EAST TIMOR SITREP: PRESIDENT WILL RESIGN TOMORROW UNLESS

S E C R E T SECTION 01 OF 03 DILI 000327

SIPDIS

NOFORN

DEPT FOR EAP/MTS
NSC FOR HOLLY MORROW
USUN FOR GORDON OLSON AND RICHARD MCCURRY
USPACOM FOR JOC AND POLAD
SIPDIS

E.O. 12958: DECL: 6/22/2016
TAGS: PGOV MOPS ASEC KPKO MY AS TT
SUBJECT: EAST TIMOR SITREP: PRESIDENT WILL RESIGN TOMORROW UNLESS
PRIME MINISTER RESIGNS FIRST

REF: A) DILI 316; B) DILI 322; C) CANBERRA 952

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CLASSIFIED BY: Grover Joseph Rees, Ambassador, U.S. Embassy
Dili, Department of State.
REASON: 1.4 (b),(d)




1. (U) Summary:
--- President will resign tomorrow if Prime Minister does not;
--- Ex-Minister Lobato arrested;
--- More anti-Alkatiri demonstrators arrive in Dili..
End summary.

President will resign tomorrow if Prime Minister does not
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2. (U) President Xanana Gusmao announced late this afternoon
(June 22) that unless Prime Minister Mari Alkatiri submits his
resignation by tomorrow morning, "it is I who will send a letter
to the National Parliament, to inform them that I will step down
as President of the Republic, because I am ashamed at the
State's bad behavior toward the people and I no longer dare to
face the people."


3. (SBU) Prime Minister Alkatiri had told President Gusmao late
yesterday afternoon that he would seriously consider the
President's demand that he resign, but that he needed a day or
so to consult with his colleagues in the Fretilin Party (see Ref
B). Today, however, Alkatiri responded instead with a
counterproposal. The Prime Minister proposed that he remain in
office but appoint two Vice Prime Ministers who would assume
some of his responsibilities. This was a variant on a
suggestion that had been made by Foreign Minister Jose
Ramos-Horta three weeks ago, before the current accusations that
Alkatiri had engaged in serious criminal conduct including the
creation of an armed group to kill various Alkatiri critics.
The earlier Ramos-Horta proposal for a strong deputy prime
minister had been part of a package of reforms and personnel
changes that would have created a "government of national
unity." Alkatiri had summarily dismissed the proposal at the
time, and today's version lacked most of the conciliatory
features of the previous proposal. The two Vice Prime Ministers
under today's proposal were to be current Minister of State
Administration Ana Pessoa, who is Alkatiri's closest ally and
confidante, and Minister of Health Rui Araujo, who is highly
regarded but has not made waves in his four years as an Alkatiri
cabinet member. The proposal was presented to the President by
Ramos-Horta at about noon today. Embassy has not yet
ascertained whether Ramos-Horta endorsed the proposal or merely
offered to be an intermediary.

(4) (SBU) It was widely assumed today that the President would
reject Alkatiri's counterproposal, since his recent call for
Alkatiri's resignation was based not on concerns about the
structure of the Cabinet but on the President's belief that
Alkatiri had committed serious crimes and could not be trusted.
Nevertheless, late this afternoon an advisor to Ramos Horta told
Emboff that the President was currently "considering" the
proposal, and a source in the President's office indicated that
the ongoing discussions would not end today.

(5) (SBU) At approximately 4:00pm today, Jose Reis, one of the
Fretilin Party's two deputy secretary generals and a close ally
of Prime Minister Alkatiri, made a public statement on behalf of
the Party in which he said that the Party will not ask Alkatiri
to resign. During the same press conference, Reis announced that
the Prime Minister would give up his portfolio as Minister for
Natural Resources and that a new minister would be named to fill
that closely held ministry. He continued by stating that two
new Vice Prime Minister positions would be created.


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(6) (U) At about 5:00 p.m. President Gusmao began a lengthy
speech to domestic and foreign journalists gathered outside his
office. The speech set forth a broad array of criticisms of
various Fretilin leaders, particularly Alkatiri and other
members of his "Mozambique group". It made clear that the
President regards the recent Fretilin Party Congress, in which
Alkatiri was reelected by a show of hands instead of the legally
mandated secret ballot, as invalid and illegal. Gusmao said the
abolition of the secret ballot violated both the Constitution
and the law governing political parties (Article 18c of the
latter specifies that leaders of political parties are to be
elected via secret ballot). At the close of his speech, the
President stated that he could no longer face the people under
the current circumstances. He demanded that Alkatiri assume
responsibility for the current crisis and step down immediately.
He also demanded that Fretilin hold an extraordinary Congress
within the week to elect new party leaders with a secret ballot.
If Alkatiri did not resign, he said, he himself would send a
letter to Parliament in the morning tendering his own
resignation. Under the Timorese Constitution, if the President
resigns the President of Parliament, Francisco Lu'Olo Guterres,
will become the interim President and elections for a new
President must be held within ninety days. Lu'Olo is also the
President of Fretilin, re-elected along with party Secretary
General Alkatiri at the Party Congress whose procedures
President Gusmao declared illegal in his speech today.

(7) (U) In a telephone interview with a Portuguese journalist
shortly after the President's speech, Alkatiri reiterated his
intention not to resign. He stated that "the current situation
is so complex that a precipitous decision could complicate
things even further."

(8) (S/NF) Comment: While it was predictable that Alkatiri
would not resign, see Ref B, it is not clear why President
Gusmao now intends to tender his own resignation rather than
exercise his constitutional power to dismiss the Prime Minister
as he had recently indicated he would do. See Ref A. One
possibility is that the President's former legal advisor,
Portuguese law professor Pedro Barcelar Vasconcelas, who had
reportedly advised the President that article 112 of East
Timor's Constitution authorizes him to dismiss the Prime
Minister in the current circumstances, might have changed his
position and urged the President not to dismiss Alkatiri.
Embassy had received reports that members of the tight-knit
Portuguese expatriate community in Dili, which is overwhelmingly
pro-Alkatiri, were making efforts to enlist Vasconcelas.
Professor Vasconcelas' legal advice was reportedly instrumental
in the President's decision last year to support Prime Minister
Alkatiri during the May 2005 anti-Alkatiri demonstration led by
East Timor's Catholic Bishops.

(8) (SBU) Comment continued: Another possibility, more
consistent with some of the President's recent conversations
with Ambassador Rees and others, is that he still believes he
has the constitutional authority to dismiss Alkatiri, but that
he also believes Alkatiri might succeed in painting him as the
perpetrator of an unconstitutional coup d'etat. By using the
imminent threat of his own resignation as his only weapon in the
struggle against the Prime Minister, Gusmao hopes to make clear
that he is seeking the good of the country, not personal power.
Nevertheless, the President has now put himself in a position
that may well force him to resign tomorrow.

(9) (SBU) Comment continued: It is possible, although unlikely,
that the President could run in the election that must be held
within 90 days to fill the vacancy created by his own
resignation. If he did run he would presumably seek a popular
mandate for his plan to dismiss the Government. End Comment.

Ex-Minister Lobato arrested
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(10) (C) As reported in reftel, former Minister of Interior
Rogerio Lobato was taken into custody by a prosecutor working in
the office of East Timor's Prosecutor General at about 9:20am.
Although neither Australian forces nor police were technically
involved in the arrest, the arresting prosecutor was reportedly
accompanied by a legal officer from the Joint Task Force (JTF),
and armed members of the Australian Defense Force (ADF) were
reportedly standing nearby. Lobato reportedly put up no
resistance, despite earlier concerns that he was armed. Lobato
was subsequently brought before a judge for a detention review
hearing. According to Prosecutor General Longinhos Monteiro,
the presiding judge accepted the prosecution's request that
Lobato remain in custody pending further proceedings, but the
judge questioned whether the Prosecutor General's office could
guarantee Lobato's safety if he were held in the Becora facility
in Dili. As the Prosecutor General could provide no such
guarantee, the judge decided to keep Lobato under house arrest.

More anti-Alkatiri demonstrators arrive in Dili
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(11) (SBU) A large number of demonstrators arrived on the
western outskirts of Dili late this afternoon. According to
Malaysian forces posted at the first checkpoint through which
vehicles arriving from the West must pass, there are currently
114 vehicles waiting at the checkpoint. Many of these vehicles
are reportedly large trucks, each of which can carry up to 40
people. Early this evening Malaysian and Australian forces were
working on security arrangements for conducting the entry of the
demonstrators into Dili and for ensuring security thereafter. It
had been reported that they might require the demonstrators to
remain outside of Dili overnight and allow them to enter in the
morning. Approximately 1,000 demonstrators appear to have
entered the city today, possibly before a decision was made to
delay further entries. Australian forces report that those who
are already in the city are being allowed to proceed with
demonstrating, but will be closely monitored. At approximately
9 p.m Emboffs saw numerous vehicles full of probable
demonstrators entering the city, suggesting that a decision had
been made to permit entry to at least some of the demonstrators
who had been waiting at the western checkpoint.

(12) (SBU) Embassy has received reports from the Australian
forces that a decision has been made to not embed international
forces with the protestors, as was done during the smaller June
6 demonstration. Instead, international troops and police
report that they are focusing on containing the demonstrators by
providing extensive perimeter security.

(13) (U) It is possible that the situation could become more
volatile once the demonstrators become aware of the President's
threat to resign tomorrow morning.
REES