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C O N F I D E N T I A L SECTION 01 OF 05 SEOUL 001204 

SIPDIS 
E.O. 12958: DECL: 06/16/2018

TAGS: PGOV PREL PINR KS KN

SUBJECT: TURBULENT TIMES FOR PRESIDENT LEE: CAN HE RECOVER? 
REF: A. SEOUL 001145

     ¶B. SEOUL 001153

     ¶C. SEOUL 001174 
Classified By: AMB Alexander S. Vershbow.  Reasons 1.4 (b,d). 
¶1.  (C) SUMMARY: President Lee Myung-bak is only four months

into his five-year term in office and already he has hit

historically low popularity ratings of around 10 percent.

Lee’s first 100 days have been a crash course in political

reality.  The public’s disappointment with the new

administration’s handling of state affairs and perception

that the Blue House disregards public opinion have virtually

crippled the administration, and the six weeks of candlelight

vigils have paralyzed decision-making, raising real concerns

about Korea’s governability in the years ahead.  Bitter

intra-party feuding and an opposition with nothing to lose

have all made it harder for President Lee to exert control.

Over the past month, the decision to restart imports of U.S.

beef has become the vehicle through which South Koreans are

expressing their anger.  President Lee cannot rebuild his

credibility until this storm passes, and we need to help Lee

defuse the beef issue without crossing our red lines.  We

should also help vindicate his original decision on beef by

making an all-out effort to get the KORUS FTA ratified by

Congress by year end. 
¶2.  (C) Even then, Lee will find it difficult to make

progress on his domestic agenda or on a host of potentially

controversial alliance issues, including the Special Measures

Agreement (SMA) negotiations, camp returns, USFK relocation,

and possibly FTA ratification by the National Assembly.

Efforts to promote robust ROK participation in international

efforts in Iraq and Afghanistan as well as the Proliferation

Security Initiative (PSI) are also likely to become much more

difficult for the foreseeable future.  Even if we weather

this storm, we may need to lower expectations for the “21st

Century Alliance,” since Lee will be a crippled leader for

some time to come.  END SUMMARY. 
————————

Problems Out of the Gate

———————— 
¶3.  (C) Lee used his CEO instincts to staff the cabinet and

the Blue House with the “best of the best” but instead he

brought in an elite team that was derided from the get-go for

their patrician credentials.  Even before taking office, Lee

was criticized for his cabinet choices, as many of his

nominees came from wealthy backgrounds — most were members

of Lee’s church, alumni of his alma mater Korea University,

and from his home province of Gyeongsang. According to a

mandatory disclosure report for government officials, members

of Lee’s cabinet were almost twice as wealthy as their

predecessors.  Progressive press began to sow doubts that Lee

genuinely had the average South Korean’s interests at heart,

especially when four of his appointees had to step down

during nomination hearings due to allegations of ethical

lapses and illegal real estate speculation.  Personnel

problems continued in May when Lee’s Blue House Chief of

Social Policy was forced to resign under charges of illegal

land speculation.  (NOTE: The current top staff members in

the Blue House have an average net worth of around 4 million

USD. END NOTE.) 
——————-

Conservatives Split

——————- 
¶4.  (C) Not only has President Lee failed to build public

consensus, but his failure to unite the conservatives

continues to dog his administration.  Although Lee won an

unprecedented margin of victory in the December presidential

election (48.7 percent of the vote to 26.3 percent for his

closest rival), he had only eked out his party’s nomination

in the presidential primary.  His rival, Park Geun-hye,

retains a great amount of support within the party as well as

enormous popular appeal in the country.  Instead of working

with Park to unite the Grand National Party (GNP), Lee and

his top aides worked to exclude politicians loyal to Park 
SEOUL 00001204  002 OF 005 
from gaining nominations in the April 9 National Assembly

election.  Lee was successful in excluding some Park

loyalists, but his direct involvement in the nomination

process and the bitter infighting caused many traditional

conservatives to turn away from Lee.  Continued infighting

with Park gave the impression that he was unwilling to work

with those who might oppose his ideas.  The GNP only obtained

a slim majority — 153 seats out of 299 — far short of

earlier predictions that projected the GNP winning as many as

200 seats; conservative candidates outside the GNP won an

additional 47 seats, demonstrating that conservative voters,

especially Park Geun-hye supporters, were fed up with the GNP

controlled by President Lee’s faction. 
—————-

Election Baggage

—————- 
¶5.  (C) Issues held over from the December presidential

election continue to spur public frustration.  Most notably,

Lee’s promises to supercharge the economy are increasingly

difficult to realize in a slowing global economy.  Lee was

elected on his pledge to grow the economy by seven percent,

but has been forced to dial down his promises because of

larger economic factors at play, such as rising world oil and

food prices and a slowing U.S. economy.  Prices for everyday

goods such as ramen noodles (a staple food for working

Koreans and students) have gone up; gasoline is about USD 10

per gallon, angering truckers, commuters and small business

owners; and growth projections are being lowered.  The

policies Lee has announced (such as efforts to monitor the

prices of 50 basic goods related to public welfare) have been

criticized as being insufficient, overly interventionist, and

purely political.  Additionally, Lee’s efforts to revise

regulations to boost investment by Korea’s chaebol businesses

have done little to assuage public concern that his policies

are targeted toward the elite and ignore the plight of the

middle and lower classes. 
¶6.  (C) Lee has yet to succeed in obtaining public buy-in for

any of his policy initiatives.  He has announced several new

policies without apparently first consulting experts or the

public, which has resulted in his ideas being derided and

called “half-baked” and “amateur.”  The best example of this

is Lee’s effort to reform Korea’s education system –

specifically his efforts to dramatically increase the number

of high school classes taught in English.  His failure to

consult with experts before making the announcement resulted

in glaring problems with the initiative, including a dearth

of qualified instructors.  Lee also failed to carry out his

campaign promise to set up physical and online sites as

forums for the public to communicate concerns to the

President.  He did manage to establish a hotline for top

executives to speak directly to the president, reinforcing

perceptions that Lee has only the elite’s interest at heart. 
¶7.  (C) Controversy surrounding Lee’s ambitious cross-country

Grand Canal project resurfaced at the end of May just as the

beef controversy was coming to a head.  Despite the fact that

67 percent of the public disapproved of the canal, shortly

after Lee’s inauguration the then minister-designate for Land

and Oceans sparked heated criticism by stating that he would

definitely undertake the project.  Lee later suggested that

he would postpone construction and his party even went so far

as to drop it from its platform ahead of the general

election.  In late March and again in early May, however,

revelations that the ROKG had no intention of abandoning the

canal project intensified public condemnation that the Lee

Administration refused to listen to the voice of the people. 
—————-

Mismanaging Beef

—————- 
¶8.  (C) If all these issues led to a sense of dissatisfaction

with Lee’s early performance, the decision to reopen the

market to U.S. beef, and the government’s mishandling of the

issue, proved to be a catalyst that galvanized Korean public

opinion.  In thinking about moving forward on beef during the

transition and early days of the new administration, Lee had 
SEOUL 00001204  003 OF 005 
several key goals:  to proceed with an agreement that was

largely in line with what the Roh Administration had quietly

discussed with us, to wait until after the April 9

legislative elections to publicly announce the negotiations;

and to prepare a set of support measures to help the Korean

beef industry (which was expected to be the principal source

of opposition) to adjust.  However, not enough was done to

prepare the Korean public for the move from the government’s

historic position (that many questions remained about the

safety of U.S. beef) — not by MOFAT, which saw its role as

negotiating the deal with the USG; not by the Agricultural

Ministry, which continued to hope to the end that the market

would remain closed; and not by the Blue House, which had

further tied its hands by dismantling much of the public and

media outreach operations it inherited from the Roh

Government, in the interest of cost-cutting.   To the Korean

public, the dramatic shift in the ROKG’s public posture on

U.S. beef, coming at the end of a tough week-long negotiation

and concluding the night before President Lee was to meet

with President Bush, seemed to demonstrate that the safety

concerns of the Korean public were being tossed aside so Lee

could enjoy an historic summit at Camp David. 
¶9.  (C) After the beef deal was announced and released for

public comment, public opposition quickly grew in a way that

reflected some uniquely Korean characteristics.

Misinformation about the safety of U.S. beef, much of it

peddled by activist groups with a broader political agenda,

was disseminated on cell phone text messages (which for many

Korean youths have more credibility than established media,

since they are “independent”).  Students played a dominant

role in the early protests, saying that eating U.S. beef

wasn’t a matter of consumer choice (as Lee had early-on

argued) since students would have no choice but to eat the

allegedly BSE-infected U.S. beef that Korean school

cafeterias (and military messes) would serve.  As concern

about U.S. beef spread from students to the mainstream

population, the government’s missteps exacerbated the

situation.  Agriculture Ministry officials, uncertain about

the text of the beef agreement during a parliamentary

hearing, suggested that their confusion stemmed from not

understanding the English language used during the

negotiation — both incorrect (the negotiations were

conducted with consecutive interpretation) and hardly a way

to build public confidence in the bilateral agreement that

ensued. 
¶10. (C) While the beef issue would probably have benefited

from some benign neglect — at least until Lee’s GNP allies

took control of the National Assembly on May 30 — the Lee

Government instead proceeded with its efforts to force FTA

ratification through the National Assembly in a May lame-duck

session, providing the opposition United Democratic Party

(UDP), in majority at the time, a spectacular platform to

grandstand against the beef deal and insist that it be

renegotiated.  Turning water cannons on the protestors

brought back unpleasant memories of past governments, and

enabled the protestors to present themselves as fighters for

Korean democracy. 
¶11.  (C) To its credit, the Lee Government has tried to do

the right thing on beef, and has resisted the calls for

renegotiation of the beef deal that have come in from

protestors, the political opposition, and the GNP alike.  Lee

and his top advisors continue to believe that once a

temporary solution is found, a line can be drawn under this

crisis, the Korean public can be educated about the safety of

U.S. beef, the market fully reopened, and the KORUS FTA teed

up for ratification.  However, the general disarray within

the government, the chaos in the streets, and the fact that

the protestors have made Lee himself the issue, have all made

it difficult for the government to defend its position and

challenge the allegations of the protestors.  Instead, the

government has found itself chasing after the moving

goalposts of NGO demands, trying to address each new

allegation as it arises.  It is clear the NGO groups in the

“BSE Beef Alliance” (many of whom are also opposed to the

KORUS FTA, and see killing the beef deal as one of their best

ways to sink the FTA in Washington, since it continues to

enjoy majority support in Korea) will not be content until 
SEOUL 00001204  004 OF 005 
Lee backs down and abrogates the beef deal (and/or formally

requests renegotiation).  The Lee Government’s good-faith

efforts to address their concerns have only emboldened these

groups.  It is equally clear that while we should try to help

Lee find a temporary solution to this problem — including

agreeing to temporary limitations on export of the most

sensitive beef products, without crossing any red lines — no

matter how the beef situation is resolved, it has

crystallized a critique of Lee’s governance that will weaken

him, and provide a rallying cry for his opponents, for some

time to come. 
——————

Lee is Floundering

—————— 
¶12.  (C) The recent outpouring of disapproval over the beef

issue has become the rallying cry enabling South Koreans to

express their cumulative frustration with the Lee

Administration.  The grassroots protests have focused mostly

on a sense that the government was willing to sacrifice the

health of the people in the interest of maintaining strong

ties to the U.S.  Protest organizers, mostly progressive

civic groups, organized labor and farm groups, have made

misleading and outright false charges against American beef,

aided by several outrageously slanted documentaries on state

TV networks still dominated by leftist management.  Sadly,

many Koreans find these charges credible, because the

credibility of the Lee Administration is so low.  Educated

Koreans do know better and reject these allegations as being

unscientific.  Still, they are of the view that Lee made a

serious mistake in rushing to open the beef market.  What

makes the situation much more inflammable is that this was

American beef and the agreement was reached hours before the

Camp David summit.  The perception that President Lee was

kowtowing to Washington is a theme much used by leftists and

nationalists in the protest, but anti-Americanism is not the

principal draw for the mainstream protesters; rather, it’s

anti-Lee. 
¶13.  (C) The opposition United Democratic Party (UDP),

struggling to find a mode of popular appeal after resounding

defeats in both the presidential and the National Assembly

elections, has seized on the beef issue in hopes of boosting

its own support base.  The UDP has demanded that the ROKG

renegotiate the beef issue before the party will end its

ongoing boycott of the 18th National Assembly.  The

opposition has used the beef issue to thrust its members back

into the limelight, criticizing (and misquoting) both the Lee

Administration and the U.S. Government.  They have, however,

notably not joined in the protesters’ demands that Lee be

removed from office and have not even floated the idea of

impeachment proceedings.  Interestingly, all its bluster has

gotten it nowhere; UDP support ratings still hover around 20

percent. 
¶14.  (C) Perhaps even more disturbingly, the ongoing protests

do call into question Koreans’ respect for the rule of law

and their own constitution.  Many Koreans view these protests

as a shining exemplar of democracy, rather than as the rule

of the masses that more informed observers are voicing

concerns about.  The ability of several thousand protesters

– many of them too young to vote — to bring Korea’s

government to a standstill threatens Korean credibility in

negotiating other international agreements.  More serious

still are the long term implications for the governability of

Korea.  Koreans — both on the right and the left — are

beginning to express serious concern that the beef hysteria

is dangerously empowering the “mob.”  Unless the ROKG manages

to win some control back, many of our interlocutors see a

grim picture of protests becoming the norm in deciding the

nation’s policy. 
—————-

Alliance on Hold?

—————- 
¶15.  (C) The beef issue will have profound influence on our

bilateral relationship in the coming months.  First, Lee

Myung-bak must rebuild domestic trust in his administration 
SEOUL 00001204  005 OF 005 
before he or his staff can even think about making any

progress on ongoing bilateral issues.  To rush into any

controversial Alliance agreements, our ROKG interlocutors

believe, is to open the door on the nascent anti-Americanism

that the protests have thus far assiduously avoided.  Already

the ROKG has taken care to push all ongoing Alliance issues

to the back burner.  In the last two weeks, the ROK side has

postponed some of our bilateral talks — the

regularly-scheduled Strategic Consultations for Allied

Partnership (SCAP), the next round of SMA negotiations, and

talks on the environmental issues relating to the return of

nine USFK camps.  SMA and camp returns have long been two of

the most sensitive Alliance issues for the Koreans, as they

require committing ROK budgetary expenditures and have

generated significant criticism for “not standing up to the

U.S.” on previous occasions.  Other issues that the Korean

public sees as being on the U.S. “wish list” — such as

continued or expanded ROK participation in Iraq and

Afghanistan as well as involvement in the Proliferation

Security Initiative (PSI) — will also prove more difficult

to make progress on in the short to medium term. 
——-

Comment

——- 
¶16.  (C) This is a nightmare for Lee Myung-bak.  Simply put,

he does not know what to do right now.  He knows that to give

in to the protests is to cripple his administration for the

remaining 56 months.  Yet, ignoring their demands will only

prolong the agony and make him look even weaker.  The course

he has chosen is a little bit of both:  bow to the crowd by

apologizing and revising some elements of the beef deal, but

not go all the way to a renegotiation of the agreement that

would likely kill chances for ratification of the FTA in the

U.S.  In addition, he will reshuffle the cabinet and his

senior staff.  Thereafter, Lee must begin the long process of

regaining his own credibility.  Key to this scenario is

getting significant help from the National Assembly, which is

possible only if President Lee accepts the reality that he

must share power with his fellow conservatives, principally

Park Geun-hye. 
¶17.  (C) At this time President Lee needs our help to come

out of the immediate crisis.  Our first task must be to stop

his political free-fall by agreeing on a beef package that he

can sell to his mainstream domestic critics — satisfying the

extremists is not possible, unless Lee resigns.  At the same

time, we should be prepared to defer our sensitive bilateral

issues, such as SMA and camp returns, until the situation has

stabilized.  Beyond the immediate terms, we must also support

and vindicate Lee’s original — and courageous — decision on

beef by making a concerted effort to push for KORUS FTA

ratification in the Congress.  Our failure to ratify the

KORUS FTA will most definitely further weaken the Lee

presidency.  In the longer term, the damage Lee has suffered

from the beef hysteria is such that we might need to reassess

our expectations for the “21st Century Strategic Alliance”

launched at Camp David because, if the Lee Administration

continues on its current course, we will be dealing with a

crippled ally for a long time to come.

VERSHBOW