VZCZCXRO0378
OO RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHIN #0865/01 0750508
ZNY CCCCC ZZH
O 160508Z MAR 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9118
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 4876
RUEHUL/AMEMBASSY SEOUL 7673
RUEHKO/AMEMBASSY TOKYO 7531
RUEHCN/AMCONSUL CHENGDU 1112
RUEHGZ/AMCONSUL GUANGZHOU 9101
RUEHHK/AMCONSUL HONG KONG 6067
RUESLE/AMCONSUL SHANGHAI 8490
RUEHSH/AMCONSUL SHENYANG 5058
RHHMUNA/USPACOM HONOLULU HI
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUEKJCS/SECDEF WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000865 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 03/16/2016 
TAGS: PGOV PREL MARS MASS MCAP TW
SUBJECT: CHAIRMAN MA HEADS TO WASHINGTON EMPTY-HANDED 
 
REF: A. TAIPEI 0229 
 
     ¶B. TAIPEI 0822 
     ¶C. TAIPEI 0138 
 
TAIPEI 00000865  001.2 OF 002 
 
 
Classified By: AIT Acting Director David J. Keegan, Reason(s): 
1.4 (B/D) 
 
¶1.  (C) Summary.  KMT Chairman Ma Ying-jeou had promised to 
present his alternative defense procurement proposal before 
he traveled to Washington.  The KMT legislative caucus, 
however, unexpectedly blocked that initiative.  KMT 
legislators blamed President Chen's NUC/NUG announcement for 
making any compromise impossible.  Barring a last-minute 
compromise by the KMT caucus or a bold end run by Ma himself 
making a unilateral decision (which some legislators are 
urging him to do), Ma will arrive in the U.S. on March 19 
without a clear KMT position on the defense procurement 
issue.  This defeat is Ma's second major stumble in the last 
two months after a long string of successes, which culminated 
in the KMT triumph in December's island-wide local elections. 
 End Summary. 
 
¶2.  (C) Opposition Kuomintang Party (KMT) legislators on 
March 14 refused to approve a consensus KMT counterproposal 
on the long-blocked Defense Special Budget to fund PAC-3 
missiles, P-3C ASW aircraft, and diesel electric submarines. 
In January, Chairman Ma had requested the KMT legislative 
caucus to reconsider the arms procurement package it had 
steadfastly opposed the preceding 16 months, and to develop a 
KMT consensus counterproposal (Ref A).  All signs in recent 
weeks pointed to an emerging consensus among the KMT members 
of the LY Defense Committee, who led the review.  Their 
proposeal would have supported the funding of P-3C aircraft, 
blocked PAC-3 missile batteries until 2007, and postponed 
decision on submarines.  KMT legislator Su Chi termed this a 
"green light, red light, yellow light" proposal. 
 
¶3.  (C) The proposal ran into a firestorm at a turbulent 
meeting of the KMT legislative caucus on March 14, however, 
with all but two of the twenty legislators present opposing 
approval of the compromise proposal.  While several 
legislators urged postponing decision on a KMT 
counter-proposal until later this week, but before Chairman 
Ma leaves for the U.S. on March 19, others pressed for 
postponement until after Hu Jin-tao's April Washington visit, 
or even postponement indefinitely depending on actions by the 
Chen government.  This was an unexpected turn of events, 
because as recently as last week KMT legislators -- including 
Defense Special Budget critics Ting Shou-chung and Su Chi -- 
were telling AIT that the review requested by Chairman Ma 
would definitely be completed early the week of March 13. 
 
¶4.  (C) There were, to be sure, indications of KMT 
discontent.  Su Chi, for example, told AIT two weeks ago that 
the KMT was angry over President Chen's actions and dismayed 
that the US had not prevented Chen from "abolishing the 
NUC/NUG."  KMT legislator Ting Shou-chung, a longtime critic 
of the original Defense Special Budget, argued that President 
Chen should not be rewarded with new weapons for provoking 
the NUC/NUG imbroglio. 
 
¶5.  (C) The twenty KMT caucus members present at the March 14 
meeting overwhelmingly opposed the proposed counterproposal 
on defense procurement, Su Chi told AIT.  While some of the 
members present, including Joanna Lei (Lei Chian), pressed 
for "indefinite postponement," Su himself and Shuai Hua-min 
argued for "temporary postponement" until after the Hu 
Jin-tao visit to Washington in April.  KMT legislator Lin 
Yu-fang, however, told AIT that a meeting of defense-oriented 
KMT caucus members on March 15 urged Chairman Ma to be more 
independent and unilaterally announce the alternative 
proposal. 
 
¶6.  (C) Joanna Lei told AIT that only two KMT caucus members 
spoke in favor of the KMT counterproposal (Comment: 
presumably Su and Shuai.  End comment.), while the balance 
either opposed or refused to support the counterproposal 
urged by Chairman Ma.  Lei explained that a  "supermajority8 
of the 88-member KMT caucus opposes moving the arms purchase 
issue forward out of anger over President Chen,s February 27 
 
TAIPEI 00000865  002.2 OF 002 
 
 
NUC/NUG announcement, which they view as having &changed the 
status quo8 across the Strait.  Lei argued that approval of 
arms purchases or an increase in the defense budget could (1) 
send a signal to the PRC that the majority of the LY is 
behind President Chen and/or (2) encourage Chen to move 
forward more aggressively with his independence agenda. 
Discounting the possibility that Ma would take unilateral 
action, Lei explained that Ma has been &extremely 
democratic8 and hands-off during the caucus,s 
deliberations, and has promised to respect the legislators, 
decision.  Lei added that she and her LY colleagues are 
simply reflecting the sentiment they have received from their 
constituents. 
 
¶7.  (C) In any event, KMT caucus endorsement in itself would 
not have been enough to move a defense budget proposal past 
the LY Procedure Committee, which has 46 times blocked LY 
consideration of the Defense Special Budget.  Any KMT defense 
procurement counter proposal would still have to go through 
the legislative gauntlet of Pan-Blue coalition partner People 
First Party (PFP).  PFP legislators and operatives tell AIT 
that the rump PFP -- nine PFP legislators have joined the KMT 
in recent weeks -- remains even more firmly opposed than ever 
to funding any of the three Defense Special Budget weapons 
systems.  On March 14, in fact, a group of PFP supporters 
demonstrated in front of AIT against purchase of U.S. weapons 
(Ref B). 
 
¶8.  (C) Comment.  The unexpected rejection of Ma's compromise 
counterproposal by KMT legislators was apparently a product 
of KMT anger over President Chen's actions and direction, 
particularly on the NUC/NUG.  Barring an unlikely last-minute 
change of heart by KMT legislators in the four days before Ma 
departs on his March 19-25 U.S. visit, or an equally unlikely 
unilateral move by Ma himself, Ma will arrive in the US 
without the concrete KMT defense procurement proposal he had 
sought.  Ma had sought to capitalize on the landslide victory 
to which he led the KMT in December to extend his leadership 
from the Party organization proper into the legislature and 
over a coterie of strong-willed and head-strong KMT 
legislators.  He had also hoped to erase the memory of his 
stumbles over his position on Taiwan independence (Ref C). 
Instead, Ma has resurrected long-standing doubts about 
whether he is decisive enough to be a leader.  End Comment. 
KEEGAN