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DE RUEHIN #1853/01 1521301
ZNY CCCCC ZZH
O 011301Z JUN 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0434
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION COLLECTIVE
RUEHOO/CHINA POSTS COLLECTIVE
RUEHLO/AMEMBASSY LONDON 0136
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHHJJAA/JICPAC HONOLULU HI
RUEKJCS/SECDEF WASHINGTON DC
RHHMUNA/USPACOM HONOLULU HI

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001853 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
E.O. 12958: DECL: 06/01/2031 
TAGS: PGOV TW
SUBJECT: PRESIDENT CHEN DECIDES TO YIELD SOME OF HIS POWERS 
TO PREMIER SU 
 
 
Classified By: AIT Deputy Director David J. Keegan 
Reasons: 1.4 (b/d) 
 
¶1.  (C) Summary: President Chen on May 31 made a surprise 
announcement that he would yield some powers to Premier Su 
and refrain from making major government policy and personnel 
decisions other than in defense, foreign affairs, and 
cross-Strait relations.  NSC Secretary General Chiou I-jen 
told the Director that Chen had grown tired of corruption 
allegations and intended his move to break the current 
political gridlock and restore party unity.  Two of Chen's 
closest advisors will step down immediately to reinforce the 
decision.  Two normally well-informed DPP legislators told 
AIT they were surprised by Chen's decision, which both 
believe will strengthen Premier Su.  End Summary. 
 
¶2.  (SBU) President Chen on the evening of May 31 convened a 
high-level meeting of DPP leaders and senior advisors to 
announce that he would: limit himself to the President's 
constitutional responsibility for foreign, cross-Strait, 
defense, and security affairs; yield to the Premier his 
decision-making authority over Executive Yuan policy and 
cabinet appointments; discontinue coordination meetings with 
the Premier and party Chairman; and discontinue Presidential 
Office policy and press coordination meetings with the EY, 
the DPP, and DPP Legislative Yuan (LY) caucus.  Chen also 
announced that he would no longer campaign on behalf of DPP 
candidates. 
 
The View from the NSC 
--------------------- 
 
¶3.  (C) NSC Secretary General Chiou I-jen told the Director 
that Chen had taken this step in an effort to break through 
the current political gridlock.  According to Chiou, he hoped 
that this would encourage DPP unity, which would also have a 
positive impact as the party prepares for the 2008 
presidential election.  He insisted that criticism by the 
opposition and even the DPP had not been a major factor. 
Chen chose to emphasize the three centers -- DPP party, 
Premier, and LY caucus -- to remove himself as the focus of 
policy coordination.  He had grown tired of being accused of 
using his regular coordinating meetings to organize a cover 
up for DPP corruption. 
 
¶4.  (C) Chiou said that the next announcement, this evening, 
will be that two of Chen's closest advisors and assistants -- 
Presidential Office Deputy Secretary General Ma Yung-cheng 
and NSC Senior Advisor Lin Chin-chang -- will both step down, 
effective immediately.  This will demonstrate the seriousness 
of the President's efforts to make serious changes since both 
Ma and Lin have been with him for fifteen years.  If only Ma 
had left there would have inevitably been claims that he was 
resigning to accept responsibility for corrupt practices of 
which he has been accused, Chiou explained.  The simultaneous 
departure of Lin, who has not been accused of corruption, 
shows that the move is not related to the scandal 
accusations.  Ma and Lin have a unique personal chemistry 
with the President and their departure will force Chen to 
make some difficult adjustments, Chiou noted.  The NSC will 
also be reorganized to reflect the devolution of 
responsibilities from the Presidential Office to the 
Executive Yuan.  Chiou said that he expects the President 
will wait a certain period, perhaps two or three weeks, and 
then meet with him to consider next steps. 
 
Uncertainty in the DPP 
---------------------- 
 
¶5.  (C) Two normally well-plugged in DPP legislators both 
told AIT they were surprised and not very clear about Chen's 
action.  Bikhim Hsiao suggested that Chen was returning to 
the prescribed constitutional order in response to criticisms 
that he had interfered too much in Executive Yuan and 
personnel issues.  Chen's continued direct control of foreign 
policy, defense, security and cross-Strait affairs, however, 
would limit the effect of any changes.  Also, Chen might 
resume a more activist role down the road after laying low 
for a while.  Hsiao predicted that Chen's move will 
strengthen Premier Su by increasing his authority and his 
room to maneuver.  Strengthening Su will help, not undermine, 
party unity, she believed.  Hsiao was uncertain whether 
Chen's statement would help him weather the current 
 
TAIPEI 00001853  002 OF 002 
 
 
corruption scandal crisis involving the detention of his 
son-in-law Chao Chien-ming.  It is not clear how much more 
there is that has not yet been uncovered, she noted, 
stressing that the scandal is generating a great deal of 
concern at DPP grassroots level. 
 
6  (C) Hong Chi-chang, a heavyweight legislator from the DPP 
New Tide faction, told us he could not yet gauge the 
significance of Chen's decision.  He saw three possible 
explanations for Chen's surprise action: it could be 
political posturing, an emotional reaction, or a well 
thought-out plan.  Regardless, Hong questioned Chen's move: 
first, there was no prior internal coordination within the 
DPP, and second, cancellation of high-level coordination 
meetings would make governance more, not less, difficult. 
Hong doubted that Chen's statement would help him escape the 
still unfolding scandal surrounding his son-in-law though he 
personally believed that Chen himself was clean.  Hong did 
not, however, rule out possible problems involving First Lady 
Wu Shu-chen or government officials who might be involved 
with Chao.  Chen's move has increased Premier Su's power and 
his vulnerability at the same time, Hong said, explaining 
that in the future Su will be blamed for problems that 
previously would have been ascribed to Chen. 
 
Comment 
------- 
 
¶7.  (C) Whether or not one believes Chiou's insistence that 
weeks of unrelenting attacks on President Chen and his family 
were not a major factor behind last night's dramatic 
announcement, the personally unpalatable decision to have two 
of his closest aides step down demonstrates that this is more 
than window dressing.  Clearly, Chen has decided that some 
painful choices were unavoidable.  Whether these steps will 
suffice to quell the storm or to rebuild DPP unity and 
prospects before 2008 remains to be seen, though Chen's move 
appears for now to have muted some of the attacks from within 
his own party.  However, Chen's actions could add to the 
ongoing confusion and turmoil in DPP politics.  Premier Su 
Tseng-chang, the most promising DPP presidential candidate 
 
SIPDIS 
for 2008, has an unexpected opportunity at least for the 
moment.  He may find it a challenge to survive that 
opportunity. 
YOUNG