LIEBERMAN'S GAME PLAN

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 004013

SIPDIS

E.O. 12958: DECL: 04/28/2011
TAGS: PGOV PINR IS
SUBJECT: LIEBERMAN'S GAME PLAN


Classified By: Charge d'Affaires Gene A. Cretz. Reason 1.4 (B/D)


1. (C) Summary: In the midst of the Jewish holiday of
Sukkot, when most government officials are on holiday, and on
the eve of the resumption of Knesset activity on October 16,
political pundits are making hay of reports that Prime
Minister Olmert will soon expand the governing coalition to
include Avigdor Lieberman and his Russian-immigrant based
Yisrael Beiteinu party. Lieberman has stolen the headlines
during the holidays with news of his initiative to introduce
a package of political reforms aimed at creating a more
presidential political system when the Knesset comes back
into session. Lieberman's consultations with Olmert and
meetings with key coalition figures, such as Shas Party head
Eli Yishai, further fueled speculation that Lieberman is
about to join the coalition, despite the opposition of Labor
Party leader Peretz. While Lieberman's eleven Knesset seats
are undoubtedly attractive to a politically weakened Prime
Minister, the price demanded by Yisrael Beiteinu,
particularly in terms of its hard-line inclinations toward
Arabs, may be difficult for Olmert's Labor Party coalition
partner to accept. End Summary.

2 (U) In July, Yisrael Beiteinu tabled a draft basic law
"The Government (Separation of Powers and Presidential
Authority" outlining his plan to reform the Israeli political
system into one that is more presidential. This bill
promotes, inter alia, the following reforms:

-- The Prime Minister is to be elected at the same time as
the Knesset (i.e., a return to a double-vote system that was
last used in the 1990's): he/she has to be 35 years old, a
Knesset member, or the nominated head of a political party
represented in the outgoing Knesset. Once he has served
seven years as Prime Minister, he cannot run for re-election
at the next election. He is the supreme executive authority
in the state, with the sole power of appointing ministers.

-- The Prime Minister has to obtain fifty percent of the
vote; there must be a run-off between the two leading
candidates if the first round does not produce a candidate
with this percentage.

-- A minister cannot also serve as a Knesset member.

-- Should the Prime Minister resign, his deputy will serve
out the original Prime Minister's term.

-- The existing law (i.e. that failure to pass the state
budget law by December 31 means new elections) is retained.

-- The government has the sole power of declaring war.

-- Knesset elections and elections for the prime minister are
to be held simultaneously.


3. (C) Lieberman's legislative aide, Anna Oliker, told
poloff October 11 that this will be the third time that
Lieberman has introduced such a bill. She reported that all
Yisrael Beiteinu MKs had been called to attend a seminar on
"presidential systems" on October 16 in advance of the bill's
anticipated introduction for a preliminary reading on October

18. Oliker noted another dramatic element of the Lieberman
reform program: Knesset parties must win at least ten percent
of the vote (up from the current two percent) to secure seats
in the Knesset. She wagered that prospects for the bill
would depend heavily on whether Olmert invites Yisrael
Beiteinu to join the coalition. If Olmert does, then Oliker
anticipates that it will be easier to obtain the majority
vote required to secure preliminary passage. If not, the
current coalition would have "ample tricks" to slow-roll
Lieberman's legislative agenda, which also includes drafting
a constitution and a new constitutional court. Oliker
reported that the Knesset's Constitution and Law committee
would meet on October 19 in the first of three sessions to
review the work of nearly one hundred Knesset meetings on a
draft constitution.


4. (C) A Labor Party political consultant who worked on
Peretz' election campaign, Oriella Ben-Zvi, reviewed the
political landscape in the aftermath of the Lebanon war with
poloff. She commented that with Peretz' leadership of the
party shaken by the war, everyone within the Labor Party is
jockeying for power within and outside the party. Labor Party
members are divided on issues ranging from political reform
to the question of Lieberman's membership in the coalition.
MKs Avishai Braverman, Ami Ayalon and Ehud Barak are clearly
embarking on quests to take back the helm of the party
sometime in 2007, and this, Oriella remarked, has led to the
emergence of strange alliances of political convenience, such
as the reported collaboration between Braverman and Likud MK
Gilad Erdan on a joint initiative to change the government.
Meanwhile, the Kadima Party appears to be pressing forward
with its own plan to raise the electoral threshold and
instituting regional voting, an idea that Lieberman does not
favor.


5. (C) Comment: The intrigue surrounding the question of
whether Lieberman will join the coalition is a reprise of the
political debate that preceded Olmert's announcement of his
government and platform in April. Lieberman's price back
then was relatively cheap -- the Ministry of Public Security
-- but ultimately unpayable given the lingering police
investigation hanging over Lieberman's head. Now,
Lieberman's price comprises five policy matters that will be
difficult for Olmert (and, in some areas, for the U.S.) to
accept: government reform, no more talk of convergence, no
further removal of illegal outposts, a civil marriage bill
(dear to the Russian immigrant community but anathema to
Olmert's ultra-orthodox allies),and a formal Commission of
Inquiry into the Lebanon war. In addition, Lieberman's
longstanding hostility toward Israel's Arab minority and his
bellicose posturing have in the past made him an unacceptable
coalition partner for Peretz. Olmert may feel that adding
Lieberman will strengthen his hold on power, but the price
may prove higher than he can afford. End Comment.
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