UNCLAS SECTION 01 OF 04 DILI 000167

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SENSITIVE
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DEPT FOR EAP/MTS

E.O. 12958: N/A
TAGS: PGOV KDEM TT
SUBJECT: AMBASSADOR GUTERRES TO CHALLENGE ALKATIRI FOR FRETILIN PARTY
LEADERSHIP

REF: 05 DILI 377

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1. (SBU) Summary: Preparations for Fretilin's National Party
Congress are well underway. Delegates to the Congress have been
elected at district meetings that began in February. Within the
party it has long been assumed that Prime Minister Mari Alkatiri
would continue in a second term as Secretary General --- and
therefore as Prime Minister --- and he currently remains the
likely front runner. However, the recent announcement by East
Timor's Ambassador to the U.S. and U.N., Jose Luis Guterres, may
significantly alter the competition. Guterres is widely
regarded as having the charisma and experience necessary for the
job and sufficient appeal to unite disparate anti-Alkatiri
elements. Many close to the process note that important changes
to party structure are likely, whether or not that involves a
leadership change. However, the strength of the
anti-Alkatiri/pro-reform camp is hard to determine at this
point. Alkatiri and his supporters continue to express public
confidence that "there is no alternative" to his continued
leadership and have been generally unwilling to acknowledge
directly the existence of competition within the party.
Meanwhile, some observers are pessimistic regarding the
prospects for a genuinely democratic process at the upcoming
Congress and fear that an Alkatiri win may be effectively fixed
in advance, especially if it appears that he lacks the support
to win legitimately. End summary.

Preparations for Fretilin's National Party Congress
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2. (U) Preparations are underway for Fretilin's National Party
Congress, scheduled for May 27-29 in Dili. Beginning in
February, meetings were held in all 13 districts to elect
delegates for the National Congress. According to sources in
the party, a total of about 575 delegates and more than 100
alternates will attend the Congress. Further preparation for
the national congress will take place at five regional meetings.
The first of these meetings, for the region including Baucau,
took place last weekend. Included in the current preparatory
work are draft revisions to the party constitution and

regulations for the congress itself. Meanwhile, potential
candidates to challenge Prime Minister Mari Alkatiri for the
position of Secretary General of the party are coming forward
after a period of several months during which rumors abounded
regarding a range of candidates and ever-shifting alliances.
Jose Luis Guterres, currently East Timor's Ambassador to the
United Nations, has confirmed privately to Emboffs that he is a
candidate and has been widely quoted in the press to the effect
that he would accept the Secretary General position if the
Congress happened to select him. Another possible challenger is
Abel Ximenes, currently Minister of Development in Alkatiri's
41-member cabinet.

Many Fretilin members may be ready for change
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3. (U) According to sources within Fretilin, extensive
discussions about the future of the party are taking place among
party members, out of the public eye and without the
participation of the current party leadership. The overarching
questions reportedly being discussed are: a) whether to continue
with Alkatiri's leadership and b) the party's structure and
strategy for moving forward. Reports have been circulating for
years that many Fretilin members are unhappy with the leadership
of Alkatiri and his allies and with the direction in which he
has taken the party. The primary complaints are that they have
cultivated a culture of favoritism and a lack of transparency
and that decision-making power is concentrated in the hands of a
few. These party members hope that the upcoming congress will
result in significant change, although their views range from
those who declare that they will not continue to support the
party under the current leadership to those who would support a
continued mandate for Alkatiri if accompanied by satisfactory
reform of party structures.


4. (SBU) The actual strength of opposition to Alkatiri remains
hard to measure. Although it is often alleged that Alkatiri is
unpopular within Fretilin, the indications of widespread
opposition within the party remain anecdotal and inconclusive.
The only well-defined intraparty opposition group seems to be a
group known as the "group of 20" or "renovators" within the CCF
who are strongly anti-Alkatiri and some of whose members have
strong ties with UNDERTIM, a new party registered last year (see
reftel). But party members outside this group generally dismiss
its strength as insignificant. The leaders of other Fretilin

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factions may or may not like Alkatiri personally, but he appears
to have learned how to keep them satisfied. (One indication of
this is the extremely large size of East Timor's Cabinet.)
Nevertheless, there are indications that Alkatiri's reelection
is not a sure thing. Of the 500-plus delegates to the national
party congress, 88 are members of the Fretilin Central Committee
(CCF) and therefore automatic delegates, but the rest were
elected during the district congresses. Several sources within
Fretilin have noted that, of the newly-elected delegates, at
least one-third are newcomers who are eager to "discuss the
issues". Moreover, these sources report that a number of
candidates close to the Alkatiri camp, including Vice Minister
of the Interior Alcino Barris, were unsuccessful in their bids
to be delegates from their respective districts. (Note: The
list of delegates is not publicly available, so the Embassy is
unable to make its own assessment of these assertions, which
could be wishful thinking on the part of anti-Alkatiri
enthusiasts. End note.)


5. (SBU) Another unknown variable is how Alkatiri and his
supporters will respond if they perceive widespread opposition
and the possibility of defeat. Several Embassy contacts have
expressed concern that the current party leadership might choose
to undermine democratic processes at the Congress. They point
to the last Fretilin Congress in 2001, at which these Alkatiri
critics say he unilaterally assumed the chairmanship of the
meeting and was "accepted" by the delegates rather than actually
being elected as the new Secretary General. Some of these
observers add that now-Ambassador Guterres, who had been the
elected leader of Fretilin's overseas wing during the last few
years of the Indonesian occupation, had been expected to assume
the newly created Secretary General position in 2001 but that
Alkatiri and his faction arranged for the Congress to be held
before Guterres could return to Timor.

Ambassador Guterres may mount a serious challenge to Alkatiri
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6. (U) The most significant development for members of the party
looking for an alternative to Alkatiri is the candidacy of
Ambassador Guterres. Although Guterres's name had been
mentioned frequently as a potential candidate in recent months,
and although he has often been cited as the only candidate who
could credibly challenge Alkatiri, most political observers did
not expect him to throw his hat in the ring. His public
acknowledgement that he is ready to run for Secretary General
came as a welcome development to those in the party who see
grassroots readiness for change but until now did not see a
realistic alternative for party leadership.


7. (SBU) In conversations with Emboffs last week Guterres left
no doubt that he intends to run an aggressive campaign to unseat
Alkatiri as the party's Secretary General. He reported that he
has been in regular email contact with various members of the
party over the last months, discussing issues of mutual concern
and preparing for his candidacy. He stated that it was not his
idea to run for the position but that many people within the
party have been pressuring him to do so. When asked about his
differences with the Alkatiri camp, he strongly stressed what he
sees as a lack of democracy within the party and in the way the
Government operates. He particularly emphasized his unhappiness
with the Government's relationship with the Catholic Church and
civil society, noting that greater dialogue and openness to
opposing views is needed in the nation's governance. Regarding
party structure, he said the CCF should be given greater
decision-making powers, in contrast to the current situation in
which all major decisions are taken by Alkatiri and his small
circle of close supporters. Guterres has also been quoted as
saying that he would take a conciliatory and co-operative
attitude toward opposition parties, in contrast to Alkatiri's
dismissive and often sarcastic approach.


8. (SBU) Ambassador Guterres, who along with East Timor's other
Ambassadors is in Dili for a two-week Ministry of Foreign
Affairs conference, told Emboffs he will return to New York for
the last two weeks of April but will then return to Timor in
early May to focus on being a "full-time politician" during the
weeks leading up to the Party Congress. He indicated to Emboffs
that he expects to take leave during May rather than resigning
from his Ambassadorship, pointing out that Alkatiri and other
cabinet members will retain their positions while spending much
of their time in May campaigning.


DILI 00000167 003.2 OF 004



9. (SBU) In an interesting follow-up discussion, Jorge Teme, a
former Vice Minister of Foreign Affairs and Ambassador to
Australia who had joined Ambassador Guterres in a meeting with
Emboff, stated that he will leave Fretilin for the Democratic
Party (PD) if Ambassador Guterres does not become Fretilin's
Secretary General. Furthermore, Teme said that Ambassador

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Guterres has also indicated in private that he may also move to
PD if his bid is unsuccessful. The Embassy has not been able to
confirm this intent directly with Ambassador Guterres. PD is
the largest of the opposition parties and is regarded as the
only one that might be able to launch a serious challenge
against Fretilin in the 2007 elections. A defection to PD by
such a high profile Fretilin member could significantly alter
election dynamics.


10. (SBU) In addition to Guterres, there are a number of other
candidates still being discussed within Fretilin circles.
Discussions by Fretilin insiders about an Alkatiri-Guterres race
frequently assume that there will be a third candidate, Minister
of Development Ximenes. Although he does not generate the kind
of excitement expressed in response to Guterres's candidacy, he
is seen as a potentially shrewd campaigner who has been quietly
establishing a base of support. However, his support is
reportedly thin on the ground in some key districts, so most
observers do not regard him as having a real shot at the
Secretary General seat. Others who have been mentioned as

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potential candidates at various times in recent weeks, but have
not publicly declared, include: Aniceto Guterres, former head of
the Commission for Reception, Truth and Reconciliation (CAVR)
and current member of the bilateral Truth and Friendship
Commission (TFC); Rogerio Lobato, Minister of the Interior; and
Victor da Costa, who would be a candidate from the "renovator"
group mentioned in paragraph 5. (Comment: Aniceto Guterres
would draw support from many of the same circles as Ambassador
Guterres and is more likely to support the Ambassador than to
run himself. Lobato is an ambitious but widely disliked figure
who appears to understand that his best strategy for continued
political survival is to make himself useful to Prime Minister
Alkatiri. He reportedly negotiated a deal a few months ago to
support Abel Ximenes, but then reported the negotiations to
Alkatiri. End Comment.)

Alkatiri and supporters revealing little but showing signs of
concern
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--------------


11. (SBU) Meanwhile, Alkatiri and his supporters have been
expressing confidence that he, along with Fretilin President
Francisco "Lu'olo" Guterres (who is also the President of the
National Parliament), will continue to lead the party. In a
recent conversation with Emboff, Jose Reis, the Secretary of
State for Region I (Baucau, Viqueque and Lautem) who is close to
Alkatiri, stated, "There is no alternative to Mari and Lu'olo
and this is agreed within Fretilin." This sentiment has also
been expressed publicly by other prominent members of the
current leadership. (Note: The support of Party President
Lu'olo is regarded as a key element in Alkatiri's continued
legitimacy, since he remained in Timor as a member of the
resistance to Indonesian occupation while Alkatiri and most
other leaders of the ruling circle were in exile in Mozambique.
Although there have been occasional rumors in the past that
Lu'olo was considering a split from Alkatiri, the pairing has
been recently reaffirmed and a split is now regarded as unlikely
in the extreme. End note.)


12. (SBU) However, Alkatiri's recent public comments indicate
that he may well be nervous that his position in the party is
not assured. Although his public statements were initially
dismissive regarding Ambassador Guterres' candidacy, he has
since demonstrated his discomfort with the new situation. At
the regional party meeting in Baucau last Saturday, Alkatiri
reportedly called on members to conduct open dialogue regarding
the future of the party, but warned that some party members were
conducting "secret night meetings", implying that such meetings
were designed to destroy rather than construct the party. This
statement appears to have been directed at Ambassador Guterres,
who has been spending much of his time meeting with Fretilin
members and asking for their support.


13. (SBU) Comment: Given Fretilin's dominance and the general
view that its organizational and financial advantages will
enable it to win the next election despite the personal
unpopularity of Alkatiri and some other Fretilin leaders, the

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outcome of its National Congress will be extremely important.
However, gauging this outcome remains difficult. Three main
questions are outstanding. First, what is the real strength and
breadth of opposition to Alkatiri within the party? Although
Emboffs have heard from a number of party sources confident that
"there will be changes," it has not been possible to get a sense
of solid numbers of delegates behind one or another position.
It is quite possible, as one journalist put it, that the
majority of the delegates elected at the district conventions
"know their job already" and have no intention of opposing
Alkatiri. Second, what will be the effect of Ambassador
Guterres' candidacy? It is possible that his entry into the
race will solidify it into a two-person competition, but it is
not yet clear whether the various elements within Fretilin who
profess dissatisfaction with Alkatiri will consolidate around
Guterres. Third, how will Alkatiri and his supporters approach
the Congress and will they allow it to be truly democratic? The
election of delegates is generally reported to have been a far
more democratic process than some had feared, but at least one
independent-minded Fretilin member of Parliament has reportedly
been disqualified on a technicality after being elected as a
delegate, and there is still time for strong-arm tactics if the
leadership were inclined to use them. One possible obstacle to
any such efforts is that the Congress will reportedly elect the
Secretary General and President by secret ballot. End Comment.

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