BOSNIA: BREAKAWAY CROAT "HDZ 1990" BUILDS ITS

C O N F I D E N T I A L SECTION 01 OF 03 SARAJEVO 001174

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E.O. 12958: DECL: 05/10/2016
TAGS: PREL PGOV BK
SUBJECT: BOSNIA: BREAKAWAY CROAT "HDZ 1990" BUILDS ITS
RANKS


Classified By: AMBASSADOR DOUGLAS MCELHANEY. REASON: 1.4 (B) AND (D).


1. (C) SUMMARY AND COMMENT: Breakaway ethnic Croat "HDZ
1990" made a dramatic entry into BiH politics on April 26,
when it co-opted enough key parliamentary votes to block
constitutional reform. Since then, it has tried to ride on
the momentum as it builds local party structures. Lacking
definition, HDZ 1990 is currently running on negatives: "no"
to constitutional reform, "no" to the entity structure, "no"
to Covic (the leader of the mainstream HDZ party),"no" to
the international community and the U.S.. And while HDZ
1990's party president, Bozo Ljubic, once tried to position
himself as a pro-European moderate, he is increasingly waving
his hardline credentials. That is no surprise; many of HDZ
1990s members have a well-established reputation as Croat
nationalists (some associated with the discredited "Third
Entity" movement). HDZ 1990's appeal to the nationalist
right likely means that Covic's HDZ will increasingly run to
the right as well; both will seek coalition partners among
the small Croat parties. HDZ 1990's success in the elections
depends on its ability to gain backing from them as well as
from the Catholic church (and potentially the HDZ in
Croatia). For now, Covic dismisses HDZ 1990 as lacking both
structure and votes (he thinks they will be unable to cross
the minimum vote threshold come October). Publicly, Covic --
a tough streetfighter not to be underestimated -- is trying
to remain above the fray, while ensuring that he throws every
legal obstacle possible into HDZ 1990's path. END SUMMARY.

FIRST, STOP CONSTITUTIONAL REFORM . . .


2. (C) Over the past few weeks, breakaway ethnic Croat "HDZ
1990" has focused on defining its public profile. To gain
traction with Croat voters, HDZ 1990 needed to be seen as
more than the by-product of the poisonous personal
relationship between its leader, Bozo Ljubic, and HDZ's party
president, Dragan Covic. Ljubic (whose bid for the HDZ
Presidency last June failed due to a -- probably fraudulent
-- vote count at the party congress) found his defining issue
in the BiH Parliament: the U.S.-brokered, EU-backed
constitutional reform. With Covic among the reform's
negotiators, Ljubic calculated that he could position himself
as the "true" protector of Croat interests, while at the same
time differentiating his party from Covic's HDZ. As a
result, Ljubic sped up his breakaway party's formation,
holding a hasty founding Congress on April 8; the party's
first "proper" Congress will be held in July.


3. (C) Ljubic drew valuable backing from Croats burned by
Covic's autocratic attitude. Covic's decision in November
2005 to kick the speaker of the BiH House of Representatives,
Martin Raguz, out of HDZ's ranks backfired. Raguz joined
Ljubic in HDZ 1990; eventually, Raguz' influence in the House
meant that HDZ 1990 was able to pull four of five HDZ
parliamentary delegates into the "no" column when
constitutional reform came to a vote on April 26. During
end-game negotiations, it became clear that HDZ 1990's
delegates would not agree to ANY compromise proposal
(including a retrograde idea to give Croats an ethnic veto
over all legislation). Rather, HDZ 1990 argued that the
elections should be postponed two-three months, giving them
much-needed time to consolidate their party while pretending
to "negotiate." Their ploy failed; the parties backing
constitutional reform recognized it as an effort to whittle
away at the solid 26 votes in favor of the package and expand
the 16 against, and went ahead with the vote in parliament --
regrettably, however, failing to reach the required
two-thirds majority by two votes.

. . . THEN DEFINE A PLATFORM


4. (C) Ljubic has trumpeted the failure of constitutional
reform as a victory for his nascent party, and is counting on
it to give him momentum. But he still has to define HDZ 1990
more broadly. This is no alliance of moderates; HDZ 1990
will run to the right, not the center. Raguz' relative
moderation in the BiH parliament over the past couple of
years had helped him overcome his former association with the
"Third Entity" movement (which favored construction of a
Croat-majority entity in Herzegovina and was disbanded by the
High Representative in 2002). However, Raguz has returned to
his roots. Other troubling hardliners can also be counted
among HDZ 1990's adherents: Vinko Zoric, a Croat member of
the BiH House of Representatives (a known advocate of Croat
self-rule),Slavica Josipovic, Pero Markovic, and Ivo

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Lozanzic. Ljubic, who last year was trying to cast himself
as a pro-European moderate, has taken on as his advisor
Drazenko Primorac, a former associate of the (now-convicted)
one-time Croat member of the BiH Presidency, Ante Jelevic.


5. (C) Ljubic's recent rhetoric, both public and private,
confirms his swing toward a hardline defense of Croat
interests. On May 19, he told us that he would "never"
compromise his principles on constitutional reform, which
would only cement the entity system and weaken Croat
influence in state institutions. He claimed it was up to the
U.S. to bring the Bosnian Serbs to a (different, presumably
pro-Croat) compromise. When asked how BiH would pursue
reforms needed for EU membership in the absence of U.S. or
OHR initiatives, Ljubic shrugged, saying "Maybe we'll just go
back to fighting each other then."


6. (C) So far, Ljubic is hyping his credentials as a
defender of Croat interests generally, waiting until the
upcoming party congress to define further specifics on
issues. Avoiding Bosnian domestic issues means that Ljubic
is increasingly running against the international community
and the U.S. In one recent example, Ljubic publicly averred
that the referendum in Montenegro was somehow linked to
constitutional reform -- reform here, he claimed, was part of
a plan to compensate (presumably Serb) losses at the expense
of Croats in BiH.

BUILDING A BASE


7. (C) Meanwhile, the race is on between Ljubic and Covic
for HDZ voters and assets. HDZ is asking the BiH Election
Commission to prevent HDZ 1990 from registering for the
elections in October, and is also fighting for control of the
party symbol, name, etc. Rumor has it that the two will also
be battling over party properties. There are also reports
that Croatian political figure Ivic Pasalic is bankrolling
Ljubic and the HDZ 1990, though that remains also in the
realm of rumor.


8. (C) At the grassroots level, HDZ 1990 is quickly
establishing its party infrastructure by forming municipal
boards, though their regional strength varies considerably.
In Capljina (a stronghold of Ljubic associate Pero Markovic),
11 city councillors have opted for HDZ 1990, with only four
still loyal to Covic. But some in Covic's HDZ argue that
Capljina (and Ravno municipality) are making a huge mistake,
as Covic still has influence over Cantonal officials who
control municipal purse strings. In Siroki Brijeg and Grude
municipalities, Covic's support is holding firm, though that
may change; this is a Vinko Zoric (HDZ 1990) stronghold.
Ruza Sopta, the HDZ representative in the BiH House of
Representatives who has so far stuck with HDZ, is probably a
weak link; she voted with HDZ 1990 against constitutional
reform, claiming she "could not go home" to Siroki Brijeg
otherwise. Mostar is (so far) considered to be a Covic
stronghold, though HDZ 1990 is building its organization
there. In addition, having shown its strength in the BiH
parliament, HDZ 1990 quickly established its caucus in the
entity-level Federation parliament (six representatives plus
one member of the House of Peoples).


9. (C) But nascent party structures in key locations does
not mean that HDZ 1990 is on a winning streak. HDZ president
Covic is clearly biding his time, in part due to the imminent
conclusion of his own court case. Covic -- a tough and canny
politician -- told the Ambassador that he believed HDZ 1990
was so structurally weak that it would not be able to
surmount the minimum vote threshold for representation in the
BiH parliament in October. Covic also believes that the
declining number of Bosnian Croat voters in BiH means that
there will be only four, not five Croats (from exclusively
Croat parties, as opposed to Croats running in multi-ethnic
parties like the SDP) in the next parliament. Though Covic's
assessment is self-serving, it is not wrong, at least not
now. It remains an open question whether HDZ 1990 can build
a functional party structure that will be effective in
October.

LJUBIC FOR PRESIDENT?


10. (C) All signs are that Ljubic has his eyes on what he
considers the big prize: election as the Croat member of the
BiH Tri-Presidency. He believes he will get the job,
provided he can gain support from small Croat parties.

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Sources cite recent meetings between Ljubic and HSP (Croat
Party of Rights, a small far-right party) leader Jurisic; HSP
has agreed to open negotiations with HDZ 1990 despite
Jurisic's own open pretentions to the Tri-Presidency slot.
Negotiations continue amid rumors that Cardinal Puljic
favored the coalition; other coalition partners may also be
available if HSP falls through. But undoubtedly Covic and
his HDZ supporters are also looking for coalition partners,
making a deal potentially expensive.


11. (C) Backing from Catholic Church officials will also be
important; their opposition to constitutional reform brought
with it a natural alignment with HDZ 1990's stance. HDZ
Zagreb's views may also play a role. So far, it has remained
above the fray. But Croat citizens resident in BiH also vote
in Croatian elections as the eleventh electoral district of
Croatia (they did in the 2004 Croatian presidential
elections),so HDZ Zagreb may have to deal with the split
sooner or later. Croatian Prime Minister Sanader (no fan of
HDZ president Covic) recently told Bosnian High
Representative Christian Schwarz-Schilling that he regretted
the fractures in the Bosnian Croat political scene and
believed that "reunification" of the various HDZ factions was
possible and even likely -- presumably he was contemplating
the possibility that Covic will finally be convicted for
financial misdeeds in the ongoing BiH court case, which would
open the door for HDZ breakaways to rejoin the mother party.

COMMENT


12. (C) The turmoil in the Croat camp has both positive and
negative aspects for political developments here. Croats
themselves bemoan the fact that their representation, already
small, is ever more fractured. Those fractures, however, are
a function of internecine fighting and personal animosities,
not international interference or pressure. Indeed,
breakaway Croat political figures with aspirations to the
country's Presidency and Parliament have used the figleaf of
constitutional reform to seize the spotlight by opposing the
reform, not because it in any way damages Croat interests but
because such opposition distinguishes them from fellow Croat
politicians -- namely Covic -- who accept the reform mandate.
The atomization of the Croat political front, which for
years has been highly monolithic, is not in and of itself a
bad thing, opening the door for a greater plurality of voices
(though most Croat parties run to the right, not the center).
It will also, however, make it more difficult to negotiate
coherent agreements with the Croats, particularly on issues
like constitutional reform. Even if the HDZ eventually comes
together again, these fissures are likely to remain, and
lobbying the restive Croat body politic will become
increasingly more complex over time. End comment.
MCELHANEY