C O N F I D E N T I A L SECTION 01 OF 04 KATHMANDU 001762

SIPDIS

STATE FOR SA/INS
LONDON FOR POL - RIEDEL

E.O. 12958: DECL: 09/10/2012
TAGS: PGOV PREL NP GON
SUBJECT: SPECULATON BUILDS FOR POSSIBLE ROYAL INTERVENTION

REF: A. (A) KATHMANDU 0740

B. (B) KATHMANDU 1008

C. (C) KATHMANDU 1316

D. (D) KATHMANDU 1748

Classified By: POL PMAHONEY. REASON: 1.5 (B,D).

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SUMMARY AND ACTION REQUEST
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1. (C) The Embassy believes that King Gyanendra is now
actively considering use of his Constitutional authority to
dismiss the current government, appoint an interim
government, and postpone general elections scheduled for
November 13. The King's decision is likely shaped by
numerous factors, including the deteriorating security
situation and declining confidence in Prime Minister Deuba
and his troubled Cabinet. The King will probably weigh
reactions from foreign allies important to Nepal, such as the
U.S., UK, Japan, India, and China, before making a final
decision. We believe that the King may elicit USG reaction
during a September 12 meeting (arranged at the request of the
Palace) with the Ambassador. The Ambassador is also meeting
with the Prime Minister the morning of September 12, where
the same subject may arise. Department is requested to
review suggested Para 13 talking points on this subject and
convey any changes to Embassy by COB September 11. End
summary and action request.

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ELECTION PREPARATIONS:
PLODDING AT BEST
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2. (SBU) Since the May 22 dissolution of Parliament,
preparations for mid-term national elections, scheduled for
November 13, have proceeded haltingly at best. Campaigning
has been hindered by the unpredictable security situation, as
well as by the bitter fight between rival factions of Prime
Minister Sher Bahadur Deuba's own Nepali Congress Party.
Despite frequent suggestions from within the government, the
security forces, political parties, and NGOs that voting will
be held in staggered phases across the country to minimize
the security risk, the Election Commission has yet to
announce such a schedule. (Note: We have just heard the
schedule may be out before the end of the week. End note.)
Many sources point to the Commission's continued failure to

publish an election schedule--as well as its apparent
procrastination in deciding which rival Nepali Congress
faction is legitimate--as evidence of increasing uncertainty
that polls can be held by the November 13 date.


3. (SBU) Overshadowing any preparation for elections is the
very real threat of Maoist violence directed against
candidates, voters, and election officials. Maoist
insurgents have pledged to disrupt the elections, and the
sharp, recent surge in violence has demonstrated their
apparently undiminished ability to do so. Attacks against
local-level mainstream political cadre are increasing. A
human rights activist who recently held public programs in
Syangja and Pyuthan Districts told us that local Maoists were
poised to disrupt the programs until they learned the topic
was human rights, rather than elections. (One Maoist cadre
reportedly told the organizer, "We're not against human
rights. We're just against free and fair elections.") A
former MP who flew into Gorkha District to inspect damage to
a bridge said he was immediately surrounded by armed Maoists
upon landing. Once the Maoists learned he was not there to
promote the elections, however, they let him continue his
visit.

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DEUBA'S DECLINING STOCK
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4. (C) Despite this grim scenario, Prime Minister Deuba
claims to be as committed as ever to beginning
elections--even if only partial elections--by November 13.
Sources close to the PM indicate that he feels he has staked
his credibility as a leader on keeping to the November 13
deadline--however unrealistic it may be. Elections held on
this date run a substantial risk of being flawed, incomplete,
and marred by violence. If he is unable to hold elections by
that date, he has told the British DCM, he will step down.


5. (C) Deuba's insistence on holding the elections, viewed
against the backdrop of mounting security concerns both
within and outside of Kathmandu, may do little to promote
public confidence in his judgment. For many observers, ugly
intra-party feuds and petty partisan squabbling seem to have
commanded most of the PM's attention over the past few
months, rather than more pressing matters of general national
concern, such as the insurgency or the troubled economy.
Recent corruption scandals sparked by the widely applauded
new anti-corruption bill have spotligthed a variety of pulic
officials, including one of his closest advisors (Ref D), and
have focused popular dissatisfaction on the widely perceived
lack of good governance in successive governments since the
restoration of democracy 12 years ago.

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DECLINING OPTIONS
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6. (C) Ref C outlined three possible scenarios after the
dissolution of Parliament: a) flawed and/or partial
elections beginning o/a November 13; b) indefinite
postponement of the elections, pending improvements in the
security situation; and c) royal intervention under Clause
127 of the Constitution. Given the sharp deterioration in
the security climate since the summer and given Deuba's
reported unwillingness to postpone elections, the Embassy
finds increasing evidence that royal intervention is under
active consideration. (Comment: Clause 127 grants the King
broad authority to "issue necessary Orders to remove (any)
difficulty" that may arise in the implementiation of the
Constitution. The language is sufficiently vague to appear
to give the King ample latitude to take any steps he deems
necessary--possibly including the dissolution of a sitting
government--to restore order. End comment.) Many observers
believe that if elections do begin by November 13, the
Constitution may be interpreted as requiring the current
government to step down. (Note: This last is subject to
judicial interpretation. The Constitution contains no
specific provision for what happens in the event elections
are not held on time. End note.)


7. (C) The military, motivated by increasing concerns
about its ability to provide security for elections, may also
be advising the King to take action to defer the November 13
polling date. The Election Commission has revised an earlier
estimate of polling places needed for the election upward
from 7,000 to 10,000. One high-ranking military officer said
privately that the Royal Nepal Army (RNA) would be hard
pressed to provide adequate security for so many additional
polling places. The main public line of the RNA to us and
others, however, is that the military will be ready and able
to provide security.


8. (C) The King had previously told the Ambassador that he
agreed to Deuba's request to dissolve Parliament contingent
upon the PM's formation of a smaller, more capable Cabinet,
free from chronic political in-fighting and committed to
tackling corruption (Ref B). The ongoing inner Nepali
Congress Party squable between Deuba and Party President
Koirala has kept the Prime Minister from acting on the King's
request, however. Instead, the PM has clung to his allies
that remain in the Cabinet, the seniormost member of which is
now deeply embroiled in a corruption scandal himself. Palace
sources have told the Japanese embassy that Deuba's position
is growing increasingly "weaker." The King, through his
advisors (Ref C), has also intimated in the past that he was
considering using Clause 127 to postpone elections until the
security situation improves and form an interim government
focused on addressing the nation's most pressing problems.
Over the past week, speculation among a variety of
well-placed sources that the King may be ready to act has
become louder. Sepculation regarding the composition of such
an interim government (alternatively described as
multi-partisan, non-partisan technocrats, or some combination
of the two) also abounds. Today's rumors include former
Prime Minister Chand or former Prime Minister and former
Leader of the Opposition Madhav Nepal to head a new
government. (Comment: Chand, who served as Prime Minister
three times previously and who is associated with the old and
discredited panchatat system would be hard for many Nepalis
to swallow. Nepal heads the major opposition party, but the
Nepali Congress Party had a majority in the Parliament that
was dismissed in May. Thus the choice of either could be
problematic. End comment.)



9. (C) A reliable source close to the King has told us that
the King would want the major political parties to come to
him with the suggestion that he bless an interim government.
On September 10 a military advisor to the King told DATT that
the King is contemplating invoking his authority under Clause
127, but would consult with the U.S., UK, and Japan before
doing so (septel IIR). On September 11 the Palace notified
the Ambassador that the King wishes to meet him the evening
of September 12. He also will be meeting with the British
Ambassador that same day (at British request, however). We
expect the King to elicit USG reaction to invocation of
Clause 127 during this meeting. (Note: The Ambassador and
the British Ambassador are also scheduled to meet the Prime
Minister the morning of September 12. We expect the same
topic may arise during the meeting with the Prime Minister as
well. End note.)

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CONSTITUTIONALITY, CONSENSUS ARE KEY
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10. (C) Recent Maoist success in staging large-scale attacks
against the Army and police in different parts of the
country, combined with a series of bomb explosions in the
heart of Kathmandu, have made the GON's ability to hold free
and fair elections more questionable than ever. Holding
elections in the current environment seems certain to put
voters, candidates, and election officers at significant
risk. Maoist intimidation, moreover, will doubtless depress
voter turn-out substantially. In some areas, it remains
doubtful that polling can take place outside of district
headquarters. Elections held under such circumstances are
almost certain to be flawed, undermining the legitimacy of
any government so elected. Should the current government
postpone elections, however, Deuba's personal
credibility--and possible motives of self-interest in
postponing facing disgruntled voters in the polls--could be
questioned.


11. (C) Of the three possible scenarios outlined in Para 6
above, royal intervention under Clause 127 of the
Constitution may be the most practical, provided three
factors are observed. First, the intervention should be
performed in strict accordance with the (admittedly broad)
provisions of the Constitution. Second, the King should
attempt to obtain multi-partisan national consensus for such
action. Third, the King should emphasize that his
intervention is a temporary measure, necessitated by the
critical security situation confronting the country, and
announce a date for elections as soon as possible, preferably
within one year.


12. (C) In previous conversations with the Ambassador, the
King has emphasized his commitment to democracy (Refs A and
B). We have no reason to believe he is dissembling. Although
public suspicions about his possible role in his late
brother's death have substantially subsided, we believe that
the King remains sensitive to this early popular mistrust and
will work hard to avoid re-igniting it. He is perceived to
be above partisan politics, and may thus be the only national
figure capable of uniting the fractious mainstream parties to
develop a strategy to address the root causes of the
insurgency and, perhaps ultimately, a strategy for possible
future negotiations with the Maoists.

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SUGGESTED TALKING POINTS
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13. (C) Embassy requests Department clearance by COB
September 11 on the talking points below in the event that
the subject of royal intervention is raised in the
Ambassador's September 12 meetings with the Prime Minister
and the King.

Begin suggested talking points:

--The security climate raises significant doubt that free and
fair elections can be safely held according to the stipulated
schedule.

--Any action taken by the King to intervene should be done in
strict accord with the Constitution.
--We suggest seeking advice from the Supreme Court before
taking such action.

--The King should emphasize the temporary nature of the
intervention, perhaps by appending a future date for national
elections.

--Multi-partisan consensus on royal intervention will be
crucial to the success of this action.

End text of suggested talking points.

MALINOWSKI