US embassy cable - 05TAIPEI4552

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 004552 
 
SIPDIS 
 
DEPARTMENT PASS AIT/W 
 
E.O. 12958: DECL: 11/10/2015 
TAGS: PGOV, TW 
SUBJECT: TAIWAN'S RULING DPP: DIFFICULT TIMES AFTER 
ELECTION? 
 
REF: A. TAIPEI 4439 
 
     B. TAIPEI 4353 
     C. TAIPEI 4158 
     D. TAIPEI 3793 
     E. TAIPEI 4189 
     F. TAIPEI 4482 
 
Classified By: AIT Director Douglas Paal, Reason(s): 1.4 (B/D) 
 
1.  (C) Summary:  Many local observers expect the opposition 
Kuomintang (KMT) to make significant gains in the December 3 
local elections at the expense of the ruling Democratic 
Progressive Party (DPP).  Several DPP contacts, moreover, 
have expressed pessimism to AIT about the party's prospects 
over the next decade.  They are concerned that recent changes 
in the Legislative Yuan (LY) structure will ensure continued 
KMT control of the LY and that the DPP also stands to lose 
the presidency to the KMT in 2008 if current trends continue. 
 End Summary. 
 
DPP Saddled with Scandals 
------------------------- 
 
2.  (C) AIT's DPP contacts are visibly discouraged by the 
snowballing charges of corruption, cronyism, and poor 
performance swirling around President Chen and his 
administration.  The most damaging allegations have concerned 
the Kaohsiung Mass Rapid Transit (KMRT) project, the subject 
of intense controversy since a violent protest by Thai 
laborers last August raised questions about corrupt labor 
brokering practices and other issues (Refs A, B, C, D). 
Chen's initial defensive reaction to criticism of scandals 
and poor performance was to lash out at the opposition 
parties and their leaders.  In reaction to Chen's failure to 
address problems directly, DPP Young Turks in early October 
launched the "New DPP Movement," a call for party reform 
aimed at restoring the party's clean-government orientation 
(Ref E).  Many DPP reformers were disappointed when Chen 
rejected the New DPP Movement, charging it would split rather 
than reform the party.  In mid-October, Chen launched an 
attack on People First Party (PFP) leader James Soong over 
cross-Strait issues, apparently in a failed effort to deflect 
public attention from the corruption issue. 
 
3.  (C) The KMRT scandal tarnished Chen directly when a top 
advisor and confidant, Chen Che-nan, was implicated and 
arrested after the media published a sensational photograph 
of the advisor together with the KMRT Vice Chairman gambling 
at a casino in South Korea.  The Chen administration 
compounded its problems by launching an investigation of 
TVBS, the television station that had unveiled this and other 
scandals (Ref F).  Although Chen subsequently apologized 
publicly for the scandals, embraced the DPP reform movement, 
and announced he would not close TVBS, he has continued to 
counterattack his critics as well as to attack the 
opposition's cross-Strait policies.  The KMRT corruption 
story is hitting the press at an awkward time for Chen as he 
and other DPP leaders try to generate support for the party's 
candidates in the December 3 local elections.  As long as the 
almost daily corruption charges and revelations continue, and 
there are promises of new dirt to come, Chen will be on the 
defensive on what has traditionally been one of his strongest 
campaign themes: clean government. 
 
Cross-Strait Challenges 
----------------------- 
 
4.  (C) Despite his criticism of the opposition on 
cross-Strait policy, Chen may also be on the defensive on 
this issue as well.  KMT officials trace the rise in KMT 
popularity, compared to the DPP, to the party's cross-Strait 
initiative launched by then-Chairman Lien Chan when he 
visited China last May.  A KMT official told AIT that the 
party's polling indicates the KMT effort to improve 
cross-Strait relations enjoys greater popular support than 
the confrontational approach of the DPP.  If this trend 
holds, Chen's campaign efforts to mobilize his base by 
stirring up antagonism to the opposition's cross-Strait 
policy may have less resonance than in previous years. 
 
December 3 Elections 
-------------------- 
 
5.  (C) Heading into the December 3 local elections, Chen and 
the DPP are in a significantly weakened position compared to 
previous elections and they may pay a heavy price at the 
polls.  Even within the DPP, it is now common to criticize 
Chen and his administration for policy mistakes, lack of 
consistency, paucity of achievements, and exclusive reliance 
on a small coterie of politically trustworthy advisors. 
Since May, public support for the KMT has exceeded public 
support for the DPP, a reversal of the pattern over the past 
several years.  According to a regular monthly poll by the 
respected but Blue-leaning ERA polling center, the gap 
between the two parties has remained consistently about ten 
percent in each of the monthly polls since May.  According to 
an October 20 ERA poll, 50 percent of the public trusts KMT 
Chairman Ma Ying-jeou, while just 34 percent trusts President 
Chen.  While several important local elections on December 3, 
including Taipei County magistrate, remain up in the air, 
many observers here expect the KMT to gain significant ground 
at the expense of the DPP. 
 
Beyond December 3 
----------------- 
 
6.  (C) Beyond the December 3 local elections, AIT's DPP 
contacts are also concerned about the long-term prospects for 
the ruling party.  A poor showing on December 3 could harm 
the unity and morale of the DPP as it faces an important 
series of elections over the next three years. 
Constitutional reforms passed in June, moreover, that will 
halve the size of the 225-member LY and create a 
one-member-per-district legislative system to replace the 
current multiple member district system, could complicate DPP 
election prospects in the 2007 legislative elections.  In the 
view of AIT's DPP contacts, the new system will probably 
ensure a pan-Blue majority in the LY in 2007, and probably 
for years to come, in part because the new system will give 
the opposition pan-Blue a lock on several tiny districts, 
including Kinmen, Matsu, and Penghu. 
 
7.  (C) DPP prospects for the 2008 presidential election also 
appear bleak at the moment, though much can change between 
now and 2008.  Even as the DPP weathers the current 
corruption storm, the Chen administration will continue to 
suffer from a public perception of much talk and little 
achievement.  Even DPP officials volunteer that 
responsibility for this problem runs deeper than opposition 
obstructionism in the LY -- although that is part of the 
problem -- because not all reforms require new legislation. 
Taipei Mayor and KMT Chairman Ma Ying-jeou, the presumed KMT 
presidential candidate and a model of integrity, is riding 
high in current political popularity polls.  If the DPP loses 
both the LY elections in 2007 and the presidential election 
in 2008, the party will be consigned to playing an opposition 
role for some time. 
 
8.  (C) The one bright sign for the DPP may be its ability to 
reform itself and its generally higher clean government 
standards than the KMT.  Although Ma Ying-jeou has a 
reputation for integrity, the KMT does not.  A PFP legislator 
recently told AIT that KMT legislators are far more likely to 
be corrupt than DPP legislators and that the DPP as a party 
has the ability to reform itself.  So, despite its current 
difficulties, the DPP may well be able to make a comeback. 
Paal