KMT VICE CHAIRMAN CHAN ON MA YING-JEOU, PARTY

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 000728

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/29/2032
TAGS: PGOV TW
SUBJECT: KMT VICE CHAIRMAN CHAN ON MA YING-JEOU, PARTY
CHAIR RACE, LEGISLATIVE ELECTIONS, AND DEFENSE ISSUE


Classified By: AIT Acting Director Robert S. Wang,
Reason 1.4 (b/d)


1. (C) Summary: KMT Vice Chairman Chan Chuen-po told the
Acting Director on March 27 that he expected KMT Vice
Chairman Wu Po-hsiung to handily defeat legislator Hung
Hsiu-chu in the KMT Chairman election on April 7. Wu's top
priority will be the difficult task of trying to bring former
KMT Chairman Ma Ying-jeou and rival Legislative Yuan (LY)
Speaker Wang Jin-pyng together on the KMT presidential ticket
to enhance KMT prospects in the 2008 presidential election.
While the KMT is expecting a close presidential election, the
party has hopes of winning an outright majority of seats in
the December 2007 legislative elections. ADIR emphasized the
need to keep electoral politics from undermining Taiwan's
national defense, noting U.S. disappointment over lack of
progress in the LY on the defense budget. While the KMT
cannot afford to block the budget and defense procurement
indefinitely, Chan argued, the party has to play a delicate
"balancing act" with the People First Party (PFP),whose
support will remain critical to maintaining the pan-Blue
majority in the LY until year-end legislative elections. End
Summary.


KMT Chairman Race
--------------


2. (C) The Acting Director met with KMT Vice Chairman Chan
Chuen-po on March 27 to discuss Kuomintang (KMT) perspectives
on the political situation. Chan, currently on leave from
his party position while managing former Chairman Ma
Ying-jeou's presidential campaign, predicted that KMT Vice
Chairman Wu Po-hsiung will handily defeat legislator Hung
Hsiu-chu in the KMT Chairman bi-election scheduled for April

7. Chan noted that the KMT had to relax its registration
rules after Hung failed to secure the 30,000 party member
signatures required to run in the party chair election. By
contrast, respected party veteran Wu Po-hsiung, who only
entered the race after confirming that former KMT Chairman
Lien Chan would not run, had no difficulty obtaining the
requisite signatures. Wu's top priority as party chairman
will be ensuring KMT victory in the 2008 presidential
election, Chan noted, adding that the main focus of Wu's work
over the coming months will be to try to bring LY Speaker
Wang Jin-pyng on to the Ma ticket as the KMT's vice
presidential candidate.

Primary Politics and the Ma-Wang Rivalry
--------------


3. (C) Ma, who remains the best hope for the party in 2008,
will begin taking the steps necessary to register for the KMT
presidential primary next week, Chan said. The KMT is
worried that the presidential race will be close and very
competitive, giving the ruling Democratic Progressive Party
(DPP) an opportunity to pull off a last-minute surprise or to
push controversial issues, such as Taiwan identity and ethnic
politics, in its efforts to control the issue agenda and
campaign tempo. Fielding a combined Ma-Wang ticket would be
the best way for the KMT to counter the DPP strategy and win
the 2008 election, Chan emphasized.


4. (C) However, overcoming friction between Ma and Wang
will not be easy, Chan continued, because both KMT
heavyweights are reluctant to give ground. Nonetheless, Ma
and Wang have taken a significant step forward by each
agreeing to offer the other the right of first refusal to be
vice presidential running mate if they win the presidential
nomination. While this by no means ensures a joint Ma-Wang
ticket, it helps ease tension and opens the way for possible
future cooperation. Chan said he urged Ma to endorse this
proposition because it showed more sincerity and "warmth"
than Ma's previous statement that he would "not rule out"
Wang as a running mate. Also, the new agreement puts the
ball in Wang's court. If Wang were to ultimately reject Ma's
offer and run on a separate ticket, Wang, not Ma, would be
blamed for breaking party unity and not showing good faith.


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5. (C) Chan said he remained uncertain whether Wang
intended to compete in the KMT presidential primary, despite
recent discussions between the two camps. Wang has
consistently pushed for former KMT Chairman Lien Chan to
mediate to determine the party's presidential ticket in order
to avoid an open primary competition, which he knows he would
lose, according to Chan. Ma, on the other hand, insists on
using the primary process to determine the presidential
candidate since neither he nor Wang have agreed to accept the
vice presidential slot. Chan confirmed that Lien had tried
to break the impasse by proposing that Wang serve as party
chairman while Ma ran as the presidential candidate. Chan
said both he and Vice Chairman Wu Po-hsiung had advised Ma
against accepting this proposal, arguing that it would not be
a "good idea" to put the party machinery in the hands of his
erstwhile rival, as Wang could undermine the presidential
campaign from within.


6. (C) The roots of the Ma-Wang rivalry extend beyond their
bitter fight for the KMT chairmanship in 2005, Chan
suggested. Ma and Wang have very different personalities and
political backgrounds that inform their current positions.
Ma, more aloof in his personal relationships, was identified
early on by the KMT as a "superstar" and has been groomed for
higher positions throughout his career. Wang, on the other
hand, is more adept at building personal relations because he
is a product of local Kaohsiung factional politics and has
had to struggle to get to where he is now. Wang's warmer
person-to-person touch, however, does not translate into
strong popular appeal. Rather, Ma continues to enjoy very
broad public support for his clean-cut "movie star" image,
especially among young voters and women. Many people
sympathize with Ma as a victim, viewing his recent indictment
for corruption as a politically-motivated attack by the DPP
government. Chan observed that this sentiment came across
clearly during Ma's recent trips outside Taipei, where he has
received a warmer reception than in the past. Chan suggested
that the "underdog" and "victim" sympathy effect, long used
by the DPP, could play to Ma's advantage during the
presidential race.

Optimistic on KMT Legislative Prospects
--------------


7. (C) Despite KMT concerns about the uncertainty of the
presidential race, Chan told the Acting Director that his
party is "fairly confident" it will win an outright majority
of seats in the upcoming legislative elections. The KMT
expects to make a strong showing in northern and eastern
Taiwan, island counties, and the aborigine constituencies.
The south will be an uphill battle for the KMT, however,
making central Taiwan the "key battleground," which will be
especially important for the presidential race as well as the
LY elections. Noting that the central Taiwan county
governments of Taichung, Nantou, and Changhua are now in KMT
hands, Chan surmised this would help the KMT in both the
legislative and presidential elections, in contrast to the
situation in 2004 when those areas were in DPP hands.


8. (C) Chan doubted that many KMT legislators who lose in
the primaries will split the KMT vote by running as
independents, explaining that party affiliation will play a
crucial role in the new single-member legislative districts,
making it difficult for independents to win. Chan speculated
that the DPP government is still considering whether it will
support combining the December 2007 legislative and March
2008 presidential elections into one election in January

2008. While the DPP initially backed such a proposal for the
sake of saving public resources, Chan assessed that the
electoral loss during the combined 2005 local elections has
raised doubts within the DPP about this strategy. Chan
predicted that a joint LY-presidential election would favor
the KMT because its strong grassroots organizations would be
able to combine voter mobilization efforts for the two
elections.

KMT stronger than PFP in Keelung Mayoral Race
--------------


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9. (C) Chan argued that the poor image of the People First
Party (PFP) after James Soong's embarrassing defeat in the
2006 Taipei mayoral race will hurt the PFP in the legislative
elections. It will also weaken the PFP candidate for the
Keelung mayoral bi-election on May 12. According to Chan,
PFP candidate Liu Wen-hsiung has further compromised his
chances by antagonizing most local political factions in
Keelung. Keelung Council Speaker (KMT) Chang Tong-rong, the
KMT candidate, on the other hand, has gained the backing of
former Mayor Hsu Tsai-li's supporters because Chang stuck
with Hsu despite Hsu's corruption indictment and Ma's support
for Hsu's recall. Chang has also been able to pull support
from other local factions who see his potential speakership
vacancy as an opportunity to advance their own interests.
Thus, Chan said, he expected the KMT to win in Keelung
despite the pan-Blue split.

Defense Budget and LY Politics
--------------


10. (C) ADIR emphasized U.S. disappointment over the
failure of the LY to pass the 2007 annual budget, including
the defense budget for arms procurement, noting the
difficulties created as partisan electoral politics begins to
heat up and spill over into the LY. Chan said he believes
the KMT cannot afford to block the budget and defense
procurement indefinitely, citing strong popular support for
improving Taiwan's defense capabilities. Nevertheless, LY
politics are "complicated," Chan argued, because the KMT does
not enjoy an outright majority and has to play a delicate
"balancing act" with the PFP, whose support is critical if
the KMT-led pan-Blue coalition is to maintain its LY majority
until the legislative elections in December. At that time
the KMT anticipates the PFP will be marginalized and no
longer a necessary political partner. In the meantime, the
KMT needs to heed strong PFP opposition to DPP efforts to
restore previous defense cuts in exchange for PFP support for
passing the KMT's Central Election Commission bill.

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


11. (C) The continuing friction between Ma and Wang is par
for the course in a KMT used to internal divisions. However,
a divided KMT cannot hope to beat the DPP in the 2008
presidential election. Therefore, the challenge facing Wu
Po-hsiung, Chan Chuen-po and other KMT leaders is to patch up
differences with Wang and other disgruntled KMT political
figures in hopes of unifying the party behind presidential
candidate Ma. Ma's current vulnerable position -- his
corruption trial begins April 3 -- will complicate their
efforts to rally party support behind Ma.
WANG