CHAIRMAN MA HEADS TO WASHINGTON EMPTY-HANDED

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000865

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/16/2016
TAGS: PGOV PREL MARS MASS MCAP TW
SUBJECT: CHAIRMAN MA HEADS TO WASHINGTON EMPTY-HANDED

REF: A. TAIPEI 0229


B. TAIPEI 0822

C. TAIPEI 0138

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Classified By: AIT Acting Director David J. Keegan, Reason(s):
1.4 (B/D)


1. (C) Summary. KMT Chairman Ma Ying-jeou had promised to
present his alternative defense procurement proposal before
he traveled to Washington. The KMT legislative caucus,
however, unexpectedly blocked that initiative. KMT
legislators blamed President Chen's NUC/NUG announcement for
making any compromise impossible. Barring a last-minute
compromise by the KMT caucus or a bold end run by Ma himself
making a unilateral decision (which some legislators are
urging him to do),Ma will arrive in the U.S. on March 19
without a clear KMT position on the defense procurement
issue. This defeat is Ma's second major stumble in the last
two months after a long string of successes, which culminated
in the KMT triumph in December's island-wide local elections.
End Summary.


2. (C) Opposition Kuomintang Party (KMT) legislators on
March 14 refused to approve a consensus KMT counterproposal
on the long-blocked Defense Special Budget to fund PAC-3
missiles, P-3C ASW aircraft, and diesel electric submarines.
In January, Chairman Ma had requested the KMT legislative
caucus to reconsider the arms procurement package it had
steadfastly opposed the preceding 16 months, and to develop a
KMT consensus counterproposal (Ref A). All signs in recent
weeks pointed to an emerging consensus among the KMT members
of the LY Defense Committee, who led the review. Their
proposeal would have supported the funding of P-3C aircraft,
blocked PAC-3 missile batteries until 2007, and postponed
decision on submarines. KMT legislator Su Chi termed this a
"green light, red light, yellow light" proposal.


3. (C) The proposal ran into a firestorm at a turbulent
meeting of the KMT legislative caucus on March 14, however,
with all but two of the twenty legislators present opposing
approval of the compromise proposal. While several
legislators urged postponing decision on a KMT
counter-proposal until later this week, but before Chairman
Ma leaves for the U.S. on March 19, others pressed for
postponement until after Hu Jin-tao's April Washington visit,
or even postponement indefinitely depending on actions by the
Chen government. This was an unexpected turn of events,
because as recently as last week KMT legislators -- including
Defense Special Budget critics Ting Shou-chung and Su Chi --
were telling AIT that the review requested by Chairman Ma
would definitely be completed early the week of March 13.


4. (C) There were, to be sure, indications of KMT
discontent. Su Chi, for example, told AIT two weeks ago that
the KMT was angry over President Chen's actions and dismayed
that the US had not prevented Chen from "abolishing the
NUC/NUG." KMT legislator Ting Shou-chung, a longtime critic
of the original Defense Special Budget, argued that President
Chen should not be rewarded with new weapons for provoking
the NUC/NUG imbroglio.


5. (C) The twenty KMT caucus members present at the March 14
meeting overwhelmingly opposed the proposed counterproposal
on defense procurement, Su Chi told AIT. While some of the
members present, including Joanna Lei (Lei Chian),pressed
for "indefinite postponement," Su himself and Shuai Hua-min
argued for "temporary postponement" until after the Hu
Jin-tao visit to Washington in April. KMT legislator Lin
Yu-fang, however, told AIT that a meeting of defense-oriented
KMT caucus members on March 15 urged Chairman Ma to be more
independent and unilaterally announce the alternative
proposal.


6. (C) Joanna Lei told AIT that only two KMT caucus members
spoke in favor of the KMT counterproposal (Comment:
presumably Su and Shuai. End comment.),while the balance
either opposed or refused to support the counterproposal
urged by Chairman Ma. Lei explained that a "supermajority8
of the 88-member KMT caucus opposes moving the arms purchase
issue forward out of anger over President Chen,s February 27

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NUC/NUG announcement, which they view as having &changed the
status quo8 across the Strait. Lei argued that approval of
arms purchases or an increase in the defense budget could (1)
send a signal to the PRC that the majority of the LY is
behind President Chen and/or (2) encourage Chen to move
forward more aggressively with his independence agenda.
Discounting the possibility that Ma would take unilateral
action, Lei explained that Ma has been &extremely
democratic8 and hands-off during the caucus,s
deliberations, and has promised to respect the legislators,
decision. Lei added that she and her LY colleagues are
simply reflecting the sentiment they have received from their
constituents.


7. (C) In any event, KMT caucus endorsement in itself would
not have been enough to move a defense budget proposal past
the LY Procedure Committee, which has 46 times blocked LY
consideration of the Defense Special Budget. Any KMT defense
procurement counter proposal would still have to go through
the legislative gauntlet of Pan-Blue coalition partner People
First Party (PFP). PFP legislators and operatives tell AIT
that the rump PFP -- nine PFP legislators have joined the KMT
in recent weeks -- remains even more firmly opposed than ever
to funding any of the three Defense Special Budget weapons
systems. On March 14, in fact, a group of PFP supporters
demonstrated in front of AIT against purchase of U.S. weapons
(Ref B).


8. (C) Comment. The unexpected rejection of Ma's compromise
counterproposal by KMT legislators was apparently a product
of KMT anger over President Chen's actions and direction,
particularly on the NUC/NUG. Barring an unlikely last-minute
change of heart by KMT legislators in the four days before Ma
departs on his March 19-25 U.S. visit, or an equally unlikely
unilateral move by Ma himself, Ma will arrive in the US
without the concrete KMT defense procurement proposal he had
sought. Ma had sought to capitalize on the landslide victory
to which he led the KMT in December to extend his leadership
from the Party organization proper into the legislature and
over a coterie of strong-willed and head-strong KMT
legislators. He had also hoped to erase the memory of his
stumbles over his position on Taiwan independence (Ref C).
Instead, Ma has resurrected long-standing doubts about
whether he is decisive enough to be a leader. End Comment.
KEEGAN