ROUND TWO IN TAIPEI: TWO MORE DPP CASUALTIES

C O N F I D E N T I A L AIT TAIPEI 001917

SIPDIS



SIPDIS
NOFORN

E.O. 12958: DECL: 06/05/2031
TAGS: PGOV TW
SUBJECT: ROUND TWO IN TAIPEI: TWO MORE DPP CASUALTIES

REF: TAIPEI 1853

Classified By: AIT Acting Director David J. Keegan,
Reasons: 1.4 (b/d)


1. (C) June 4 saw the second round of resignations from the
Chen administration: NSC Deputy Secretaries General Parris
Chang and Michael Tsai both stepped down under instruction.
This follows the earlier resignations of Presidential Office
Deputy Secretary General Ma Yung-cheng and NSC Senior Advisor
Lin Chin-chang.


2. (C) In separate conversations with AIT on June 5, DPP
Legislator Bikhim Hsiao and former DPP Chairman Shih Ming-teh
both concluded, as have others, that Chen's recent actions
derive from the extreme pressure he is under over his
son-in-law's mushrooming insider trading case. Shih stressed
that public anger over this corruption case is very intense
and extends to Green as well as Blue supporters. Chen's May
31 statement and subsequent personnel changes are part of the
President's fight to keep his position, both suggested, but
they doubted Chen's actions will get him out of his current
difficulties. Neither sees Chen at this point focusing at
all on legacy issues such as constitutional reform; rather,
they see him struggling for political survival. Shih
suggested that Chen's dumping of Ma Yung-cheng and Lin
Chin-chang on June 1 was intended to show that the President
was implementing reforms by making a break with the past
practice of using Presidential Office and NSC officials to
give orders to the Executive Yuan (EY) on personnel and
policy issues.


3. (C) Both Hsiao and Shih were more puzzled by the
announcement of the departure of Michael Tsai than by Parris
Chang's leaving the NSC, though Shih suggested that Chen may
hope to use these personnel moves to try to demonstrate that
he is making significant changes at the NSC. NSC Secretary
General Chiou had told the Director last week that he
anticipated directed resignations from the NSC, contending
that these staff reductions would reflect the President's
decision to discontinue presidential direction of Executive
Yuan activities. However, it is difficult to make these two
resignations fit that logic, since both officials were
handling issues involving core presidential responsibilities:
Chang in foreign policy and Tsai in defense. Our own theory
is that both Chang and Tsai had been imposed on Chiou I-jen,
who chose this opportunity to get rid of the two unwanted
deputies. Chang was forced on Chiou by Vice President Lu,
while Tsai was brought over to enable the President's choice,
Henry Ko Chen-heng, to replace Tsai as Vice Minister of
Defense. Chiou never included either Chang or Tsai in any
meeting we had with him; Ko, by contrast, regularly attended
our meetings with Chiou, especially if the topic were
national security. Fortuitously or not, Chiou is now in
Germany for a week to watch the World Cup as the head of
Taiwan's soccer association.


4. (C) Chang's case was hurt further by the fact that Chang,
who handles Latin American and Middle East issues, does not
get along at all with Foreign Minister James Huang, who has
been trying to make breakthroughs by secret personal
diplomacy in exactly the areas that Chang covers.


5. (C) One final note: If the NSC were going to reduce staff
to reflect its ceding authority to the EY, one likely
candidate would by Counselor Connie Yang, a highly energetic
and effective protege of Vice Premier Tsai Ing-wen, who
covers economic and trade matters for the NSC. If Yang
remains at the NSC, that would suggest that recent personnel
changes tell us much more about politics than restructuring.
If Yang does depart the NSC, we believe it is highly likely
she would land in the Council for Economic Planning and
Development (CEPD) or the Vice Premier's office within days
or even hours.
YOUNG