BOSNIA: HDZ REBELS FOUND BREAKAWAY PARTY -- WITH

C O N F I D E N T I A L SECTION 01 OF 02 SARAJEVO 000814

SIPDIS

SIPDIS

DEPT FOR D (SMITH),P (BAME),EUR (DICARLO),EUR/SCE
(ENGLISH, SAINZ, FOOKS),NSC FOR BRAUN, USNIC FOR WEBER,
GREGORIAN

E.O. 12958: DECL: 04/10/2016
TAGS: PREL PGOV BK
SUBJECT: BOSNIA: HDZ REBELS FOUND BREAKAWAY PARTY -- WITH
DANGEROUS IMPLICATIONS FOR CONSTITUTIONAL REFORM

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


1. (C) SUMMARY AND COMMENT: On April 8, HDZ rebels -- some
formally ousted from HDZ by its leader, Dragan Covic --
founded a new BiH political party: "HDZ 1990." The name is
intended to recall (supposed) prewar days of Croat unity in
BiH. The approximately 350 attendees at the session were a
schizophrenic mix of anti-Covic moderates and hardline
nationalists, an unstable pairing made possible largely by
shared electoral ambitions. But while "HDZ 1990" may not be
viable over the long term, it is bad news for the
constitutional reform package agreed by party leaders last
month (and scheduled for parliamentary debate two weeks from
now). For "HDZ 1990," opposition to Covic means opposition
to the package. In the days ahead, we (and European
ambassadors) will heighten the pressure we are already
putting on HDZ 1990's more moderate members (particuarly
Martin Raguz),trying to get them to take a more constructive
stance. It will be an uphill battle. In a meeting this week
with HDZ 1990's leader, the Ambassador underscored that
America and the EU would judge this new party by its stance
on constitutional reform. Our first goal: getting HDZ
1990's MPs to allow the constitutional reform package to move
from committee to the House floor -- even if their proposed
amendments are rejected. At this point, the committee vote
hinges on three votes, one of which belongs to HDZ 1990's
Martin Raguz. His support is critical if the package is to
move forward. END SUMMARY.

THE OUSTED, THE DISAFFECTED AND THE REPREHENSIBLE JOIN FORCES


2. (C) Since Dragan Covic's removal from the BiH Presidency
last year, he has focused on consolidating his leadership of
BiH's primary Bosnian Croat political party, HDZ. But
Covic's election as party president was highly
controversial, with well-founded allegations of a fraudulent
vote count at last June's party congress. Covic's
challenger, Bozo Ljubic, protested strongly and publicly --
joined by sympathizers from within HDZ ranks. Covic,
however, brooked no opposition. In November, Covic formally
ousted Ljubic, Parliamentary Speaker Martin Raguz and
Federation Deputy Speaker Josip Merdzo from HDZ. These
"rebels" were left with few options. Joining one of the
fringe Croat parties would not get them what they needed:
viable candidacies for office in the October 2006 general
elections.


3. (C) They joined forces with Ljubic at Saturday's
"founding congress," along with some 350 other attendees.
Prominently arrayed in the ranks were not only relative
moderates such as Raguz, but also some with troubling
hardline credentials. Among the latter: Vinko Zoric, a
Croat member of the BiH House of Representatives who was a
known advocate of Croat self-rule. Other attendees at the
conference with hardline backgrounds: Slavica Josipovic,
Pero Markovic, and Ivo Lozanzic. Their credentials were
reinforced by the large presence of those active in the
"Third Entity" movement of 2000-2002 (Note: the
international community acted forcefully to blunt this
movement, including via the removal, by then-High Rep
Petritsch, of the ethnic Croat member of BiH's
Tri-Presidency). In addition, the Congress gave special
recognition to the "founders of the HDZ and HVO."

WHAT DOES HDZ 1990 STAND FOR?


4. (C) With this troubling membership mix, HDZ 1990
desperately needs a defining issue beyond mere personal
opposition to Covic. And it believes it has found one in the
Covic-backed constitutional reform package now before
Parliament. At the congress, Covic-challenger Bozo Ljubic
alleged that the agreement would reduce the Croat people to a
national minority, and termed it unacceptable. Martin Raguz
echoed Ljubic's opposition -- while underscoring that HDZ
1990 took as its model Sanader's HDZ in neighboring Croatia.
Vinko Zoric called the constitutional changes a "betrayal of
the Croat people" in BiH and said he would rather see his
"hands dry up" than sign on.


5. (C) HDZ 1990's program hits on predictable themes. It
advocates a decentralized state "which respects the
tripartite separation of power." Looking at current
constitutional reform efforts, the program specifically
singles out retention of qualified majority voting for
condemnation. It insists on a new constitution for BiH, and

SARAJEVO 00000814 002 OF 002


advocates a federal formula based on ethnic, geographic,
economic, traffic and historical criteria. However, a
none-too-subtle sub-theme is one that smacks distinctly of
"third entity," a non-starter for the USG and European
capitals.

U.S. PUTS THE PRESSURE ON LJUBIC TO LIMIT IMPACT ON
CONSTITUTIONAL REFORM


5. (C) With constitutional reform scheduled for debate in
the House of Representatives, every HDZ vote counts. That is
true not only in the vote in the Constitutional and Legal
Affairs Committee (CLAC) on April 18, but also on the House
floor on April 24. It is therefore troubling to find that
two HDZ parliamentarians have sent HDZ 1990 letters of
support (though hedging their votes by not joining): Ruza
Sopta and Filip Andric.


6. (C) The Ambassador met with HDZ 1990 leader Ljubic on
April 12. The Ambassador sent Ljubic a clear message: the
U.S. would judge its relationship with his party based on its
ability to play a constructive role on constitutional reform.
We understood that HDZ 1990 would try to lobby for certain
amendments (Ljubic focused on qualified majority voting and
beefing up the role of the House of Peoples) -- but HDZ 1990
should not make rejection of amendments an obstacle to
eventual support of the package. If HDZ 1990's proposed
amendments failed, we expected party members to allow the
reforms to move forward.


7. (C) Ljubic argued that HDZ 1990's requests were
reasonable; he himself could not support the constitutional
reform package, as it currently stood, in Parliament. The
Ambassador pressed: Ljubic was not an MP, but had influence
on those HDZ 1990 members and sympathizers who were. Ljubic
needed to allow HDZ 1990 MPs to support the package. The
U.S., the EU and the international community would judge HDZ
1990 on the basis of its conduct at this crucial moment.

AND ON OTHER HDZ 1990 MPS


8. (C) The Ambassador made a similar argument to Martin
Raguz, who is sweating the pressure. When the High
Representative spoke to Raguz on April 12, Raguz did not
suggest blocking the package. Rather, he indicated that,
while he could see the possibility of getting HDZ 1990s
amendments adopted, he did not exclude seeing the package
moving forward unamended. However, Raguz was clearly looking
for assurances that the issue of qualified majority voting
could be raised, again, in "phase 2." The Ambassador meets
with Raguz again today; we will provide further details
septel.


9. (C) Finally, we are also pressing two other key MPs.
Filip Andric, while HDZ, is on the outs with Covic. While he
has not formally cast his lot with HDZ 1990, he knows that,
as a witness against Covic in his upcoming trial, he may be
booted from HDZ in the near future and will be looking for a
soft landing. Andric's opposition to constitutional reform
is strongly focused on the role of the House of Peoples. The
Embassy message to Andric: given his critical role in the
committee stage, Andric needs to allow the package to move to
the floor, unamended.
MCELHANEY