VZCZCXRO1715
PP RUEHCN RUEHGH
DE RUEHIN #1662/01 2060757
ZNR UUUUU ZZH
P 250757Z JUL 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC PRIORITY 6127
INFO RUEHBJ/AMEMBASSY BEIJING 7053
RUEHGH/AMCONSUL SHANGHAI 1244
RUEHCN/AMCONSUL CHENGDU 2007
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RUEHGZ/AMCONSUL GUANGZHOU 0421
RUEHHK/AMCONSUL HONG KONG 8300

UNCLAS SECTION 01 OF 02 TAIPEI 001662 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR AIT/W, EAP/TC, INR/EAP 
 
FROM AIT KAOHSIUNG BRANCH OFFICE 
 
E.O. 12958: N/A 
TAGS: PGOV TW
SUBJECT: Investigation of Corruption Allegations Against DPP 
Candidate Frank Hsieh: Southern Perspectives 
 
SENSITIVE BUT UNCLASSIFIED, PLEASE PROTECT ACCORDINGLY 
 
¶1. (SBU) Summary: The Special Investigation Division (SID) of the 
Supreme Prosecutors' Office is investigating Democratic Progressive 
Party (DPP) Presidential candidate Frank Hsieh for alleged 
corruption while he was mayor of Kaohsiung.  Some local political 
contacts believe that the possibility of a Hsieh indictment means 
the DPP presidential nomination is not yet completely settled.  One 
KMT contact suggested that President Chen may try to take advantage 
of the ongoing investigations to pressure Hsieh to accept Su 
Tseng-chang as his running mate.  End summary. 
 
SIPDIS 
 
Kaohsiung Prosecutors' Office 
------------------------------ 
¶2.  (SBU) The Taiwan Supreme Court's Special Investigation Division 
(SID) is reported to be investigating five cases of alleged 
corruption against Democratic Progressive Party (DPP) Presidential 
candidate Frank Hsieh.  These cases include alleged incidents of 
construction project bribery, illicit political donations, and 
manipulation of a bank's board member selection process.  All five 
cases are alleged to have occurred during Hsieh's seven years 
(1998-2005) as mayor of Kaohsiung.  Deputy Prosecutor General Chung 
Chung-hsiao of the Kaohsiung Prosecutors' Office told AIT/K that his 
office had already investigated three of these cases, which did not 
result in any charges against Hsieh.  In a bribery case involving 
construction of the Kaohsiung Mass Rapid Transit (KMRT), in January 
2007, prosecutors indicted both the City Government Public Works 
Bureau's former Director, Wu Meng-te, and a businessman who served 
as the head of Frank Hsieh's fundraising campaign, for accepting 
bribes from one of the KMRT contractors.  Deputy Prosecutor General 
Chung added that, at the time, his office did not pursue charges 
against Hsieh because it did not find evidence linking him to 
malfeasance. 
 
¶3.  (SBU) The SID has jurisdiction over corruption investigations 
involving cabinet-level officials.  Since Frank Hsieh was a former 
Premier, SID can conduct its own investigations of corruption 
allegations while disregarding the Kaohsiung Prosecutors' Office's 
previous conclusions. Deputy Prosecutor General Chung Chung-hsiao 
confirmed to AIT/K that the SID visited Kaohsiung City Government 
offices in search of evidence, and is investigating the corruption 
charges on its own without the Kaohsiung Prosecutors Office's 
participation. 
 
Little Public Reaction 
---------------------- 
¶4.  (SBU) Most southerners seem indifferent to the allegations 
against Hsieh.  However, KMT Kaohsiung Legislator Lo Shih-hsiung 
speculated to AIT/K that President Chen could try to take advantage 
of the corruption investigations as leverage to force Hsieh to 
choose former Premier Su Tseng-chang rather than former Kaohiung 
Acting Mayor Yeh Chu-lan as his running mate.  Some in the DPP 
believe a Hsieh-Su ticket would give the DPP its strongest chance at 
winning the 2008 presidential election.  Some other conspiracy 
theorists have speculated that President Chen might use the 
investigation to strike a deal with Hsieh that, once elected, Hsieh 
would not conduct any investigations of alleged corruption involving 
President Chen and his family. 
 
¶5. (SBU) Kuo Kuo-wen, Chairman of the Tainan County DPP office 
acknowledged to AIT/K that the timing of the investigation is 
sensitive.  Most DPP members have avoided discussing the possibility 
of political maneuvering during the investigation process, Kuo said, 
but he added that some party members are expecting Frank Hsieh to be 
indicted.  Based on current DPP regulations, if indicted, Frank 
Hsieh's party membership would be suspended and his candidacy 
revoked.  Thus far, Kuo said, no one in the DPP has discussed 
amending the regulations.  One pro-DPP professor, Yang Tze-chuan of 
Tainan's National Cheng Kung University, suggested that the new 
allegations mean the DPP presidential nomination is still up in the 
air. 
 
Comment 
------- 
¶6. (SBU) The outcome of the current investigation is uncertain 
though Hsieh has been cleared in previous investigations.  If Hsieh 
is indicted, he and the DPP will need to carefully gauge public 
opinion in determining whether to stay in the race.  However, such 
indictments are by no means necessarily fatal in Taiwan politics. 
For example, the indictment of Ma Ying-jeou did not deter the KMT 
candidate from running, and President Chen has rebounded from the 
effects of the indictment of First Lady Wu Shu-chen. 
 
TAIPEI 00001662  002 OF 002 
 
 
 
Pierre-Louis 
 
Young