In 1972, Lee Huan was appointed as Director General of the Department of Organization for the Kuomintang when Chiang Ching-kuo was premier. In 1976, Chiang Ching-kuo instructed Lee Huan to select several dozen young party leaders for the highest level cadre training program at the Institute of Revolutionary Practice. Among the 60 individuals chosen for the training, half were Taiwanese, including Lien Chan, Wu Po-hsiung, Shih Chi-yang. This opening of the KMT's cadre program was an unprecedented opening for native Taiwanese, and was an important step in Chiang Ching-kuo's program of loosening mainlander control of the KMT by integrating native Taiwanese into its leadership. In 1977, several thousand anti-KMT demonstrators led by Hsu Hsin-liang rallied in the town of Chung-li to protest the use of paper ballots in the upcoming elections, for fear that the KMT would use the ballots to rig the election. When the protesters realized that the KMT had likely carried out the fraud that they had feared, they rioted, ultimately burning down the Chung-li police station. The riot – the first such large-scale protest in Taiwan since 1947 – was subsequently called the Zhongli incident. The Kuomintang believed that Lee Huan's placatory approach to the Tangwai movement had caused the incident and forced him to resign. After his resignation, he became the president of CTV until 1979. That year he became president of National Sun Yat-sen University. In 1984, he was appointed Minister of Education. In his three years as Education Minister, he abolished restrictions on students' hair length, enabled the establishment of private colleges, established a college of physical education, increased scholarships for graduate students, and established the University Publications Committee.
Chiang Ching-kuo ascended to the presidency in 1978, and in July 1987, he tapped his old confidante Lee Huan to be the KMT's new Secretary-General. Chiang told Lee that he had three goals he would like Lee to fulfill: reform the KMT, move the ROC towards democracy, and move the ROC towards reunification. In a speech to the KMT's Kaohsiung headquarters in September 1987, Lee declared that the KMT's goal was no longer to replace the communist party ruling mainland China, but rather to "push for democracy, freedom of the press, and an open economy in the mainland so as to rid China of Communism and to move it toward a democratic modern state." Many in the KMT's right-wing claimed the speech betrayed the party's historic commitment to destroy the communists; Chiang countered by instructing Lee to publish the entire speech in the party's official journal. The role Lee played in the lifting of martial law in Taiwan and subsequent reforms to the National Assembly led to assembly members characterizing Lee as one of the Red Guards.
Premiership
Chiang Ching-kuo died on 13 January 1988 and Vice President Lee Teng-hui immediately stepped in and ascended to the presidency. The "Palace Faction" of the KMT, a group of conservative mainlanders headed by General Hau Pei-tsun, Premier Yu Kuo-hwa, and Lee Huan sought to block President Lee's accession to the KMT chairmanship and sideline him as a figurehead. With the help of James Soong – himself a member of the Palace Faction – who quieted the hardliners with the famous plea "Each day of delay is a day of disrespect to Ching-kuo," Lee was allowed to ascend to the chairmanship unobstructed. At the KMT party congress of July 1988, Lee named 31 members of the Central Committee, 16 of whom were native Taiwanese: for the first time, the native Taiwanese held a majority in what was then a powerful policy-making body. Yu Kuo-hwa retired as premier in 1989, and President Lee named Lee Huan to replace him. However, only one year later, Lee was forced out in favor of Hau Pei-tsun, due to strong disagreements between President Lee and Lee Huan. Despite being forced from office, conservative leaders within the KMT such as Lee Huan, Premier Hau, Judicial Yuan President Lin Yang-kang, and the second son of Chiang Kai-shek, Chiang Wei-kuo, formed a bloc to oppose those who followed President Lee. Lee died at the Veterans' General Hospital in Taipei on 2 December 2010 at the age of 93.
