"NEW DPP MOVEMENT": TRYING TO REGAIN THE HIGH

S E C R E T SECTION 01 OF 03 TAIPEI 004189

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 10/14/2015
TAGS: PGOV TW
SUBJECT: "NEW DPP MOVEMENT": TRYING TO REGAIN THE HIGH
GROUND ON CLEAN GOVERNMENT


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


1. (C) Summary: Tuan Yi-kang, convener of the Democratic
Progressive Party (DPP) New Tide Faction, told AIT that he
created the "New DPP Movement" to help Luo Wen-jia, the
Democratic Progressive Party (DPP) candidate for Taipei
County Magistrate, win election on December 3 by burnishing
Luo's reformist credentials and distancing him from perceived
DPP corruption. The broader goal of the reform initiative is
to press the DPP to return to its original anti-corruption
and clean government mission. Tuan said the DPP's failure to
deliver on reform pledges has resulted in a loss of public
trust. Therefore, Tuan stressed, the DPP's top priority must
be to restore its credibility. Tuan expressed disappointment
that President Chen Shui-bian had attacked the opposition
rather than accepting responsibility for Government problems
in his October 10 National Day speech. Chen's October 13
meeting with DPP leaders and candidates dramatically revealed
the chaos that corruption charges have produced in the party.
Chen's challenge will be to take real steps to reform the
party while resisting the temptation to lapse into his
accustomed attack mode. End Summary.

2. (C) On October 11, Tuan Yi-kang, convener of the
Democratic Progressive Party's New Tide Faction (called "The
Movement" in English) and former DPP legislator, briefed AIT
on the "New DPP Movement" that he and Luo Wen-jia, DPP
candidate for Taipei County magistrate, launched on October

1. The goal of the New DPP Movement, Tuan explained, is to
press the party to return to its original mission of
anti-corruption, reform, and clean government. Public trust
in the party has declined because the DPP has not delivered
on its reform pledges since coming into power in 2000. The
New DPP Movement, which was not vetted or approved by the
party, has no organization and is being planned and run by
just three individuals: Tuan, Luo, and DPP Legislator Lee
Wen-chung. Initial results have been positive, Tuan said,
with 74 of 89 DPP legislators endorsing the movement. The
movement also enjoys wide support among party members in
central Taiwan, according to DPP International Affairs
Advisory Counselor Liu Shyh-fang, who participated in AIT's
meeting with Tuan and had just returned from central Taiwan.
Tuan noted that he does not intend to continue using the term
"New DPP Movement" for his campaign for party reform. "New
DPP Movement" is a name designed to use in "fighting," he
said.

Origins of the New DPP Movement
--------------


3. (C) The idea for the New DPP Movement, Tuan explained,
developed during discussions he held with Luo about Luo's
campaign in Taipei County. Tuan told Luo that current trends
are running against him and that Luo's problems are likely to
increase as the December 3 date of the election approaches.
Although his opponent, Kuomintang (KMT) candidate Chow
Hsi-wei, is a weak campaigner, the KMT will try to turn the
election from a contest between individuals into one between
the KMT and DPP. Current Taiwan polls indicate that the
approval rating for the KMT is ten percent higher than that
for the DPP. To counter the negative effect of DPP
unpopularity, Luo will need to maintain a lead of more than
five percent over Chow to ensure victory, Tuan said. Luo's
current lead is less than five percent, however, and Chow
continues to gain ground. Luo's particular vulnerability
stems from his close association with President Chen
Shui-bian, and so Tuan suggested initiating a reform campaign
that would distance Luo from the scandals and missteps of the
DPP Government.


4. (C) Initial polling indicates that the reform initiative
has given a modest boost to Luo, Tuan noted, but the effects
are probably temporary and so more will need to be done.
That the campaign has met some resistance within the DPP will
probably help Luo solidify his reform credentials, Tuan
observed. Some party members have voiced concern they might
be singled out as the "old DPP," while worry has also been
expressed that the campaign will deflate the party's fighting
spirit on the eve of the December local elections.


5. (C) Pro-Blue pollster and pundit Emile Sheng offered AIT
a different perspective on the Taipei County race. Although
Luo is the stronger campaigner and better liked by the
public, Chow has taken the lead within the last several weeks
according to opinion polls. Luo's drop can be ascribed
almost solely to the negative image of the DPP; Chow has
shown little ability as a campaigner. Luo's presentation of
the "New DPP" slogan has not succeeded in protecting him from
voter distaste for DPP corruption.

The Need to Regain Public Trust
--------------


6. (C) Tuan maintained that in the past the DPP has been
overly focused on winning each election. To increase support
from voters, the DPP has bent its principles and not followed
through on promised reforms. The result has been a loss of
credibility with the public. For example, Tuan cited, the
DPP backtracked on income tax reforms, agreeing to rebates
for teachers and members of the armed services as a tactical
move to win votes. The DPP has also failed to deliver on a
pledge to eliminate the positions of highly paid presidential
advisors who have no responsibilities, Tuan noted. Restoring
the people's trust in the DPP must be the party's top
priority, he stressed. This priority is much more important
than winning elections, Tuan added, even the legislative and
presidential elections in 2007 and 2008.

Criticizing Chen Shui-bian's October 10 Speech
-------------- -


7. (C) Tuan said he was disappointed with President Chen's
October 10 address because Chen ducked responsibility for the
Government's problems, once again attacking the opposition
over the issue of KMT party assets. Government leaders
should reflect, accept responsibility, and apologize to the
public for Government mistakes, Tuan suggested, and there
should be cabinet changes under the principle of
administrative responsibility. For example, Tuan said he had
heard of at least one case in which a senior official had
been indicted with no consequences for his superiors. He
said that the unnamed minister should be required to step
down to take administrative responsibility for the indictment
of his subordinate. Because he had been disappointed with
the Government's response so far, Tuan said, he planned to
organize a press conference at which Legislative Yuan (LY)
members would criticize the government over corruption
issues, including the large bonuses paid to the chairman of
the State-owned China Steel Corporation (CSC). In addition,
Tuan said, he was inviting DPP candidates for county
magistrates and city mayors to sign a pledge to uphold four
clean government measures if elected, measures that exceed
legal requirements and include placing personal assets into a
trust while in office. Tuan noted that DPP Chairman Su
Tseng-chang was making DPP headquarters available for the New

SIPDIS
DPP Movement's public events. Su Tseng-chang hosted the
candidates' signing of a clean government pledge on October
12 as an official DPP event. On the same day, several DPP
and Taiwan Solidarity Union (TSU) legislators held a press
conference to display a letter signed by 94 legislators that
demanded China Steel Corporation Chairman and Justice
Alliance member Lin Wen-yuan turn his bonus over to the
Government. (NOTE. The bonus was based mostly on last year's
booming exports to China's construction explosion. END NOTE.)


8. (C) Tuan said he would monitor Government reaction,
including Chen's handling of a meeting with DPP local
election candidates, before deciding whether further measures
are needed. Noting that acting Kaohsiung Mayor Yeh Chu-lan
has been appointed to investigate problems with the Kaohsiung
rapid transit system project, such as alleged bidding
irregularities, Tuan said he would wait to see whether the
investigation is good, whether someone is held
administratively responsible, and whether public opinion is
satisfied with the investigation results.


9. (C) If Tuan was looking for modest self-examination from
the President's meeting, what he got instead was an amazing
display of DPP fratricide October 13, or maybe it's just a
healthy sign of a capacity for self-renewal. Chen Shui-bian
used a televised gathering of the DPP elite and candidates at
the Taipei Guest House to announce, among other things, that
if scandal touches him he will step down, referring
specifically to CSC Chairman Lin's bonus. It appears that
Chen offered himself because he feels safe from proof of a
connection, but he has set a standard to remove the premier
or other high ranking officers to expiate himself and try to
arrest the fall of the DPP's spiraling reputation.


10. (S) Chen Shui-bian's effort, after the cameras were
turned off, produced a spirited reaction from the New Tide
faction, which has been calling for a New DPP to set itself
apart from those associated with the recent scandals. The
president's Justice Faction in turn called for the removal of
Wu Nai-jen as head of the Taiwan Stock Exchange. The back and
forth of the debate was widely covered in today's media.
Presidential Deputy Secretary General James Huang, who
attended the meeting, told AIT DIR that the party is in a
true "crisis," and said, smiling wryly, the meeting was an
example of the spirit of the DPP, with factions slamming each
other.

DPP Officials Caught by Surprise
--------------


11. (C) Two DPP officials we asked appeared to have been
surprised by, and not entirely sure what to expect from, the
New DPP Movement. Both agreed, however, on the need for
reform. Legislator and DPP Director of International Affairs
Bi-Khim Hsiao suggested to us that the movement, which she
has endorsed, is a "concept" at this stage. Tung Li-wen, DPP
Director of Chinese Affairs, said the idea of reform is good
and is popular with the people, but some specific proposals
should be dropped. He suggested that the party might take up
the reform agenda after the December 3 elections and that the
problem now is that voters may be expecting reforms that will
not happen before the elections.

Comment
--------------


12. (C) The DPP has been hard hit in recent months by a
series of widely publicized scandals, corruption allegations,
and charges of mismanagement. Its talent for public and
vicious squabbling has only compounded the damage. Party
leaders are concerned that growing popular dissatisfaction
with the DPP will translate into defeat in local elections on
December 3 and that the opposition KMT may be able to build
momentum to retake power in the 2008 presidential election.
The New DPP Movement adds to the already considerable
pressure on DPP leaders to address corruption issues, and
Chen Shui-bian is responding, as he often has in the past, by
attacking opponents and allies alike. By themselves, Chen's
statements seem unlikely to turn public opinion around, and
so Chen may come to feel compelled to make some high-level
personnel changes in an effort to reverse the dramatic shift
in public opinion away from the DPP. It is also possible,
but far less likely, that Chen will heed the ideas of the New
DPP proponents and engage in genuine reform of the party.

PAAL