LY ELECTION AT THE TWO-WEEK MARK

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 003779

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 11/29/2014
TAGS: PGOV TW
SUBJECT: LY ELECTION AT THE TWO-WEEK MARK

REF: A. TAIPEI 03771


B. TAIPEI 03340

C. TAIPEI 02662

D. TAIPEI 03294

Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D)


1. (C) Summary: The campaign for the December 11 Legislative
Yuan (LY) election is entering its final phase with neither
camp assured a majority of seats. On balance, campaign
officials and observers project that the Pan-Green will win a
plurality, leaving it within reach of a majority with the
help of non-partisans. President Chen Shui-bian has
dominated the campaign agenda, and his Democratic Progressive
Party (DPP) is running a tightly coordinated campaign. In
contrast, Pan-Blue candidates are running individualized
campaigns, with many downplaying their partisan affiliations.
The Kuomintang (KMT),which took a cautious nomination
approach, will likely roughly retain its current seats, but
its junior partner, the People First Party (PFP),is set to
lose between 16-21 of its current 46 seats. Both sides have
employed sharply negative themes in order to mobilize core
supporters, but DPP officials say they will attempt a more
positive appeal in the final weeks of the campaign in order
to win over centrist voters. End Summary.

Some Preliminary Predictions
--------------


2. (C) It is still too early to make solid predictions about
the results of Taiwan's Legislative Yuan (LY) election
scheduled for December 11. All major polls indicate that
neither side has more than 50 percent of the electorate's
vote, and differences in support rates for most candidates in
each electoral district are well within the margin of error.
Furthermore, polls in Taiwan are notoriously unreliable (Ref
A) so predicting election outcomes is more art than science.
Analysts are undaunted, however, and by far the most common
assessment is that the Pan-Green will win several more seats
than the Pan-Blue, but neither side will come away with an
outright majority, so the balance will be held by
independents. The second most likely outcome, according to
the majority of observers, is that the Pan-Green will win a
very slim majority. With the exception of the Pan-Blue
public relations team, however, no commentators or political
operators AIT has met predict the Pan-Blue will be able to
hold onto its majority.


3. (C) Turnout for the LY election is expected to be
significantly lower than the 80 percent seen in the March
presidential election, some say due to "election fatigue".
Most observers expect turnout to be in the mid-60 percent
range at best, a figure consistent with historical rates for
LY elections (66 percent of eligible voters voted in the
2001, for example). Academia Sinica election researcher Hsu
Yung-ming noted that this would mean 2.5 million voters who
came out to the polls in March will stay home this December.
With a margin of victory for the multiple seats in many
districts of fewer than 1000 votes each, he said, all parties
are therefore scrambling to mobilize their core supporters.
However, Steve Hsieh (Hsiang-chuan) of the National Policy
Foundation, a KMT think-tank, suggested that the Pan-Blue was
at a decided disadvantage this election because as many as 1
million embittered Pan-Blue supporters might have emigrated
to Shanghai, among other places, after Chen Shui-bian's
victory in the March presidential elections. Taipei
University professor Chiang Min-chin cited the same estimate
from a weekly news magazine, and added that unlike Pan-Blue
voters, who often have connections in the US, Canada and
Mainland China, Pan-Green voters generally have no place to
go, so their strength in Taiwan is only growing. (Comment:
Pan-Blue officials frequently make this claim, but AIT has
not seen any concrete, or even anecdotal, evidence to support
it. End Comment.)

Creating a Sense of "Crisis"
--------------


4. (C) Both sides seem to have decided that the best way of
spurring apathetic voters into action is by manufacturing a
sense of "crisis" for their constituents, primarily by
ratcheting up the rhetoric and mounting vicious and negative
attacks on their opponents. The danger that such tactics
would alienate moderate voters may be partly mitigated by the
fact that such voters are among those least likely to turn
out in December. Both camps, for example, have suggested
that a victory for the other side would spell an end to
Taiwanese democracy. The Pan-Blue claims that its control of
the LY is the only thing standing in the way of a Chen
Shui-bian dictatorship and accuse him of wielding
undemocratic control over the press and the judiciary. The
PFP's James Soong suggested that "a Pan-Green majority will
mean war with China." KMT Chairman Lien Chan has repeatedly
demanded that the DPP organize a referendum on independence
to coincide with the December 11 election. KMT Culture and
Publicity Department Deputy Director Chen Yu-mei told AIT
that Lien's statements were meant to force the president to
take an extreme position that would alienate centrist voters.
However, she bemoaned that the president easily side-stepped
the attack and within 24 hours was back in control of the
campaign agenda. The Pan-Blue's campaign agenda does not
appear to be filtering down to the grass-roots level, where
many candidates, especially those from outside Taipei, are
actively downplaying their partisan affiliations.

CSB v. KMT
--------------


5. (C) While Chen has tacked to the pro-independence extreme
on several occasions during the campaign, these have been
mostly in response to statements by former President Lee
Teng-hui rather than Lien Chan. The president's main focus,
however, has been assailing the KMT for its party assets, its
use of the national emblem for its party seal, and
allegations that the Pan-Blue appealed to KMT loyalists in
the Taiwan military to attempt a "soft coup" after the March
20 presidential election. National Security Council (NSC)
Secretary General (and veteran campaign strategist) Chiou

SIPDIS
I-jen told AIT that these attacks are part of a calculated
effort to blame the island's woes on the KMT's inability to
disentangle itself from government. Chiou said the DPP is
satisfied that the negative campaign push has succeeded in
energizing the DPP base. Chiou said that in the final two
weeks of the election, President Chen will shift to a more
positive, substantive approach tailored to win over centrist
voters. Political commentator Yang Hsien-hong assessed that
Chen's move to the center would open up space for the Taiwan
Solidarity Union (TSU),which has been largely marginalized
in the campaign by Chen's domination of the Pan-Green air
waves.

Peipiao Will be Key
--------------


6. (C) More than any of these issues however, the single
biggest variable that will determine the outcome of the
election in December will be intra-party vote distribution,
or "peipiao." In Taiwan's multi-member district system,
proper distribution of votes among candidates is often more
important than the gross number of votes received (Ref B).
The Pan-Green has a huge advantage in this area because the
DPP enjoys greater party cohesion than the other parties and
its candidates are more willing to cooperate with forced
peipiao schemes. Adept use of peipiao allowed the DPP to
take six percent more seats than its vote share would seem to
have justified in the last election, according to ERA Polling
Center Director Tai Li-an, and the party is focusing its
efforts on repeating that success. Candidates in most
districts run as a team and plans have already been made to
ask voters to divide their votes based on the month of their
birth or the last digit of their national ID card number.
DPP voters, who tend to be more ideologically loyal to the
party than to any particular candidate, can be expected
reliably to follow the party's peipiao instructions.

Can the Pan-Blue Peipiao Successfully?
--------------


7. (C) Soochow University political science professor and
political talk show host Emile Sheng (Chi-jen) asserted that
successful DPP peipiao is a given, and that "the only
variable is Pan-Blue peipiao." The outlook for the Pan-Blue
in this regard is not good. KMT and PFP politics are
dominated by personalities and their LY campaigns are far
more candidate-based than party-based. KMT Culture and
Publicity Deputy Chief Chen told AIT that prospects for vote
coordination within the KMT are close to zero and the
likelihood of establishing peipiao schemes with other
Pan-Blue parties is even lower. Successful peipiao would be
difficult under the best of circumstances, but Pan-Blue
candidates are even less likely to show generosity in this
election. Academia Sinica's Hsu suggested that this is
because Pan-Blue candidates see this election as a "primary"
for the 2008 LY election. Since the number of LY seats will
be halved in 2008 under a constitutional amendment expected
to be ratified in the spring (Ref C),it is widely believed
that only incumbents from this election will be considered
for nomination in the next one, and those with the highest
vote totals in 2004 will stand the best chance. An
additional difficulty for the Pan-Blue is that, in
opposition, it has few appointments to offer its most
well-known national figures other than LY nominations. These
"superstar candidates" are likely to take an unnecessarily
large share of the vote in their respective districts, and
are generally unwilling to cooperate with peipiao schemes, as
these have famously backfired in the past, resulting at least
twice in 2001 in the most popular candidate losing after his
votes were "shared" away to weaker candidates.

Pan-Green Overnomination in the North?
--------------


8. (C) However, even the most perfectly implemented peipiao
scheme is doomed to failure if the party has run too many
candidates. The Pan-Green may be in greater danger in this
regard. Encouraged by Chen's victory in the March
presidential election, the DPP nominated aggressively in
areas where Chen made major gains during the 2004 election.
In many southern districts where it already enjoys high
support levels, the DPP's nominees will likely find the
necessary votes. In northern districts, however, which have
historically favored the Pan-Blue, the Pan-Green's nomination
strategy ranges from merely aggressive to downright reckless.
The DPP is not entirely at fault here, however. The TSU,
encouraged by media speculation that it could double its
seats by riding the wave of growing Taiwanese identity,
hastily decided to increase its nominations in almost every
district. Most of these last-minute additions stand little
chance of winning election, and will possibly drain enough
votes from their TSU and DPP allies to give up a seat to the
Pan-Blue. The NSC's Chiou acknowledged this danger and said
the DPP would make a call by December 1 about culling weak
candidates from several northern districts. Chiou noted that
if the DPP dropped a candidate each from Taoyuan County,
Taipei City North, and Taipei County's Second District it
could guarantee a pick up of three seats over 2001 by
securing the rest of its candidate list in these areas.

Pan-Blue Problems with Mavericks
--------------


9. (C) The Pan-Blue is not entirely free of overnomination
worries, however. Lack of discipline among candidates has
undermined the KMT's generally conservative nomination
strategy in some districts, as the candidates who did not
receive nominations decided to run anyway on their own. Such
"maverick" candidates could potentially split the KMT vote in
some decisive districts, giving up seats to the Pan-Green and
reducing the KMT party's share of votes for the at-large
proportional representation seats. Soochow University's
Sheng noted that the political balance in Taipei City splits
65-35 in favor of the Blue, yet campaign officials on both
sides predict that the Pan-Green will win half of the 20
seats in the capital due to poor Pan-Blue nominations and
coordination (Septel).

The Decline and Fall of the PFP
--------------


10. (C) A greater concern for the Pan-Blue is the widespread
perception that the PFP is on the verge of collapse as a
result of the Pan-Blue's clumsy mismanagement of the proposed
KMT-PFP merger and the PFP's increasingly extremist line on
many policy issues. Most of the PFP's stronger incumbents,
especially in northern districts, are unlikely to be hurt by
this, but PFP newcomers and less well-known incumbents are in
increasing danger. This has given rise to PFP calls for the
KMT to include PFP candidates in its peipiao efforts, but
with the exception of Nantou County (Ref D),these pleas have
been ignored. Hsu Yung-ming offered a typical assessment of
the Pan-Blue situation, saying that "the KMT will keep its
seats because it nominated conservatively, but the PFP will
suffer, going from 46 seats now to probably less than 30
after the election." PFP Acting Secretary General Chin
Ching-Sheng separately offered an estimate of 25-30 seats for
his party. LY President (and KMT Vice Chairman) Wang
Jin-pyng was even more downbeat on the PFP, "they can count
on 25 seats, but definitely no more than 28."

Comment: First Step Towards a Two Party System?
-------------- --


10. (C) Although it is too early to predict the final outcome
of the LY election, some general shifts seem likely. The
Pan-Blue will almost certainly lose its control of the LY,
with its losses coming almost exclusively from the ranks of
the PFP. The DPP stands to gain seats, but with TSU support
remaining stagnant, an outright Pan-Green majority may be
beyond its grasp. DPP officials are confident that if they
are within 3-5 seats of a majority, they can assemble a
working coalition with like-minded (or buyable) independents.
Strong showings by the DPP and KMT vis-a-vis their junior
coalition partners could reduce TSU and PFP ability within
the LY to push extremist agendas. However, much will hinge
on what happens to the Pan-Blue after December 11. Opinion
among Pan-Blue leaders over the opposition's post-election
role is divided. Some officials, like Wang, have warned that
the DPP will be allowed to dictate policy, with an unengaged
and marginalized KMT sitting on the sidelines. KMT Taipei
Mayor Ma Ying-jeou have emphasized the need for the KMT to
play an active, responsible, balancing role in order to
remain competitive for elections in 2006 and later. What
sort of KMT emerges after December 11 could matter more than
who wins on election day.
PAAL