KOSOVO: CONTROVERSIAL AND WEALTHY EXPAT FORMS NEW

C O N F I D E N T I A L SECTION 01 OF 02 PRISTINA 000989

SIPDIS

SIPDIS

DEPT FOR DRL, INL, AND EUR/SCE, NSC FOR BRAUN, USUN FOR
DREW SCHUFLETOWSKI, USOSCE FOR STEVE STEGER

E.O. 12958: DECL: 09/29/2016
TAGS: PGOV PREL KCRM EAID KDEM INR YI
SUBJECT: KOSOVO: CONTROVERSIAL AND WEALTHY EXPAT FORMS NEW
KOSOVO ALLIANCE PARTY

REF: 05 PRISTINA 83

Classified By: COM TINA KAIDANOW FOR REASONS 1.4 (B) AND (D).


1. (C) SUMMARY: Bexhet Pacolli's Alliance for a New Kosovo
(AKR) recently held its first convention in Pristina,
evolving from a U.S.-based lobbying group for Kosovo
independence into a registered political party. Pacolli, a
wealthy Kosovar Albanian who lives in Switzerland, has
plastered the Kosovo countryside with billboards advertising
his new party and promising to work all manner of miracles
for Kosovo. The party convention revealed Pacolli's
autocratic style, but his wealth, ambition, and connections
to former Assembly Speaker Nexhat Daci translate into
influence. He remains unpopular and distrusted by many
Kosovars for his murky ties to former Russian President
Yeltsin, Slobodan Milosevic and -- allegedly -- to organized
crime. END SUMMARY.

Bexhet Pacolli: Controversial Emigre Millionaire


2. (C) The AKR held its first national convention on October
26, unanimously electing founder Bexhet Pacolli as party
president. Pacolli is a controversial Swiss-Kosovar
multi-millionaire who made his fortune through a series of
lucrative deals between his company Mabetex and the Russian
and Kazakh governments. He has been viewed with suspicion in
the past because of rumored connections to the Russian
political elite and the late former Yugoslav President
Slobodan Milosevic (reftel). His first foray into
post-conflict reconstruction in Kosovo was the 1.6 million
euro renovation of the Kosovo Assembly building interior,
which took place under former Assembly Speaker Nexhat Daci's
tenure and may come under scrutiny for procurement
irregularities as part of an ongoing audit process. In
September 2004 Pacolli founded the Kosovo daily newspaper,
Lajm Ekskluzive. Pacolli's brother, Selim Pacolli, runs the
paper, which gives Daci-related scandals scant coverage while
regularly following corruption stories involving other
politicians. On the more reputable side, Pacolli is also the
principal donor to the American University of Kosovo.

AKR: From U.S. Lobbying Group to Party


3. (SBU) AKR began as a U.S.-based group lobbying for Kosovo
independence; it was established in March 2006 and continues
under the name New Kosovo Alliance. The New Kosovo Alliance
website (www.newkosovo.org) is in English only, designed for
a Washington and international audience rather than potential
suporters in Kosovo.


4. (U) The AKR political party (slogan: "Enough Talk")
applied to the OSCE for party status on April 18 and was
registered two weeks later pursuant to OSCE rules. In
October, Pacolli mounted an extensive advertising campaign in
advance of the convention, plastering the countryside with
huge billboards featuring himself and the headings "Alliance
for Stability," "Alliance for Employment," or "Alliance
Against Corruption." Pacolli told the convention that he
anticipates the AKR participating in national elections in

2007.


5. (SBU) Pacolli's main focus is his pledge of economic
development. The AKR economic platform promises to reduce
unemployment, revitalize industry and agriculture, and
strengthen the banking system. Pacolli participated in an
October 5 CSIS event in Washington on economic cooperation
and investment opportunities in south-eastern Europe, as did
Deputy PM Lutfi Haziri, Minister of Trade Bujar Dugolli, and
others. Pacolli also helped establish the Southeast Europe
Economic Development (SEED) Foundation.

Autocratic Convention


6. (C) The convention itself was hardly a study in democracy,
as Pacolli brooked little debate or dissent. The delegates
elected him by a show of hands rather than by secret ballot,

PRISTINA 00000989 002 OF 002


and endorsed 31 members of the Steering Council, which then
authorized Pacolli to hand-pick 20 others from experts in
various fields, to reach the total of 51 members required by
OSCE rules. Delegates also approved the party platform
without objection. In the initial stages of the convention
some delegates abstained from voting, but this ended when
Pacolli asked for an explanation from an abstaining delegate.
Some delegates wanted to modify the party statute, but the
working committee decided to deal with written revision
proposals "at a later stage." Though some delegates
complained about the lack of openness in the process, little
attention was paid to their remarks.


7. (C) Delegates included 15 representatives of the
diaspora, 15 women, and 15 representing youth. Guests and
observers at the October 26 convention included former
Assembly speaker Nexhat Daci's son, Daci's advisor Ahmet
Alishani (later arrested October 31 on corruption charges
related to the recent audit report on Daci's tenure as
Assembly Speaker),and representatives from OSCE, the
Albanian Liason Office, the Democratic Party of Kosovo (PDK),
Alliance for the Future of Kosovo (AAK),the Justice Party
(PD),the Liberal Party of Kosovo (PLK),the Turkish
Democratic Party of Kosovo (KDTP),and the Green Party of
Kosovo (PGJK). Former Prime Minister and current ICTY
indictee Ramush Haradinaj sent a letter of greeting, which
was read aloud during the convention.


8. (C) Pacolli gave a wide-ranging speech accepting the
party's nomination, arguing that Kosovo should be a
presidential republic, and depicted AKR's goals as economic
development and fighting corruption in politics. He said
Kosovars can only restore their dignity through hard work,
and cited his own wealth as a sign that Kosovars could trust
him not to steal from the government budget. He claimed many
international businessmen have promised him they will invest
in Kosovo, and also said Russia would be constructive on
Kosovo status, which he asserted would be resolved by March

2007. Pacolli complained that despite being a major
employer, he was never consulted by Kosovo politicians, and
also incorrectly told delegates and observers that the State
Department had no Kosovo desk prior to his lobbying efforts.

Comment


9. (C) Despite Pacolli's wealth, it is unlikely that the AKR
will have an immediate impact -- as a party -- in Kosovo
politics. Thus far, Pacolli has been unwilling to insert
himself directly into the political scene, though he is
likely bankrolling Daci's current efforts to take control of
the ruling LDK. Both for his money and his links to Daci,
Pacolli bears watching. However, given his reported unsavory
business connections, we will continue to do so from a
distance. END COMMENT.


10. (SBU) U.S. Office Pristina clears this cable in its
entirety for release to U.N. Special Envoy Martti Ahtisaari.
KAIDANOW