PFP INSIDER SAYS: PFP HAS NO FUTURE

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 000054

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/06/2016
TAGS: PGOV MASS MCAP TW
SUBJECT: PFP INSIDER SAYS: PFP HAS NO FUTURE


Classified By: AIT Director Douglas H. Paal, Reason(s): 1.4 (B/D).


1. (C) Summary: People First Party (PFP) legislator Lin
Yu-fang told AIT that the PFP has no political future and
that he and a number of other legislators will be returning
to the KMT before the next LY session begins in February.
Lin describes PFP Chairman James Soong as deeply jealous over
the political success of the younger KMT Chairman, Ma
Ying-jeou. Recent meetings between the two chairmen achieved
little toward unifying the putative Pan-Blue allies. Lin, a
longtime critic of the Defense Procurement Special Budget,
explained that Ma began considering the defense budget issue
seriously only after his election as Chairman in July 2005,
but he subsequently backed off, skittish in the face of
criticism from Soong and maverick legislator Li Ao. Lin
views President Chen's strident New Year's Day speech as
intended to bolster deep-Green support for Yu Shyi-kun,
Chen's favored candidate for DPP Chairman. Finally, as he
said during the hubbub attending LY approval of the Kidds
purchase, Lin sought to assure AIT that he was not anti-U.S.,
but that his vocally critical efforts to formulate reasonable
defense budgets and policies for Taiwan were actually in sync
with U.S. interests and policies. End Summary.

PFP Insider: PFP Has No Future
--------------


2. (C) On January 5, AIT met with PFP legislator Lin
Yu-fang, one of the four Chairs of the Legislative Yuan (LY)
Defense Committee. Lin, a strong critic of the Defense
Procurement Special Budget over the past sixteen months, has
made a public show of declining to meet with AIT for most of
the past year. Elected from Taipei's southern district, Lin
told AIT that he will be returning to the KMT before the
start of the next LY session in early February. He explained
that his supporters have repeatedly told him they will not
vote for him over the KMT candidate in the 2007 LY election.
Lin predicts that a number -- perhaps eight to nine -- other
PFP LY members will leave the party one by one, until only
the most die-hard Soong supporters remain. Lin said
"legislators-at-large," or those elected on the PFP ticket
who have no home district or constituency of their own, will
stick with the PFP until the very end, because without the
party they have no chance of winning a seat.


3. (C) Lin said he began trying a year ago to persuade James
Soong to return to the KMT. He told Soong directly and
through intermediaries that the PFP's power would continue to
decline, and the longer Soong waited to return, the fewer
bargaining chips he would have. Lin advised Soong that the
KMT would give him a hero's welcome if he offered without
conditions to return to the KMT the PFP's 33 LY members and
its considerable strength in the city governments of Taipei
and Kaohsiung. For his part, Soong should offer to become a
"lifetime volunteer for the party" like KMT LY Speaker Wang
Jin-pyng. Lin reminded Soong that he and others left the KMT
because of Lee Teng-hui and that, now that Lee had was out of
the KMT, it was Soong's and the PFP's "duty" to return to the
mother party. Lin told AIT that he had been repeating this
argument over and over to Soong, as recently as one month
ago, but to no avail. Once a close confidant of Soong, Lin
now rarely speaks to him.

Ma-Soong Talks Catharsis For Soong, Little Else
-------------- --


4. (C) Lin said that after the PFP's poor showing in the
December 3, 2005 local elections, he feared that Soong, angry
over KMT tactics during the race, would quickly attack Ma and
his KMT, creating a rift in the Pan-Blue that President Chen
could exploit. To avert this outcome, Lin said he and others
in the PFP pushed hard for a quick meeting between the two
chairmen. Lin told AIT that the two Ma-Soong meetings have
helped curb Soong's anger toward Ma, serving as a form of
catharsis for the PFP Chairman, and have thus far kept
relations between the two men from "getting worse." Soong
still resents playing second fiddle to the younger Ma, since
the two men had similar career tracks as they rose in the
seniority-driven KMT. There has been no progress on a
Pan-Blue mechanism for apportioning candidates for next
year's LY election, said Lin, who then added that since most

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PFP LY members will have returned to the KMT well before the
2007 election, the nomination mechanism will be mooted.

Ma Receptive To Rational Defense Budget Analysis
-------------- ---


5. (C) Lin told AIT that shortly after Ma was elected KMT
Chairman in July 2005, Ma requested a briefing from Lin on
the Special Defense Budget issue. Lin said he told Ma that
the "vetoed" 2004 missile defense referendum had ruled out
any discussion of the PAC-III missiles for the foreseeable
future. Even though the submarines were too expensive and
too many at the average price of $1.1 billion each, Lin
counseled Ma against flatly rejecting their purchase.
Instead, Lin suggested Ma ask the Ministry of National
Defense (MND) to pursue a price reduction, after which the LY
could consider the purchase, perhaps under a "four-plus-four"
scheme, where, if the first four did not meet the MND's
requirements, the purchase of the second four could be
considered. As to the P-3C ASW planes, Lin told Ma the
price seemed reasonable, but Taiwan perhaps needed only eight
planes to meet its defense objective. Ma agreed to all of
the foregoing in principle.


6. (C) Shortly after briefing Ma, Lin recommended the KMT
establish a four-member "arms procurement working group" to
set KMT defense budget policy, and to develop a strategy to
pursue it in the LY. The group included LY Defense Committee
member Su Chi, Adm. Shuai Hua-min (ret.),and KMT Vice-chair
Kuan Chung. After the working group's first meeting, Lin
recommended a poll be taken to determine whether a gap
existed between public opinion and the KMT's opposition to
arms procurement. Before the poll could be conducted, Lin
said, the existence of the working group was leaked to the
press. Independent legislator Li Ao attacked the group as
evidence the KMT was caving in to U.S. pressure to buy
unnecessary weapons. Five months before the December 2005
local elections, and desperate to distinguish his party from
the KMT, Soong publicly accused the KMT of having gone soft
on the weapons issue, and claimed that the PFP was the more
"courageous, independent" party, still willing and able to
say "no" to the U.S. arms procurement package. Under
political pressure, the working group was dissolved, Lin
said, and Ma retreated from the arms procurement issue.

Chen's Speech for DPP Consumption
--------------


7. (C) Lin said he was not surprised by President Chen's
change of direction in his New Year's Day speech. After
having paid attention to Chen for years, Lin now understands,
he explained, that Chen is "not rigid ideologically," but is
rather "very pragmatic" and has no "set principles." Lin
told AIT that he views Chen's strident January 1 remarks as
primarily intended to help Yu Shyi-kun become the next DPP
Chairman. Chen hoped his remarks would energize the
deep-green base to turn out in sufficient numbers to elect
You as the new DPP Chairman. Chen is confident, said Lin,
that he can control the party through Yu, but he fears
becoming a lame-duck should Yu lose the race. Chen's
decision to adopt a "consolidated deep-green" strategy
follows the DPP's humiliating loss in the December 3, 2005
local elections, whose results show, said Lin, that
traditional DPP voters broke from the party to support blue
candidates. Once his objectives are achieved, Lin said, Chen
will probably return to a moderate tone.


8. (C) Lin said Chen, since entering politics, has tried to
cultivate relationships with tycoons, particularly Chang
Yung-fa, Chairman of Evergreen Shipping. On the eve of the
2004 presidential election, when Chen announced his intention
to restrict the three links, including direct cross-Strait
transport services, Chang, Chen's long-time benefactor,
openly and harshly criticized Chen, and transferred his
support to then-KMT presidential candidate Lien Chan. Lin
also said Beijing has learned "a lot of useful information"
since Lee Teng-hui became president, about how politics works
in Taiwan, and the delicate balance among Washington,
Beijing, and Taipei. Beijing now understands, said Lin, that
if "worse comes to worst," Washington will put sufficient
pressure on Chen or another president to avoid confrontation,

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obviating China's need to do so. The PRC also understands
that Chen's flexibility is both his greatest strength and his
greatest weakness: he can make decisions quickly, but changes
his position too often. Knowing he will change tack soon,
Beijing now ignores Chen's provocative remarks, and avoids
stirring up anti-China sentiment on Taiwan for Chen to
exploit.

Lin Wants To Rehabilitate Himself
--------------


9. (C) Lin said he is upset that he has been "marked" by AIT
as "anti-American." (Note: Last June, Lin and others
involved in the arms budget question were invited to a lunch
at the Deputy Director's residence. Lin publicized the
invitation, and proclaimed that he would not go, to avoid
being "pressured" by AIT on the arms issue. End note.) As
evidence that his views were really in close accord with the
views and policies of the U.S., Lin told AIT that after the
LY had decided to cut the budget for the Kidd-class
destroyers by 17 percent in 2001, he was the one who found a
solution to keep the deal alive. Lin said he told Wang
Jin-pyng that it had been foolish of the LY to cut the budget
to try to force the U.S. to discount the destroyers, and
suggested that instead of confronting the U.S. with the
diminished budget, Taiwan should simply buy fewer missiles.
Lin claims that without his intervention, the Kidd purchase
would not have gone through. Lin also asserts that it is he,
and not KMT Defense Committee Member Su Chi, who first
insisted that the MND be allowed to buy the P-3Cs, and that
the Procedural Committee should release the ASW planes to the
Defense Committee for consideration.
PAAL