Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D)
1. (C) Summary: PFP Chairman James Soong is struggling to recover from a political setback and is using everything within his means. Soong has fueled rumors of a DPP-PFP alliance and is hoping to use a visit to Washington to sanction his role as a national leader in Taiwan. The DPP, having fallen short of an LY majority and always looking to sow tension within the Pan-Blue, has nothing to lose in courting the PFP. Soong's public statements immediately after the LY election hinted that such an alliance was possible. Soong's private words to KMT Chairman Lien Chan and his PFP ranks, however, suggest the Pan-Blue will remain intact, but that the PFP will play a more independent role. The agreed-upon KMT-PFP merger will not take place by the March 2005 target, if at all. Soong has already derived some benefits from his maverick posture, but he also risks alienating core PFP supporters and his own PFP colleagues who for their own reasons want to merge with the KMT. Soong appears to be playing one of his last cards today with his high profile visit to Washington. End Summary.
James Soong: Phoenix Rising
2. (C) PFP Chairman James Soong is currently struggling to recover from a political setback and is using everything within his means to do so. By exploiting the PFP's role as a "crucial minority," Soong has used rumors of a DPP-PFP alliance to leverage his position with the KMT and played up meetings with Washington officials to sanction his role as a Taiwan national leader. December 11 was a grim day for Soong, with the PFP losing 12 incumbents in the LY, and the KMT saying there will be no room in the party leadership for Soong when, for want of resources and electoral support, he is finally forced to accept merger on KMT terms. In recent days, however, various sources are feeding media speculation of potential DPP offers of a host of positions to Soong, including Premier, Straits Exchange Foundation (SEF) Chair, and Chair of Chen Shui-bian's proposed "Cross-Strait Peace Development Commission."
Strange New Bedfellows?
3. (C) The DPP's failure to win a Legislative Yuan (LY) majority in the December 11 election has prompted much speculation that Chen Shui-bian might try to build a governing alliance with the PFP, whose 34 LY seats would give the DPP majority control of the LY. Over the past 30 days, the DPP has not hesitated to fuel these rumors, with DPP leaders, including Kaohsiung Mayor Frank Hsieh, Acting Chairman Ker Chien-ming, and DPP Secretary General Chang Chun-hsiung, making suggestive comments of imminent DPP-PFP accord. As early as December 14, the Taiwan Daily News quoted an anonymous DPP official saying cooperation with the PFP was definitely a possibility. On December 29, Ker publicly suggested that Soong should head Chen Shui-bian's proposed "Cross-Strait Peace Development Committee." After SEF Chairman Koo Chen-fu passed away on January 3, rumors started circulating that the DPP was considering Soong as Koo's successor. Legislator Lee Wen-chung and other members of the DPP's "60s Group" (made up of DPP members born around that decade) even urged the leadership on January 5 to delete the pro-independence plank in the party's platform. The DPP loses nothing by wooing the PFP -- if it succeeds it could form a comfortable LY majority, and effectively destroy the Pan-Blue alliance. If the courting goes nowhere, the DPP has already damaged the Pan-Blue coalition by sowing suspicion between KMT and PFP.
Cryptic Words from Soong
4. (C) Statements by PFP Chairman James Soong immediately after the LY election also hinted that a DPP-PFP alliance was possible (Ref A). Soong ruled out the possibility of a KMT-PFP merger, declaring that PFP would cooperate with the KMT only on an issue by issue basis, and fueled rumors of DPP overtures to the PFP for coalition government by making a leading statement, just before boarding a U.S.-bound plane on December 15, that he was not interested in forming a joint cabinet with the DPP. Soong returned to Taiwan briefly to attend the funeral of former President Chiang Ching-kuo's widow, Chiang Fang-liang, on December 27, then departed for the U.S. again the next day saying that the PFP would not ask for any positions in the new government and would not participate in a coalition government. However, Soong said, the PFP should act in the interest of the public and not merely along confrontational Green-Blue ideological lines. He added that the PFP would cooperate with the KMT on defending the ROC, but compete with the KMT on legislation on political party reform, and that the PFP would consider cooperating with any other parties on economic and public policy.
5. (C) Soong's public statements appear to correlate with what he has said in private to Lien Chan and to his PFP colleagues. Lien told the AIT Director on January 12 that Soong had assured him that, although KMT-PFP merger was not possible in the immediate future, the PFP would continue to cooperate with the KMT. If the DPP government was willing to safeguard the ROC, however, he would consider cooperating with the DPP on specific issues involving the people's livelihood (Ref B). Soong confidant Hwang Yih-jiau confirmed to AIT on January 11 before he departed Taiwan to join Soong in the U.S. that these are the guiding principles that Soong laid down for the party.
Areas for Cooperation
6. (C) A PFP insider Raymond Wu, formerly PFP International Affairs Director, told AIT on January 11 that the possibility for a DPP-PFP alliance is very real, and outlined three levels of possible cooperation. At the very least, Wu said, the two parties could cooperate on policy, but it would be limited to domestic issues such as economics, social welfare, education, and environment. Wu said the ideological gap between the two parties was too wide, so they would probably not seek cooperation on cross-Strait or international policy. The DPP and PFP, Wu continued, could also cooperate on personnel issues, including appointment of PFP members to the new Cabinet and, more importantly, securing for the PFP the LY Vice Speakership. Wu told AIT that PFP Legislators Christina Liu (Yi-ru), Chung Jung-Chi, Lee Ching-an, Lee Ching-hua, and Shen Chih-hwei are all lobbying for the job. Finally, there is also talk, Wu said, of forming a DPP-PFP coalition government. Wu, however, dismissed the third point as highly unlikely.
7. (C) KMT Legislator John Chang (Hsiao-yen) told AIT on January 14 that Soong has been extremely successful in exploiting the PFP's role as a "crucial minority" in the LY. Chang noted the KMT had already dropped its original intention of nominating Wang Jin-pyng and Chiang Pin-kun as the LY Speaker and Deputy Speaker. Most likely, he said, the Deputy Speaker will now come from the PFP ranks. Chang also confirmed that informal talks have taken place between DPP and PFP caucus leaders and that there will definitely be "some kind" cooperation on domestic policy.
High Risk Game
8. (C) Chang said however that Soong should be careful not to overplay his hand in this "highly risky game." He pointed out that there is the danger that Soong might alienate his grassroots supporters, as well as PFP legislators (Chang estimated that at least ten would leave the PFP and return to the KMT if Soong moved too far toward the DPP). The possibility of alienating core PFP supporters worries Hwang Yih-jiau and other PFP leaders. Hwang told AIT that PFP supporters are retired and active military personnel, Mainlanders, and other dark Blue voters who would not tolerate any sort of cooperation with the DPP. Raymond Wu pointed out that many PFP LY candidates had campaigned on the promise of merging PFP with KMT, and that some newly elected members, Vincent Chang (Hsien-yao) for example, may well be recalled if the merger is not achieved.
9. (C) Wu also pointed out that there are many other PFP members who were elected in areas with high concentrations of KMT supporters, and because of their personal ambitions (especially for this year's city and magistrate elections), these PFP members desire greater integration with the KMT. For example, Wu told AIT that Sun Ta-chien wants to run for Taoyuan County Magistrate, Chou Hsi-wei and Lee Ching-hua for Taipei County Magistrate, Lee Ching-an for Taipei City Mayor, and Lee Yong-ping for Taipei City Deputy Mayor.
From Party to Entourage
10. (C) Yet another complicating factor is that the best interests of the PFP as a political party might not necessarily be in the best interests of James Soong. Many KMT officials say they simply cannot see a role in the KMT for Soong. They doubt party members would be willing to elect Soong as Chairman and expect Soong would not accept any position other than the top job. Soochow University Professor Emile Sheng told AIT on January 3 that he feared Soong would not hesitate to break up the PFP if he thought it were in his interest. Sheng said that even if only half of the 34 PFP legislators stayed with Soong, he would still control 17 LY seats, which is more than the Taiwan Solidarity Union's (TSU) 12 seats.
Comment: In the Driver Seat
11. (C) For all the talk and rumors of DPP-PFP cooperation, there has been little evidence of actual negotiations between the two parties. The PFP continues to block legislation of vital interest to the DPP -- and the U.S. (such as the Defense Special Budget). Though professing opposition to the KMT's "black gold" (corruption) image, the PFP did not even cooperate with the DPP in placing the Political Party Reform bill on the LY agenda, an issue that the DPP uses to attack the KMT's "ill-gotten assets." In the meantime, Soong has proved once again that he is one of Taiwan's most astute politicians. Dominating today's headlines with news of his meetings with American officials in Washington, Soong has returned from "loser" status on December 11 to being at the center of Taiwan politics. PAAL