with Chen will be 
considered 'subject to attack' (douzheng de duishou)." 
 
Comment: Waiting for the End 
---------------------------- 
 
7. (C) While President Chen's overzealous NA election 
rhetoric has complicated the current political atmosphere, we 
doubt that Soong would have been able to deliver his party's 
LY Caucus on the budget regardless of external factors. 
Faced with the PFP's internal disarray and Soong's 
desperation, Chen administration officials are belatedly 
coming to the realization that it may be necessary to reach 
out to the KMT to get the budget through.  Both Wang and 
advisors to KMT rival Ma Ying-jeou tell AIT that the next KMT 
Chairman is likely to seek a quick conclusion to the deadlock 
over the Special Defense Budget.  However, neither KMT nor 
DPP officials have offered any workable solutions for 
breaking down a threatened PFP veto over the bill.  Given the 
need for PFP politicians to secure a place for themselves 
post-James Soong, both the KMT and DPP could offer incentives 
to accelerate the dissolution of the PFP.  Unfortunately, 
both the KMT and DPP believe that it will be easier (and 
cheaper) to simply wait for the PFP to collapse on its own 
accord. 
PAAL