TAIWAN: SATELLITE PROGRAM IN LIMBO

S E C R E T AIT TAIPEI 004045 SIPDIS NOFORN SIPDIS STATE FOR EAP/TC AND EC/NP CHRIS KESSLER E.O. 12958: DECL: 12/04/2015 TAGS: TSPA PREL ETTC ECON TW SUBJECT: TAIWAN: SATELLITE PROGRAM IN LIMBO REF: A. TAIPEI 2379 ¶B. TAIPEI 3745 Classified By: AIT ECONOMIC CHIEF DANIEL K. MOORE FOR REASONS 1.4 B/D ¶1. (S/NOFORN) SUMMARY: National Space Program Office (NSPO) Director Lance Wu told AIT November 30 that his deputy, Hsiao Chiu-teh, was under investigation by the Ministry of Justice Investigation Bureau (MJIB) for allegedly passing secrets to members of the Legislative Yuan (LY) and the press. The focus of the investigation is the Cyclops remote sensing project, a joint U.S.-Taiwan project whose main clients are Taiwan's National Security Bureau (NSB) and Ministry of National Defense (MND). Wu unrealistically requested U.S. intercession to keep the project afloat because funding has been suspended by the legislature. On December 4 Wu told AIT he understands another funding request will be made for Cyclops, but not by the NSPO. END SUMMARY NSPO DEPUTY UNDER INVESTIGATION FOR LEAKING SECRETS -------------- -------------- ¶2. (S/NOFORN) ESTOFF met with NSPO Director Lance Wu November 30 for a readout on news reports that his deputy, Hsiao Chiu-teh, had leaked secret information to legislators and the media concerning a remote sensing satellite. Wu stated information on the classified project, dubbed "Cyclops", to develop a 0.5 meter resolution remote sensing satellite was illegally leaked to the public through legislator Liao Pen-yen of the Taiwan Solidarity Union (TSU). According to Wu, when the United Daily news published articles on October 10 and 24, 2005 revealing details about the project, MJIB officials became suspicious. In February 2006, another article appeared in the "New Taiwan" weekly giving further details of the project. MJIB started an internal investigation, resulting in the search of Hsiao's home and office and his arrest on November 21. Hsiao has since posted bail and cannot leave the country but continues to report to work. CYCLOPS: IN LIMBO -------------- ¶3. (S/NOFORN) Cyclops is meant to replace Formosat-2 when the latter is decommissioned in 2009 (note: Formosat-2 is a 2 meter broadband resolution satellite). Because of its classified mission, the project involves the National Science Council, NSB and MND. In the November 30 issue of New Taiwan weekly, Legislator Liao claimed that what was purportedly an open source "commercial" satellite venture had surreptitiously become a highly classified project shrouded in secrecy. Liao claims that the NSPO website carries basic data on the Cyclops. Liao also claims that high level NSB officials told him the procurement of the satellite was not a secret--only its ultimate flight path and image acquisition SIPDIS plan (note: the flight path would include sensitive areas of China.) In the same article, Hsiao claims he never saw any classified documents regarding the project and believes he was framed by those who wanted to see this project completed without any interference. As it stands now, funding for the project has been frozen by the LY and NSC Minister Chen Chien-jen has asked NSPO to resubmit a complete proposal together with a feasibility study for submission to the project review committee. According to Lance Wu, the next funding request to the LY for Cyclops will not be made by NSPO, but by MND and/or NSB. U.S. HELP TO SAVE CYCLOPS? -------------- ¶4. (S/NOFORN) Although Wu lamented that morale at NSPO had suffered due to the incident, he believes the leaks only involve Hsiao because no one else involved in the Cyclops program at NSPO was close to Hsiao. Wu also believes that Hsiao, a political appointee, probably got the information through his contacts at MND and then passed that information to legislator Liao Pen-yan. It is not clear why Liao would personally get involved in this classified project, Wu complained to AIT that he has said all along that the Cyclops project should have been a classified MND-funded project and not a Science Council project open to the legislative review process. Wu suggested that National Security Council Secretary General Chiou I-jen had good relations with the SIPDIS Department of State and Wu implied AIT should seek Chiou's support for continuation of the project (Note: AIT does not support the suggestion). TOUR OF THE FACILITIES -------------- ¶5. (S/NOFORN) After the conversation, Wu conducted a tour of NSPO facilities, including a staging area equipped with vibration simulators and an assembly area for satellite components. The facilities were idle at the time of the visit. Most equipment was of U.S. manufacture. AIT also visited the Formosat-2 image processing center, where a large poster-sized photo of the suspected North Korean nuclear test site was displayed. NSPO officials said that they could turn out a picture 10 hours after a request. They have ground stations in Kiruna, Sweden and Fairbanks, Alaska, connected with local receiving stations in Tainan and Miaoli. COMMENT -------------- ¶6. (S/NOFORN) Although Wu assured AIT that things were under control at NSPO, the investigation into the deputy director is not over and new information may be uncovered. This incident raises questions about the management of NSPO and its mission. NSPO's leadership of the Cyclops project has been brought into question by the media coverage since October 2005 and Hsiao's arrest. Wu's statement to AIT that future Cyclops funding requests will be handled by either the NSB or the MND suggest bureaucratic control is shifting away from NSPO to one or both of the other agencies. Unfortunately, it is not clear at this point exactly how control of the project may be excercised. We believe NSPO will have to remain involved in some capacity because it has the technical expertise in space-related sciences. END COMMENT. YOUNG