Cablegate: Director's 10/6 Meetings with Dpp Tainan Heavyweights

VZCZCXRO5904
RR RUEHCN RUEHGH RUEHHM
DE RUEHIN #1471/01 2890712
ZNR UUUUU ZZH
R 150712Z OCT 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0121
INFO RUEHBJ/AMEMBASSY BEIJING 8651
RUEHHI/AMEMBASSY HANOI 3672
RUEHGH/AMCONSUL SHANGHAI 2266
RUEHCN/AMCONSUL CHENGDU 2858
RUEHSH/AMCONSUL SHENYANG 6816
RUEHGZ/AMCONSUL GUANGZHOU 1446
RUEHHK/AMCONSUL HONG KONG 0100
RUEHHM/AMCONSUL HO CHI MINH CITY 0389

UNCLAS SECTION 01 OF 02 TAIPEI 001471

SIPDIS

SENSITIVE

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

FROM AIT KAOHSIUNG BRANCH OFFICE

E.O. 12958: N/A
TAGS: PGOV ECON TW
SUBJECT: Director's 10/6 Meetings with DPP Tainan Heavyweights

SENSITIVE BUT UNCLASSIFIED, PLEASE PROTECT ACCORDINGLY

1. (SBU) Summary: In his October 6 meeting with the Director,
Tainan County Magistrate Su commented on former President Chen's
lingering influence in the DPP, foreshadowed the possible return of
some of the DPP "old guard," and remarked on DPP Chair's Tsai
concern over her image. In a separate luncheon with the Director,
the always-opinionated Tainan City Mayor Hsu questioned Tsai's party
leadership skills, criticized President Ma as "nave and ignorant"
about cross-strait relations, and predicted a solid DPP performance
in December 2009 "3-in-1" elections. Both Magistrate Su and Mayor
Hsu are term limited. They cannot run for their current offices
next year, but might be put forward as candidates for other county
magistrates or mayors. Barring that, they would be strong
Legislative Yuan (LY) contenders in 2012. End summary.

2. (SBU) During his October 6-7 visit to southern Taiwan, Director
Young met separately with Tainan County Magistrate Su Huan-chi and
Tainan City Mayor Hsu Tian-tsair. Both Magistrate Su and Mayor Hsu
are finishing up their second and final terms in office. Su has
long known former President Chen Shui-bian, as both are Tainan
County natives. In recent years, however, Su has distanced himself
from Chen and the deep-green DPP wing, stating that an excessive
focus on sovereignty issues would marginalize Taiwan in the global
economy. Mayor Hsu has enjoyed high popularity ratings in Tainan
City, devoting much of his energy to promoting the city's
environmental causes.

Tainan County View: Old Guard Down but Not Out
--------------------------------------------- -

2. (SBU) In his meeting with the Director, Magistrate Su
acknowledged that former President Chen's ongoing corruption case
has become an increasingly onerous burden for the DPP. Chen used to
be the DPP's most influential figure, Su stated, but his legal
troubles had reduced his influence on DPP nominations for December
2009 "3-in-1" county/city/local elections to almost nothing.
However, Chen still had many die-hard supporters in southern Taiwan,
particularly in Tainan County. For example, Tainan County DPP
Legislative Yuan (LY) member Lee Chun-yih was still trying to use
Chen's popularity in the county to bolster his possible candidacy
for county magistrate.

3. (SBU) Su remarked, however, that Chen was not primarily
responsible for the DPP's demise in January 2008 LY elections. The
new "single-member, two-vote" system reduced the scale of the DPP's
constituency and handed the KMT a significant electoral edge. Su
said he had warned Chen about the disadvantages of the new system
but Chen rejected his advice. Su also commented that the DPP's
stinging 2008 electoral defeats had not completely forced the DPP
old guard to withdraw from the scene. The retirements were
temporary, he suggested. Some of the old guard may be tempted to
return, especially if President Ma or current DPP Chair Tsai Ing-wen
stumbled.

4. (SBU) On DPP Chair Tsai, Su commented that Tsai's rise to
prominence reminded him of the "Palin effect." Tsai was a new,
fresh face, who represented the DPP's younger generation. Tsai was
very professional, much like Senator Clinton, Su remarked, and was
highly concerned about protecting her image. He suggested that
Tsai's cautious approach signaled her interest in running for
President in 2012. Su also speculated that Kaohsiung Mayor Chen Chu
was gearing up for a 2010 reelection bid. If Chen secured the DPP
mayoral nomination, she was likely to face off against KMT LY member
Huang Chao-shun. Su was optimistic about Chen's chances in this
matchup, stating that Huang had too many enemies and that Huang's
personality was too aggressive to administer the city effectively.

Tainan City View: Tsai's Leadership Questionable
--------------------------------------------- ---

5. (SBU) In a subsequent lunch with the Director, Tainan City Mayor
Hsu echoed Su's sentiment that former President Chen's legal case
had damaged the DPP. Hsu said he had distanced himself from Chen,
even though Chen had visited Tainan City twice since leaving office.
Hsu underscored that he knew Chen extremely well, as the two had
been high school classmates. He sympathized with the view that Chen
was being treated harshly, adding however that many DPP supporters

TAIPEI 00001471 002 OF 002

were now realizing that Chen may have broken the law. Hsu suggested
that President Ma's declining popularity may have helped Chen, since
some DPP supporters thought DPP Chair Tsai was not tough enough and
were using Chen to protest Ma's government policies.

6. (SBU) Hsu commented that DPP supporters had high expectations of
DPP Chair Tsai but party insiders were increasingly questioning her
leadership abilities. For example, she took three weeks to decide
whether to join the 8/30 anti-Ma demonstration in Taipei. In the
end, Hsu said, she concluded that the DPP could not afford to weaken
its ties with the social groups participating in the demonstration
since those groups formed an important part of the DPP's base.
Nevertheless, her hesitation cost her some authority within the
party. Hsu stressed that Tsai had to do more than just talk about
Taiwan's sovereignty; she needed to take action. Hsu also
complained that Tsai did not know how to reform the DPP. All of her
reforms to date were just technical, he remarked, and failed to
address the deep-rooted structural reform that the party required.

7. (SBU) Hsu was also highly critical of President Ma, remarking
that Ma was "nave and ignorant" about cross-strait issues and too
willing to sacrifice Taiwan's sovereignty. The PRC had deceived Ma
by not allowing sufficient numbers of PRC tourists to visit Taiwan.
Hsu agreed with the overall objective of improved cross-strait ties,
but complained that the PRC had responded to Ma's goodwill with low
PRC tourist numbers and contaminated dairy products. Hsu suggested
that if Ma wanted to consolidate fully his Presidential authority,
he should serve concurrently as KMT Chair. Unless Ma forced former
Chair Lien Chan and current Chair Wu Po-hsiung to relinquish their
hold on the party, the KMT would be split heading into 2009 "3-in-1"
elections.

8. (SBU) Handicapping the 2009 elections, Hsu predicted that the
DPP would hold on to five of its posts in Tainan City and in Tainan,
Chiayi, Kaohsiung and Pingtung Counties, and had a chance to pick up
victories in KMT-led Ilan and Changhua Counties. DPP Chair Tsai
wanted to wrap up the nomination process by the end of 2008, Hsu
acknowledged, but the process was more likely to extend into the
spring 2009. Key factors in the process included whether Tsai chose
to ally herself with the "New Tide" faction and whether former
President Chen could still sway those DPP members to whom he had
previously offered financial support.

Comment
-------

9. (SBU) Both Magistrate Su and Mayor Hsu have tried to carve out
autonomous reputations in their respective seats, which has led to
media speculation that they may try to run in different locations
during "3-in-1" elections next year once their terms are up. Hsu in
particular is confident that he could triumph elsewhere, noting to
us that he is the first elected Tainan City mayor who was not
originally from Tainan City. Su may choose to take a break from
governing after leaving the Tainan County seat. While running for
reelection in 2005, he suffered from a serious bout of hepatitis C
but has since recovered. If other DPP stalwarts stake their claim
to other county and mayoral seats in 2009, Su and Hsu may choose to
sidestep the likely factional battles and compete instead for LY
seats from Tainan in 2012. End comment.

CASTRO

WANG

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