C O N F I D E N T I A L JERUSALEM 001337

SIPDIS

SIPDIS

NEA FOR FRONT OFFICE, NSC FOR ABRAMS/DORAN/MUSTAFA

E.O. 12958: DECL: 04/03/2016
TAGS: PREL PGOV KWBG KPAL KDEM IS
SUBJECT: PALESTINIAN ELECTIONS COMMISSION FACING INSOLVENCY


Classified By: Consul General Jake Walles, per reasons 1.4 (b) and (d).


1. (C) Summary. Palestinian Central Elections Commission
(CEC) officials warned international donors that the CEC
faced insolvency unless it received immediate financial
assistance to cover its one-year budget. CEC Chairman Dr.
Hana Nasir said that the CEC -- an independent agency whose
leadership is appointed by the PA President -- would cease
operations if the CEC did not receive an infusion of funds to
pay April salaries. In presenting the CEC's budget to
donors, Nasir indicated that the funding for the first six
months would be geared toward preparations for the fifth
round of municipal elections, which he expected to take place
this summer. End summary.

CEC Budget
--------------


2. (SBU) During a March 29 meeting with donors in the
Elections Reform Support Group (ERSG), CEC Chairman Dr. Hana
Nasir presented a revised one-year budget in response to
concerns raised by donors at an earlier meeting. Nasir said
that the budget for the first six months (USD 2,954,409)
would be allocated toward funding a fifth and final round of
municipal elections. While no date has yet been agreed with
the new PA government, Nasir anticipated that the elections
could take place in late July. (Note: The fifth round of
municipal elections would include the large population
centers of Hebron, Khan Yunis, and Gaza City. Nasir did not
indicate whether elections would be re-held in the Gaza
localities of Rafah, al-Burayj, and Bayt Lahia, which were
invalidated by a PA court last year. End note.) Nasir also
noted that the budget would enable the CEC to handle snap
Palestinian elections, should the CEC be called upon to
organize them. (Note: According to the Palestinian Basic
Law, PA presidential elections must occur within 60 days of
the president's death or his tendered resignation, which must
be approved by two-thirds of the sitting PLC members. The
Basic Law, however, does not provide a similar timetable for
holding out-of-year legislative elections. End note.)


3. (SBU) Nasir said that the remaining six months of the
budget would be considerably less (USD 1,927,400), with the
costs focused on conducting voter registration. Nasir
expected the CEC budget to decrease further in the future due
to additional restructuring that would reduce permanent CEC
staff to approximately 45 personnel.

CEC Facing Insolvency
--------------


4. (SBU) Nasir warned the donors that the CEC faced
insolvency without an immediate infusion of donor support.
After March, the CEC would be unable to pay April salaries to
its staff, who may opt to abandon their jobs at the CEC. PA
financial assistance is not forthcoming. Without donor
support, Nasir said that the CEC may be forced to shut down
operations altogether.

Comment
--------------


5. (C) The CEC's performance in conducting both
Palestinian presidential and legislative elections has earned
strong praise from international election observers and
donors alike. The hallmark of the CEC's success has been its
ability to maintain independence from PA institutions and
Palestinian factions. Nasir believes assistance from the new
Hamas-led PA is unlikely, given budget constraints, thereby
making the CEC dependent on donor funding for at least the
next year.


6. (C) USAID has provided commodity and technical
assistance to the CEC since late 2004. This aid is currently
scheduled to end in June 2006. USAID has not provided direct
budget support due to legislative restrictions. The bulk of
funding to the CEC has come from the EU and other donors.
According to the ERSG secretariat, the EU, Japan, Sweden,
Canada, and Norway have thus far indicated interest in
releasing up to USD three million in assistance to the CEC.
The secretariat has set an April 4 deadline for donor
pledges. Support to the CEC is consistent with USG contact
policy and the future strategy for U.S. assistance. ConGen
recommends that Department use upcoming informal donor
meetings to convey our support for continued funding by other
donors.

WALLES