196939            3/15/2009 13:18          09ISLAMABAD552   Embassy Islamabad      CONFIDENTIAL                   "VZCZCXRO9810

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SIPDIS

E.O. 12958: DECL: 08/04/2018

TAGS: PREL, PTER, PGOV, PK

SUBJECT: WHAT'S NEXT?

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

1.  (C)  Summary.  Absent a terrorist attack or what we believe is unlikely Army intervention, the lawyers' ""long march"" will end with both sides claiming victory.  They then will have to settle into a protracted series of negotiations to address the Sharifs' eligibility, governors' rule in Punjab, and the fate of the judiciary deposed by former President Musharraf.  Zardari clearly over-reached in imposing governor's rule and he will emerge from the march weaker politically.  Nawaz will retain the ""high moral ground"" as defender of the judiciary, but he still does not have the votes to bring down the government.  If there is a winner from the latest political drama in Pakistan, it is Prime Minister Gilani, who has adroitly positioned himself to rescue President Zardari from his current self-inflicted crisis. In the coming days, we will be carefully watching the Zardari-Gilani dynamic.  End Summary.

2.  (C)  Absent a terrorist attack or what we believe is unlikely Army intervention, the lawyers' ""long march"" will end with both sides claiming victory.  President Zardari will say that Nawaz Sharif was unable to muster significant street support; Nawaz will claim his ability to deliver any crowd was a success given drastic and ""illegal"" government measures to stop the protests.  Hopefully, the government quickly will release those political party and civil society activists detained during the march.  Both sides then must face the need to craft a way forward on three issues:  the ability of the Sharifs to hold public office; governor's rule in Punjab; and the fate of the deposed judiciary.

Sharifs' Eligibility --------------------

3.  (C)  Zardari has agreed to seek a review of the Supreme Court's decision to disqualify Nawaz and Shahbaz Sharif from public office.  The media reports that the Court will issue, as soon as March 15, a full written decision on which the government can base an appeal.  Zardari told Ambassador March 14 that the same three-member bench, plus an additional ""senior"" judge, will review the case.  The fact that Zardari is so intimately involved in how the case will be heard confirms yet again that the Court is following his guidance.

4.  (C)  The Court could again rule that both Sharifs are ineligible, could clear them both for public office, or could issue a split judgment.  The law is quite clear on Nawaz's ineligibility: under the constitution, a person convicted of a crime of moral turpitude is ineligible to run for office. There have been several suggestions on how to address Nawaz's predicament.  He could appeal his original conviction, executed under the Musharraf government and widely considered to have been politically motivated, but Nawaz refuses to recognize the current courts as legitimate.  PM Gilani believes that the best way forward is to address the judiciary issue separately and then allow Nawaz to appeal his own conviction.  The parliament could amend the constitution (this requires a two-thirds majority) to remove the disqualification clause.  Also, the courts or the parliament conceivably could restore to pre-Musharraf time the five year limit on the disqualification clause.

5.  (C)  Zardari and many Pakistan People's Party (PPP) members claim they were surprised the Court ruled against Shahbaz, indicating this was not in the game plan but was prompted by the Sharifs' ad hominem attacks on Chief Justice Dogar's daughter and other justices.  The charges against Shahbaz are much shakier than those against his brother--violation of an Election Commission regulation on notifying it prior to taking office of which district a multiple district winner will represent.  The written Court judgment should clarify if a secondary issue, that of whether Shahbaz absconded without paying a debt, is also in play.

Governor's Rule ---------------

6.  (C)  There are several opinions on the subject, but post's legal sources (and President Zardari's spokesman) confirm that simply filing a request for Supreme Court review will return a case to the status quo, pending a new court decision.  Thus, filing the review petition should at least

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temporarily restore Shahbaz as Chief Minister of Punjab and end governor's rule.

7.  (C)  However, in the wake of governor's rule, it is unclear if the PPP-Pakistan Muslim League-Nawaz (PML-N) coalition in the Punjab can be restored with any degree of stability.  Zardari has come under criticism from PPP members (including PM Gilani) and his coalition partners for imposing governor's rule without properly counting votes on whether he could install a PPP-led government.  Gilani has said that the PPP should back off and let an election proceed, even if that leaves the PPP in opposition.  Both Zardari and Nawaz continue to woo the Chaudhry's Pakistan Muslim League (PML), which holds the votes to allow either side form a government. For its part, the PML leadership distrusts both Zardari and Nawaz but has made more offers to join PPP than PML-N.  PML's suggestion of a three party ""unity"" government have so far been rejected; eventually, PML will have to choose who to support.

Judiciary Issue ---------------

8.  (C)  During the February 2008 election campaign, Nawaz made common cause with the populist lawyers' movement seeking to restore the judges deposed by then President Musharraf under his Provisional Constitutional Order (PCO) in November 2007.  The central player in the judges' drama is former Chief Justice Iftikhar Chaudhry, who initially was fired because he blocked a lucrative steel privatization deal being pushed by former PM Shaukat Aziz.

9.  (C)  Particularly after being reinstated, Chaudhry became increasingly active on the bench, inserting the Court into issues ranging from the price of vegetables to the fate of the ""disappeared,"" individuals (primarily Baloch and Sindhi nationalists) detained illegally over terrorism concerns. The public perception (which continues to be fed by Zardari) is that Chaudhry was removed because the U.S. did not want ""disappeared"" terrorists released by the Court.  This is completely untrue but has become a popular myth.  For his part, Zardari is convinced that Chaudhry is on Nawaz's payroll and would declare unconstitutional the 2007 National Reconciliation Ordinance (NRO) that granted Zardari (and many others but specifically not Nawaz) immunity from prosecution for corruption charges.

10.  (C)  Before this latest controversy, the lawyers' movement was fizzling badly as a public facing 30% food and fuel inflation had more immediate worries than who was sitting in the Supreme Court.  Former Law Minister Naek successfully had defused the judges issue further by bringing a significant number of the PCO judges back to the Provincial High and Supreme Court benches.  By officially joining the lawyers' ""long march,"" however, Nawaz has further politicized the lawyers' movement and given it new life.  PM Gilani told Ambassador that Zardari will have no choice but to find some way forward on the judges.

11.  (C)  Zardari has told us repeatedly that he will not/not restore Chaudhry as Chief Justice. Although Nawaz publicly has said Chaudhry's restoration is also a red line for the PML-N, recently, there have been indications PML-N is open to another face-saving alternative to restoration.  No leader in Pakistan really wants an activist and unpredictable Chief Justice.  There are multiple possible formations for ""fixing"" this issue.  These include pending packages of constitutional reform and the implementation of the PPP/PML-N Charter of Democracy (septel) that outlines a system for vetting new judges into the system.  Nawaz said publicly March 15 that he would join an all-parties conference led by PM Gilani to address the issue; Gilani told Ambassador that he would form this group as soon as emotions had cooled after the long march.  If Zardari continues to press to extend current Chief Justice Dogar beyond his retirement (March 21), he will re-ignite this issue and derail efforts at compromise.

Winners and Losers ------------------

12.  (C)  From political commentators to Army leaders and the man on the street, the overwhelming view is that Zardari seriously overreached in imposing governor's rule in Punjab.

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The decision has expanded rifts within the PPP and between Zardari and his coalition partners. It reinforced Zardari's already dubious reputation among the Corps Commanders and with Chief of Army Staff General Kayani.  The GOP's heavy-handed tactics in trying to restrict demonstrations has hurt its democratic credentials at home and abroad.  It is not clear, however, that Zardari recognizes the degree to which his position has been weakened.

13.  (C)  After Zardari left him no other option, Nawaz had little to lose from moving forward to join the lawyers' march.  Even a weak turnout in Islamabad March 16 will allow him to claim victory given the government's efforts to deter demonstrations.  Nawaz emerges stronger in the public eye and retains the ""high moral ground"" by defending the judiciary, but he still does not have the votes to bring down the government.

14.  (C)  The big winner is Prime Minister Gilani, who has adroitly positioned himself (as both a PPP stalwart and friend to PML-N and PML) to broker a resolution to Zardari's self-inflicted political crisis.  In recent meetings with Ambassador, Gilani has shown himself to be increasingly empowered, likely because of the back-door support of the Army, Nawaz, and Zardari opponents within the PPP.  But Gilani has not demonstrated the intellectual acumen and has not built the staff to lead Pakistan effectively.  Although Zardari denies any concern, he cannot be pleased with Gilani's new-found independence.  As this drama plays out in the coming days/weeks, we will be carefully watching the Zardari-Gilani dynamic.

PATTERSON

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