FROM COALITION TO PARTY: IN ELECTION AFTERMATH,

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 004850

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 12/12/2015
TAGS: PGOV TW
SUBJECT: FROM COALITION TO PARTY: IN ELECTION AFTERMATH,
KMT AND PFP MULL UNIFICATION

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


1. (C) Summary. As KMT chairman Ma Ying-jeou and PFP
chairman James Soong meet to discuss party merger the evening
of December 12, the death of the PFP seems inevitable, the
only question is when. The People First Party (PFP) lost the
December 3 local elections with a humiliating one percent of
the vote and is increasingly viewed as a deteriorating,
though highly obstructive, force in Taiwan politics. Merger
could, for example, eliminate the single biggest obstacle to
progress on LY approval of a budget for defense
modernization. It would also be a feather in the cap of KMT
chairman Ma, still basking in the glow of the KMT victory
December 3. The biggest single obstacle to merger will
likely be the fragile pride of James Soong, who has suggested
he will demand KMT support to run for Taipei Mayor in return
for agreeing to merge. Ma has no reason to accept that
bargain, and he can afford to watch as the PFP deteriorates
further. End Summary.


Slouching Fitfully Toward Merger
--------------


2. (C) The two Pan-Blue coalition parties, KMT and PFP,
which split in 2000, have been debating unification for the
past year and a half (Note: the third coalition partner, New
Party, effectively merged with the KMT in early 2005. End
Note). Opinion survey after opinion survey over the past two
years have shown Pan-Blue supporters strongly support the
three Pan-Blue parties merging into one. All earlier efforts
to merge, however, foundered on the shoals of leadership
pride and personal animosities. The PFP's December 3
electoral humiliation appears to have given one more impetus
to overcome the fragile pride of the PFP and James Soong.


3. (C) In the run up to the December 2004 legislative
elections, the brother-sister legislative team of Lee
Ching-hua and Lee Ching-an publicly called for immediate
merger of PFP and KMT, but Chairman Soong and his close
advisors dismissed the idea, pledging to pursue merger after
the elections. Lee Ching-an later told AIT that this was a
delaying tactic by Soong and company in hopes of scoring
upset victories in the legislative elections. By the time
PFP victories failed to pan out on election day, she said,
the bitterness that had accumulated during the campaign made
any movement toward merger impossible. Soong's meeting with
President Chen Shui-bian in February 2005 further soured
PFP-KMT relations. The KMT, in turn, moved to undercut
Soong's bid to make himself a key cross-Strait middleman with
his early May visit to Mainland China, PFP legislator
Christina Liu recently reminded AIT, by quickly arranging an
earlier trip by then-KMT Chairman Lien Chan. This was a blow
from which neither Soong nor his party, which placed last in
the National Assembly election two days after Soong returned
from Beijing, ever fully recovered. Soong's final gambit,
former DPP legislator and just-announced Taipei Mayoral
candidate Shen Fu-hsiong told AIT, was the December 3 local
elections, in which Soong campaigned "desperately" for PFP
candidates in Keelung and Hualien. PFP's empty-handed finish
with an embarrassing vote total of 1.1 percent was the final
blow, which started the internal PFP movement to rejoin the
KMT. (Note: PFP's actual vote percentages in Keelung and
Hualien were a respectable 26 and 25 percent, and PFP
actually won the Lienchang County (Matsu) Magistrate race
unopposed by any party candidates. End Note.)


4. (C) PFP legislator Vincent Chang (Hsien-yao),who met
with KMT Chairman Ma Ying-jeou on December 8 along with four
other PFP legislators, told AIT that he and his four PFP
colleagues made good progress in sorting out the "extremely
complex" process of merging. They and Ma, Chang said,
focused on some of the less sensitive merger issues, such as
party personnel and related issues. They parted agreeing
that merger could take as long as two years. Further
negotiations between the PFP group of five legislators and
KMT Secretary-General Chan Chun-po, Chang noted, would
continue over the ensuing three days in preparation for the
announced Monday evening, December 12, meeting between Ma and
Soong at KMT headquarters.

Soong's Ambitions
--------------


5. (C) The fly in the merger ointment, however, is the
apparent determination of PFP Chairman James Soong to run for
Taipei Mayor in December 2006. Chang told AIT that Soong is
"strongly leaning" towards declaring his candidacy.
According to other PFP contacts, Soong has become convinced
that the only course now open for the PFP to remain a vital
force in Taiwan politics is for him to run in December 2006
to replace Ma Ying-jeou as Mayor of Taipei. PFP hardliners,
they explain, support and encourage this decision as the only
way to keep the party alive for the foreseeable future.
Vincent Chang and KMT Policy Deputy Director Chang Jung-kung
separately told AIT that Ma's endorsement of Soong is -- or
will be, when the discussions reach that point -- a tacit
(moqide) condition for merger. This, however, according to a
whole range of KMT and other political operatives, is a
non-starter, as it would position Soong to directly challenge
Ma for the KMT presidential nomination. Ma and many KMT
leaders, moreover, are deeply bitter toward Soong for his
attack on the KMT's history of corruption on the eve of the
December 3 elections.


6. (C) Chairman Ma, in fact, told the five-member PFP
delegation, according to Vincent Chang, that James Soong
would have to follow party election rules and go through the
regular primary nomination process for Taipei Mayor. Ma
subsequently responded to a media query by stating that James
Soong as a KMT member would have to follow the KMT electoral
rules and enter primaries. This, DPP Taipei mayoral hopeful
Shen Fu-hsiung told AIT, will virtually assure Soong never
becomes the KMT nominee, as his popularity has fallen
significantly since his near-victory in the 2000 presidential
race. Shen acknowledged that he personally very much wants
Soong as his opponent next year, either running on the KMT
ticket or, preferably, on the PFP ticket, thus splitting the
Pan-Blue vote. KMT insiders close to the Ma Ying-jeou camp,
tell AIT that Ma has not announced who he will support to
succeed himself as Mayor, but note that it will probably be
either former Taipei Vice Mayor Ou Chin-te, former Taipei
environmental director Hau Long-bin, KMT legislator Wu
Tun-yi, or maybe LY member John Chiang, and not, under any
circumstances, James Soong.

Comment: PFP Fading Fast
--------------


7. (C) Over the past year, there has been a growing sense of
frustration among PFP legislators who sense that the days of
their party are numbered. This sense of inevitability grew
after the June 2005 constitutional reforms that created a
one-district-one-representative legislative system to replace
the old multi-member legislative districts. While many PFP
members have their own bitter memories of their break with
the KMT in 2000, most have overcome that through
intra-coalitional cooperation within the Pan-Blue over the
intervening years. Ma's insistence that Soong must, like
everyone else, go through the KMT primary nomination process
will put a damper on Soong's willingness to return his party
to the mother KMT, but growing restiveness among PFP
legislators, two of whom (Lin Yu-fang and Lee Ching-an) have
announced their imminent departure from the party, will raise
the pressure on Soong. With the PFP's humiliating showing in
the May 14 National Assembly election and the December 3
local elections, Soong and his PFP hardliners are not in a
strong position either to lay down conditions for merger or
resist internal PFP pressures for merger. If merger does go
through, Chairman Ma's position will be further strengthened
on the back of his election victory on December 3. If the
PFP stalls, Soong gains nothing and Ma loses little.
PAAL