193807            2/25/2009 15:14          09ISLAMABAD415   Embassy Islamabad      CONFIDENTIAL            08LAHORE221|09ISLAMABAD141|09ISLAMABAD378|09LAHORE11|09LAHORE9     "VZCZCXRO2252 OO RUEHLH RUEHPW

DE RUEHIL #0415/01 0561514ZNY CCCCC ZZHO 251514Z FEB 09FM AMEMBASSY ISLAMABADTO RUEHC/SECSTATE WASHDC IMMEDIATE 1616INFO RUEHBUL/AMEMBASSY KABUL PRIORITY 9894RUEHLO/AMEMBASSY LONDON PRIORITY 9753RUEHNE/AMEMBASSY NEW DELHI PRIORITY 4518RUEHKP/AMCONSUL KARACHI PRIORITY 1132RUEHLH/AMCONSUL LAHORE PRIORITY 6822RUEHPW/AMCONSUL PESHAWAR PRIORITY 5750RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITYRHWSMRC/USCINCCENT MACDILL AFB FL PRIORITYRUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL PRIORITYRUEKJCS/SECDEF WASHINGTON DC PRIORITYRUEAIIA/CIA WASHDC PRIORITY"           "C O N F I D E N T I A L SECTION 01 OF 04 ISLAMABAD 000415 SIPDIS E.O. 12958: DECL: 02/25/2019TAGS: PGOV, PREL, PINR, KJUS, EAID, PKSUBJECT: SHARIFS DISQUALIFIED FROM OFFICE REF: A. ISLAMABAD 378

B. ISLAMABAD 141C. LAHORE 11D. LAHORE 9E. 2008 LAHORE 221 Classified By: Charge d'Affaires Gerald Feierstein for reasons 1.4 (b),

(d).

1. (C) Summary and Comment: Pakistan's Supreme Court ruled February 25 that both Nawaz and Shahbaz Sharif from the opposition Pakistan Muslim League-N (PML-N) party are ineligible to hold public office.  President Zardari told Charge that he had temporarily appointed PPP Governor Taseer as Chief Executive pending an election to replace Shahbaz, that the government would consider additional legal appeals, and that he did not expect significant political fallout from the Court's decision.  The street reaction will be ""in the hundreds, not the millions,"" claimed Zardari.  Nawaz and Shahbaz Sharif told Principal Officer Lahore that the decision, which they claimed was entirely Zardari's, was a declaration of war; they would not seek legal appeals and instead would take their battle to the streets.  In a press conference, Nawaz revealed that Zardari had offered to drop the case in exchange for PML-N agreement to extend the tenure of the current Chief Justice of the Supreme Court; he called on Pakistanis to come out into the streets to protest.

2.  (C)  Even before the press conference, there were sporadic demonstrations in Punjab, particularly Lahore, and Islamabad/Rawalpindi; we expect additional demonstrations tomorrow.  Both Embassy and Consulate Lahore held EAC meetings and sent LES staff home early to avoid traffic problems. Following the decision, PML-N certainly will participate in the lawyers' march, planned to begin in Karachi on March 12 and end on March 16 in Islamabad with a proposed sit-in.

3.  (C)  The decision comes as no surprise as Zardari has been telling us for weeks that he was going to move against Nawaz.  This was a controversial move within the Pakistan People's Party (PPP) and one that PM Gilani tried to forestall two days ago in talks with Shahbaz that apparently were not blessed by Zardari.  Before moving, Zardari expanded the coalition's seats in the National Assembly and worked out deals in three of four provinces to ensure the PPP will increase its seats in upcoming Senate elections.

4. (C)  The ruling will open up the battle for control of the Punjab Provincial Assembly and prompt renewed rounds of inter-party negotiations.  If Zardari is right and the street reaction remains modest, we expect little real political change to emerge from this Court decision.  If Nawaz's gamble pays off and he can bring significant crowds into the streets, the Army could possibly be called out to maintain law and order.  We expect a renewed rush of predictions that this will prompt the Army to replace Zardari; certainly, the military will consider the Court decision as unnecessary and ill-timed, but we still have no indications the military would move to oust Zardari or pave the way for a PML-N government.  With the ongoing debacle in Swat and a high-level Pakistani delegation in Washington, few will challenge the perception of the bad timing of this move.  It also demonstrates, disappointingly, that Zardari continues to play politics while his country disintegrates.  End Summary. The Decision

-------------

5. (SBU) On February 25, a three-judge panel of Pakistan's Supreme Court effectively ruled that both opposition Pakistan Muslim League-N (PML-N) leaders Nawaz and Shahbaz Sharif were disqualified from holding public office.  The judges issued an oral ruling from the bench, dismissing all of the appeals by Sharif proxies; one anti-Sharif petition was not struck down.  The Sharifs themselves had refused to appeal the original rulings against them, questioning the legitimacy of this Court, which took oath of office under Musharraf's November 2007 provisional constitution order (PCO).  To settle ruffled political feathers when the LHC decision was announced, the Pakistan People's Party (PPP) government ISLAMABAD 00000415  002 OF 004 decided to represent the Sharifs in an appeal to the Supreme Court.

6.  (SBU)  By dismissing the pro-Sharif appeals, those original, adverse rulings stand, Attorney General Latif Khosa told PolOff February 25.  The Lahore High Court (LHC) ruled in June 2008 that Nawaz was disqualified to run for a National Assembly seat because of his previous hijacking and corruption convictions.  The LHC held that Nawaz had not proven the Musharraf administration pardoned these convictions instead of simply commuting the prison sentence.

7.  (C)  There is continuing confusion over Shahbaz's case. The Lahore Elections Ruling Officer decided in December 2007 that Shahbaz was disqualified to run for a Punjab Provincial Assembly seat because of a previous loan default.  According to Khosa, today's decision automatically throws out the later decisions by the Ruling Officer, as well as by the Lahore Election Tribunal, allowing Shahbaz to run in a June 2008 by-election.  PML-N spokesman Ahsan Iqbal, however, told Polcons that the disqualification was based on a technical fault when Shahbaz failed to announce which seat he would claim from his victories in the June by-election.  In any case, Shahbaz is disqualified from serving in the Punjab Provincial Assembly, and this is the prerequisite for being Chief Minister.

PPP Reaction-------------

8.  (C)  The decision was no surprise; Zardari advised Ambassador weeks ago that he felt he had to move to rein in Nawaz (Ref ).  However, in a phone call, Zardari--just back from his latest trip to China--told Charge February 25 that he had ""nothing to do with the decision"" and had been surprised by Shahbaz's disqualification.  He noted that the Court had ruled against the government, which had been representing the Sharifs.  He said he had ordered PPP Punjab Governor Taseer to temporarily take over the Punjab government until new elections for a Chief Minister could be held.  He expected the PPP would have a candidate and thought the Pakistan Muslim League (PML) party would also be interested in running a candidate.

9.  (C)  Asked about any further legal steps, Zardari indicated the government might consider going back to the Lahore High Court to appeal the decision.  He said he was not concerned about political fallout, as the initial reaction had been for hundreds, not millions, of people in the streets.  Interior Minister Malik told Charge essentially the same thing and reiterated that the government had not anticipated that Shahbaz would be disqualified.

10.  (C) After the ruling, AG Khosa today noted to PolOff that the PML-N could always negotiate with the PPP to amend the qualification/disqualification provisions of Pakistan's Constitution.  Information Minister Sherry Rehman told PolCouns, however, that the decision was ""unsettling"" and the reaction ""would be volatile.""  PPP parliamentarian Farah Ispahani (Zardari confidant and wife of Pakistan's Ambassador to the U.S. Husain Haqqani) told PolCouns February 25 that today's Court decision ""is not the end of the story.""  The GOP might even appeal the decision.

(Note: There is a provision for "review" of Supreme Court decisions but only by the same bench.)

11.  (C)  Ispahani confided that Zardari would take further actions to ensure the March 12-16 lawyers' march/sit-in ""would not cause problems."" She hinted at proposals affecting former Chief Justice Iftikhar Chaudhry and Shahbaz Sharif. Asked why Zardari chose now to move on this long-stalled decision, Ispahani said the PPP-led GOP ""had no choice"" because Prime Minister Yousuf Gilani had entered into discussions with Shahbaz on February 23. ""We are very unhappy with the way Gilani has gone off the reservation"" while Zardari was in China, she said.  According to unconfirmed press reports, Gilani had assured Shahbaz that the PPP would not try to remove the Sharifs from power in Punjab and suggested Chaudhry might lead a new ""Constitutional Court,"" proposed by the 2006 PPP/PML-N Charter of Democracy.

PPP Moves in on the Punjab

ISLAMABAD 00000415  003 OF 004--------------------------12.(C)  Despite Gilani's assurance to Shahbaz earlier in the week, Zardari is already moving in on the Punjab government. In addition to temporarily (for two months) appointing Governor Taseer as Chief Executive pending an election to replace Shahbaz, he has fired the Punjab Chief Secretary and replaced him with Kamran Lashari, a long-time PPP supporter. MOI Malik told Charge that the Punjab Inspector General of the Police technically was not fired but since he was so close to the Sharifs, he has voluntarily vacated the office. Both the Chief Secretary and IG Police are federal appointees.

Opposition Reaction-------------------

13.  (C)  Principal Officer Lahore met February 25 with Shahbaz and Nawaz Sharif (septel) to hear their reaction. The Sharifs pre-briefed what Nawaz said in his press conference, namely that they laid the decision at Zardari's door and it was not in the interests of Pakistan's democracy. As proof of Zardari's complicity, Nawaz revealed to PO and later in his press conference that Zardari had offered Shahbaz a ""business deal"" -- if the PML-N would agree to extend Supreme Court Justice Dogar's tenure and agreed to stop attacks on the PPP, then Zardari would drop the Supreme Court cases against the Sharifs.

14.  (C)  Shahbaz told the PO that this was now ""war"" with the PPP, and the PML-N would take their battle directly to the streets.  The Sharifs would not appeal the decision in Musharraf's PCO courts.  PML-N would not resign from the Punjab Assembly and might run its own candidate for Chief Minister.  If they did, PML-N could succeed without the support of the PML.

15.  (C)  In Nawaz's press conference, he carefully tried to create friction against Zardari on several levels.  He said the PML-N did not blame the PPP rank and file for this decision, expressed concern that it was a ""slap in the face"" to Punjabis, and declared there was no chance of rapprochement with Zardari.  He suggested that Zardari was obsessed with concern that a reinstated Chief Justice Chaudhry would declare invalid the National Reconciliation Order that absolved Zardari of corruption charges.  He said it would be ""catastrophic"" if Pakistanis did not take to the streets to protest this decision, and he affirmed that the PML-N would fully participate in the March 12-16 lawyers' long march.

16.  (C)  PML-N Spokespersons Ahsan Iqbal and Siddiq-ul-Farooq declared, ""We do not recognize this court."" Iqbal went even further, charging Zardari with ""assuming the mantle of Musharraf,"" a theme we expect the PML-N to press in the coming days.  Religious Jamaat-e-Islami (JI) party leader Qazi Hussain disavowed the Musharraf court.  The leader of Musharraf's Pakistan Muslim League (PML) party, Chaudhry Shujaat Hussain, declared the Court's decision was ""nothing to be happy about"" but noted that the PML would respect the decision.  The Pakistan Institute of Legislative Development and Transparency (PILDAT) had named an ""independent observer"" to watch the case; PILDAT issued a statement questioning whether justice had been served with this verdict.

Public Reaction---------------

17.  (C) The public's reaction was swift.  Sporadic demonstrations began in Lahore, and other cities throughout Punjab saw large crowds.  In Lahore, streets were blocked with tire fires and PPP posters were torn down.  PO Lahore reported a tense mood as well as limitations on movements around the city. The Islamabad Police briefly shut down Constitution Avenue around official buildings to warn against spontaneous demonstrations.  The capital's Abpara Market did attract about one thousand, according to RSO, and the airport road was shut down by crowds tearing down PPP posters and throwing rocks.  As of this writing, the airport road remains closed and airport operations are uncertain.  Both Embassy Islamabad and Consulate Lahore held EAC meetings and allowed LES staff to depart early. Several bar associations have

ISLAMABAD 00000415  004 OF 004  called for strikes. and we expect additional demonstrations in the coming days.

U.S. Reaction-------------

18.  (C)  Zardari asked Charge for a readout of PO Lahore's meeting with Nawaz; Charge said that the PO had conveyed the U.S. position that this was an internal matter for the Pakistani government.  In his press conference, Nawaz characterized the visit as a courtesy call.  PML-N spokesman Ahsan warned Polcouns that Pakistanis would assume the U.S., as a firm supporter of Zardari, had supported the decision and urged that we issue a statement expressing concern.

19.  (C) Comment: The decision comes as no surprise; Zardari has been telling us for weeks that it was coming and that he felt he could control the reaction.  Before making this move, he coaxed the Muttahida Quami Movement party into the coalition to renew Gilani's majority in the National Assembly (Ref B).  He also successfully sealed a power sharing deal in three of the four provinces over seats in the upcoming Senate elections (Ref A) to ensure the PPP will have a majority in the Senate.

20.  (C)  The game now will be controlling the street, and Zardari has about two weeks if he is to make any repairs to reduce the impact of the March 12-16 lawyers' march.  If Zardari is correct and the street reaction is muted, we expect the Court ruling to have no immediate impact on PPP rule.  If Nawaz's gamble -- to provoke enough protests to require the Army to come out and restore order -- pays off, we may see a different dynamic.  So far, we still have no indication the Army has any interest in ousting Zardari or ushering in a PML-N government.

21.  (C)  Zardari may indeed win the short-term tactical battle against Nawaz. In the longer term, however, Nawaz is playing his cards well and now has grounds to compare what he will term Zardari's high-handed rule to that of Musharraf. Many in the PPP disagreed with the decision to challenge Nawaz, so Zardari has further alienated party faithful. This decision and promises of additional deals for the former Chief Justice or Shahbaz demonstrate, disappointingly, that Zardari remains focused on political machinations rather than the militant threat in Swat and the tribal areas.

FEIERSTEIN

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