TSAI ING-WEN COMMENTS ON DPP TURMOIL

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 004870 SIPDIS STATE PASS AIT/W E.O. 12958: DECL: 12/13/2015 TAGS: PGOV TW SUBJECT: TSAI ING-WEN COMMENTS ON DPP TURMOIL REF: A. TAIPEI 4840 ¶B. TAIPEI 4818 Classified By: AIT Director Douglas Paal, Reasons: 1.4 (b/d) ¶1. (C) Summary: Vice President Lu Hsiu-lien suddenly resigned as acting chairman of the ruling Democratic Progressive Party (DPP) December 12. Lu may hope that will help her chances to win the DPP 2008 presidential nomination, DPP Legislator Tsai Ing-wen told AIT, but added that Lu is unlikely to succeed. Tsai said the most likely candidate to be elected party chairman next January is Presidential Office Secretary General Yu Shyi-kun. Luo Wen-jia, a reformer who SIPDIS lost the Taipei County magistrate race, will probably be appointed DPP Secretary General. According to Tsai, President Chen is still reacting to the defeat in December 3 local elections, is considering senior personnel decisions, and is likely to take a cautious and gradual approach in adjusting cross-Strait policy. End Summary. ¶2. (C) DPP Legislator Tsai Ing-wen told AIT that Vice President Lu Hsiu-lien's sudden resignation as acting party chairman on December 12 may be an effort by Lu to distance herself from President Chen in hopes of boosting her long-shot campaign to win the DPP presidential nomination in ¶2008. (Comment: AIT has long observed Tsai's strong personal dislike for Lu, which may color her views. End Comment.) Lu's protest resignation, after just five days in office, will require the DPP Central Standing Committee (CSC) to pick a new acting party chairman at its meeting on Wednesday December 14. While Lu may hope the CSC members will not accept her resignation, that is unlikely, Tsai said. DPP LY Party Whip Jao Yung-ching (Chao Yung-ching) will probably be named acting party chairman as there is already a precedent for the DPP Whip to serve as acting chairman when a chairman resigns. Tsai disputed Lu's claim to be victim of factional power struggle within the DPP, explaining that the real competition within the DPP is between individuals rather than factions. ¶3. (C) The acting chairman's main function will be to organize the mid-January party chairmanship election. Tsai suggested that Lu may want to run for chairman if the vice president believes this will help her 2008 presidential campaign. The party chairman must enjoy President Chen's endorsement, however, so Lu's chances seem remote given the �A;strained relationship between president and vice president. Presidential Office Secretary General Yu Shyi-kun appears to be Chen's preferred candidate for party chairman, Tsai said, though this is not definite. There may end up being only a single candidate for the election since senior officials will not want to run unless they are assured of victory. A contested election would be better for the DPP, however, she added. ¶4. (C) Yu, close to President Chen, is unlikely to be a strong force for party reform, Tsai observed. Therefore, she said, it is probable that Luo Wen-jia, who launched the New DPP Reform Movement and was recently defeated in his bid for Taipei County magistrate, will be named DPP Secretary General, the number two position in the party organization leadership. ¶5. (C) Tsai said the DPP currently is going through both a difficult leadership transition and the worst crisis in its 19-year history. The reverses suffered in the December 3 local elections were the culmination of problems that have accumulated in the party and government. Given this difficult situation, Tsai said, she did not consider President Chen's week-long withdrawal from public view to be a problem, adding that Chen's reduced political capital will circumscribe his policymaking and personnel choices. Although Chen resumed public activities on December 12, he has still not made important personnel and policy decisions, and Chen is receiving conflicting advice from different quarters. Some advisors, for example, want Chen to say more, while others want him to say less. ¶6. (C) On policy issues, Tsai suggested, President Chen will take a cautious approach. Chen will want the Cabinet to show some accomplishments, especially on economic issues but not to take bold steps that could potentially be risky. On cross-Strait policy, Chen is likely to continue cautious gradual adjustments so as not to offend his fundamentalist supporters, Tsai said. ¶7. (C) It is not definite that Chen will remove Premier Hsieh in January though the chances are that he will do so because of the inescapable connection between former Kaohsiung Mayor Hsieh and the Kaohsiung Mass Rapid Transit scandal. The question is whether there is any better choice than Hsieh. Su Tseng-chang will not want to be premier because that would hurt his presidential chances. Chen would like to find someone who is expert in policy issues and also politically adept in policy process. Chen also has to consider how senior personnel decisions might affect competition for the 2008 DPP presidential nomination. So far, Chen has tried to keep a balanced playing field for the four major potential candidates -- Su Tseng-chang, Hsieh Chang-ting, Lu Hsiu-lien, and Yu Shyi-kun -- but he could decide to support one candidate, likely Su Tseng-chang, to increase the party's chances in 2008. Comment -------------- ¶8. (C) Chen reportedly was displeased from the beginning with Lu's taking on the acting chairman position, and Lu's highly activist approach to her "temporary" position simply increased friction between the president and vice president. When Chen canceled a routine meeting with Lu on December 12, Lu decided it was time to go but not quietly. Lu is ambitious but has only very limited support within the DPP. Tsai's comments on the events of the past 48 hours are those SIPDIS of a seasoned DPP technocrat, well connected to the moderate elements in the DPP. There is little love lost between Tsai and Lu as reflected in Tsai's willingness to see Lu quickly leave the DPP chairmanship. PAAL