DIRECTOR'S INTRODUCTORY CALL ON TAICHUNG MAYOR

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001455

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/27/2016
TAGS: PGOV TW
SUBJECT: DIRECTOR'S INTRODUCTORY CALL ON TAICHUNG MAYOR
JASON HU, APRIL 25, 2006


Classified By: Director Stephen M. Young, Reason(s): 1.4 (B/D).


1. (C) Summary: KMT Chairman Ma Ying-jeou is unlikely to
move forward on the arms procurement issue until this fall,
when his political position will be more secure, Taichung
Mayor and Ma intimate Jason Hu told the Director during their
introductory meeting on April 25. Hu predicted that Ma will
win the presidency in 2008, though media scrutiny and
missteps of other KMT leaders will dull his shine over the
next two years. Beijing will want to cooperate with
"President Ma" to take advantage of a "golden opportunity" to
increase Taiwan's economic integration with the PRC, Hu
argued. The KMT will win the Taipei mayoral race, he
suggested, but lacks a competitive candidate in Kaohsiung.
End Summary.

Ma Gets Defense Issue, But Can't Move Yet
--------------


2. (C) In his initial meeting with Taichung Mayor and KMT
heavyweight Jason Hu, the Director stressed that the issue is
not purchasing one defense system over another; but, rather
that Taiwan must do something practical, sooner rather than
later, to demonstrate that it has the resolve to defend
itself. Taiwan needs a credible defense capability to assure
an equal footing in any future negotiation with the PRC. Hu
told the Director that the KMT understands U.S. concerns over
Taiwan's failure to take reasonable steps to maintain its
self-defense capability. Hu suggested that Ma will move the
defense procurement issue forward in the LY when he is more
secure politically. Unfortunately, Hu predicted this would
not be until the start of the next LY session in the fall.
(Comment: Others have insisted to us that the Pan-Blue will
act by mid-June. We'll believe it when we see it. End
Comment.) Hu suggested that progress on the arms procurement
issue would be more likely if "someone," i.e. the U.S., could
persuade President Chen not to portray arms purchases as a
personal victory over the KMT.

Ma's Popularity Will Diminish, But He'll Still Win
-------------- --------------


3. (C) KMT Chairman Ma Ying-jeou is very popular now, Hu
explained, but Ma's worst enemy is time. As the presumptive
KMT presidential candidate, Ma will be under the microscope
for the next two-plus years, and his popularity will
gradually be worn down by Taiwan's media culture and by the
mistakes and failures of those around him. Barring any
serious mistakes, however, Ma should win the presidency in
2008, but by a smaller margin than if the election were held
now. Though President Chen favors DPP Chairman Yu Shyi-kun
to be the DPP presidential candidate, Premier Su Tseng-chang
will be Ma's most dangerous and capable opponent. Former
Premier Frank Hsieh's popularity and personal power base are
already dwindling.


4. (C) Hu acknowledged that President Chen kept tight control
over previous Premiers in his administration, and predicted
that there will be a "showdown" between Chen and Su in the
months leading up to the March 2008 presidential election.
If Su crosses Chen, Chen will only be able to retaliate by
sacking him, which would simply lionize Su before the party
faithful and help him secure the DPP presidential nomination.

Eight Years of KMT Rule, PRC Cooperation
--------------


5. (C) Hu differed with the Director's notion that once Ma
becomes president, the PRC might be less willing to work with
him and the KMT. While acknowledging that Beijing is
concerned by Ma's criticism of China's human rights record,
Hu suggested that the PRC would view a Ma presidency as a
"golden opportunity" to expand cross-Strait economic
cooperation and integration. To bring Taiwan closer to the
PRC, Beijing will "put politics on the shelf" during a Ma
presidency. Ma already has reliable communication channels
to the PRC through Lien Chan and through KMT Vice Chairmen
Kuan Chung and Chiang Ping-kun, both of whom travel to the
PRC regularly.


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6. (C) Hu said he believes there is little chance the KMT
will split before the 2008 election, despite lingering
tensions between Ma and Lien, and Lien's ally LY President
Wang Jin-pyng. During the July 2005 vote for KMT Chairman,
Hu recalled, Lien Chan twice showed his ballot to the press
to make clear that he had voted for Wang. If Lien had not
made such a public show of support for Wang, the LY President
might have defected from the KMT already. Wang's role and
future remain unclear, however. While Lien has played an
important role in managing KMT cross-Strait policy, his
influence is limited to that portfolio, and his role will
diminish over the next year or so, Hu predicted. He stressed
that, while he likes and respects Lien, those within the KMT
who want Lien to run a third time for president are deluding
themselves.

KMT Will Win Taipei Mayor, But Can't Compete in Kaohsiung
-------------- --------------


7. (C) Handicapping the Taipei mayoral race, Hu said that Hau
Long-bin is likely to win the KMT nomination and the December
2006 election. Hau earned a good reputation during his
tenure as Director of the Taiwan Environmental Protection
Agency, and during the KMT primaries at least, Hau will be
neither helped nor hurt by being the son of former KMT
Premier Hau Pei-tsun. If Hau Long-bin wins the KMT mayoral
nomination, however, the DPP will use corruption allegations
against his father (stemming from the 1990's Lafayette
frigate scandal) to tarnish the younger Hau's image. No
matter who the DPP candidate is, or what tactics the DPP
uses, said Hu, they will lose the Taipei mayoral race. Hu
was less optimistic about Kaohsiung. Although the KMT will
"pull out all the stops" to win, the KMT does not have a
competitive candidate for the Kaohsiung race.

DPP Scandals Make KMT Look Good?
--------------


8. (C) Hu observed wistfully that perhaps it was a good thing
the DPP had won the last two presidential elections -- now
the public knows the DPP has its own corruption and
infighting problems, and that in comparison, the KMT "isn't
so bad." The DPP's corruption problems are a result of the
DPP "being the minority for too long," Hu suggested. As the
minority party, the DPP had few resources and little
corruption. So, when the DPP assumed power, it did not have
in place systems to detect or discourage corrupt practices.
Moreover, the DPP only recently abolished a "payback" system
which required party members in high positions to contribute
financially to the party. This system encouraged DPP public
figures and corporate leaders to raise money for the party
through questionable, sometimes illegal, means, exposing them
to charges of corruption.

Comment
--------------


9. (C) Hu, a former KMT Foreign Minister, is one of Mayor
Ma's closest advisers, though we have been told he is
offering his assistance not out of any personal loyalty to
Ma, but rather as a loyal KMT veteran who wants to see his
party back in power.
YOUNG