Investigation of Corruption Allegations Against DPP

UNCLAS SECTION 01 OF 02 TAIPEI 001662

SIPDIS

SIPDIS

DEPT FOR AIT/W, EAP/TC, INR/EAP

FROM AIT KAOHSIUNG BRANCH OFFICE

E.O. 12958: N/A
TAGS: PGOV TW
SUBJECT: Investigation of Corruption Allegations Against DPP
Candidate Frank Hsieh: Southern Perspectives

SENSITIVE BUT UNCLASSIFIED, PLEASE PROTECT ACCORDINGLY


1. (SBU) Summary: The Special Investigation Division (SID) of the
Supreme Prosecutors' Office is investigating Democratic Progressive
Party (DPP) Presidential candidate Frank Hsieh for alleged
corruption while he was mayor of Kaohsiung. Some local political
contacts believe that the possibility of a Hsieh indictment means
the DPP presidential nomination is not yet completely settled. One
KMT contact suggested that President Chen may try to take advantage
of the ongoing investigations to pressure Hsieh to accept Su
Tseng-chang as his running mate. End summary.

SIPDIS

Kaohsiung Prosecutors' Office
--------------

2. (SBU) The Taiwan Supreme Court's Special Investigation Division
(SID) is reported to be investigating five cases of alleged
corruption against Democratic Progressive Party (DPP) Presidential
candidate Frank Hsieh. These cases include alleged incidents of
construction project bribery, illicit political donations, and
manipulation of a bank's board member selection process. All five
cases are alleged to have occurred during Hsieh's seven years
(1998-2005) as mayor of Kaohsiung. Deputy Prosecutor General Chung
Chung-hsiao of the Kaohsiung Prosecutors' Office told AIT/K that his
office had already investigated three of these cases, which did not
result in any charges against Hsieh. In a bribery case involving
construction of the Kaohsiung Mass Rapid Transit (KMRT),in January
2007, prosecutors indicted both the City Government Public Works
Bureau's former Director, Wu Meng-te, and a businessman who served
as the head of Frank Hsieh's fundraising campaign, for accepting
bribes from one of the KMRT contractors. Deputy Prosecutor General
Chung added that, at the time, his office did not pursue charges
against Hsieh because it did not find evidence linking him to
malfeasance.


3. (SBU) The SID has jurisdiction over corruption investigations
involving cabinet-level officials. Since Frank Hsieh was a former
Premier, SID can conduct its own investigations of corruption
allegations while disregarding the Kaohsiung Prosecutors' Office's
previous conclusions. Deputy Prosecutor General Chung Chung-hsiao
confirmed to AIT/K that the SID visited Kaohsiung City Government
offices in search of evidence, and is investigating the corruption
charges on its own without the Kaohsiung Prosecutors Office's
participation.

Little Public Reaction
--------------

4. (SBU) Most southerners seem indifferent to the allegations
against Hsieh. However, KMT Kaohsiung Legislator Lo Shih-hsiung
speculated to AIT/K that President Chen could try to take advantage
of the corruption investigations as leverage to force Hsieh to
choose former Premier Su Tseng-chang rather than former Kaohiung
Acting Mayor Yeh Chu-lan as his running mate. Some in the DPP
believe a Hsieh-Su ticket would give the DPP its strongest chance at
winning the 2008 presidential election. Some other conspiracy
theorists have speculated that President Chen might use the
investigation to strike a deal with Hsieh that, once elected, Hsieh
would not conduct any investigations of alleged corruption involving
President Chen and his family.


5. (SBU) Kuo Kuo-wen, Chairman of the Tainan County DPP office
acknowledged to AIT/K that the timing of the investigation is
sensitive. Most DPP members have avoided discussing the possibility
of political maneuvering during the investigation process, Kuo said,
but he added that some party members are expecting Frank Hsieh to be
indicted. Based on current DPP regulations, if indicted, Frank
Hsieh's party membership would be suspended and his candidacy
revoked. Thus far, Kuo said, no one in the DPP has discussed
amending the regulations. One pro-DPP professor, Yang Tze-chuan of
Tainan's National Cheng Kung University, suggested that the new
allegations mean the DPP presidential nomination is still up in the
air.

Comment
--------------

6. (SBU) The outcome of the current investigation is uncertain
though Hsieh has been cleared in previous investigations. If Hsieh
is indicted, he and the DPP will need to carefully gauge public
opinion in determining whether to stay in the race. However, such
indictments are by no means necessarily fatal in Taiwan politics.
For example, the indictment of Ma Ying-jeou did not deter the KMT
candidate from running, and President Chen has rebounded from the
effects of the indictment of First Lady Wu Shu-chen.

TAIPEI 00001662 002 OF 002



Pierre-Louis

Young