PFP POLITICAL PROSPECTS AWAIT SOONG'S RETURN

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000314

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 01/25/2015
TAGS: PGOV PREL TW
SUBJECT: PFP POLITICAL PROSPECTS AWAIT SOONG'S RETURN

REF: TAIPEI 00168

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


1. (C) Summary: PFP Chairman James Soong delayed his rumored
January 21 return to Taiwan, generating further questions
about his intentions and leaving unresolved PFP prospects in
the Legislative Yuan session beginning February 1. PFP Vice
Chairman Chang Chao-hsiung announced that PFP officials would
not accept posts in the new DPP government. The KMT has
maintained a discreet silence on media speculation of DPP-PFP
cooperation, but it has in recent days sought pragmatically
to draw the PFP back into the Pan-Blue fold with talks of a
joint campaign for election of LY Speaker and Deputy Speaker.
End Summary.

Medium Term Reassurances
--------------


2. (C) People First Party (PFP) Chairman James Soong did not
end his month-long post LY election exile in California and
return to Taiwan on January 21, generating questions about
his intentions and leaving unresolved the PFP role in the
upcoming Legislative Yuan (LY) session beginning February 1.
PFP Vice Chairman Chang Chao-hsiung, however, did return from
meeting with Soong in the U.S. to try to clarify the
situation by announcing that Soong would not meet with Chen
Shui-bian on his return to Taiwan. The PFP, he stated, is an
independent entity with its own agenda, and PFP officials
will not accept posts in the DPP government. He also
confirmed Soong's support for KMT Vice Chairman Wang
Jin-pyng's re-election bid for LY Speaker, and noted there
are many in the PFP interested in being Deputy LY Speaker.
(Note: PFP insider Raymond Wu told AIT on January 11 that
Soong would return near the end of January. End note)

Making Lemonade Out of Lemons
--------------


3. (C) Having suffered a painful legislative defeat, the PFP
is moving to save a role for itself as what KMT Legislator
John Chang (Hsiao-yen) called the "crucial minority" in the
LY. The PFP's 34 LY members are theoretically essential to
either DPP or KMT hopes for majority control of the LY.
Echoing Chang's statements on PFP autonomy, PFP Legislator
Hwang Yih-jiau told AIT that his party intends to keep an
equal distance from both KMT and DPP. Noting that he had
accompanied Soong to some of his meetings with USG officials
in Washington, Hwang said the U.S. government had urged Soong
and the PFP to be more non-partisan for the sake of
government efficiency. Hwang said the USG suggestion is
consistent with Soong's prior statement that PFP would look
for ways to cooperate with the DPP on legislation that would
benefit the people's livelihood.


4. (C) While the PFP would not rule out cooperating, PFP
officials are now downplaying reports of an outright alliance
with the DPP. Responding to DPP attempts to court the PFP
with hints of cabinet appointments, Vincent Chang
(Hsien-yao),PFP Policy Research Center Director and newly
elected legislator, announced January 21 that PFP would not
discuss the possibility of a coalition government unless DPP
first dropped its party manifesto on Taiwan independence.
Chang also stated that Soong is completely uninterested in
being chairman of Chen Shui-bian's proposed "Cross-Strait
Peace Development Committee."

Seeking a Price for Cooperation with KMT
--------------


5. (C) Soong's flirtation with the DPP is most likely
intended to give the election-weakened PFP a bargaining chip
to lever its position with the KMT. KMT Chairman Lien Chan
told the AIT Director he had received reassurances of
cooperation by telephone from Soong. Recently, the KMT has
begun to use the media to draw the PFP back into the Pan-Blue
fold. On January 23, KMT Legislator Tseng Yung-chuan told
the press that Vincent Chang had telephoned him to request an
early decision on a joint KMT-PFP LY Speaker-Deputy Speaker
ticket, so that a joint task force could be formed to
campaign for the two jobs. Tseng, however, admitted that
KMT-PFP cooperation on LY positions and other related issues
could not be finalized until after a meeting between Lien
Chan and Soong after the latter's return to Taiwan.

6. (C) The KMT for the most part has refrained from
commenting directly on the ongoing DPP courtship of PFP.
Joanna Chen, Chief of Staff for KMT Legislator John Chang,
told AIT that Lien Chan had instructed KMT members not to
comment on the issue for fear of pushing the mercurial Soong
into actually cooperating with the DPP. Privately, some KMT
officials are worried the PFP will cooperate with the DPP "in
some way." Veteran KMT Legislator James Chen (Chien-chih)
outlined for AIT on January 21 just how Soong might try to
justify to PFP supporters cooperation with the DPP. Soong,
Chen surmised, could point to the KMT's "black gold"
(corruption) problem as a valid reason for breaking with KMT,
at least on certain issues. Soong could then portray PFP-DPP
cooperation as an act of self-sacrifice for the greater good
and as a way to inject PFP ideals into the DPP government.
Having surprisingly been granted a clean bill of health by
Chen administration prosecutors on his long outstanding
Hsinpiao corruption case earlier this month, Soong is on
firmer ground to try this tactic.

Comment: Postponing the Inevitable
--------------


7. (C) Since his departure from Taiwan almost immediately
after the end of the LY election on December 11, James Soong
has kept political observers guessing his every move. His
absence encouraged the DPP to float rumors of a possible
DPP-PFP alliance and coalition government with PFP members in
key positions and to sow seeds of distrust within the
Pan-Blue coalition (Reftel). For his part, Soong seems to be
trying to exploit the rumors and the PFP's role as a possible
swing minority in the LY to lever his and the PFP's position
both in Taiwan politics and within the Pan-Blue alliance.
James Chen pointed out that despite the grumbling within his
own party about Soong being out for himself, no one in the
party would dare defy Soong (even if he joined the DPP),and
ultimately Soong would likely have the final say on selecting
the PFP candidate for LY Deputy Speaker and all other
outstanding issues involving the PFP. Soong's reluctance to
depart the U.S., however, suggests his control of the PFP may
be more fragile than Chen suggests. Soong's room for
maneuver will significantly diminish the minute he lands in
Taiwan and has to face his PFP colleagues and supporters.
PAAL