CHEN TAKES THE FALL FOR DPP LY SETBACK

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003988

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 12/15/2014
TAGS: PGOV PREL TW
SUBJECT: CHEN TAKES THE FALL FOR DPP LY SETBACK


Classified By: AIT Acting Director David J. Keegan, Reason: 1.4 (B/D)


1. (C) Summary: President Chen Shui-bian resigned his
position as Democratic Progressive Party (DPP) Chairman
December 14 to accept full responsibility for the worse than
expected showing in the December 11 Legislative Yuan (LY)
election. In a speech to the DPP's Central Standing
Committee (CSC),Chen said he would withdraw from party
operations in order to serve all Taiwan's people. The same
day, the DPP's party headquarters issued a report blaming the
party's provocative campaign rhetoric and over-aggressive
nominations for its poor election showing. Although
disappointed by the December 11 results, party moderates say
the failure of Chen's campaign strategy and the electoral
defeat for Lee Teng-hui's Taiwan Solidarity Union (TSU)
together strengthen their hand within the DPP government.
DPP officials say that the President appears to be looking
for a more conciliatory approach to working with the
opposition camp, but how far he is prepared to compromise on
issues like personnel appointments and policy priorities may
depend on whether the Pan-Blue coalition is able to maintain
the increasingly shaky KMT-People First Party (PFP) alliance.
End Summary.

Chen Takes Full Responsibility
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2. (C) President Chen Shui-bian announced his resignation as
DPP Chairman December 14 to take responsibility for the
party's worse than expected performance in the December 11 LY
election. Chen said that he was removing himself from his
party role in order to be the president of "all of Taiwan's
23 million people." The president promised to rule "with
humility" over the coming four years, and urged the
opposition to cooperate with the ruling coalition on issues
of governance. Chen told the party's CSC that the election
results represented a setback for himself personally, but not
a defeat for the DPP, which he noted was the only party in
the December 11 election that increased its vote share over

2001.


3. (C) DPP officials publicly welcomed Chen's decision to
accept full responsibility for the election disappointment.
DPP Secretary General Chang Chun-hsiung, who was asked by
Chen to remain in his post, submitted a report to the CSC on
December 14 analyzing the DPP's performance. The report
assessed that the DPP failed to reach its pre-election
targets due to a combination of overly aggressive nominations
and use of provocative campaign themes that alienated
centrist voters. DPP Taipei County Magistrate Lin Hsi-yao, a
ranking New Tide faction member, told AIT that both the
nomination strategy and the choice of campaign slogans were
formulated by the president personally. "We warned him
repeatedly during the campaign about these things," Lin told
AIT on December 14, "but since he chose to ignore us, he will
have to bear the responsibility."

Moderates Re-energized
--------------


4. (C) Although disappointed by the party's poor showing, DPP
moderates say they do see a silver lining. The New Tide
faction increased its representation from 17 to 22 seats in
the LY, and expects to recruit more newly elected DPP
legislators into the faction over the coming weeks. Taipei
County's Lin said the failure of Chen's hard-line campaign
strategy and the poor showing by Lee Teng-hui's TSU has also
bolstered DPP moderates. "We will be much more forceful in
the future in standing up to Chen when we think he's wrong,"
Lin asserted. Lin added that the TSU's poor performance will
undermine Lee Teng-hui's influence, and likely marks the
beginning of the end for his party. "At some point in the
coming months, we will start talking about how to absorb the
TSU into the DPP," Lin commented.

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Who Wants to Be DPP Chairman?
--------------


5. (C) Following Chen's resignation, the DPP's CSC appointed
party LY Caucus Leader Ker Chien-ming as interim Chairman
pending a party election for a permanent replacement.
President Chen reportedly had urged Vice President Annette Lu
to take the position, but she and the other three DPP
presidential hopefuls (Presidential Office Secretary General
Su Tseng-chang, Kaohsiung Mayor Frank Hsieh, and Premier Yu
Shyi-kun) have all ruled out taking the job. Many DPP
officials tell AIT privately that the Chairman post is seen
as a consolation prize for the first candidate eliminated
from contention for the 2008 presidential race. DPP
Secretary General Chang Chun-hsiung and other senior party

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officials are expected to keep their current jobs until the
new Chairman is announced, likely at a party conference on
February 1, 2005.

Cabinet Changes Ahead
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6. (C) While party personnel will remain in place for the
time being, Chen administration officials tell AIT to expect
major Cabinet changes in the coming weeks as President Chen
considers ways to improve relations with the
opposition-controlled LY. Given Premier Yu's difficult
relationship with the LY, especially since March 20, he is
almost certain to be replaced before the new LY convenes in
February. Officials say that Chen has not yet decided
whether to appoint a DPP heavyweight like Su or Hsieh, or
choose a less partisan technocrat, such as former MAC Chair
Tsai Ing-wen or former Vice Premier Lin Hsin-yi. How Chen

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handles personnel assignments, both for the Cabinet and for
the upcoming round of Control Yuan (CY) appointments, could
offer an insight into his approach to policymaking in the
coming years. Taipei County Magistrate Lin commented that if
Chen allows Pan-Blue leaders input into his upcoming
personnel decisions, it will indicate that he is sincere
about staying above the political fray. National Security
Council (NSC) Senior Advisor Chen Chung-hsin told AIT that
the mood inside the Presidential Office has clearly shifted
since December 11. Chen said that NSC officials were
instructed on December 13 to prepare for a more bipartisan
approach to policymaking in the coming four years.

Temporary Setback
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7. (C) Nevertheless, some in the DPP say that the president's
conciliatory rhetoric is only a passing phenomenon. DPP
Deputy Secretary General Lee Ying-yuan told AIT that Chen's
actions over the past several days have been largely symbolic
and asserted that he will remain very much in control of the
DPP and the political agenda. Lee also disputed his own
party's official assessment of its election performance.
Lee, a polished spokesman for the fundamentalist wing of the
party, argued that tactical errors and general voter fatigue
rather than overly provocative rhetoric accounted for the
DPP's December 11 setback.

Comment: A New Era or More of the Same?
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8. (C) Chen's resignation from the DPP Chairmanship was
expected regardless of the party's December 11 performance.
Nonetheless, the fact that Chen was willing to accept full
responsibility for the election setback should help reduce
the backlash within the DPP against his heavy-handed role in
the campaign. Whether Chen will fulfill his promise to
remain above the political fray is less clear. Many will be
inclined to say that Chen has gone through such cycles of
reconciliation before and come out swinging. The Pan-Blue
majority is not as solid as it may appear from the outside,
and leading KMT figures like Ma Ying-jeou have warned that
the Pan-Blue's small victory could quickly turn into a large
defeat if post-election internal squabbles lead to splits in
the opposition ranks. Given this prospect, Chen may look for
opportunities to exploit internal divisions in the Pan-Blue.
This may mean a return to the all too familiar mud-slinging
of the past four years, or it may provide opportunities for
the DPP to move forward on reform by building coalitions
across the Blue-Green divide.
PAAL