PRESIDENT CHEN AND THE DIRECTOR DISCUSS DEFENSE

S E C R E T SECTION 01 OF 02 TAIPEI 003641

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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

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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
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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

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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
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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

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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
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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
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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