STRAITS EXCHANGE FOUNDATION (SEF) CHAIRMAN P. K.

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000543

SIPDIS

E.O. 12958: DECL: 05/06/2019
TAGS: PGOV PREL CH TW
SUBJECT: STRAITS EXCHANGE FOUNDATION (SEF) CHAIRMAN P. K.
CHIANG OFFERS RESIGNATION; PRESIDENT MA ASKS HIM TO STAY ON

Classified By: AIT Director Stephen M. Young,
Reasons: 1.4 (b/d)


1. (C) Summary: Straits Exchange Foundation (SEF) Chairman

P. K. Chiang tendered his resignation to President Ma
Ying-jeou on May 4, citing his age (76) and physical
condition. On May 6, Ma expressed his strong hope that
Chiang would stay on and told the media he had rejected
Chiang's resignation. Chiang's resignation offer did not
involve any differences over cross-Strait policy. Rather,
some critics had charged Chiang with conflicts of interest
relating to business dealings with China by his family
members and to his alleged lobbying on behalf of a relative
for appointment as general manager of the Taiwan Sugar
Corporation. Chiang's resignation offer was clearly related
to his unhappiness over the criticism and pressure on him and
his family. Chiang may also have been testing whether Ma
wanted him to stay on or whether he should, for the good of
the party, resign to make way for Wu Poh-hsiung. Note: It
appears increasingly likely that Ma may take up the KMT
chairmanship himself this summer, replacing Wu. There have
been some rumors in the media that Ma might be hoping to
placate Wu by moving him over to the SEF chairman position.
End Summary.


2. (SBU) Straits Exchange Foundation (SEF) Chairman P. K.
Chiang confirmed publicly at the Legislative Yuan (LY) on May
6 that he had tendered his resignation both orally and in
writing to President Ma Ying-jeou on May 4. Chiang stressed
this was not a sudden decision, noting that he had already
submitted his resignation orally last December 2, but
President Ma had asked him to stay on to complete the current
stage of work. Now, Chiang noted, he had fulfilled his work
by completing nine cross-Strait agreements and one joint
statement with the PRC's Association for Relations Across the
Taiwan Strait (ARATS). Chiang cited a quotation that
"leaving office is more important than entering office," and
noted he had also considered his age (76) and physical
condition in making his decision to offer his resignation.


3. (SBU) In his remarks to the media at the LY, Chiang also
said that Ma had "of course" told him he absolutely could not
resign, that this was a critical period, and that Chiang was
doing a very good job. Chiang responded to Ma by explaining
his physical condition. Ma asked Chiang to take a vacation
and reconsider, and he also tried to give the resignation
letter back to Chiang. Chiang then said, "Mr. President,
Please look carefully at the content of my letter
resignation, and perhaps you will change your mind."


4. (SBU) Presidential Office Spokesman Wang Yu-chi said on
May 6 that President Ma's attitude on this issue was very
clear: full efforts would be made to persuade Chiang to stay
on, and Ma would not approve Chiang's letter of resignation.
During a television interview the same day, Ma, noting he had
talked to Chiang on the phone that morning, said he would not
let Chiang go. Ma said he had encouraged Chiang to stand up
to the pressure, and that Chiang had responded that he could
take the pressure himself but he could not bear to see his
family suffer. Ma told the television interviewer, "I asked
Chiang not to come up with this idea (about resigning) again,
and I returned his resignation letter on the spot."


5. (C) SEF Deputy Secretary General Maa Shaw-chang confirmed
to AIT that Chiang had in fact submitted his resignation to
President Ma and that SEF was waiting to see what would
happen. If Ma were eventually to approve Chiang's
resignation, Maa said, it would still have to go through the
SEF Board of Directors to take effect.

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


6. (C) Chiang has been a target of criticism over business
dealings with China by his family members and over his
alleged lobbying on behalf of his nephew Chen Ching-pin to be
promoted from deputy to general manager of the state-run
Taiwan Sugar Corporation. Chiang was clearly unhappy with
criticisms that touched on his family members as well as

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himself. A series of press articles earlier this year
carried rumors that Ma was allegedly displeased with Chiang's
apparent conflicts of interest and was thinking of replacing
Chiang with current KMT Chairman Wu Poh-hsiung. There are no
indications, however, that would suggest Ma had anything to
do with Chiang's resignation offer. Also, there are no
apparent disagreements over cross-Strait policy between
Chiang and President Ma.


7. (C) Comment continued: P. K. Chiang may have made his
very public resignation offer in part to test whether Ma
wanted him to stay on or to step down to make way for Wu
Poh-hsiung. It appears increasingly likely that Ma Ying-jeou
may take up the KMT party chairmanship this summer, replacing
Wu. Appointing Wu as SEF chairman could in theory be one way
to placate Wu for stepping down as KMT chairman. There have
also been suggestions that Wu may be placated by having his
son, Taoyuan County Legislator Wu Chih-yang, nominated as the
KMT candidate to run for Taoyuan County magistrate.
YOUNG