145093            3/10/2008 15:21          08ISLAMABAD1072 Embassy Islamabad      CONFIDENTIAL            08ISLAMABAD1070|08ISLAMABAD924|08ISLAMABAD970      "VZCZCXRO0486

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SIPDIS

SIPDIS

E.O. 12958: DECL: 03/10/2018

TAGS: PGOV, PREL, PK

SUBJECT: ZARDARI'S VIEWS ON AGREEMENT WITH NAWAZ

REF: A. ISLAMABAD 1070

B. ISLAMABAD 970

C. ISLAMABAD 924

Classified By: Anne W. Patterson, Reasons 1.4 (b), (d)

1. (C) Summary: Pakistan People's Party (PPP) leader Asif Zardari told Ambassador March 10 that yesterday's agreement with Pakistan Muslim League-N (PML-N) leader Nawaz Sharif was less than it seemed regarding the restoration of the judges (Ref A).  Zardari reiterated his desire to work with Musharraf as President.  He and Nawaz have agreed, privately, that former Supreme Court Chief Justice Iftikhar Chaudhry will not be restored and that the current Chief Justice will remain.  Zardari said his choice for Prime Minister was Yousef Gillani (Ref B).  Zardari has selected Sherry Rehman as Minister of Information and Syed Naveed Qamar as Minister of Finance (Ref C).  Embassy cautions there is more ground to travel before these issues are resolved.  Zardari seems sincere and has shown some political courage, particularly on the Kashmir issue.  He has good ideas, especially on the Federally Administered Tribal Areas (FATA) and on economic issues.  But it remains to be seen how he will handle the parliament )- and his coalition partners -- once the sessions get underway.  End Summary.

2. (C) Ambassador called on Asif Zardari March 10 to get his version of the ""deal"" with PML-N head Nawaz Sharif.  Zardari said he and Nawaz had agreed (very privately) that the former Chief Justice would not be restored, nor would current Chief Justice Dogar be removed.   Zardari said he had to do something about the judges: a new civilian government could not keep the former Chief Justice and his family, including two disabled children, in confinement two blocks from the parliament, and Zardari had conveyed this view to ISI head Nadeem Taj and NSA Tariq Aziz.  He had asked the government to move the former Chief Justice to his family home in Quetta, but the government had refused, arguing that the CJ ""had a gun"" and would forcibly resist being moved.  (Comment: No one wants the black eye of moving the former Chief Justice and his family under the glare of international publicity. End Comment.)  When Ambassador asked about the 30 day deadline for the parliamentary resolution which would supposedly reinstate the judges, Zardari laughed and said in politics thirty days could become eighty or ninety.  He reiterated his commitment to working with Musharraf and especially Tariq Aziz, with whom he felt particularly comfortable.  He wanted Musharraf to ""relax"" and not be so concerned about the former Chief Justice.

3. (C) Zardari revealed he had been in touch with Chief Justice Dogar to assure him he would not be removed. Zardari was less clear about the legalities of the restoration of the other judges, although he implied some phased-in system might be employed.  He noted Aitzaz Ahsan was campaigning for President now, a job that Nawaz Sharif would also like to have.  Zardari said he would not welcome Aitzaz back into the PPP fold.

4. (C) Ambassador asked about the choices for Prime Minister. Zardari reiterated that he was angry Amin Faheem had spent virtually the entire campaign in Dubai ) engaging his ""weak libido (sic)"" and ignoring his party responsibilities in the middle of the campaign.  Zardari argued that Faheem was simply not up to the demands of the office of the Prime Minister.   Ambassador asked about the possibility of a split in the party and the general perception that Faheem was a popular party stalwart with IOUs in the party structure. Zardari said Faheem would only take two deputies with him if he split from the party.  In the meantime, he was being courted by the PML-Q.  Zardari confirmed he would have been willing to work with the PML-Q if they had dumped the Chaudharys -- which Musharraf had been reluctant to do.  Now, Zardari said, he did not trust Faheem.   Zardari said he was going to wait until the very last minute, after the assembly was convened, to announce the choice for PM.

5. (C) Zardari said he had made a deal with Jamiat Ulema-e-Islam (JUI-F) leader Fazlur Rehman to enter the coalition.  While he only has six seats in the national assembly, Rehman still has fourteen senators.  Ambassador asked if ANP leader Walid Khan had agreed to this:  Zardari said he had.

6. (C) Zardari said he planned to run in a by-election if he were permitted to do so.  Ambassador said we would like to work with the PPP and other parties on the reform of the electoral commission, to make it truly independent.  Zardari concurred with this idea.

7. (C) Zardari said he had floated Ahmed Mukhtar,s name as a possible candidate for Prime Minister, but Mukhtar had not done well in the subsequent glare of international publicity. Zardari said his current choice was Yousef Raza Gillani (Ref B) who is also a vice chairman of the party.  Zardari argued he needed someone from the Punjab as PM, since that populous province was the backbone of the party's future.  He said Sherry Rehman would be Information Minister and that Syed Naveed Qamar would become the Minister of Finance, although he would be advised by a strong group of businessmen. Zardari said he was at pains to rebrand the PPP as friendly to business and to encourage American investment.

8. (C) Comment:  Party infighting seems to continue unabated. Tariq Aziz told us a few days ago that while the government would have preferred Amin Faheem, any of the four major candidates would be acceptable to them.   Embassy will get an update from him March 11.  At this point we do not believe it realistic to try and put together any coalition with the PML-Q.  One of the main outstanding questions is whether Zardari plans to run for Prime Minister himself if allowed to run in a by-election.  End comment.

PATTERSON

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