A SETBACK FOR LITHUANIA'S PM, A BOOST FOR USPASKICH

C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 001198

SIPDIS

STATE FOR EUR/NB

E.O. 12958: DECL: 11/08/2015
TAGS: PGOV PREL LH
SUBJECT: A SETBACK FOR LITHUANIA'S PM, A BOOST FOR USPASKICH

REF: VILNIUS 1190

Classified By: Pol/Econ Officer Gregory L. Bernsteen for reasons 1.4(b)
and (d)

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SUMMARY
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1. (C) The Parliament narrowly voted November 8 to begin
investigation of Prime Minister Brazauskas and his family's
business interests, despite ostensible ruling coalition
support for defeating the measure. An opposition solidly
united behind the Conservatives and the refusal of several
coalition MPs to vote allowed the unexpected outcome. A
final vote on the proposal will occur November 10, when the
coalition leaders will pull out all the stops to prevent the
formation of an ad-hoc commission to conduct the
investigation. Tension inside the ruling coalition
continues, as Labor Party leader Viktor Uspaskich subtly
works behind the scenes to undermine Brazauskas's authority,
even as he pledges his public support. END SUMMARY.

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A surprising reversal for the PM
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2. (U) The Parliament voted November 8 to establish a
commission to investigate Brazauskas's wife and her ownership
of Vilnius's Crowne Plaza hotel. The opposition Conservative
party has alleged that Mrs. Brazauskas received a sweetheart
deal from a company connected to Russian oil company Lukoil
Baltija in connection with her purchase of the hotel
(reftel). The Parliamentary opposition, in a rare show of
cross-faction unity, voted en masse for the resolution, with
no abstentions. Coalition members, in accordance with the
ruling council agreement reached last week, voted against the
resolution or abstained. The Conservative-supported measure
won by a simple majority of only one vote -- 54 for, 27
against, and 26 abstentions.

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Uspaskich flexes his muscles - again
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3. (C) Sixteen of the Labor Party's 39 MPs refused to
register their presence in the Parliamentary chamber or
quietly left just before Parliament began debate on the
proposal. If just one of these Labor members had voted (or
even abstained),the coalition would have defeated the
measure. Labor MP Vladimir Orechov confirmed to us that
their actions were part of Labor's strategy -- a
demonstration of the Social Dem's (and Brazauskas's)
dependence on Labor to get things done. Orechov commented
that Uspaskich and Brazauskas were meeting today, and that
Uspaskich would likely use his leverage to improve his
party's position within the coalition.

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It's not over yet
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4. (C) The Conservatives won the first vote, but there will
be a second vote on November 10 to confirm the final text.
The coalition has another chance to mobilize its solid
majority to defeat the measure. The Conservatives are
pessimistic about their chances to prevail in this final
vote. Rasa Jukneviciene, Conservative MP, told us that the
"majority will kill the commission, even if they have to
violate the law to do it." She predicted a party-line vote.
The media is already reporting that the coalition is
marshalling its forces, including calling back MPs currently
traveling abroad.


5. (C) Coalition MPs from several parties privately said that
the Social Dems will do what it takes to prevail during the
second vote. Algirdas Paleckis, Social Dem MP, told us that
their goal is to have enough MPs to ensure a majority even if
some of the Labor MPs refuse to back Brazauskas.

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Next steps
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6. (U) Chances are slim that Brazauskas will follow through
immediately on his threat to resign, even if the
Conservatives manage to find a majority in the November 10
vote. The Social Dems have said they would file appeals to
the Ethics Commission and the Constitutional Court in an
attempt to overturn the vote on technical grounds.


7. (U) The Conservatives still believe that the petition they
submitted with the signatures of more than 40 MPs should have
established the commission without a vote. If the
Conservatives lose the second vote, they will try to appeal
to the Constitutional Court as well, but are unsure of their
chances for success.
COMMENT

8. (C) The Conservatives have succeeded beyond their own
expectations, but will have a tough time in the second round
if coalition discipline holds. Win or lose, they have both
weakened Brazauskas and achieved their goal of making it more
difficult for Lukoil to purchase the Mazeikiu Nafta oil
refinery. However, they have also put wind in the sails of
Uspaskich, who may demand that the Social Dems cede control
of a ministry or two to Labor in return for Labor's support.
MULL