KMT LEADERSHIP TRANSITION IN THE MIST

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 004007

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 12/17/2014
TAGS: PGOV PREL TW
SUBJECT: KMT LEADERSHIP TRANSITION IN THE MIST

REF: A. TAIPEI 00909

B. TAIPEI 01150

C. TAIPEI 01170

D. TAIPEI 03865

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


1. (C) Summary: The KMT's stronger than expected performance
in the LY election will bring more uncertainty to the party's
leadership question. While KMT Secretary General Lin
Fong-cheng told local media on December 12 that Lien Chan
would step down as party Chairman at the end of his term next
July, there are some still in the KMT that would rather keep
Lien than make a choice between Taipei Mayor Ma Ying-jeou and
LY President Wang Jin-pyng. While both Ma and Wang have
expressed interest in the job, neither has been willing to
challenge Lien explicitly. Both PFP Chairman James Soong's
role in the Pan-Blue alliance, and plans to merge the KMT and
PFP now appear even more tenuous. KMT reformers fear that
the KMT's LY electoral victory might prove counter-productive
and actually undercut the prospects for longterm reform and
leadership change. End Summary.

Will he go or will he stay?
--------------


2. (C) Following the Pan-Blue alliance winning a 114-seat
majority in the December 11 Legislative Yuan (LY) election
and the KMT performing better than expected, the KMT must
once again turn its attention to the twin challenges of
leadership change and its relationship to the People First
Party (PFP). KMT Secretary General Lin Fong-cheng told local
media on December 12 that Lien Chan will resign as the party
Chairman at the end of his term in July 2005. (Note: A
Chairman may serve for two terms. Lien is currently serving
out his first term and therefore is qualified to stand for
reelection. End note) Lien himself has been more ambiguous
about his plans. In a press conference on election night,
Lien merely repeated his earlier statement that the KMT would
handle this question according to its Charter. LY President
Wang Jin-pyng told the AIT Acting Director on December 16
that it was his judgement Lien will resign around August

2005. (Note: According to the KMT Charter, the Party holds
an election for Chairman every four years, three months (i.e.
in April) prior to its (biannual) Party Congress meeting --
next in July 2005. Wang told AIT that the Chairman
election might be delayed until May or June. End note)

Deja Vu?
--------------


3. (C) After the March 2004 presidential election, many KMT
officials told AIT that to avoid a divisive internal struggle
between supporters for Taipei Mayor Ma Ying-jeou and LY
President Wang Jin-pyng, Lien had to stay. Some KMT
legislators argued at that time that given the choice between
splitting the party and keeping Lien, the latter was the
lesser evil. Others even said that Lien was the only person
who could unify the KMT (Refs A, B, C). Eight months later,
however, on the eve of the LY election, most KMT officials,
including some close to Lien, were telling AIT that Lien had
to go. Former Mainland Affairs Council (MAC) Chairman Su
Chi, for example, told the AIT Deputy Director on December 9
that after losing the 2000 and 2004 presidential elections
and running a poor LY election campaign, Lien should resign.
Taichung City Mayor Jason Hu told the AIT Deputy Director
that he would urge Lien to step down (Ref D). Veteran KMT
Legislator Shyu Jong-shyong went one step further, telling
AIT that once the LY election was over, he will focus his
energy on removing Lien. The urgency behind the effort to
dump Lien may have faded now that the KMT has survived the
election with its LY majority intact.

Ma and Wang on Deck?
--------------


4. (C) As difficult as it is to determine if and when Lien
will resign, it is just as difficult to assess who his
successor would be. All political observers agree that there
are only two real choices -- Ma or Wang. Over the last nine
months, both men have indicated that they are candidates for
the Chairmanship -- Wang in his usual oblique statements and
Ma more deftly through his subordinates. Both have gone out
of their way not to appear to be directly challenging Lien.
KMT officials repeatedly told AIT that KMT culture does not
allow subordinates to challenge leaders and that this value
is strongly imbued in both Ma and Wang. Perhaps nothing
epitomizes the situation more clearly than when Wang
Jin-pyng, with a straight face, told the AIT Acting Director
on December 16 that no one has yet expressed an interest in
being Chairman.


5. (C) Ma and Wang's respective popularities have ebbed and
risen over time. In the immediate aftermath of March 20, KMT
insiders favored Ma. Then as the party quarreled internally
over the KMT role in the PFP-led street demonstrations
protesting Chen's election, and Ma came under attack from
James Soong and PFP for not being more supportive of the
demonstrations, support shifted away from Ma to Wang.
However, as the LY election campaigns got underway, Ma, with
his telegenic popular appeal, began again to outshine Wang.
KMT Legislator Hung Chao-nan from Taichung City told AIT that
legislators across Taiwan invited Ma to stump for them. Hung
said that Wang had not been nearly as popular on the campaign
trial. Publicly however, few have been willing to commit to
either man. KMT Legislators Alex Tsai and Apollo Chen
typified this wait-and-see attitude among KMT members when
each recently told AIT, "I am staying neutral."


6. (C) Differences between Ma and Wang have been repeated ad
nauseam -- Ma is a Northerner, a Mainlander, and a media star
who cut his political teeth as an administrator/executive.
Wang is a Southerner, ethnic Taiwanese, backroom
wheeler-dealer, and a master of the legislative process.
Their strengths and weaknesses are equally well known. Party
members criticize Ma for being indecisive and lacking the
stomach for rough and dirty politics. KMT elder Hsu Li-teh
told AIT Deputy Director on December 7 that even Ma's own
father acknowledged his son lacked leadership skills and was
nothing more than a technocrat. Ethnic Taiwanese KMT members
(bentupai) have told AIT it is unlikely that a Mainlander
could be elected President and that KMT bentupai would insist
the next Chairman be Taiwanese.


7. (C) Despite Ma's reported shortcomings, many KMT insiders
feel Wang's feet of clay are even worse. KMT Legislator Hung
Chao-nan told AIT that Wang is the very symbol of "black
gold" (money) politics and has little appeal among the
electorate. While acknowledging that so far no one has
produced any evidence about Wang's rumored "legal problems,"
Su Chi explained that many in the KMT fear that if they
supported Wang for Chairman and later President, at the
eleventh hour, the DPP might expose a scandal destroying Wang
and the KMT along with him. Ironically, this would replicate
the KMT's eleventh hour tarring of James Soong in 2000 for
being Lee Teng-hui's bagman. Moreover, Su added, "Wang is a
poor public orator who puts people asleep as quickly as Lien
Chan does."

Procedural Gremlins
--------------


8. (C) Another complicating factor is the mechanism by which
the next Chairman will be selected. In 2001 the KMT revised
the Party Charter to allow for direct election of the
Chairman. Despite these "democratic" reforms, Su Chi told
AIT that it is quite possible that Party elites might still
be able to control the decision and impose their choice on
the rest of the Party. If this were the case, Su said, Wang
would be at a great advantage because he excels in backroom
deals. However, if the decision were left to the Party
Congress of some 800 members, Su expected Ma would be the
choice. And yet, Su mused, if the rules were interpreted to
allow every "card-holding" KMT member to vote, Wang would
know how to manipulate the balloting to his favor.

You Can't Go Home Again
--------------


9. (C) Another unresolved question is whether there is a
place in the KMT for James Soong, who has publicly made it
clear he is unwilling to be relegated to "Number Two."
During LY campaign, Soong went into high gear and appeared to
be plotting his return. Longtime Soong confidant Daniel
Hwang (Yih-jiau) told AIT on November 15 that Lien and Soong
had worked out a secret agreement in which the two parties
would merge in February 2005, Lien would remain chairman, and
Soong would be appointed to a newly created position of
Deputy Chairman. As part of the pact, Ma would be the 2008
presidential nominee with the understanding that Soong would
be appointed Premier in a Ma Presidency. Hwang said that
Wang does not have a role in this new arrangement because
Lien and Soong decided that Wang lacked charisma.


10. (C) However, as relations between the PFP and KMT
continued to sour during the course of the LY campaign, the
alleged secret agreement apparently fell by the wayside. The
terms of the secret agreement clearly illustrate that the
primary dilemma for Lien in his push for merger is finding an
appropriate role for Soong in a reconstituted KMT-PFP. PFP
elder and former Taipei City Council Speaker Luo Bin told AIT
on December 8 that the greatest stumbling block to a merger
was James Soong himself. A KMT official told AIT that there
had been no progress in merger talks before the election
because Soong was dissatisfied with becoming just one more
KMT vice chairman. The KMT official pointed out that if the
KMT had offered Soong the Chairmanship, "he would be back
quicker than greased lightning."

11. (C) The day after the PFP's poor showing in the December
11 LY race, Soong ruled out the possibility of a merger. On
December 13, he publicly blamed the KMT for his party's poor
election showing, bitterly lamenting that many outstanding
PFP candidates did not win because the KMT had withdrawn its
support for them. Soong also criticized Wang Jin-pyng for
not being more supportive of PFP causes in the LY and
suggested that the PFP might not support Wang's bid for LY
presidency in the next session. PFP Legislator Sun Ta-chien
told AIT on December 13 that "too many conflicts happened in
this campaign," and the KMT was "not our friend and did
everything it could to push us out." Even if the KMT and PFP
were to merge, he added, he would not cooperate with the KMT.


Comment: A Bad Ending
--------------


12. (C) The surprise outcome of December 11 election has not
eased the internal tension that existed within either in the
KMT or the Pan-Blue prior to the election. In many ways the
KMT's stronger than expected showing has complicated matters.
Lien's advisors are urging him to stay on as Chairman. The
ongoing divide between Ma and Wang will enhance the
likelihood that Lien can remain as Chairman if he so chooses.
As the KMT's James Chen pointed out, keeping Lien Chan as
Chairman serves the important purpose of keeping the party
together. The choice between Ma Ying-jeou and Wang Jin-pyng
is actually symbolic of deep splits within the KMT between
the Mainlander and the Bentu wings. While Ma clearly has
greater popular appeal, the KMT's LY electoral success will
give Wang a boost in the upcoming leadership battle. The
PFP's poor performance will put enormous pressures on James
Soong. Already a volatile personality in the best of times,
Soong might well make statements in the days ahead that will
aggravate the KMT's problems. The issue of leadership
transition is crucial for the KMT and its viability as a
political force. After 2004 presidential election, several
KMT reformists told AIT that they secretly wished their Party
could suffer more small defeats so that the Old Guard would
leave the scene and allow them to commence the much needed
internal reforms. Paradoxically, from that viewpoint, the
KMT's December 11 "victory" might have been the worst thing
that could have happened.
PAAL