KMT IN "WAIT AND SEE" MODE PENDING LIEN CHAN'S

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003180

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 07/28/2015
TAGS: PGOV TW
SUBJECT: KMT IN "WAIT AND SEE" MODE PENDING LIEN CHAN'S
RETURN

REF: TAIPEI 3097

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


1. (C) Summary: Since Ma Ying-jeou's KMT Chair election
victory on July 16, there has not yet been any noticeable
shift in the direction of the party. Ma, who does not assume
office until August 19, has begun to travel around the island
to thank supporters, to build KMT momentum for the December
city/county elections, and to gauge support for various KMT
reform proposals. LY Speaker and former KMT Chairman
candidate Wang Jin-pyng still refuses to reconcile with Ma,
and has announced his intention to relinquish his Vice-Chair
position after current Chairman Lien Chan steps down. Lien,
who left Taiwan immediately after the election, is scheduled
to return on July 28. According to AIT contacts, until Lien
returns and makes his intentions known, no one can predict
the party's course, or whether there will be meaningful
cooperation between Chairman-elect Ma and Lien ally Wang.
End summary.


2. (U) On July 23, Ma started his "thank you" tour around
Taiwan, making his first stop in Taichung City, where he
garnered 77 percent of the party vote. Ma told the press he
planned to cut 1000 of the party's 1600-member staff. Ma
also contemplated moving KMT headquarters out of its lavish
and imposing gray granite Taipei building, and into more
modest facilities. DPP opponents have long accused the KMT
of acquiring the building, located directly opposite the
Presidential Palace, through illegal means. Ma also used the
Taichung City stop to promote Pan-Blue unity, without which,
Ma said, the KMT would certainly lose the December
city/county elections. Ma has pledged to visit 25 cities
over the next month to promote his ideas for KMT reform and
Pan-Blue cooperation.


3. (C) Current Chairman Lien Chan departed Taiwan for the
United States shortly after casting his ballot on July 16.
He was originally scheduled to return to Taiwan on Tuesday,
July 26, in time to preside over the weekly meeting of the
KMT Central Standing Committee (CSC) on Wednesday, July 27.
After it was announced that Lien's return was delayed until
July 28, the CSC meeting, which would have brought Ma and
Wang face to face, was canceled. AIT contacts in the KMT had
anticipated that at this meeting Lien would most likely urge
cooperation between the former adversaries. If, on the
contrary, Lien fails to push for reconciliation, it will be
interpreted to indicate Lien's continued support for Wang,
and implied opposition to Ma's proposed reforms. James Chen
(Jian-zhi),former KMT legislator and Wang Jin-pyng's chief
of staff, declined to meet with AIT until the first week of
August, explaining that at present matters within the party
were "still unclear."


4. (C) KMT Legislator and self-styled Lien-Ma-Wang
intermediary Hsu Shu-po told AIT that he is "100 percent
certain" that Wang Jin-pyng will not cooperate with Ma
(reported septel),and that Ma's leadership will face serious
challenges in the short term. According to Hsu, the KMT
hierarchy is highly age-sensitive, and after his humiliating
loss, Wang would never accept a subordinate position to the
younger Ma. Hsu, who claims to have been Lien Chan's
go-between to the Ma and Wang camps during the Chairmanship
election, says Wang's resentment is so strong that he will
refuse to work with Ma even if Lien asks him to do so. Hsu
said that beyond his personal animosity toward Ma, Wang also
feels no sense of loyalty or obligation to the party after
his defeat. Hsu is afraid that once the LY resumes normal
sessions, the potential for a power struggle within the party
will increase if Wang and Ma disagree on legislation.
Despite these gloomy short-term predictions, Hsu believes
that if Ma can improve his networking and interpersonal
skills to establish his own relations with KMT legislators
and local leaders, Ma will be able to trade star-power
charisma for cooperation, and his long-term prospects will be
good. Hsu added that in the likely event Wang refuses to
mobilize the KMT vote for December's city/county elections,
Lien Chan himself will pitch in. Former KMT LY member and
Lien Chan associate Apollo Chen (Hsueh-sheng) told AIT that
Wang will not cooperate with Ma until one year before the
2008 presidential election. Chen said Wang cannot accept a
position under Ma without losing his stature within the KMT.
Chen opined that by refusing to play second-fiddle to Ma,
Wang can credibly declare his own presidential candidacy in
2007, which he can use to angle for his real goal: the
Vice-Presidential slot under Ma.


5. (C) Comment: Lien Chan is still the KMT's center of
gravity. Others in the party are waiting to see whether he
sides with Wang and the party's traditionalists, or with
reformer Ma, who has already been embraced by the KMT
rank-and-file. Lukewarm support for Ma will likely be
interpreted as implicit support for Wang, and could establish
Wang as a competing focus of power within the party. Hsu
Shu-po suggests that if Ma is able develop his own network of
contacts, he may be able to convert his grass-roots
popularity into real political power within the KMT. Ma's
personality militates against this -- his circle of trusted
allies is very small, and he does not make new alliances
quickly. Ma faces the challenge of having to build by
December a network of allies that can yield the kind of
results he needs to stay in power. End comment.
PAAL