REQUEST FOR FOREIGN SOVEREIGN IMMUNITY ACT

C O N F I D E N T I A L BANDAR SERI BEGAWAN 000422


FOR L/EAP AND EAP/MTS

E.O. 12958: DECL: 08/18/2016
TAGS: PREL BX
SUBJECT: REQUEST FOR FOREIGN SOVEREIGN IMMUNITY ACT
COVERAGE IN LAWSUIT AGAINST BRUNEI'S SULTAN AND CROWN PRINCE

Classified By: Ambassador Emil Skodon, reasons 1.4 (b, d)


1. (C) SUMMARY: THIS IS AN ACTION CABLE. SULTAN AND
CROWN PRINCE OF BRUNEI ARE BEING SUED IN A NEW YORK COURT FOR
ALLEGED BREACH OF CONTRACT, BY AN INDIVIDUAL BELIEVED TO BE A
SLOVENIAN NATIONAL AND WHO CLAIMS HE HELPED COVER UP THE
CROWN PRINCE'S AFFAIR WITH A SLOVENIAN WOMAN. GOVERNMENT OF
BRUNEI (GOB) STRONGLY DENIES CHARGES AND BELIEVES PLAINTIFF
IS ONLY TRYING TO EXTRACT AN OUT-OF-COURT MONETARY
SETTLEMENT. GOB NOTES THAT FOREIGN SOVEREIGN IMMUNITIES ACT
(FSIA) WAS APPLIED IN PREVIOUS U.S. LAWSUITS AGAINST SULTAN
AND MEMBERS OF HIS FAMILY FOLLOWING ISSUANCE OF A "SUGGESTION
OF IMMUNITY" TO THE COURT BY THE DEPARTMENT, AND REQUESTS
DEPARTMENT'S ADVICE ON HOW BEST TO SEEK APPLICATION OF FSIA
TO THIS CASE. GOB WISHES TO AVOID NEGATIVE PUBLICITY UNTIL
THE MATTER IS SETTLED, AND SO HAS ADVISED THE CROWN PRINCE TO
CANCEL PLANS TO HEAD THE GOB DELEGATION TO THIS YEAR'S UNGA,
AND ASKS THAT ITS EXCHANGE WITH USG ON THIS ISSUE BE KEPT
CONFIDENTIAL FOR NOW. ACTION REQUEST IN FINAL PARA. END
SUMMARY.


2. (C) BRUNEI FOREIGN MINISTER II, PEHIN LIM JOCK SENG,
CALLED ME IN TO HIS OFFICE FOR A "CONFIDENTIAL" DISCUSSION OF
A LAWSUIT FILED AGAINST SULTAN HAJI HASSANAL BOLKIAH AND HIS
SON, CROWN PRINCE AL-MUHTADEE BILLAH, IN NEW YORK DISTRICT
COURT ON JUNE 26, 2006. LIM SAID THE PLAINTIFFS ARE A
SLOVENIAN NATIONAL NAMED GOCE GLIGOROV AND HIS COMPANY, BEN
CONSULTING.


3. (C) READING FROM A "CONFIDENTIAL NON-PAPER," LIM
EXPLAINED THAT GLIGOROV IS SUING FOR USDOLS 500 MILLION ON
THE GROUNDS THAT HE WAS NOT PAID FOR A MATTER "THAT AROSE OUT
OF AN ALLEGED RELATIONSHIP BETWEEN THE CROWN PRINCE AND A
LADY." THE SUIT REPORTEDLY ALSO ALLEGED THAT THE SULTAN AND
CROWN PRINCE ARE ENCOURAGING HUQN TRAFFICKING AND
PROSTITUTION. (COMMENT: A LATER GOOGLE SEARCH TURNED UP A
JUNE 18 ARTICLE IN THE OBSERVER NEWSPAPER STATING THAT
GLIGOROV CLAIMS TO HAVE FACILITATED A PAYMENT OF "HUSH MONEY"
TO A SLOVENIAN WOMAN WHO CLAIMED TO HAVE HAD SEXUAL RELATIONS
WITH THE CROWN PRINCE, BUT THAT HE WAS NEVER COMPENSATED FOR
THIS SERVICE AS PROMISED BY BRUNEI'S ROYAL FAMILY. ACCORDING
TO THE ARTICLE, HE IS SUING FOR COMPENSATION AND EXEMPLARY
DAMAGES FOR ALLEGED BREACH OF CONTRACT AND FRAUD. END
COMMENT.)


4. (C) LIM WENT ON TO SAY THE ALLEGATIONS IN THE LAWSUIT
WERE BASELESS. HE SUSPECTED THAT GLIGOROV WAS SIMPLY TRYING
TO THREATEN THE SULTAN AND HIS FAMILY WITH EXTENSIVE
EMBARRASSING PUBLICITY IN AN ATTEMPT TO EXTRACT AN
OUT-OF-COURT SETTLEMENT.


5. (C) LIM SAID THE GOB BELIEVED THAT BOTH THE SULTAN AND
THE CROWN PRINCE ENJOYED SOVEREIGN IMMUNITY IN U.S. COURTS
UNDER THE FSIA. HE NOTED THAT A 1998 LAWSUIT FILED AGAINST
THE SULTAN IN A CALIFORNIA COURT WAS DISMISSED WHEN THE STATE
DEPARTMENT ISSUED A "SUGGESTION OF IMMUNITY" TO THE COURT.
AGAIN READING FROM THE NON-PAPER, HE SAID IT WAS THE GOB'S
UNDERSTANDING THAT SOVEREIGN IMMUNITY COULD EXTEND TO A HEAD
OF STATE'S IMMEDIATE FAMILY MEMBERS, AND CITED PREVIOUS CASES
INVOLVING IMELDA MARCOS AND PRINCE CHARLES. (COMMENT: THE
1998 LAWSUIT LIM REFERRED TO WAS PROBABLY SHANNON LA RHEA
MARKETIC V.S. KALIBER TALENT CONSULTANTS ET AL. WE BELIEVE
THAT THE FEDERAL JUDGE IN THAT SUIT RULED THAT THE FSIA
APPLIED TO BOTH THE SULTAN AND HIS BROTHER PRINCE JEFRI, WHO
AT THAT TIME WAS GOB FINANCE MINISTER, AND REMOVED THEM AS
DEFENDANTS IN THE CASE. END COMMENT.)


6. (C) BEFORE PROCEEDING FURTHER, LIM WANTED ADVICE FROM
THE USG AS TO THE PROPER METHOD FOR SEEKING A "SUGGESTION OF
IMMUNITY" FOR THE CURRENT SUIT FILED BY MR. GLIGOROV. HE
SAID THE SULTAN AND CROWN PRINCE DID NOT WISH TO GIVE ANY
MORE PUBLICITY THAN NECESSARY TO THE CASE AND DID NOT WANT TO
LOOK LIKE THEY WERE HIDING BEHIND THE FSIA, BUT WOULD LIKE TO
PUT THESE BASELESS CHARGES BEHIND THEM. WHAT ROUTE DID THE
DEPARTMENT SUGGEST IT FOLLOW? SHOULD THERE BE A
GOVERNMENT-TO-GOVERNMENT REQUEST FOR A "SUGGESTION OF
IMMUNITY," A REQUEST FROM BRUNEI'S U.S. LAWYERS TO THE
PRESIDING JUDGE ASKING HIM TO SEEK SUCH A "SUGGESTION" FROM
THE DEPARTMENT, OR A REQUEST DIRECTLY FROM BRUNEI'S LAWYERS
TO THE DEPARTMENT?


7. (C) LIM SAID THE DESIRE TO AVOID PUBLIC EMBARRASSMENT TO
BOTH THE GOB AND USG HAD ALREADY CAUSED HIM TO RECOMMEND THAT
THE CROWN PRINCE ABANDON PLANS TO HEAD THE GOB DELEGATION TO
THIS YEAR'S OPENING OF THE UNGA, IN HIS CAPACITY AS SENIOR
MINISTER IN BRUNEI'S CURRENT GOVERNMENT. THE GOB, HE
EXPLAINED, DID NOT WANT TO HAVE THE NEW YORK COURT TRY TO
SERVE THE CROWN PRINCE WITH A SUMMONS, AND SO WOULD RECOMMEND
THAT HE AVOID TRAVEL TO U.S. SOIL UNTIL THE FSIA WAS
DEFINITIVELY APPLIED TO THE PENDING COURT CASE.


8. (C) FINALLY, LIM TOLD ME THAT HE WOULD LIKE TO KEEP THE
GOB-USG EXCHANGE ON THIS MATTER AS CONFIDENTIAL AS POSSIBLE
UNTIL HE RECEIVED ADVICE FROM THE DEPARTMENT AS TO NEXT
STEPS. HE DID NOT INTEND TO INFORM THE GOB AMBASSADOR IN
WASHINGTON OF HIS APPROACH TO ME, AND SAID THE ONLY OTHER
PERSON IN THE MINISTRY WHO WOULD BE AWARE OF IT WOULD BE
PENGIRAN ALI HASHIM, THE DIRECTOR FOR THE AMERICAS, EUROPE,
AND AFRICA AND THE ONLY OTHER PERSON IN THE ROOM DURING OUR
MEETING.


9. (C) I TOLD LIM THAT I COULD NOT COMMENT ON THE
APPLICATION OF THE FSIA BUT THAT I WOULD SEEK AN ANSWER TO
HIS QUESTIONS FROM THE DEPARTMENT. I ALSO ASKED HIM FOR COPY
OF CONFIDENTIAL NON-PAPER FROM WHICH HE HAD BEEN READING; HE
PROVIDED IT TO ME, AND EMBASSY CAN RETYPE IT AS CABLE AND
FORWARD IT TO DEPARTMENT IF REQUIRED. (COMMENT: ALTHOUGH
EMBASSY DOES NOT HAVE LEGAL EXPERTISE REQUIRED TO DETERMINE
APPLICATION OF FSIA, WE NOTE THAT THE CROWN PRINCE, IN
ADDITION TO BEING THE DESIGNATED HEIR TO THE THRONE, DOES
INDEED PLAY AN ACTIVE ROLE IN THE GOB AS SENIOR MINISTER IN
THE CABINET, THE NUMBER TWO CABINET POSITION AFTER THE PRIME
MINISTER POSITION FILLED BY HIS FATHER THE SULTAN. END
COMMENT.)


10. (C) ACTION REQUESTED: REQUEST DEPARTMENT ADVISE AS TO
PROPER METHOD FOR GOB TO REQUEST APPLICATION OF FSIA TO
SULTAN AND CROWN PRINCE AS REGARDS THIS LAWSUIT.


SKODON