US embassy cable - 05TAIPEI2786

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002786 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 02/01/2015 
TAGS: PREL, PGOV, PINR, TW 
SUBJECT: PREMIER HSIEH FRUSTRATED OVER FAILURE OF 
RECONCILIATION POLICIES 
 
REF: TAIPEI 2745 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary: A longtime aide to Premier Frank Hsieh told 
AIT that Hsieh is increasingly frustrated by the partisan 
gridlock in Taiwan politics.  Corey Chen, a close political 
advisor to the Premier, told AIT that Hsieh is now convinced 
that opposition leaders will not cease their obstructionism 
unless they lose their lock over the Legislative Yuan (LY). 
To this end, Chen said that Hsieh is considering eroding the 
Pan-Blue's current narrow majority by engineering defections 
among disaffected opposition legislators.  Chen complained, 
however, that Hsieh's room to maneuver is limited by 
President Chen Shui-bian's efforts to maintain exclusive 
control over all major political and policy decisions.  End 
Summary. 
 
Running in Place 
---------------- 
 
2. (C) Longtime Hsieh confidante Corey Chen (Chien-chung) 
told AIT that Premier Frank Hsieh is frustrated that his 
"reconciliation cabinet" has failed to produce any measurable 
results.  Chen said that reluctance by opposition legislative 
leaders to consider an emergency budget to help communities 
in southern Taiwan hit by recent flooding has convinced Hsieh 
that the Pan-Blue is obsessed with sabotaging the 
government's policies, regardless of the cost to the public 
or their own political interests.  Chen noted that when 
senior Executive Yuan (EY) officials pointed out to 
opposition legislative leaders that opposing the special 
flood relief budget could jeopardize Pan-Blue candidates in 
the year-end local election, "their response was 'we don't 
care, we just want to get Chen Shui-bian.'" 
 
Enough Velvet Glove, Time for the Iron Fist 
------------------------------------------- 
 
3. (C) Chen said that Hsieh expected to be able to replicate 
his experience with the opposition-controlled Kaohsiung City 
Council with the LY.  "In Kaohsiung, you could get things 
done as long as you demonstrated that what you were doing it 
for the greater, rather than simply partisan, good," Chen 
commented, "in the LY, they don't care about the substance of 
policy, it's all power politics."  Chen said he was skeptical 
that the next KMT Chairman would be able to make a 
significant shift even if he wanted to, given the growing 
power of hard-line (read: conservative, ethnic Mainlander) 
factions within the Pan-Blue parties.  Chen said that Hsieh 
is increasingly convinced that the Pan-Blue parties will only 
cooperate when they have no other choice, and that means 
depriving the Blue of its LY majority. 
 
4. (C) Chen noted that there are internal discussions under 
way over whether to re-launch the National Stabilization 
Alliance.  President Chen floated this proposal in 2002 in an 
attempt to entice moderate KMT legislators to join a loose 
legislative majority coalition that would help the government 
pass major legislation.  While the 2002 initiative resulted 
in a handful of defections from the KMT, most KMT legislators 
stayed put rather than risk expulsion from the party ahead of 
a possible Pan-Blue return to power in the 2004 presidential 
election.  Corey Chen noted that some Hsieh advisors have 
made the case that the current conditions are ripe for 
revisiting the National Stabilization Alliance idea.  They 
argue that internal discontent over the July 16 KMT election 
results, the implosion of support for James Soong's People 
First Party (PFP) and National Assembly (NA) passage of 
reforms that will cut the number of LY seats in half should 
produce a significant bloc of Pan-Blue legislators vulnerable 
to inducements of jobs and political patronage. 
 
Hsieh's Short Leash 
------------------- 
 
5. (C) Chen said that a major constraint on any new 
initiative is the approach of the President.  Chen said that 
Hsieh is increasingly annoyed by the President's continued 
interference in the Premier's political and policy 
prerogatives.  Chen criticized the President's attempts to 
build a legislative majority through his February 24 
cohabitation agreement with PFP Chairman James Soong.  "You 
need more than a joint press conference to build a 
coalition," Chen complained.  Chen said that the President's 
focus on trying to arrange high-level meetings with 
opposition leaders has only reinforced the personalized 
nature of ruling-opposition relations. 
 
6. (C) Premier Hsieh's ability to formulate his own policy 
line is also limited by Presidential interference, Chen 
continued.  Chen said that the proposed National Security 
Report (Reftel) presents a major headache to Hsieh as he 
prepares his own policy address for delivery to the LY in 
September.  "The media and LY will pick over every word of 
the two reports to find differences to exploit," he 
complained.  Chen stated the inclusion of domestic and 
economic policies in the National Security Report also 
represents an intrusion by the President into policy domains 
reserved constitutionally for the Premier.  Nevertheless, 
Chen said it was unlikely that Hsieh will directly challenge 
the President, even as the 2008 election nears.  "Hsieh knows 
that the President can replace him at any time," Chen 
concluded. 
 
Kaohsiung Politics: Betting on the Blue? 
---------------------------------------- 
 
7. (C) Turning to Kaohsiung City politics, Chen asserted that 
acting Mayor Chen Chi-mai has under-performed expectations 
and could face a tough battle against presumptive KMT 
challenger, Apollo Chen (Shuei-sheng).  Corey Chen noted that 
Chen Chi-mai is handicapped by the fact that "pretty much 
everything that could have been done to improve Kaohsiung was 
already done by Hsieh, leaving Chen (Chi-mai) with little to 
run on in 2006." (Comment: the KMT's Apollo Chen recently 
offered AIT the exact same assessment.  Apollo Chen is trying 
to portray himself as more capable of fulfilling Hsieh's 
political vision than Chen Chi-mai.  End Comment.)  Corey 
Chen added that acting Mayor Chen is more an administrator 
than a leader, offering little vision for a constituency 
"whose expectations have been raised" by Hsieh's successful 
tenure as Mayor.  Corey Chen added that the Democratic 
Progressive Party's (DPP) election may in the end turn on 
acting Mayor Chen's ability to complete the subway system 
without any further accidents or scandals. 
 
Comment: Thankless Job 
---------------------- 
 
8. (C) Hsieh's appointment as Premier earlier this year was 
viewed by many political insiders as a major boost for Hsieh 
over DPP rival, Su Tseng-chang.  However, Hsieh is already 
encountering the same structural challenges -- an 
obstructionist LY and a domineering, unpredictable President 
-- that frustrated his three predecessors.  In order to avoid 
this same fate, the Premier will need to secure some sort of 
accommodation from the LY.  In our estimate, Hsieh has proven 
a realistic sensible leader of Taiwan's executive.  Despite 
the frustrations we describe here, Hsieh has shown 
considerable leadership potential, certainly more than his 
DPP predecessors.  Hsieh's control over governmental 
resources should give him the leverage he needs to assemble a 
working majority coalition from disaffected Pan-Blue 
legislators, if only he is given the authority to do so. 
 
Bionote 
------- 
 
9. (C) Corey Chen has been with Hsieh in various capacities 
for well over a decade and is considered among his closest 
personal confidantes.  When Hsieh was DPP Chairman, Chen 
served as his Special Assistant.  When the President ousted 
Hsieh from the DPP Chairmanship in 2002, Corey Chen stayed 
behind as Deputy Director of the party's International 
Affairs Department Deputy Director and as a self-confessed 
"Hsieh spy" at party HQ.  After being dismissed by DPP 
International Affairs Director Bi-khim Hsiao, an ally of 
Hsieh rival Su, Hsieh appointed Chen to run Kaohsiung City's 
representative office in Taipei.  Chen technically still 
reports to the Kaohsiung City government, but in reality is 
working full time as a Hsieh political advisor (Note: Chen 
took three calls from Hsieh during a two-hour dinner with 
AIT.  End Note.).  Chen is a former recipient of a U.S. 
International Visitors Program grant.  He has also spent time 
at Sophia and Keio Universities in Tokyo, Japan. 
PAAL