RENEWED CHALLENGE TO PRESIDENT CHEN

C O N F I D E N T I A L AIT TAIPEI 002743

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/11/2031
TAGS: PGOV TW
SUBJECT: RENEWED CHALLENGE TO PRESIDENT CHEN


CLASSIFIED BY: AIT ACTING DEPUTY DIRECTOR CHARLES BENNETT,
REASONS: 1.4 (B/D)


1. (C) SUMMARY: CORRUPTION SCANDALS SURROUNDING PRESIDENT
CHEN CONTINUE TO DRIVE TAIWAN'S POLITICAL DYNAMICS, WITH NO
END IN SIGHT. MOST LEADERS IN PRESIDENT CHEN'S OWN PARTY
(THE DEMOCRATIC PROGRESSIVE PARTY OR DPP) AND HIS DEEP GREEN
SUPPORTERS ARE STANDING BY HIM TO PROTECT THEIR OWN
INTERESTS, BUT DIVISIONS ARE BEGINNING TO DEEPEN IN THE
BROADER PAN-GREEN CAMP. FORMER DPP CHAIRMAN SHIH MING-TE HAS
WRITTEN URGING CHEN TO STEP DOWN AND IS ALSO SEEKING PUBLIC
SUPPORT FOR A STREET PROTEST MOVEMENT TO TOPPLE THE
PRESIDENT. WHILE AIT'S GREEN CONTACTS EXPECT CHEN TO STAY IN
OFFICE, HE COULD BE IN TROUBLE IF SHIH'S CAMPAIGN GAINS
TRACTION OR IF CORRUPTION SCANDALS IMPLICATE HIM DIRECTLY.
END SUMMARY.

DIVISIONS IN THE PAN-GREEN CAMP
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2. (C) DIVISIONS IN THE GREEN CAMP ARE BEGINNING TO DEEPEN.
FORMER PRESIDENT LEE TENG-HUI, SPIRITUAL LEADER OF THE TAIWAN
SOLIDARITY UNION (TSU) HAS TOLD PARTY MEMBERS THAT HE NO
LONGER SUPPORTS PRESIDENT CHEN AND THAT THE TSU SHOULD "GO
ITS OWN WAY," TSU LEGISLATOR LAI SHIN-YUAN TOLD AIT. ONE
MONTH AGO, A GROUP OF PROMINENT GREEN SCHOLARS ISSUED A
STATEMENT CALLING ON PRESIDENT CHEN TO RESIGN IN THE
INTERESTS OF TAIWAN'S DEMOCRATIC DEVELOPMENT.

SHIH MING-TE
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3. (C) FORMER DPP CHAIRMAN SHIH MING-TE, WHO LEFT THE PARTY
IN 2000, CREATED A NEW STIR EARLIER THIS WEEK BY WRITING AN
IMPASSIONED OPEN LETTER URGING CHEN TO STEP DOWN, ARGUING
THAT CHEN'S REMAINING IN POWER WOULD HARM TAIWAN AND DRAG THE
DPP DOWN TO A SERIES OF DISASTROUS DEFEATS THROUGH THE
PRESIDENTIAL ELECTION IN 2008. DPP LEGISLATOR LEE WEN-CHUNG
SUGGESTED TO AIT THAT SHIH'S LETTER IN ITSELF WOULD HAVE
MARGINAL EFFECT, BECAUSE IT REPEATED THE EARLIER MESSAGE OF
THE SIMILAR STATEMENT OF THE GREEN SCHOLARS.


4. (SBU) NOT STOPPING AT JUST WRITING A LETTER, HOWEVER,
SHIH IS WORKING TO LAUNCH A SOCIAL PROTEST MOVEMENT TO CAUSE
CHEN'S DOWNFALL. IN A PRESS CONFERENCE AT THE "FEBRUARY 28
PEACE PARK" IN DOWNTOWN TAIPEI ON AUGUST 12, SHIH WILL
ANNOUNCE ARRANGEMENTS FOR THE PUBLIC TO JOIN HIS MOVEMENT BY
DEPOSITING NTD 100 EACH (ABOUT USD 3) IN A SPECIAL ACCOUNT.
SHIH'S GOAL IS TO SIGN UP ONE MILLION PEOPLE BY SEPTEMBER 9
OR EARLIER AND THEN LEAD A ROUND-THE-CLOCK STREET PROTEST
UNTIL CHEN STEPS DOWN. IF HE GAINS THE NEEDED PUBLIC SUPPORT
FOR HIS MOVEMENT, SHIH VOWS THAT "IF YOU (CHEN) DO NOT FALL,
THEN I (SHIH) WILL BE FINISHED."


5. (C) SOME DPP AND DEEP GREEN POLITICIANS HAVE HARSHLY
CRITICIZED SHIH, QUESTIONING HIS MOTIVES AND HIS GREEN
CREDENTIALS, AND IT IS NOT CLEAR AT THIS EARLY STAGE WHETHER
HE WILL BE ABLE TO GENERATE THE MOMENTUM HE SEEKS AMONG GREEN
SUPPORTERS. HOWEVER, MANY GREEN SUPPORTERS, INCLUDING IN THE
GREEN STRONGHOLD AREAS OF SOUTHERN TAIWAN, ARE DEEPLY ANGRY
AT PRESIDENT CHEN OVER THE CORRUPTION SCANDALS, ACCORDING TO
TSU LEGISLATOR LAI SHIN-YUAN. IF SHIH CAN TAP THIS RESERVOIR

SIPDIS
OF GREEN ANGER, HIS MOVEMENT HAS GREATER POTENTIAL TO TOPPLE
CHEN THAN THE FAILED RECALL EFFORT BY THE PAN-BLUE OPPOSITION
OR THE STATEMENT ISSUED BY THE GREEN SCHOLARS. THE RECALL
EFFORT BACKFIRED BECAUSE IT CAUSED GREEN SUPPORTERS TO RALLY
AROUND CHEN IN THE FACE OF WHAT WAS PERCEIVED TO BE A VICIOUS
POLITICAL ATTACK BY THE OPPOSITION. THE CALL ISSUED BY THE
GREEN SCHOLARS FIZZLED AFTER SEVERAL DAYS BECAUSE THEY DID
NOT LAUNCH A FOLLOW-ON PROTEST MOVEMENT. WHAT MAKES SHIH A
GREATER THREAT TO CHEN IS THE POSSIBILITY THAT HE MAY BE ABLE
TO DIVIDE THE GREEN CAMP AND TURN A SIGNIFICANT NUMBER OF
PREVIOUS SUPPORTERS AGAINST THE PRESIDENT IN A FULL-FLEDGED
PROTEST MOVEMENT.

THE LEE TENG-HUI AND LIN I-HSIUNG FACTOR
--------------


6. (C) SHIH MING-TE'S INITIATIVE AGAINST PRESIDENT CHEN HAS
FOCUSED ATTENTION ON TWO OTHER MAJOR FIGURES IN THE GREEN
CAMP: LEE TENG-HUI AND FORMER DPP CHAIRMAN LIN I-HSIUNG, WHO
LEFT THE PARTY EARLIER THIS YEAR. PRESSURE ON CHEN WOULD
INCREASE SIGNIFICANTLY IF LEE AND/OR ESPECIALLY LIN WERE TO

CALL FOR THE PRESIDENT'S RESIGNATION. WHILE LEE NO LONGER
SUPPORTS CHEN, HE IS UNLIKELY TO ASK HIM TO STEP DOWN, IN
PART BECAUSE CHEN HAS MADE CLEAR THAT HE HAS INFORMATION
CONCERNING LEE'S HANDLING OF CONFIDENTIAL FUNDS THAT COULD
EMBARRASS THE FORMER PRESIDENT, TSU LEGISLATOR DAVID HUANG
EXPLAINED TO AIT. LEE HAS PUBLIC ACTIVITIES SCHEDULED THIS
WEEKEND, INCLUDING A PRESS CONFERENCE, WHICH WILL PROVIDE
OPPORTUNITIES FOR HIM TO MAKE CLEAR HIS VIEWS ABOUT PRESIDENT
CHEN, SHOULD HE CHOOSE TO DO SO. LIN I-HSIUNG HAS PROVIDED
PRIVATE ASSURANCES THAT HE WILL NOT CALL FOR CHEN TO STEP
DOWN, ACCORDING TO DPP LEGISLATOR LEE WEN-CHUNG.

CHEN CONSOLIDATES DPP AND DEEP GREEN BASE
--------------


7. (C) CHEN RELIES ON DPP LEADERS AND THE DEEP GREEN.
WHENEVER HE ENCOUNTERS DIFFICULTIES, CHEN MEETS WITH THEM TO
CONSOLIDATE THEIR SUPPORT, WHICH HE BELIEVES IS CRITICAL TO
HIS STAYING IN POWER. CHEN HAS BEEN QUITE WILLING TO MAKE
DEALS WITH BOTH GROUPS TO GUARANTEE CONTINUED SUPPORT. THEY
HAVE ACCEPTED HIS ASSURANCES THAT HE IS NOT CORRUPT, WITH DPP
CHAIRMAN YU SHYI-KUN STRESSING THAT THE PARTY WILL CONTINUE
TO SUPPORT THE PRESIDENT UNLESS THERE IS EVIDENCE HE IS
CORRUPT. CHEN'S DEAL WITH OTHER DPP LEADERS IS THAT HE WILL
ALLOW THEM TO EXERCISE THEIR POWERS WITHOUT INTERFERENCE.
HIS BARGAIN WITH THE DEEP GREEN IS THAT HE WILL TRY TO
PROMOTE THEIR INDEPENDENCE-RELATED AGENDA IN RETURN FOR THEIR
SUPPORT. FOR THEIR OWN INTERESTS, BOTH GROUPS WANT CHEN TO
REMAIN IN OFFICE, DESPITE THE VERY DAMAGING SLIPPAGE IN
SUPPORT FOR THE DPP THAT HAS RESULTED FROM HIS TOLERATION OF
CORRUPT PRACTICES BY THOSE CLOSE TO HIM.


8. (C) PRESIDENT CHEN HAS LOST POLITICAL INFLUENCE AND BEEN
SIDELINED, DPP LEGISLATOR LEE WEN-CHUNG TOLD AIT, AND THERE
WOULD BE STRONG RESISTANCE WITHIN THE PARTY IF HE TRIED TO
STAGE A COMEBACK. PREMIER SU HAS THE UPPER HAND AMONG PARTY
LEADERS AND HAS RESISTED SUGGESTIONS TO TURN THE DPP CENTRAL
STANDING COMMITTEE INTO A COLLECTIVE LEADERSHIP MECHANISM.
LEE WEN-CHUNG AND SOME OTHER DPP CONTACTS HAVE PREDICTED TO
AIT THAT THE PARTY WILL DO VERY POORLY IN UPCOMING ELECTIONS
OVER THE NEXT TWO YEARS FOR TAIPEI AND KAOHSIUNG MAYOR
(2006),THE LEGISLATIVE YUAN (2007),AND PRESIDENT (2008).
WHILE CHEN'S TRAVAILS HAVE CAUSED SUPPORT FOR THE PARTY TO
PLUMMET, LEE SAID, HE DID NOT BELIEVE CHEN'S EARLY DEPARTURE
WOULD BOOST SUPPORT FOR THE PARTY. HOWEVER, HE SUGGESTED,
THE DPP IS RESILIENT AND WILL MAKE A COMEBACK AFTER A SERIES
OF DEFEATS.

VICE PRESIDENT LU
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9. (C) MOST DPP LEADERS VIEW THE CURRENT POWER EQUATION IN
THE PARTY AS IN THEIR INTERESTS: A WEAKENED CHEN, A
STRENGTHENED SU AND PERHAPS A HIGHER PROFILE FOR THE DPP
HEADQUARTERS AND DPP CAUCUS. THE ONE DPP LEADER WHO WOULD
BENEFIT DIRECTLY IF CHEN STEPS DOWN IS VICE PRESIDENT LU.
CLEARLY HAVING THE PRESIDENCY IN MIND, LU HAS BEEN MAKING
OVERTURES TO POTENTIAL SUPPORTERS AND HAS TRIED TO PORTRAY
HERSELF AS A FIGHTER AGAINST CORRUPTION. OTHER DPP LEADERS,
WHO VIEW LU AS A THREAT TO THEMSELVES, SHARE AN INTEREST IN
SEEING THAT CHEN REMAINS IN OFFICE. DEEP GREEN LEADER YAO
CHIA-WEN AND DPP LEGISLATOR HONG CHI-CHANG, WHO HAVE VERY
DIFFERENT PERSPECTIVES ON MANY OTHER ISSUES, WERE IN
AGREEMENT ON LU: SHE IS SIMPLY INCAPABLE AND NOT QUALIFIED TO
BE PRESIDENT. SHIH MING-TE HAS SUGGESTED PUBLICLY THAT CHEN
WOULD HAVE FALLEN LONG AGO IF IT HAD NOT BEEN FOR THE FACT
THAT VP LU WOULD SUCCEED HIM.


10. (C) CHEN HAS INSISTED THAT DESPITE PROBLEMS INVOLVING
THOSE CLOSE TO HIM, HE IS NOT CORRUPT AND THEREFORE HAS NO
REASON TO STEP DOWN. DPP ELDER YAO CHIA-WEN, A LONG-TIME
CLOSE ASSOCIATE OF PRESIDENT CHEN, TOLD AIT HE DOUBTED CHEN
WOULD EVER RESIGN WILLINGLY. DESPITE HIS STRONG WILL TO STAY
IN POWER, CHEN HAS REPORTEDLY WAVERED AT VARIOUS POINTS.
ACADEMIA SINICA RESEARCH FELLOW WU NAI-TEH, AUTHOR OF THE
GREEN SCHOLARS' STATEMENT (SEE PARA 2),TOLD AIT HE HAD HEARD
THAT CHEN SAID HE WAS GOING TO THROW IN THE TOWEL WHEN THE
STATEMENT WAS ISSUED BUT THEN RECOVERED HIS COMPOSURE AND
DECIDED TO FIGHT ON.

COMMENT
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11. (C) THE CHEN SAGA HAS NOT REACHED ITS END. VARIOUS
CORRUPTION SCANDALS ARE CONTINUING TO UNFOLD, AND THESE NOW
INCLUDE ALLEGATIONS OF MISUSE OF CONFIDENTIAL AND SPECIAL
BUDGET FUNDS, WHICH OVER TIME MIGHT COMPOUND PRESIDENT CHEN'S
DIFFICULTIES. IN ADDITION TO THE POSSIBILITY OF A PROTEST
MOVEMENT OR STATEMENTS AGAINST CHEN BY GREEN LEADERS, THE
LEGISLATIVE YUAN (LY) COULD ALSO RENEW PRESSURE ON CHEN AFTER
IT CONVENES ON SEPTEMBER 19. THE OPPOSITION PEOPLE FIRST
PARTY PLANS TO INTRODUCE AN IMPEACHMENT MOTION IN THE LY, ITS
LEGISLATIVE CAUCUS LEADERS TOLD THE DIRECTOR AUGUST 11.

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