PRESIDENT GUSMAO ESTABLISHES NEW PARTY

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SUBJECT: PRESIDENT GUSMAO ESTABLISHES NEW PARTY

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1. (SBU) Summary: Following months of preparation accompanied by
widespread speculation, President Xanana Gusmao formally
announced the establishment of his new party, currently known as
the National Congress for the Timorese Reconstruction (CNRT).
Gusmao's hope is that with his name and reputation, the CNRT can
defeat the ruling Fretilin party in the upcoming parliamentary
elections. However, it is unclear at this point how much
support the CNRT will have. Most opposition party leaders view
the new CNRT with a mix of skepticism and anger, criticizing the
enterprise as likely to further divide and undermine the
opposition, while possibly risking Gusmao's standing as a
national figure above party politics. Further, Gusmao's status,
while remaining remarkably resilient, has nonetheless diminished
over the last year of crisis. Regardless, the new CNRT will
bring an added variable to both the presidential and
parliamentary elections - the party's supporters have been
actively supporting Prime Minister Jose Ramos-Horta's
presidential bid and the possibility remains that the CNRT could
be a major player in the parliamentary elections. End summary.


2. (U) President Xanana Gusmao March 26 formally announced the
formation of a new party, the National Congress for the Timorese
Reconstruction (CNRT),following the receipt of 6,500 signatures
supporting the party's establishment under his leadership. On
March 30, the CNRT was expected to formally file its
registration papers with the Ministry of Justice. "After
Releasing the Nation, Let's Release the People" is the motto of
the new party. Gusmao will remain technically outside of the
party until he steps down from office; when receiving the
signatures he stated, "after finishing my role as President I
will join them to give a new direction to the country and to the
people." A national party congress to elect leadership and
finalize the party platform and constitution is scheduled to
take place sometime during the month of April. Meanwhile, the
party will be nominally led by Mau-Huno a former FALINTIL
(pro-independence resistance) commandant and former member of
Fretilin's Central Committee (CCF).

A Fretilin alternative
--------------


3. (SBU) Sources close to Gusmao unequivocally agree that the
main intention in establishing the party is to defeat the
dominant "Mozambique clique" of the ruling Fretilin party, the
group of Fretilin leaders such as Alkatiri who spent most of the
occupation in Mozambique and have held the reins of power since
independence. The name of the new party is a deliberate
reference to the former CNRT, a non-partisan umbrella resistance
body that was led by Gusmao and represented the independence
cause in 1999. The CNRT symbol was the symbol on the 1999
referendum ballot that represented the choice of independence
from Indonesia. Using the CNRT's history and Gusmao's
historical importance as its leader, supporters hope they have a
formula that can rival Fretilin's status as the party of the
struggle. Moreover, the party's platform will strongly
emphasize the formation of a national unity government should
they win, harkening back to the hopes many Timorese held during
the first national elections. Fretilin Secretary General Mari
Alkatiri stated in a March 16 press release that Fretilin will
launch a legal challenge against the use of the CNRT acronym in
court, arguing that it is a deceptive and inappropriate use of a
national unity symbol for partisan purposes.

Strained relationship with the opposition
--------------


4. (SBU) The new CNRT is regarded with a range of skepticism,
ambivalence and anger among many opposition figures. However,
it nonetheless may prove a powerful drain on their support
bases. Gusmao likely decided to establish the CNRT because of
his disappointment with the opposition. Gusmao has in the past
been linked to the Democratic Party (PD); PD president and
presidential candidate Fernando "Lasama" de Araujo founded the
East Timorese Student Movement, RENETIL, in 1998 while attending
the University of Bali and was jailed alongside Gusmao in

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Jakarta from 1992-99. Moreover, some delegates at the PD party
congress in October 2006 informally discussed asking Gusmao and
Ramos-Horta to continue to serve in government if PD were to win
election, so many in the party view Gusmao's decision to go it
alone as tantamount to betrayal. This was further underscored
when Gusmao turned to many of PD's coordinators for assistance
in laying his new party's groundwork, though PD insiders claim
only a few of their coordinators answered the President's call.
Party leaders nevertheless have expressed concern that Gusmao's
efforts could seriously undercut if not destroy their party.

Election implications
--------------


5. (SBU) The same structure that is now founding CNRT is also
active in supporting Ramos-Horta's presidential campaign. Among
delegates meeting this week, there was much confidence that
Ramos-Horta would win the election. Some of the delegates were
getting ready to head to Manatuto on March 29 to join
Ramos-Horta on a campaign event. Vicente da Conceicao "Railos",
who is strongly supporting the Ramos-Horta campaign in Liquica
district is also a delegate at the CNRT national meeting.
Gusmao is presenting CNRT as a national unity party which, if it
wins the elections, would reach beyond the party to form a
government. Some sources close to Gusmao have said that one of
his possible plans would be to name Mario Carrascalco, President
of the Social Democratic Party (PSD),as Prime Minister with two
deputies: Fernando "La Sama" Araujo, President of PD (and
presidential candidate),and Josi Luis Guterres, leader of the
Fretilin Mudansa (Reform) group. Gusmao would then take the
position of President of National Parliament.
NAGY