US embassy cable - 05TAIPEI4800

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 004800 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 12/05/2015 
TAGS: PGOV, TW 
SUBJECT: MA YING-JEOU AND CORRUPTION DEFEAT RULING DPP IN 
LOCAL ELECTIONS 
 
 
Classified By: AIT Acting Director David Keegan, Reasons: 
1.4 (b/d) 
 
1.  (C) SUMMARY. The opposition Kuomintang (KMT) scored a 
landslide victory over the ruling Democratic Progress Party 
(DPP) in Taiwan's December 3 island-wide local elections. 
The KMT victory was made possible by intense public anger at 
DPP corruption and dissatisfaction over the DPP's inability 
to govern since Chen Shui-bian became president in 2000. 
Accusations of corruption against Chen and his closest 
associates made the DPP's most active campaigner more a 
liability than an asset for the party.  KMT chairman Ma 
Ying-jeou successfully presented himself as a dynamic, clean 
and competent alternative, establishing himself as the 
presumptive KMT presidential candidate in 2008.  While the 
KMT celebrates, the DPP is in disarray, with Party Chairman 
Su Tseng-chang resigning and Premier Frank Hsieh offering to 
do the same.  In contrast to previous elections, President 
Chen did not resort to divisive and provocative calls for 
Taiwan independence, a separate Taiwan identity, or a new 
constitution.  END SUMMARY. 
 
2.  (C) The opposition Kuomintang (KMT) scored a landslide 
victory in local county and city elections on December 3, 
winning 14 of the 20 races in which it nominated candidates. 
The ruling Democratic Progressive Party (DPP) suffered a net 
loss of four districts, including critical Taipei County, and 
will now control just five counties and one city, all in 
southern Taiwan.  Overall, DPP candidates received just 42 
percent of the votes while KMT candidates received 51 
percent, dramatically reversing the trend in recent years of 
growing DPP support. (Further details reported septel.) 
 
3.  (C) While the post-mortems are only beginning, the basic 
reasons for this dramatic reversal are clear.  For the first 
time since the local elections in 1997, the DPP failed to 
control the campaign.  Ever since riots broke out among Thai 
laborers on the Kaohsiung Metro in late August, the DPP has 
been engaged in damage control.  Whether the issue was 
gambling holidays at government expense for senior Chen 
advisors, who were accused of skimming funds from the 
Kaohsiung labor contract, accusations against Premier and 
former Kaohsiung mayor Frank Hsieh (Chang-ting) of knowingly 
signing a Metro deal that benefited DPP loyalists, or the 
bungled effort by the DPP head of the Government Information 
Office to close a TV station that publicized the Kaohsiung 
allegations, the DPP has been on the defensive.  Virtually 
its only campaign initiative, cutting retirement benefits for 
government retirees, only helped mobilize the KMT base.  When 
the DPP government publicized an on-going investigation into 
corruption involving the acquisition of Lafayette Frigates by 
the KMT government under former president Lee Teng-hui in the 
final weeks of the campaign, it confirmed to most that the 
DPP had abandoned any hope of clearing its own name and had 
resorted instead to ensuring that the KMT would also have to 
fight corruption charges.  President Chen, the DPP's dominant 
campaign figure in recent elections, became the symbol of DPP 
corruption and missteps. 
 
4.  (C) KMT Chairman Ma seized on the DPP's troubles, 
proclaiming these elections as a &mid-term examination8 on 
the performance of President Chen and his government.  By 
capitalizing on the DPP government scandals and missteps, he 
succeeded in controlling the election agenda from beginning 
to end.  Ma urged the voters to give the DPP government a 
vote of no-confidence in order to force the DPP to reform and 
improve its performance.  In over 300 campaign appearances, 
he presented himself as a dynamic, clean and competent 
alternative.  Ma's personal campaigning and the ubiquitous 
billboards of him posing with local candidates proved the 
single most striking and effective campaign tactic for a KMT 
still recovering from two disastrous presidential bids by its 
former chairman Lien Chan. 
 
Scandal and Ma Decide the Critical Contest 
------------------------------------------ 
 
5.  (C) In the critical Taipei County race, the margin of DPP 
candidate Luo Wen-jia's defeat (10.5 percent) was magnified 
by a late-breaking scandal involving small payments, 
presumably by campaign supporters, to participants in a 
campaign rally.  A bus driver reportedly provided KMT 
candidate Chou Hsi-wei's campaign team with video footage 
from a bus surveillance camera that showed a man handing out 
cash to passengers on a bus heading to Luo's rally.  This 
video footage was shown over and over during the final days 
before the election.  According to internal DPP polls, Luo 
lost 5-6 percentage points as a result of this scandal.  KMT 
Chairman Ma Ying-jeou spent so much time campaigning together 
with KMT candidate Chou Hsi-wei that voters doubtless 
identified a vote for Chou as a vote for Ma. 
 
Dueling Resignation Threats 
--------------------------- 
 
6.  (C) In the final days before the elections, Ma announced 
he would step down if the KMT did not win at least 11 
districts, gaining credit for accepting responsibility and 
helping to bring out the KMT vote to "save" Ma, the KMT's 
best chance to regain power in the 2008 presidential 
election.  Ma's statement also upstaged a subsequent similar 
statement by DPP party chairman Su Tseng-chang, who is one of 
the DPP's leading potential presidential candidates in 2008. 
 
 
7.  (C) On the night of the elections, Su immediately honored 
his commitment and announced his resignation as DPP party 
chairman, an act which earned public respect and may help his 
future political career.  Premier Frank Hsieh (Chang-ting) 
twice offered his resignation, but President Chen responded 
that political stability is most important at this point. 
Nonetheless, DPP infighting has been growing in recent weeks 
as the scope of the likely defeat became clearer. Chen 
publicly criticized Hsieh several times during the campaign, 
and his future is far from secure. Other significant cabinet 
changes are likely; it is just a matter of time. 
 
U.S. Interests 
-------------- 
 
8.  (C) For the first time since 2000, President Chen did not 
campaign by appealing to the pro-independence sentiments of 
the DPP,s deep Green southern base.  In sharp contrast to 
the 2004 presidential and legislative elections, he made no 
calls for building a Taiwan identity separate from mainland 
China or for rewriting the Republic of China constitution to 
make is more suitable for the realities of present-day 
Taiwan, which many Green supporters understood to be a plan 
to create a Republic of Taiwan.  Even though President Chen 
excoriated then KMT Chairman Lien Chan and PFP Chairman James 
Soong when they visited China in April and May of this year, 
he hardly mentioned cross-Strait issues in the course of the 
campaign.  Under pressure on the issue of corruption and poor 
performance, DPP leaders may have concluded that pressing 
radical themes would only drive more swing voters into KMT 
arms.  More important, the DPP may be hoping for some gradual 
limited opening in cross-Strait relations over the coming 
months, realizing that, given the breakthrough in KMT 
relations with China, the DPP must show that it can handle 
cross-Strait relations effectively if it hopes to stay in 
power in 2008. 
 
KEEGAN