KMT HONORARY CHAIRMAN LIEN CHAN ON DECEMBER 9

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 004064

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/06/2031
TAGS: PGOV TW
SUBJECT: KMT HONORARY CHAIRMAN LIEN CHAN ON DECEMBER 9
MAYORAL ELECTIONS AND DEFENSE BUDGET


Classified By: AIT Director Stephen M. Young, Reason 1.4 (b/d)


1. (C) Summary: KMT Honorary Chairman Lien Chan told the
Director on December 6 that the December 9 Taipei and
Kaohsiung mayoral elections will be a contest between the KMT
and the DPP as well as one between the candidates. Lien
expects Pan-Blue voters in Taipei to ignore James Soong and
unite behind KMT candidate Hau Lung-bin, who is widely
expected to defeat the DPP's Frank Hsieh. Although most
polls give KMT candidate Huang Chun-ying a double digit lead
in Kaohsiung, the race there remains too close to call, Lien
suggested. The former KMT Chairman predicted that a KMT win
in both races would renew pressure on President Chen to
resign and precipitate a reshuffling of the Cabinet that
could result in LY President Wang Jin-pyng becoming premier.
Lien also claimed the double victory could speed passage of
the 2007 defense budget in the KMT-controlled legislature.
End Summary.


2. (C) In a meeting with the Director on December 6,
Kuomintang (KMT) Honorary Chairman Lien Chan described the
December 9 Taipei and Kaohsiung mayoral elections as a
contest between the candidates as well as a vote of
confidence on the KMT and the Democratic Progressive Party
(DPP). Lien suggested that pan-Blue voters in Taipei are
uniting behind KMT candidate Hau Lung-bin, who is widely
expected to defeat DPP candidate Frank Hsieh. Pan-Blue
People First Party (PFP) Chairman James Soong, Lien's running
mate in 2004, continues in the mayoral race despite repeated
KMT efforts to offer "opportunities" for KMT-PFP cooperation
during next year's legislative elections. Although some
within the KMT advocate ignoring an increasingly marginalized
Soong, Lien explained that the KMT still requires PFP support
to form a majority in the Legislative Yuan. He added that
without good KMT-PFP relations, the PFP could become a
"noisy" irritant during next year's legislative elections by
running too many PFP candidates and splitting the pan-Blue
vote.


3. (C) Lien suggested that although KMT candidate Huang
Chun-ying enjoys a double digit lead in most polls, the race
in Kaohsiung remains too close to call. Lien emphasized that
last minute vote-buying by the DPP and a sizable number of
"hidden" DPP supporters could allow DPP candidate Chen Chu to
squeeze out a victory. Both sides are working hard to
energize their base supporters while reaching out to swing
voters. Lien assessed that the DPP will face difficulty
convincing light Green voters dissatisfied with President
Chen to go to the polls on election day.


4. (C) A KMT win in both Taipei and Kaohsiung would renew
pressure on President Chen to resign and precipitate a
reshuffling of the Cabinet, Lien suggested. Chen could offer
LY President Wang Jin-pyng (KMT) the premiership in order to
maintain government stability and deflect criticism of his
administration. A Wang premiership under a DPP
administration would be an "acceptable" development, with the
condition that the KMT fills several cabinet-level positions,
Lien said. Wang, who challenged Ma Ying-jeou for the KMT
chairmanship in 2005, is an affable politician and enjoys
good relations with former President Lee Teng-hui, James
Soong and the PFP, and independent legislators. Lien said he
could serve as an intermediary between Wang and Ma to reduce
friction between the two KMT leaders and ensure that Wang as
premier would fully enjoy Ma's support.


5. (C) Turning to defense issues, Lien Chan suggested that a
KMT victory in both Taipei and Kaohsiung could make passage
of the 2007 defense budget submitted to the legislature
easier. A KMT loss in Kaohsiung, however, would not make
passage in the KMT-controlled legislature "entirely
hopeless." In response to the Director underscoring the need
to keep politics from interfering with Taiwan's defense
needs, Lien pointed to the KMT's past history of supporting
Taiwan's defense and said he personally believes the
legislature must approve the defense budget as soon as
possible to "catch up" with China. Lien, nevertheless,
blamed the DPP for making arms procurement a political issue
in the 2004 election. At the Director's request, Lien

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pledged he would continue to urge KMT Chairman Ma and Wang to
pass a robust defense budget.

Comment
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6. (C) Like many other politically savvy local observers,
Lien sees the Kaohsiung election as a nailbiter, despite
Huang Chun-ying's apparent wide lead in the polls. Lien
clearly sees Wang Jin-pyng serving as premier under President
Chen Shui-bian as a viable way to improve the contentious
political atmosphere. However, it is not clear whether Ma
would support a development that could substantially raise
the profile of Wang, Ma's primary competitor for influence
within the KMT. We have little doubt that both Lien and Wang
would take great pleasure in Ma's discomfort, hoping that
they can slow the steamroller momentum of their party rival
for the KMT presidential nomination next summer.
YOUNG