ENGAGING THE NEW ROK LEADERSHIP ON U.S. PRIORITIES

S E C R E T SEOUL 003576 SIPDIS SIPDIS FROM AMBASSADOR VERSHBOW FOR EAP A/S HILL NSC FOR WILDER OSD FOR SHINN E.O. 12958: DECL: 12/18/2017 TAGS: PGOV PINS MARR KS KN SUBJECT: ENGAGING THE NEW ROK LEADERSHIP ON U.S. PRIORITIES REF: "GAME PLAN FOR ENGAGING THE ROK PRESIDENT-ELECT" (SUB-PCC DISCUSSION PAPER) - NOTAL Classified By: AMB. ALEXANDER VERSHBOW. REASONS 1.4 (b/d). ¶1. (S) SUMMARY: Early results and exit polls show that GNP presidential candidate Lee Myung-bak has won the election with around 50 percent of the vote. His closest rival, the UNDP's Chung Dong-young, garnered around 25 percent. This is an unprecedented margin of victory, but Lee is seriously hobbled by scandals, intra-GNP feuding, and an uncertain outlook for the April 9 National Assembly elections. He therefore does not have the political authority that corresponds to his win. The domestic political environment will be particularly turbulent during the nine weeks leading up to the February 25 inauguration. Lee will face a hostile National Assembly, with the majority of seats still controlled by the UNDP and the far-left Democratic Labor Party. He will also have to contend with a special prosecutor who will reopen the question of his involvement in the BBK scandal. ¶2. (S) The Embassy supports the USG interagency strategy plan for engaging with Lee and his team on U.S. priorities (ref). However, bearing in mind the domestic political sensitivities, we advise that it is best if we carry out that engagement primarily through direct Embassy contacts, while Washington officials engage in informal contacts and appropriate Track 1.5 mechanisms. On substance, we believe it best to concentrate on conveying our broad policy goals, laying the basis for more detailed exchanges with the new government following its inauguration, when it will hopefully have weathered the worst of the political storms. To the extent that we raise specific issues and proposals, we need to be realistic and avoid trying to pressure the incoming leadership for concrete commitments before they are ready. END SUMMARY ¶3. (S) We appreciate the opportunity the Embassy has had to contribute to the USG interagency strategy plan that has been developed to engage Lee Myung-bak's transition team and the incoming ROK administration on U.S. priorities (ref). We fully support the elements of that plan and see it as a real opportunity to strengthen the overall U.S.-ROK bilateral relationship by resolving a number of the issues that are most important to us, including ratification of the KORUS FTA, reopening the Korean market to American beef, and extension of the ROK's Zaytun troop dispatch to Iraq, as well as making further progress on needed Alliance transformation. With the Six Party Talks at a delicate stage, we also need to ensure that the incoming Korean government is in sync with Washington from day one. The Embassy looks forward to playing its role in: -- exploring the prospects for achieving our long-term goals with key members of the incoming South Korean leadership team during the transition period (between the December 19 election and the February 25, 2008 inauguration); -- encouraging bipartisan cooperation during the transition period on key short-term priorities (6PT, FTA, beef); and -- working with the new ROK Administration on key political, economic and security issues in its first few months in office. -------------- POLITICAL CONTEXT -------------- ¶4. (C) Early results and exit polls show that GNP candidate Lee Myung-bak has won the election with around 50 percent of the vote, some 25 percent more than UNDP's Chung Dong-young. This is by far the largest margin ever achieved under the current constitution. In 2002, Roh Moo-hyun won by 2 percent, and before that Kim Dae-jung won by 1 percent, Kim Young-sam by 8 percent and Roh Tae-woo by 8 percent as well. However, due to a variety of reasons, Lee's enormous margin of victory does not translate into an authoritative mandate for the President-elect. -- The most serious problem is 11th-hour resurfacing of the BBK scandal, which has led to the passage of a bill to appoint a special prosecutor to reopen the investigation on Lee Myung-bak's alleged involvement in this stock-manipulation scheme. The supposed smoking-gun videotape of Lee stating in the year 2000 that he founded the BBK company may prove that he owned the gun at one point, but it is far from conclusive proof that he ever committed a crime with it. We will have to wait and see whether the special prosecutor can tie President-elect Lee to any actual wrongdoing. What is certain, however, is that although he won a sizable percentage of the vote, he has not convinced the Korean public -- including many of those who voted for him -- of his innocence. -- Lee's political opponents, principally the center-left ruling party, the UNDP, and the far-left DLP, will continue to exploit the BBK scandal. At stake is the April 9 National Assembly elections. The leftist parties clearly sense that their political survival as a viable force in the National Assembly depends on weakening Lee Myung-bak through the BBK scandal. They will use their current majority status to frustrate and discredit Lee personally -- possibly launching impeachment proceedings soon after he takes office. While this strategy could well backfire with the electorate (which is ready for a change after ten years of leftist rule),for now at least, the left believes that it has no other option. -- Conservatives in the GNP are also disgruntled, which can be traced to the bitter primary battle between the Lee Myung-bak and Park Geun-hye factions during the summer. Viewed by hard-core conservatives as an unprincipled opportunist, Lee will have to tread carefully in government appointments and, especially, the party nominations for the April legislative elections. Otherwise, he will risk a mass revolt, splitting the GNP. Ex-GNP Presidential candidate Lee Hoi-chang, although he came in a distant third in the election, has already announced plans to establish a new party, and he could take many current GNP members with him -- possibly including Park Geun-hye -- if Lee Myung-bak fails to reach out to traditional conservatives. ¶5. (C) Lee, therefore, comes into office under something of a cloud, with far less good will than any of his recent predecessors. -------------- EFFECTIVE APPROACH -------------- ¶6. (S) Dealing with a transition team in Korea is always sensitive, and Lee's team is no exception. We will need to be careful not to treat the president-elect's transition team as a government until they formally come to power on February 25th. The transition team will have much to do and we doubt they will be ready very quickly, given Lee Myung-bak's tendency to mull over personnel appointments. We also need to avoid the perception in the Korean press that we are talking with "two governments." ¶7. (S) Essentially, this means that Washington officials should not meet and negotiate formally with Lee's transition team. This will require that we curb our enthusiasm, but there are good reasons for doing so. For one thing, we know that many of the members of the transition team will not end up holding positions in the new government. It would also harm our interests to create unnecessary friction with the outgoing Roh administration and the UNDP/DLP majority in the National Assembly, and with ROKG officials who will stay on in their positions for some time to come. We have important issues to work on with them over the next two months -- Six Party Talks, Iraq troop extension, FTA ratification, beef market opening -- and our goal should be to encourage bipartisan cooperation in these areas to the extent that the domestic political environment permits. ¶8. (S) This is not to say that we should not engage the transition team. Far from it. We must engage them discreetly at all levels, but bearing in mind the domestic political context and sensitivities. I believe this is best done through regular contacts by the Embassy with the President-elect and his transition team. In the case of Washington officials, we recommend informal contacts and participation in appropriate Track 1.5 mechanisms, where we can shape the new team's thinking and set the stage for more direct dialogue after February 25. -------------- AGENDA FOR ENGAGEMENT -------------- ¶9. (S) On substance, we should concentrate on conveying our broad policy goals, laying the basis for more detailed exchanges with the new government following the February 25 inauguration. We must remember that while we are sizing them up, they will be sizing us up as well. While the new ROK administration promises to be more closely aligned with U.S. interests -- especially on alliance and North Korea policy -- it will not want to appear to the Korean public as being overly eager to do Washington's bidding. Our best strategy is not to wear out their good will by asking for too much up front. To the extent that we raise specific issues and proposals, we need to be realistic and avoid trying to pressure the incoming leadership for concrete commitments before they are ready. ¶10. (S) I and the rest of the Embassy team applaud the hard work and obvious high degree of coordination that has gone into the interagency's creation of the engagement strategy. We have an excellent opportunity to work cooperatively with both the outgoing and new incoming ROK governments to strengthen the overall U.S.-ROK relationship by resolving several of the key issues of greatest importance to us. We look forward to playing our role in implementing the final strategy coming out of your deliberations at the December 19 PCC. VERSHBOW