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Sexual Politics
An alleged affair and infighting in his own party add to Chen Shui-bian's burgeoning list of woes

Ah, scandal. In Taiwan's latest political soap opera, the question "Did they do it?" has been smartly replaced by "Did she say it?" "They" are President Chen Shui-bian and his young international affairs adviser and translator, Hsiao Bi-khim — accused by a veteran journalist and author of having an affair. "She" is Vice President Annette Lu Hsiu-lien — said by a weekly newsmagazine to have blown the whistle on the pair. Chen and Hsiao have denied any improper relationship. Lu is preparing to sue the magazine. Taiwan is enthralled.

None of which is good news for either Chen or Taiwan, since both were already beset by a host of problems. Elected in March with just 39% of the vote, the president has since faced a hostile legislature dominated by the Kuomintang, the party he deposed after 55 years in power. The KMT wants a bigger share of the decision-making process and has threatened to impeach the president to get it. Last week, the fragile stock market hit a four-and-a-half-year low — down 50% for the year. The New Taiwan dollar sank to a 17-month nadir. Attempts to reopen a dialogue with China have gone nowhere. And now, the scandal is exposing deep rifts within Chen's own Democratic Progressive Party (DPP). "It's clear there are different factions and they are fighting," says political analyst Andrew Yang. Chen's administration may be at stake. Since his election, the president's approval rating has plummeted from 75% to 48%. "He must resolve this mess quickly," Yang adds. "The whole nation is waiting for him to show leadership."

One way or another, divisions within the DPP seemed bound to emerge. A party of disparate membership, it was united against the rule of the KMT when in opposition. But with Chen's election, that bond largely lost its meaning. According to Yang, the party can now be split broadly into two camps: Chen's vs. Lu's. Chen is a pragmatist amenable to leading the DPP down a middle path and away from independence. Critics complain that Lu is a hard-core independence activist who wants to be a vice president with a virtual veto over the president.

While neither Chen nor Lu leads a faction within the DPP, divisions have crystallized around the positions they represent. Chen has surrounded himself with young, trusted workers and advisers rather than DPP veterans, yet party moderates have rallied to him. Lu is a maverick who attracts the support of the pro-independence hardliners. Nor has there been much love lost between the two: Lu had not been Chen's preferred choice for running mate. Insiders believe that Lu's backers instigated the rumors about Chen and Hsiao — and that the president's supporters fingered the vice president as the source.

Though the DPP began as a pro-independence movement, many of its founders have veered toward the mainstream. They include former chairman Shih Ming-teh, who recently resigned over the way the DPP styles itself as an anti-establishment movement rather than a ruling party. In particular, Shih has urged Chen to form a coalition with opposition parties. Another former chairman, Hsu Hsin-liang, has aligned himself with ex-KMT star James Soong, who now heads the opposition People First Party. Hsu openly embraces China's "one country, two systems" formula for reunification. Even influential Nobel laureate Lee Yuan-tseh — Chen's first choice as premier — urged the government last week to back the "one-China" principle, Beijing's precondition for new cross-strait talks.

Stuck in the middle, meanwhile, is scandal target Hsiao, 29. A Japan-born, U.S.-educated presidential adviser and translator, she is said to have great influence over her boss's policies. Analyst Yang believes Hsiao has become a convenient political football for DPP hardliners who are disenchanted with Chen's pragmatic ways. Says Yang: "Some people clearly are very disappointed with him, even within the Presidential Palace. They are trying to compromise his leadership." Still others are disturbed by Hsiao's rapid rise in the party hierarchy and her ability to command the president's ear.

Rumors have long circulated about Chen's alleged extramarital affairs, but rarely was such scuttlebutt taken seriously. (The president's wife, Wu Shu-chen, was paralyzed from the waist down in a hit-and-run incident 15 years ago; last week, she dismissed the latest rumors.) Ironically, the book that claims Chen and Hsiao are a couple was written by journalist Chou Yu-kou, herself steeped in controversy several years ago when her affair with a senior official was revealed.

Chou's tale would probably have died a natural death had The Journalist, a magazine long linked to the DPP, not dropped its own bombshell: that it was the vice president who had leaked the story. A furious Lu has called on the paper's editors to make their evidence public or to face charges in court. That triggered more recriminations within the party, with some DPP lawmakers urging Lu to ignore the allegations. Chen's advisers are reluctant to press the case because of the additional negative publicity that would come with court hearings. Indeed, the Presidential Palace has remained notably tight-lipped since the scandal broke.

Hsiao, who has a master's degree in international relations from Columbia University, comes from a family steeped in DPP ideology. Her father, Hsiao Ching-fen, was exiled from Taiwan in 1982 for his membership in the pro-independence Tainan Theological Seminary. Fluent in Mandarin, English and Taiwanese, Hsiao first joined the DPP in 1994 as an intern in its Washington D.C. branch. She later returned to Taiwan to head the party's International Relations Office and quickly climbed the DPP ladder. At the time of the presidential election, she was helping shape the party's foreign policy and Chen's diplomatic stance. Intelligent and attractive, Hsiao also turned heads while acting as a buffer between Chen and the international media.

So is she having an affair with the president? Linda Arrigo, a longtime Hsiao confidante and DPP activist, says the claim is ridiculous. Arrigo, who has lived in Taiwan since the 1970s and was married to former DPP chairman Shih, says the young adviser "isn't a Monica Lewinsky type who wants to rub shoulders with important men. She's not a social climber or dazzled by power." Arrigo also believes that Hsiao does not relish being in the spotlight. "She's really an abrupt, rebellious feminist," Arrigo says. "She used to have a biker or butch haircut, and wore army fatigues and boots to party headquarters. She was very counter-culture. But she's toned down a lot since taking up important positions."

Hsiao, however, has made enemies — the vice president among them. A rift developed after Hsiao overruled a fiery anti-Beijing speech that Lu had planned to deliver on election night. "I was just following the party chairman's orders," Hsiao told Asiaweek days after Chen's victory. "The DPP isn't responsible for that speech. If you want a copy, go ask the vice president yourself." Arrigo hopes Hsiao will survive her current ordeal. "She must be tough," says the veteran activist. "These things blow over." If only Chen's lengthening list of problems could be so easily dismissed.

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