PM WORRIED ABOUT RUMORS OF KINGLY INTERVENTION

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 001772

SIPDIS

STATE FOR SA/INS
LONDON FOR POL - RIEDEL

E.O. 12958: DECL: 09/11/2012
TAGS: PGOV PREL NP GON
SUBJECT: PM WORRIED ABOUT RUMORS OF KINGLY INTERVENTION

REF: A. (A) KATHMANDU 1762


B. (B) KATHMANDU 1748

C. (C) KATHMANDU 1741

D. (D) KATHMANDU 1515

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

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SUMMARY
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1. (C) In a September 12 meeting with the Ambassador and UK
Ambassador Keith Bloomfield, Prime Minister Sher Bahadur
Deuba seemed clearly distressed by rumors that King Gyanendra
wants to postpone the November 13 national elections, "seize
power" by invoking Clause 127 of the Constitution, and
substitute "his own man" for Deuba as head of government. He
reiterated several times that he feels his personal
credibility is linked to the elections going forward as
scheduled and asked both Ambassadors to send a "strong
signal" to the Palace to allow polling to proceed. He
indicated he will re-impose the state of emergency
selectively in certain areas after a meeting with leaders of
the major political parties. A September 11 press release
from Maoist supremo Prachanda (septel) offering a ceasefire
he dismissed as a ploy, but noted he had sent discreet
feelers through an intermediary about the possibility of
resuming dialogue. The Army Chief told the UK Ambassador
September 12 that recent Maoist successes have made the Army
question its ability to provide adequate security for the
elections. End summary.

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PALACE PLOY?
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2. (C) In a September 12 meeting with the Ambassador and
with UK Ambassador Keith Bloomfield, Prime Minister Sher
Bahadur Deuba admitted to "some suspicion that the Palace
doesn't want elections" (Ref A). Although the PM said that
King Gyanendra has told him nothing directly, well-connected
Palace emissaries have let it be known that the King wants
elections postponed and wants Deuba to step down, to be
replaced by "his own man"--Deuba said he had heard former
Panchayat-era PM Kirti Nidhi Bista suggested-- as head of an
interim government for two years. Deuba said he has rebuffed
the suggestion to postpone polling, stressing his position
that the Government of Nepal (GON) should proceed with
preparations to hold national elections on November 13.
"Let's try first" before deciding that elections cannot be
held, he stressed.



3. (C) Amb. Bloomfield asked which government body has the
authority to determine that elections should be postponed.
Deuba responded that the Cabinet can recommend postponement,
but such a decision would require his assent as Prime
Minister. Nonetheless, Deuba added gloomily, the King is
rumored to be saying if the (security) situation does not
improve, "he has to seize power" by invoking Clause 127 of
the Constitution (Ref A). "He's very much impatient to have
some sort of role." The King is "very clever," Deuba said.
He is "creating perceptions" that the elections cannot be
held in order to provoke a Constitutional crisis. The King
might then blame Deuba for having asked him to dissolve
Parliament and call for elections. But "the King cannot
force me to resign," he declared, although he later indicated
he would personally feel compelled to resign if he were
unable to hold elections as promised.


4. (C) Both Ambassadors attempted to press Deuba on whether
he would participate in an interim Cabinet, should a
determination be made that elections cannot be held. Deuba
was reluctant to accept even the hypothetical suggestion that
elections be postponed, emphasizing that he believes his
personal credibility is firmly linked to holding to the
election schedule. At another point in the conversation,
however, he said he would be ready to take part in an
all-party Cabinet--possibly also including technocrats. He
asked both Ambassadors to send a "strong signal" to the
Palace that elections should go forward as scheduled.

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SELECTIVE STATE OF EMERGENCY AN OPTION
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5. (C) Deuba said he plans to call an all-party meeting once
the Election Commission announces its long-pending decision
on which Nepali Congress faction may use the party symbol
during elections. (Note: This decision is expected soon.
End note.) Deuba said he will raise re-imposition of the
state of emergency, which expired August 28, in the meeting,
adding that the other parties are sure to oppose the
emergency. (Note: Nepali press on September 12 quoted the
State Minister for Home Affairs as asserting the emergency
will be re-imposed, regardless of the outcome of the
all-party meeting. End note.) Deuba indicated he will use
the parties' objections to the emergency to re-impose it on a
selective basis, applying it only in those areas most
affected by the insurgency. When elections are to be held in
those areas, the emergency could be lifted. Controls on the
press would have to be lifted if the emergency is applied
only to certain parts of the country, Deuba acknowledged;
"only the movement of the people would be suppressed."

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PROSPECTS FOR DIALOGUE
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6. (C) Ambassador Malinowski raised the September 11 press
release from Maoist supremo Prachanda offering a ceasefire
(septel). The Prime Minister dismissed the offer as a
typically insincere ploy by the insurgents. If, however, the
offer could be determined to be genuine, the door would be
open for secret talks. He said he had sent out feelers
through a purported Maoist emissary to "discreet talks." The
Maoists are supposed to be holding an important meeting next
week, after which the PM has been told to expect a reply.
The PM said he emphasized in his message to the insurgents
that at the very least they suspend violent activities during
the elections. Otherwise, if violence disrupts the elections
and they cannot be held, he concluded, "my credibility will
be damaged."


7. (C) The problem is, Deuba noted, he can never be sure of
the credentials of the supposed Maoist emissaries who contact
him, or with what authority they may speak for the
leadership. Although there are many would-be mediators, "I
don't know who the real person is." Because of the Maoists'
anti-royal rhetoric, the King himself "is not very keen" on
brokering talks with the Maoists, Deuba said, but noted in
the same breath rumors that had surfaced in the past linking
the Maoists to India and the Palace.

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CABINET CLEANING
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8. (C) Ambassador Malinowski asked if the PM were
considering changes in his Cabinet (Ref B). The PM replied
that he is deferring that decision--like the decision about
restoring the emergency--until after the Election Commission
makes a determination about his party's election symbol.
Deuba acknowledged that the King had earlier urged him to
pare down his Cabinet, but noted that various factors, like
having to await the Supreme Court's decision on the
dissolution of Parliament (Ref D),had made him defer action.
Deuba said that he would dismiss some of his ministers
accused of corruption. Ambassador Malinowski said that some
of those were among the most politically powerful figures in
his party and asked what they might do in retaliation. Deuba
noted ruefully that he expected them to cause difficulties
for him.

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ELECTION SCHEDULE
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9. (C) Deuba cited "strong rumors" circulating now that the
Royal Nepal Army (RNA) does not support holding the
elections. Elections could be held "phase-wise" to allay
security concerns, in up to six phases beginning in the
Himalayan region, he suggested. This schedule might not be
completed before February, he acknowledged. He asked both
the U.S. and UK to send international observers to oversee
the elections. Amb. Bloomfield replied that the EU is
deciding September 12 whether or not to send an observer
mission.
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NEW ARMY CHIEF QUESTIONS ELECTIONS
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10. (C) Chief of Army Staff Gen. Pyar Jung Thapa, who
assumed his position September 9, told the British Ambassador
September 12 that recent Maoist successes in the field (Ref
C) have made the RNA leadership question its ability to
provide adequate security for the electons. That the Maoists
were able to assemble the forces necessary to attack in two
different parts of the country--including a district
headquarters--without detection has changed the thinking of
both the RNA and the Election Commission, Thapa said. Before
people had thought the elections could be held in 2-5 phases;
now it looks like 7-8 discrete phases may be necessary. The
RNA does not want to be discredited by a botched election,
the Army Chief noted. But "no one wants to grasp the nettle"
and say out loud that elections cannot be held; neither the
RNA nor the Election Commission feels in a position to do so.

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COMMENT
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11. (C) Despite Deuba's assertions that the King can force
him neither to resign nor to postpone elections, the PM is
clearly rattled by mounting reports that the Palace is
preparing to make a move. Clause 127 does not stipulate that
the King must seek the PM's approval before taking action.
Rather, orders issued by the King under the Clause "shall be
laid before Parliament"--which, in the absence of the Lower
House, translates to the Upper House of Parliament, many of
whose members are appointed by the King. It is interesting
that the PM did not allege, as have some other political
players over the past few days, that the King's prospective
actions represent a threat to democracy. Instead, he
obviously sees the threat in much more personal terms.
Postponing the elections for him means undermining his
credility as a leader and thus his longevity as a politician.
But without similar enthusiasm for elections from other key
players--the Election Commission, the RNA, and most
important, other party leaders who may see an opportunity in
Deuba's demise--it is unclear that the Prime Minister alone
can withstand what may be the beginning of a full-court
Palace press.
MALINOWSKI