NEW PM HSIEH CHANG-TING: THE VIEW FROM KAOHSIUNG

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 000332

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 01/26/2015
TAGS: PGOV PREL CH TW
SUBJECT: NEW PM HSIEH CHANG-TING: THE VIEW FROM KAOHSIUNG


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

Summary
--------------


1. (C) Begin Summary. The January 25 appointment of
Kaohsiung Mayor Frank Hsieh (Chang-ting) as Taiwan's new
Premier was long-rumored, but still surprised some in the
South who saw Hsieh as one of President Chen's chief
competitors. The move was a natural step for Hsieh, however,
who had served previously as Democratic Progressive Party
(DPP) Chairman, legislator and Taipei City Councilor, was the
DPP's first vice presidential candidate in 1996, and is
positioning himself to run for president in 2008. Local
analysts see Chen's selection of Hsieh for the premiership as
intended to balance internal DPP factions, especially to
offset the rising strength of the "New Tide" faction, as well
as to capitalize on Hsieh's moderate views and pragmatic
style as the government faces a new legislature next month
dominated by the opposition.


2. (C) More moderate and pragmatic than President Chen, Hsieh
is nevertheless a strong advocate of core DPP tenets. He
supports maintenance of Taiwan's "de facto independence," but
opposes constitutional reform as a way to codify Taiwan's
status. He discounts threats from the PRC as mostly
rhetoric, but opposes DPP extremists' (and Chen's) efforts to
"push the envelope" with Beijing. Hsieh also has been an
advocate of expanded cross-Strait economic ties. Hsieh has
built a solid record of achievement in Kaohsiung and
demonstrated a style that stressed coalition-building and
compromise, often working quietly through intermediaries to
build support for his policies from local powerbrokers, even
ones affiliated with the opposition or local organized crime.
It remains to be seen, however, whether Hsieh's talents as a
manager and political coalition-builder will help the central
government develop a better working relationship with the
opposition-controlled legislature. Hsieh's success with the
legislature and his ability to influence policy will depend
heavily on how well he works with his long-time colleague and
rival, President Chen. And, ultimately, will determine
whether he emerges as the DPP's front-runner to succeed Chen
in 2008. End Summary.

Frank Hsieh Appointed Premier
--------------


3. (C) While Kaohsiung Mayor Frank Hsieh was long-considered
a possible candidate to succeed Yu Shyi-kun as Premier, and
the media had been rife with rumors that his appointment was
imminent, many local analysts were surprised with Chen's
decision to choose Hsieh. Hsieh, a long-time DPP figure, had
been seen as more rival than colleague of President Chen's
for many years. While the two launched their political
careers together during the 1979 "Formosa Incident" trials,
in which both served as defense counsel, they subsequently
vied with each other for leadership of the DPP. Both
National Taiwan University (NTU) Law School graduates, who in
different years ranked number one on Taiwan's bar exam, Hsieh
and Chen followed parallel political paths, rising through
the ranks of local city council positions to become
legislators in the 1980's and early 1990's. In 1994, the two
competed for the DPP Taipei Mayoral nomination, with Chen
winning the nomination as well as the election, which in turn
served as his springboard to the Presidency. Meanwhile,
Hsieh joined his former law professor, Peng Ming-min, on the
DPP's first vice-presidential/presidential (respectively)
ticket in 1996, losing by a large margin to the KMT's Lee
Teng-hui/Lien Chan ticket.


4. (C) Hsieh's career received a boost in 1997, however, from
his high-profile intervention to resolve a tense hostage
situation in which a criminal held the South African military
attache and his family hostage. Hsieh moved to Kaohsiung in
1998 and ran successfully for Mayor of Taiwan's second
largest city, winning by a narrow margin. He was re-elected
in 2002, and will be resigning with just over half his second
four-year-term completed. Under Taiwan election laws, the
Premier will appoint an acting Mayor to fill out the
remainder of Hsieh's term.


5. (C) Hsieh is well-known to AIT and was a 1982 AIT
International Visitor (IV) program participant. During his
time as Mayor, Hsieh has visited the U.S. frequently, both
for business and to visit his son who is studying at
California State University at Northridge, just outside Los
Angeles (Hsieh's only other child, a daughter married to a
doctor, lives in Taiwan). In AIT's contacts with Hsieh, he
has demonstrated a strongly positive view of the U.S. and has
often acknowledged to AIT how important he believes U.S.
support is for maintaining Taiwan's security. He speaks a
little English, with slightly better listening comprehension
and reading (perhaps a 1 /2 on the FSI scale),but has been
quietly working with an American English teacher over the
past year and a half in an attempt to improve. Hsieh's ties
to Japan are stronger. He completed a Master's Degree in Law
at Kyoto University in the mid-1970's, speaks fairly good
Japanese and visits Japan almost as often as the U.S.

More Moderate and Pragmatic than President Chen
-------------- --


6. (C) While Hsieh is a strong subscriber to core DPP tenets,
he is more pragmatic and moderate than President Chen on most
issues. Hsieh told AIT that he supports maintenance of
Taiwan's "de facto independence" but opposes Chen's calls for
constitutional revision and efforts to codify Taiwan's status
into law, because he believes the risks outweigh the
benefits. Hsieh is proud of his role while DPP Chairman in
2000-01 in revising the DPP charter to drop language calling
for a declaration of Taiwan independence in favor of more
"moderate" language stating that no declaration is necessary
since Taiwan, under the title "Republic of China" is already
an independent country. Like many in the Pan-Green camp,
Hsieh often discounts PRC threats as "mostly rhetoric," but
he opposes efforts by DPP extremists (and by Chen) to "push
the envelope" with Beijing. Hsieh has advocated expanded
cross-Strait economic ties, even pushing to lead a delegation
to the Mainland while he was Kaohsiung Mayor, before
President Chen quashed the initiative.


7. (C) On Taiwan's political scene, Hsieh has displayed
moderation and pragmatism in his positions and tactics. With
a less charismatic and more intellectual style than President
Chen, Hsieh has proven better at political deal making than
at campaigning. While he is praised by many as
intellectually sharp with a cutting wit, he has suffered
sometimes in the traditional politics of Southern Taiwan from
criticism that he comes across as &too lawyerly,"
overly-critical and sometimes arrogant. At the same time,
Hsieh has proven adept at winning elections through careful
and meticulous planning and good strategy. As DPP Chairman
in 2001, he led the DPP to a surprisingly strong showing in
the LY election. In the lead-up to the March 2004
Presidential election, Hsieh was widely criticized in the
"green" media for running a passive campaign for President
Chen in Southern Taiwan, with some questioning his loyalty to
the President's re-election cause. Hsieh argued that his
lower-key strategy was based on a careful analysis of the
electorate and polling. In the end, Hsieh was proven right
as Southern Taiwan, including Kaohsiung, produced much higher
than expected results for the President. Similarly, the
results in the December 2004 LY election in Kaohsiung, with
the DPP campaign led by Hsieh, achieved DPP targets, unlike
most other areas of the island. Many local analysts cite
Hsieh's success in leading these DPP campaigns as a major
reason Chen chose to elevate Hsieh to Premier.

Why Hsieh?
--------------


8. (C) It is Hsieh's record of managing Kaohsiung City,
however, that other observers say led Chen to select him.
When he won a surprise victory in the 1998 Kaohsiung Mayoral
race, Hsieh had no management experience, had no seasoned
political staff to assist in running the city, and faced a
hostile KMT-dominated City Council. While Hsieh initially
stumbled and had a number of difficult conflicts with the
City Council, he eventually developed a solid City
Administration and worked adeptly to peel off key City
Councilors by working through local well-connected
intermediaries. While leaving long-time city department
chiefs in place, he placed reliable, young supporters in key
deputy positions. These gave Hsieh independent eyes on the
internal workings of the City government and allowed him to
begin development of a core of qualified administrators.
After several years, Hsieh's approach paid off and he has
drawn high marks for his success in cleaning up Kaohsiung and
developing its infrastructure. Ironically, Hsieh's very
success in cutting backroom political deals almost cost him
his career when a major vote-buying scandal hit the Kaohsiung
City Council in 2003. Hsieh emerged clean, but not before
sacrificing his closest political advisor who, while serving
as the City Civil Affairs Director, was proven to have
supervised handoffs of bags of cash to City Councilors.
While Hsieh has earned high praise from many for his ability
to cut deals to benefit the city, others have condemned Hsieh
for his willingness to work with the opposition and corrupt
local powerbrokers.

Balancing the New Tide and the Presidential Contenders
-------------- --------------


9. (C) Some local analysts also believe the choice of Hsieh
for Premier helps Chen offset what many in the DPP have
complained is the rising power of the DPP's "New Tide"
faction. Unlike President Chen's "Justice Alliance" faction
or Frank Hsieh's "Welfare Nation" faction, the New Tide
faction is a tightly-organized internal DPP coalition that
holds regular meetings, tightly controls membership, requires
membership dues and maintains strong discipline. National
Security Council (NSC) Secretary General Chiou I-jen and
Taiwan Stock Exchange Chairman Wu Nai-jen are leading New
Tide figures, but reportedly both have vowed never to seek
elected positions. Instead, the faction made public --
prematurely -- its support for soon-to-be DPP Party Chairman
Su Tseng-chang to prepare to run as the DPP's 2008
Presidential candidate. While members of the faction,
especially Chiou I-jen, were seen as key to President Chen's
March 2004 re-election effort, many in the DPP complained
that the New Tide was becoming a "secret organization" in the
DPP that should be taken down a few notches. In Kaohsiung,
local DPP party officials went so far as to describe to AIT/K
the New Tide faction as the "communist party" of the DPP,
citing its almost Leninist-style party organization and the
"socialist-leanings" of some of its members. Local political
pundits speculate that Chen may feel Frank Hsieh is the only
DPP figure of sufficient stature that Chen can use to help
offset the New Tide's rise.


10. (C) While the "threat" posed by the New Tide faction may
be overstated by some, most local analysts as well as DPP
party contacts do believe President Chen is seeking to create
a balance between the two most likely contenders for the 2008
DPP nomination for President -- Frank Hsieh and Su
Tseng-chang. By supporting Su for DPP Party Chairman and

SIPDIS
Hsieh for Premier, political analyst Liao Da-chi told AIT/K,
Chen has set them up to compete with one another and provided
each with a test. Hsieh will be tested by his ability to
develop a positive working relationship with the
opposition-controlled LY and how successful he is in getting
President Chen's legislative agenda passed and implemented.
Su will be tested by his ability to achieve a strong victory
for the DPP in the year-end County Magistrate and Mayor
election.

Hsieh's Vulnerabilities
--------------


11. (C) Hsieh has built a strong record as local and central
level legislator, party chairman, political campaigner and
city mayor. He has, however, never served in a central
government position and, as LY Speaker Wang Jyn-ping argued
to AIT/K Branch Chief in a recent encounter, Hsieh's local
experience may not translate to the "national" scene. Hsieh,
of course, also will face uncertainty in his relations with
President Chen, which have traditionally shifted between
comradely and competitive. In a December 1 meeting with AIT,
Hsieh himself noted that he had always worked "side-by-side
with Chen" and had never actually worked as a subordinate to
Chen. Yet, as Premier, Hsieh will be pushed to implement
President Chen's policy.


12. (C) Hsieh also has some political vulnerabilities that
could hurt him in the competition to succeed Chen in 2008.
Hsieh has been hit in all of his political campaigns with
assertion of his ties to various scandals. In both the 1998
and 2002 mayoral campaigns, Hsieh was accused of profiting
from decisions or interventions he had made with respect to
various land development projects, including the Zanadau
project in Kaohsiung County. His opponents have also claimed
he has taken illegal campaign donations from Buddhist temples
and other organizations. Thus far, Hsieh has managed to fend
off the charges without losing too many votes, but the lack
of complete proof vindicating him in each case leaves him
vulnerable to them coming back.


13. (C) More problematic is Hsieh's involvement with a
"religion," or "cult" led by Sung Chi-li, who claims
supernatural powers. Sung was unsuccessfully prosecuted for
defrauding his followers of millions of U.S. dollars. While
Hsieh's wife openly supports Sung and even helped edit his
writings, Hsieh has tried to maintain a low profile, but
refuses to retract earlier statements that he too believed
and followed Sung. In Hsieh's most recent political
campaigns he has been quick to cite "the privacy and freedom
of religion" in response to questions about his views on
Sung, leaving most with the impression that he remains a
follower of the group.
PAAL