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.

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POLITICAL CONTEXT
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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.

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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.

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AGENDA FOR ENGAGEMENT
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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