PRESIDENT CHEN AND THE DIRECTOR DISCUSS DEFENSE

S E C R E T SECTION 01 OF 02 TAIPEI 003641 SIPDIS SIPDIS E.O. 12958: DECL: 10/25/2031 TAGS: PGOV PREL TW SUBJECT: PRESIDENT CHEN AND THE DIRECTOR DISCUSS DEFENSE BUDGET AND POLITICAL ISSUES Classified By: AIT Director Stephen M. Young, Reasons: 1.4 (b/d) ¶1. (S) Summary: President Chen Shui-bian invited the Director to a meeting on October 24 apparently to ask about a recent "background" interview in the pro-Blue United Daily News (UDN) with EAP DAS Christensen. The Director explained that the Q and A portion of the report was relatively accurate but the newspaper's article analyzing U.S. views was exaggerated and inconsistent with the meaning and tone of Christensen's remarks. The Director expressed regret for the continued pan-Blue blocking of the supplementary defense budget bill in the Legislative Yuan (LY). Chen suggested that Kuomintang (KMT) might not be willing to push forward on the issue at this stage for fear that it could damage the chances of KMT candidate Hau Long-bin in the Taipei mayoral election, which will be held on December 9. Referring to a recent letter to Taiwan officials from former Deputy Secretary Armitage on behalf of a U.S. arms company, Chen SIPDIS said that Taiwan prefers to deal with DOD on arms procurement and not directly with U.S. arms companies. Chen and the Director also discussed the Director's upcoming press conference. End Summary. Defense Budget -------------- ¶2. (S) The Director met with President Chen Shui-bian, at Chen's request, on October 24. The Director expressed regret that the pan-Blue parties had once again blocked the supplementary defense budget in the LY Procedure Committee earlier in the day, despite KMT Chairman Ma Ying-jeou's repeated endorsement of movement on arms procurement. President Chen agreed that the bill should have been passed. The various political parties had reached agreement on this during inter-party consultations and the issue should not be dragging on, Chen stressed. ¶3. (S) During the Procedure Committee meeting, Chen noted, independent legislator Lee Ao, who strongly opposes arms procurement, had sprayed the room with pepper spray to pressure legislators to continue blocking the supplementary defense budget bill. Lee Ao, a supporter of unification, is a pan-Blue candidate for mayor, Chen pointed out, adding that the KMT may believe it has to placate to Lee Ao on the arms issue to avoid his undermining support for Hau Long-bin, the KMT's candidate for Taipei mayor. People First Party (PFP) Chairman James Soong, another pan-Blue candidate for Taipei mayor, also opposes arms procurement, Chen continued. Given that two of the major candidates for mayor publicly oppose arms procurement, the KMT and especially Chairman Ma Ying-jeou do not appear determined to force the issue at this stage, Chen concluded. ¶4. (S) President Chen also observed that former Deputy Secretary Armitage's recent letter to Taiwan officials SIPDIS lobbying on behalf of a U.S. arms company was not inappropriate, but the timing of the letter was problematic. The letter had arrived at the crucial period when the LY Procedure Committee was about to take action on the supplementary defense budget bill. Some legislators could cite the actions of U.S. arms companies as reason for continuing to block the bill, President Chen suggested. Taiwan's policy is to buy weapons from the U.S. DOD and to avoid direct contact with arms companies, Chen told the Director, adding that Taiwan's MND should hold discussions with DOD, which should decide what company will sell weapons to Taiwan. Taiwan does not want to have to decide on companies, because that would complicate the situation, including the work of the LY. In addition, Taiwan wants to avoid added unpredictable factors, especially the intervention of new arms companies, in the process. The Director's Upcoming Press Conference -------------- ¶5. (S) President Chen asked the Director what issues he planned to emphasize in his upcoming press conference. One important issue would be the defense budget, the Director TAIPEI 00003641 002 OF 002 noted. Also, he hoped to correct misimpressions of U.S. policy created by some misleading Taiwan press reports. He would stress that the United States pursues U.S. interests and does not interfere or take a position on the Blue, Green, or Red (Shih Ming-te's movement) forces in Taiwan domestic politics. He would describe the important cooperation between the U.S. and Taiwan in the areas of democracy, security, and economic ties. Chen suggested the Director might consider saying that the different opinions in Taiwan politics should not affect the review of arms procurement, which is important for Taiwan's security and U.S.-Taiwan relations. Domestic political issues should not be allowed to put Taiwan's security at risk, Chen stressed. Misleading Press Report on "Background" Interview -------------- -------------- ¶6. (S) Chen asked the Director about the October 20 United Daily News (UDN) report on its background interview with EAP DAS Christensen. The Director responded that he had communicated with DAS Christensen about the article. The Q and A portion of the report was more-or-less accurate, but the newspaper's article analyzing U.S. views toward Chen was exaggerated and irresponsible, and was inconsistent with DAS Christensen's words or tone. Christensen had been very careful in his choice of words, the Director pointed out. Christensen had said that he "expected" the Taiwan government to honor its pledges, choosing the word "expect," which is used with friends you can trust, in contrast to "hope," which applies to problem countries. Comment -------------- ¶7. (S) Although President Chen clearly understands and supports our view that defense should rise above partisan politics, he also does not seem at all surprised that political calculations regularly slow movement on the defense budget issue. While Chen apparently asked for the meeting to discuss the UDN article, he did not seem overly concerned and readily took the Director's explanation. Chen was in an upbeat mood, perhaps buoyed by the divisions in the pan-Blue camp that are complicating Ma's effort to ensure a victory by Hau Long-bin in Taipei. YOUNG