AIT CHAIRMAN BURGHARDT DISCUSSES PRESIDENTIAL RACE

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 001435

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/22/2017
TAGS: PGOV PREL MCAP TW
SUBJECT: AIT CHAIRMAN BURGHARDT DISCUSSES PRESIDENTIAL RACE
WITH LY SPEAKER WANG, KMT CHAIRMAN WU, AND ACADEMICS


Classified By: Director Stephen M. Young,
Reason(s): 1.4 (B/D).


1. (C) Summary: KMT Legislative Yuan (LY) Speaker Wang
Jin-pyng told AIT Chairman Burghardt that PAC-III missiles
would stand a better chance of passage if included in the
2008 annual budget rather than a supplemental budget bill.
Wang predicted a close 2008 presidential election, claiming
Ma Ying-jeou is a weak candidate for the KMT, in part because
of his indictment for misuse of Taipei mayoral special funds.
In a separate meeting, KMT Chairman Wu Poh-hsiung argued
that the majority of voters view Ma as "clean" and regard his
prosecution as a DPP "dirty trick." Wu also asserted that
the KMT would do better than the current DPP government in
managing and improving cross-Strait relations. During a
lunch, several Blue-leaning academics told Burghardt they
believe Ma should avoid the sensitive
unification-independence issue and work to sell the economic
benefits of improved cross-Strait relations. They also said
they view the DPP's planned UN referendum as a ploy to
mobilize voters for the presidential election. End Summary.

PAC-IIIs Maybe Next Year
--------------


2. (C) Legislative Yuan (LY) Speaker Wang Jin-pyng (KMT) and
AIT Chairman Burghardt discussed the annual budget, including
defense procurement, on June 14, one day before the LY passed
portions of the budget. When pressed on the possibility of a
supplementary budget to fund the purchase of PAC-III missile
batteries, Wang demurred, insisting that it would be better
to consider the PAC-IIIs in October, as part of next year's
annual budget, thereby avoiding the "strong opinions" usually
stirred by supplemental or special budget bills. Wang
explained that the Executive Yuan must submit the 2008
proposed annual budget by August 2007 and the LY will begin
deliberations on the new budget by October 2007.

Wang Declines Vice Presidential Nomination
--------------


3. (C) Burghardt asked Wang why he declined to be Ma's
running mate. Wang said he disagreed with many of Ma's ideas
for governing the country, and had conditioned his acceptance
of the vice presidential nomination on reaching an agreement
with Ma on important policies. However, according to Wang,
Ma refused to consult with him, making it impossible for him
to join the ticket. After he declined the vice presidential
spot, Wang continued, Ma invited him to take charge of his
presidential campaign. Wang told Burghardt he declined this
offer too because there was no clear chain of command, and it
was unclear what resources would be available to the
campaign. Wang added that this presidential race promised to
be a dirty one, and being tied to a "smear campaign" would
complicate his role as LY Speaker.

Ma's Four Big Problems
--------------


4. (C) According to Wang, KMT Honorary Chairman Lien Chan has
told others within the party that Ma suffers from four
weaknesses: (1) he is a Mainlander, (2) he faces a possible
conviction for misuse of Taipei mayoral office special
accounts, and "as many as ten" other legal cases are also in
the works, (3) Ma is perceived as weak and indecisive, and
(4) the DPP can exploit government resources to bring him
down. The public also doubts Ma's integrity, Wang explained,
because Ma promised to reform the party, but instead, the
party has been forced to amend its by-laws and charter to
enable an indicted Ma to run for president. The DPP will
exploit all of these vulnerabilities, Wang predicted, making
for a very close and unpredictable race, which Ma might well
lose.

Both Presidential Candidates Vulnerable
--------------


5. (C) In fact, Wang continued, DPP candidate Frank Hsieh
and Ma both could be rendered ineligible by corruption cases,
throwing the whole presidential race into disarray. Unlike

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the KMT, Wang continued, the DPP will not change its party
rules to enable an indicted Hsieh to continue his
presidential run. According to Wang, President Chen does not
trust Hsieh, and would be happy to see his favorite, former
premier Su Tseng-chang, replace Hsieh as the DPP candidate.
(Comment: It is an open secret in Taiwan politics that Wang
himself is eager to take Ma's place should he stumble. End
comment.)

Hsieh More Partisan than He Projects
--------------


6. (C) Although Frank Hsieh is a "careful, clear thinker,"
Wang argued that the DPP candidate is "plagued by corruption
problems from earlier in his political career that he cannot
resolve." Wang claimed that Hsieh failed to solve many of
Kaohsiung City's problems during the seven years of his
mayoral tenure, and that he does not have the vision needed
to solve the larger "national" problems of Taiwan. Before he
became Premier, Wang continued, Hsieh promised to reconcile
the differences between the ruling and opposition parties;
instead, Hsieh was intensely partisan, contributing to the
political deadlock he had promised to relieve. This damaged
Hsieh's credibility with the public, insisted Wang. Hsieh's
ability to work with the PRC is also hobbled by his steadfast
refusal to accept the "1992 consensus" of "one China,
different interpretations," which the KMT supports. Taiwan
voters will discount Hsieh's promise to improve cross-Strait
relations because they will not believe the PRC will work
with him, Wang maintained.

President Chen Will be Cautious to Ensure Hsieh Victory
-------------- --------------


7. (C) Burghardt asked Wang whether President Chen, during
his last year in office, would do anything that might damage
the future president's chances of advancing cross-Strait
relations. Wang remarked that Taiwan's political landscape
is highly unstable because both presidential candidates are
at risk of being forced from the race by possible
convictions. President Chen, however, is relatively weak and
focused on self-preservation. Antagonizing the PRC could
damage Hsieh's "moderate" image and his chances of winning
the presidency. If the KMT retakes power, Wang explained,
Chen's legal problems will certainly multiply. Because it
serves his personal interests, Chen will do whatever he can
to ensure Hsieh's victory, including laying low on
cross-Strait affairs. Hsieh is by nature both "more
predictable and less troublesome" than his predecessor, Wang
added, making a repeat of earlier cross-Strait crises
unlikely.

At Least One Referendum on Ballot
--------------


8. (C) Wang told Burghardt the DPP is currently pushing two
referenda; one to force the KMT to disgorge its "illicitly
gained assets," and the other proposing UN membership under
the name "Taiwan." Burghardt stressed that the U.S. would
publicly oppose any referendum touching on sovereignty. Wang
derided the U.N. bid as folly, but admitted a referendum on
the idea would help the DPP attract supporters to the polls.
The KMT is also considering one or more referenda of its own,
including one to crack down on the kind of "official
corruption" for which President Chen was cited, but not
indicted. Overcoming the procedural hurdles will not be easy
for either party, Wang continued, but it is probable that at
least one referendum will be on the presidential ballot.

Meeting with KMT Chairman Wu Poh-hsiung
--------------


9. (C) In a separate conversation on June 15, KMT Chairman
Wu Poh-hsiung suggested to Chairman Burghardt that Hsieh is a
clever opponent and better natural campaigner than Ma, but
argued that Hsieh's "shady reputation" and related legal
problems will surface and prevent him from winning the
presidential election. Wu acknowledged that Ma Ying-jeou's
popularity has suffered as a result of his indictment, but
argued that the majority of voters still view Ma as "clean"

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and as a victim of DPP dirty tricks. Ma's presidential
campaign will survive the mayoral accounts scandal, Wu
predicted, and a second possible prosecution for other
alleged wrongdoing might end up backfiring on the DPP by
persuading to the public that the various prosecutions of Ma
were all politically motivated.

KMT Will Seek to Improve Cross-Strait Relations
-------------- --


10. (C) The KMT is pursuing a "peace and development"
campaign strategy for both the presidential and legislative
elections, KMT Chairman Wu said. President Chen's
independence agenda has resulted in Taiwan's increasing
economic and diplomatic isolation, Wu argued, adding that a
KMT president will not pursue independence, which will reduce
tensions and foster cross-Strait dialogue. Based on the
"1992 Consensus," Wu continued, a KMT government will use
dialogue to win economic and diplomatic concessions from
Beijing, making Taiwan a more attractive place for foreign
investment. A KMT government would be better for U.S.
interests, Wu argued, since Taiwan would no longer be the
"troublemaker it has been under Chen.


11. (C) Director Young expressed concern that the KMT may be
too optimistic as Beijing might reduce its willingness to
cooperate with the KMT if it becomes the ruling party. Wu
responded that the PRC is preoccupied with developing its
economy and reducing systemic inequities. As long as Taiwan
doesn't move toward independence, Beijing will remain
flexible, Wu suggested, adding that the KMT in power will not
give Chinese hard-liners any excuse to put pressure on Taiwan.

Lunch with Pro-Blue Academics
--------------


12. (C) In a June 15 lunch meeting with Chairman Burghardt,
several Blue-leaning academics suggested that the great
challenge facing the KMT is its inability to reconcile the
deep differences between the central party elite and local
KMT political leaders. Although acknowledging that Ma's
legal problems have weakened his bid for the presidency, the
academics said their main concern about Ma's campaign is the
lack of coherence in his political message, a problem they
attributed to the fact that no one person is really running
Ma's campaign. The academics agreed that Ma should avoid the
unification-independence question and focus instead on the
practical and economic benefits the KMT can deliver through
improved cross-Strait relations. They also viewed the DPP's
plan to hold a referendum on the UN together with the
presidential election as a ploy to mobilize voters.
YOUNG