194540            3/1/2009 12:09            09ISLAMABAD441   Embassy Islamabad      CONFIDENTIAL            09ISLAMABAD439   "VZCZCXRO5964 OO RUEHLH RUEHPW DE RUEHIL #0441/01 0601209 ZNY CCCCC ZZH O 011209Z MAR 09 FM AMEMBASSY ISLAMABAD TO RUEHC/SECSTATE WASHDC IMMEDIATE 1669 INFO RUEHBUL/AMEMBASSY KABUL PRIORITY 9913 RUEHLO/AMEMBASSY LONDON PRIORITY 9783 RUEHNE/AMEMBASSY NEW DELHI PRIORITY 4536 RUEHKP/AMCONSUL KARACHI PRIORITY 1158 RUEHLH/AMCONSUL LAHORE PRIORITY 6841 RUEHPW/AMCONSUL PESHAWAR PRIORITY 5769 RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY RUEKJCS/SECDEF WASHINGTON DC PRIORITY RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL PRIORITY RHWSMRC/USCINCCENT MACDILL AFB FL PRIORITY RUEAIIA/CIA WASHDC PRIORITY"           "C O N F I D E N T I A L SECTION 01 OF 04 ISLAMABAD 000441

SIPDIS

E.O. 12958: DECL: 03/01/2019

TAGS: PREL, PTER, PGOV, PINR, KDEM, PK

SUBJECT: POLITICAL TURMOIL, GOING NOWHERE FAST

REF: ISLAMABAD 439

Classified By: Charge d'Affaires Gerald Feierstein for reasons 1.4 (b) and (d).

1. (C) Summary: Actors across the political spectrum were working to solve yet another self-inflicted political crisis in the wake of the Supreme Court's February 25 decision to disqualify the Sharif brothers from public office.  Both President Zardari's Pakistan People's Party (PPP) and the Sharifs' Pakistan Muslim League-Nawaz (PML-N) recognize they need to find a way to reconcile, but neither are ready to cede ground just yet.  PML-N used a hastily-called National Assembly session to compare Zardari to Musharraf and stick to its demand for the full restoration of the judiciary. PML-N's parliamentary Opposition Leader Chaudhry Nisar spoke for nearly three hours, leaving no room for compromise with the Zardari regime; PPP's Prime Minister Yousuf Gilani responded with only brief remarks, conspicuously defending his party not Zardari.  Privately, PPP leaders admitted that Zardari probably miscalculated his party's ability to win an election to replace Shahbaz Sharif as Chief Minister of Punjab and was scrambling for a way forward.  Information Minister Sherry Rehman and Law Minister Farooq Naek addressed the diplomatic corps late February 28.  Rehman urged the international missions to intercede with the Sharifs for restraint, repeatedly adding the PPP stands ready to negotiate an accommodation with the PML-N; Naek was defensive in arguing the GOP had no other option but to impose governor's rule in Punjab, supposedly because no party held an outright majority in the Provincial Assembly.  Meanwhile, clashes between demonstrating PPP and PML-N members continued.  The Sharifs, lawyers' movement leader Aitzaz Ahsan, and religious Jamaat-e-Islami (JI) chief Qazi Hussain addressed one Lahore gathering on March 1.  While the rhetorical lines against Zardari were repeated, they also held out an olive branch to Gilani's PPP and, for the first time, tried to paint Zardari as the U.S.'s lackey.  There is a growing assumption across all political parties that the U.S. supported Zardari's court manipulation to disqualify the Sharifs; we may want to dispel that assumption in the coming days, if only to rein in Zardari's growing penchant to over-reach.  End Summary.

PML-N: Holding the High Ground - - - - - - - - - - - - - - - -

2. (C) PolCouns met February 28 with Pakistan Muslim League-Nawaz (PML-N) parliamentary Opposition Leader Chaudhry Nisar just before the National Assembly convened to discuss the Supreme Court's February 25 disqualification of PML-N leaders Nawaz and Shahbaz Sharif to hold elected office (reftel).  Nisar gave a lengthy floor speech, nearly three hours, punctuated with sloganeering.  He denounced the Court decision, called governor's rule ""undemocratic,"" ruled out any ""deals"" with Zardari's Pakistan People's Party (PPP), and labeled Zardari ""another Musharraf;"" PML-N members then walked out of the chamber.

3. (C) Privately, Nisar had no answer for what his party would do beyond the actions of the last few days.  He made it clear PML-N was not ready for new elections and wanted to avoid violence that would prompt the Army to intervene.  He revealed that, before the Court ruling, ""95 percent of the party"" had opposed joining the lawyers' March 16 sit-in because it might lead to violence; now, the party had little choice but to support them.  Nisar noted that, immediately after the verdict, Shahbaz left the governor's mansion because the party did not want to repeat the 1993 scenario when a PML-N Prime Minister called in the Army to evict a recalcitrant Punjab Chief Minister; back then, the Army had refused.

4. (C) The situation called for some kind of compromise, but Nisar ruled out including Nawaz in the National Reconciliation Order amnesty or requesting the Supreme Court to review its latest ruling.  He insisted the only conviction against Nawaz was for hijacking (not corruption, despite reports to the contrary) and against Shahbaz was for default on a debt (which could be fixed with a variety of measures). But, said Nisar, the Sharifs were not interested in a compromise only for themselves -- the only way out was to

ISLAMABAD 00000441  002 OF 004

settle the issue of the judiciary, which boiled down to the fate of former Supreme Court Chief Justice Iftikhar Chaudhry. Nisar disputed the belief that Chaudhry favored the Sharifs, noting it was Chaudhry who refused to step in when Nawaz was deported in September 2008.

5. (C) Asked about the Punjab Provincial Assembly, Nisar said the PML-N would, of course, put up another candidate for Chief Minister -- probably former governor Shahid Hamid. Zardari, said Nisar, had miscalculated with governor's rule in Punjab and did not have the votes to install a PPP government in the province.  PML-N, working with independents and smaller parties, could amass 210 votes; 186 are required for a majority.  Even if the PPP won over the Pakistan Muslim League (PML), it could not reach majority, Nisar calculated. Nisar confirmed that 35 PML ""forward bloc"" had visited Nawaz on February 27; although they could lose their seats by attempting to cross party lines, their presence showed that PML president Chaudhry Shujaat could not ""deliver his party"" to the PPP.

6. (C) Nisar believed PPP-appointed Governor Taseer must have realized the PML-N still held a coalition majority because he acquiesced February 28 in unlocking the Punjab Provincial Assembly doors, allowing legislative sessions to resume. ""This was all avoidable,"" Nisar lamented, but the PPP is ""a house divided"" and ""cannot get its act together,"" adding PM Gilani and other PPP leaders had been negotiating a reconciliation before the verdict and other PPP members had opposed imposition of governor's rule.  Nisar blamed Zardari entirely.  Without elaborating, Nisar described Gilani as now being ""a marked man.""

"Disappointed" in the U.S. - - - - - - - - - - - - - -

7. (C) As his parliamentary leader spoke in the National Assembly, a somber Shahbaz held his first, post-verdict press conference.  He said the PML-N was dedicated to restoring the ""real"" judiciary and exhorted his followers to hold peaceful demonstrations.  The themes were repeated at a March 1 rally in Lahore.  The two Sharifs, lawyers' movement leader (and PPP Central Executive Committee member) Aitzaz Ahsan, and ultra-conservative Jamaat-e-Islami (JI) chief Qazi Hussain addressed the crowd.  Shahbaz held out an olive branch to the PPP, but not to Zardari, inviting PM Gilani to join the lawyers' long march and sit-in, March 12-16.  Nawaz, for the first time, charged Zardari of taking instructions from the U.S., allowing public policy to be set by powers abroad.

8. (C) In their February 28 meeting, Nisar forewarned PolCouns that Nawaz wanted to send a message to the U.S.: he is ""disappointed"" in the public U.S. position that this controversy is an ""internal affair"" only.  In effect, this meant the U.S. was siding with Zardari, Nisar argued.  PML-N, according to Nisar, had gone as far as any opposition party could go in expressing its interest in working with a new U.S. administration.  Recent talks with Ambassador Holbrooke had gone particularly well, Nisar noted, and Holbrooke's visit to Lahore was appreciated.  But a stronger signal of even-handedness was in order, claimed Nisar, if the U.S. wanted to avoid getting tied to another unpopular Pakistani leader.

On the Defensive - - - - - - - - -

9. (C) PM Gilani had little response to Nisar's February 28 tirade in the National Assembly.  He promised efforts to resolve the political crisis in Punjab, saying whichever party could form a coalition majority would be allowed to form the next provincial government.  He explained his concurrence with the two-month governor rule as party discipline; though, he conspicuously did not mention or defend President Zardari.  Gilani concluded, ""There is no wrong without a remedy.""

10. (C) Speaking to the diplomatic corps late February 28, Information Minister Sherry Rehman and Law Minister Farooq Naek similarly seemed to rationalize the PPP's role in this crisis.  Rehman repeatedly noted that her party was willing to negotiate with the PML-N to ""accommodate"" the Sharifs.

ISLAMABAD 00000441  003 OF 004

She followed this up with a plea to the international missions to urge the Sharifs to restrain their party workers. Naek exhaustively explained the Musharraf-era convictions underlying the Sharif's disqualification from holding elected office.  He also blamed the Sharifs for not appearing before this Supreme Court, which the Sharifs do not recognize as legitimate.  More defensively, Naek labored to explain the need for immediate governor's rule in Punjab, saying the de-notification of Shahbaz's June by-election victory was ""unexpected"" and left the province without any government at all.  (Note: In a February 28 meeting of coalition party representatives, PPP partners Awami National Party (ANP), Jamiat Ulema-e-Islam (JUI-F) and the Federally Administered Tribal Areas (FATA) caucus reportedly went on record in opposition to governor's rule.  One of PPP's founders, Shaukat Hayat, also resigned from the party to protest the GOP's actions.)

11. (C) But the questions from the diplomats revealed a lack of sympathy for the PPP's plight.  Several Arab ambassadors, in particular, challenged the PPP's power play that necessitated the disqualification of both Sharif brothers. Naek barely could keep a straight face when he replied with ""judicial independence"" as the real culprit of this political crisis.  Rehman noted the PPP-led GOP had filed one of the petitions against the Sharifs' disqualification, which the Court had rejected; Attorney General Latif Khosa had argued on the Sharif's behalf, Naek stressed.  (Note: This is only technically true.  Minutes after the February 25 verdict was announced, Khosa admitted to PolOff that his statement to the Court took ""no sides."")

12. (C) Rehman blamed the PML-N for ""plunging the country into turmoil.""  She said the PML-N could have tried to negotiate a deal with the PPP instead of calling supporters to the streets.  Rehman said the GOP would gladly file, on the Sharifs' behalf, a review order with the Supreme Court, but the PML-N had refused any contact with them.  Both ministers repeated the PM, whichever party could form a coalition in the Punjab Provincial Assembly would be allowed to form a new government and possibly end governor's rule before the two-month time limit.  Several times, Rehman warned that this political crisis distracted the GOP from the economic problems (global recession, rising commodity prices, and unemployment) and security crisis (militants in the border regions) faced by the country.  ""We did not intend to open another front,"" concluded Rehman, verbalizing the general sense of desperation that pervaded the briefing.

What next? - - - - - -

13. (C) General Secretary to the President Salman Farouqi told Charge February 27 that he expected all this controversy to be settled before the lawyers' march arrived in Islamabad on March 16.  Further, he thought that ""everything would go back to the way it was"" in the Punjab, i.e., the PML-N would again rule the province in a coalition with the PPP.

14. (C) Presidential Spokesman Farhatullah Babar repeated to PolCouns February 28 the PPP line that it had been surprised by the verdict against Shahbaz, but that the PML-N had provoked the ire of the Court by ""attacking"" (not recognizing the legitimacy of) the judges.  PolCouns noted that Governor Taseer was giving the impression that governor's rule had been planned well before the verdict; Babar responded that Taseer had suffered in jail at the hands of the PML-N and had allowed his feelings to prejudice his actions.  However, Babar did not believe that Zardari had ordered Taseer to be quite so uncompromising against the PML-N -- actions like locking out the provincial assembly members had been a mistake.

15. (C) Babar noted various legal remedies that could reconcile the PML-N, including the Sharifs' appealing for a Supreme Court review of the decision (admittedly unlikely) or their moving for parliament to enact a law or constitutional amendment to confirm the Sharifs' eligibility.  The National Reconciliation Ordinance only applied to those accused but not convicted of crimes, so it would not be possible to have it apply to the Sharifs in its current form.  The case against Nawaz was airtight legally, but there was more scope

ISLAMABAD 00000441  004 OF 004  to help Shahbaz, said Babar.

16. (C) Agreeing that it was important to elect a new Punjab Chief Minister as soon as possible, Babar admitted that the PPP did not have the votes to rule without the PML-N or the PML.  It looked increasingly like the PML-N would be able to form a government, said Babar.  PML's Chaudhry Shujaat was negotiating the terms of joining the PPP, but Babar felt it was unlikely that Zardari would agree to Shujaat's desire to be named President of the Senate (second in line to the President).  At the February 27 PPP Central Executive Committee meeting, there had been prolonged debate about a PPP-PML alliance, said Babar.  Many PPP members questioned the wisdom of imposing governors' rule at all and were skeptical about an alliance with the Chaudhrys, but the electoral arithmetic left no other option since a renewed PPP-PML-N alliance looked unlikely.

17. (C) Asked if the PML-N could sustain demonstrations, Babar said it would depend on the police reaction.  So far, the PML-N had not produced large crowds, but in Pakistan any incident could spark a huge reaction that would rapidly spin out of control, he warned.  Babar's concern was that all of this was tailor-made for the militants to exploit.  He worried that pushing PML-N ""into the arms of the JI"" or the other religious parties would be unwise; it was in Pakistan's interest to find a resolution to the current impasse. PolCouns noted that this increased the importance of controlling crowds peacefully and managing the impact of the lawyers' movement.  Babar said the lawyers already had rejected PPP offers of food and drink in Islamabad, but the government would continue to seek a balance that allowed the demonstration but limited violence.

18. (C) Babar agreed that the PML-N was trying to split Zardari from the rest of the PPP, especially from PM Gilani, but he predicted this effort would fail.  There was a public perception problem that Zardari, by controlling both the PPP and the presidency, was exerting the same kind of double-hatted control that Musharraf had.  Babar admitted that Gilani had been left out of the loop on several decisions, and this had left the impression that he was subservient to Zardari.  Ultimately, however, Gilani would follow the decisions of the PPP, Babar was confidant.

19. (C) Comment: All sides appear to recognize that they are at an impasse, but no one has found a way forward yet. Zardari, perhaps on bad advice from Taseer, seems to have miscalculated on governor's rule and may have to eat some crow to restore order in Punjab.  Zardari may think this a satisfactory meal given the removal, at least for now, of his key rival.  The PML-N's assumption that the U.S. supported Zardari's efforts to disqualify the Sharifs is widely shared across political parties; it is an assumption we may want to dispel in the coming days, if only to reduce Zardari's growing penchant to over-reach.

End comment.

FEIERSTEIN

Follow us on Twitter and join us on Facebook for more updates