GUSMAO DISCUSSES ELECTION RESULTS AND CNRT STRATEGY WITH

C O N F I D E N T I A L SECTION 01 OF 02 DILI 000158

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SUBJECT: GUSMAO DISCUSSES ELECTION RESULTS AND CNRT STRATEGY WITH
CHARGE

REF: A) 095 B) DILI 129

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CLASSIFIED BY: Elizabeth S. Wharton, Political / Economic
Officer, U.S. Embassy, Dili, East Timor, Department of Defense.

REASON: 1.4 (b),(d)

1. (C) Summary: In an April 18 meeting with Charge d'Affaires,
President Xanana Gusmao described the results of the April 9
first round of the presidential elections as essentially a loss
for the ruling Fretilin party with its candidates' performance
reflecting a broad based desire for change. He attributed Prime
Minister Jose Ramos-Horta's lower support in the western
districts to his role in ordering the International
Stabilization Force (ISF) operations against dissident military
leader Alfredo Reinado. Overall, he concluded that this round,
involving candidates from most of the parties that will contest
the June 30 parliamentary elections, provided an accurate snap
shot of what the parties can expect in that poll. Gusmao
assessed the conduct of this election as basically good, despite
some concerns, noting that it was mostly peaceful, that
participation was high, and that people felt free to choose.
Gusmao also provided an overview of his current thinking about
his new political party, the National Congress for Timorese
Reconstruction (CNRT),which will hold its national congress on
April 24-26. Although Post understands that discussions are
ongoing between some opposition parties and the CNRT regarding a
possible pre-parliamentary election coalition, Gusmao threw
doubt on that possibility, stating that CNRT would go it alone.
However, it was also apparent that he was still thinking through
the party's strategy on this front. End summary.


2. (C) In an April 18 meeting with Charge d'Affaires (CDA),
President Xanana Gusmao conveyed his assessment of the April 9
elections as basically positive, noting the overall peaceful
conduct, high voter turnout, and a general impression that
people felt free to choose. Nonetheless, he remarked somewhat
sarcastically on the "sudden rocketing" of votes for Fretilin
candidate Francisco "Lu'olo" Guterres late on April 10,
following initial results pointing to him possibly being in
third place or lower. CDA relayed our observers' impressions
that election day processes went well, and despite some flaws,
did not appear to have significant elements of fraud. CDA also
relayed that Post is preparing written recommendations for
improvements in the second round to convey to both the
Government and to the UN. Gusmao was pleased to hear this and
offered his own suggestions for inclusion, such as providing
more assistance to the National Election Commission (CNE) and
improving security presence in certain areas. When asked what
kind of message he would be conveying to the public once results
are finalized, he said that he would be making a public address
to acknowledge the results and appeal for responsible and
peaceful conduct of the runoff poll.


3. (C) Overall, Gusmao described the election results as "good"
and reflective of a broad based desire for change, especially
among Dili residents. He said that even though they may not be
admitting it, Fretilin knows that it lost. (Note: Fretilin
candidate Lu'olo received 27.89 percent, which gave him the
first place slot, but is a significant reduction from Fretilin's
57 percent win in the last national elections. Moreover, the
combined strength of opposition party candidates in this
election was over 60 percent.) He believes that this could
result in a more aggressive Fretilin campaign for the runoff
election, and stated that the relative peace of the first round
could partly be attributed to Fretilin's misplaced confidence
that they would win. He described Fretilin as "not ready to
lose, not ready to accept that they can make mistakes", and
compared Fretilin's present attitude with that of Indonesia's
confidence in 1999 that Timor would vote to remain part of
Indonesia.


4. (C/NF) Gusmao attributes Prime Minister Jose Ramos-Horta's
relatively disappointing performance in the western districts to
his role in ordering operations against the immensely popular
dissident military leader Alfredo Reinado. Gusmao emphasized
that this was unavoidable, as Ramos-Horta had no other course of
action available to him. Gusmao then went on to discuss current
efforts underway to resolve the Reinado situation, noting that

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Ramos-Horta has revived efforts to convince Bishop Ricardo of
Dili to play in intermediary role and that they have discussed
pulling back the ISF operation. In addition, he reported that
Ramos-Horta would travel to Same on April 19, the southern town
where Reinado's stand off with the ISF occurred, to meet with
close Reinado ally, Leandor Isaak. He explained, however, that
the intent was not to suspend the operation to arrest Reinado,
only to lighten its touch to create the space for a peaceful
resolution. He still insists that Reinado must surrender all
his weapons and surrender himself to justice. (Note: Post has
separately concluded that the ISF operation against Reinado is
essentially dormant.)


5. (C) Gusmao described the April 9 poll as a good indicator of
party support going into the parliamentary elections. In
particular, he cited the voting percentage for Lu'olo of
Fretilin (27.89%),Lasama of PD (19.18%),and Lucia Lobato of
Social Democratic Party - PSD (8.86%) as closely aligned with
their likely party support. He expressed hope that the vote for
Xavier do Amaral of the Timorese Social Democrat Association -
ASDT (14.39%) reflected support for that opposition party, but
noted that do Amaral's personal popularity was the more likely
cause of his surprising performance. He did not remark on what
was indicated by Ramos-Horta's support (21.81%),nor on whether
the opposition parties would combine to support Ramos-Horta in
the runoff against Lu'olo.


6. (C) Gusmao also provided an overview of his current thinking
about his new political party, the National Congress for
Timorese Reconstruction (CNRT). The CNRT will hold its national
congress on April 24-26 where it will ratify the decisions on
party structure reached at an earlier national gathering, but
will mostly focus on planning the parliamentary election
campaign. (Note: Ramos-Horta's campaign manager has told us
that CNRT plans to use the second round presidential elections
as a test of their party organization.) Gusmao described the
CNRT as a "situational party" that he does not see as existing
for the long run, but rather dissolving once its objectives of
"saving the country" are met. (Reftel A provides more detail on
Gusmao's thinking regarding CNRT's goal to end the dominance of
the current Fretilin leadership.) He portrayed the CNRT as a
buffer between Fretilin and other opposition parties,
effectively allowing them the space to campaign in peace.


7. (C) Post has been receiving reports from opposition party
contacts that discussions are underway to form an opposition
coalition with the CNRT in advance of the parliamentary
elections. However, when asked about this possibility, Gusmao
raised a series of doubts and concerns and stated that CNRT
would run alone. He expressed reluctance to enter into the
difficult negotiations with other parties that would be required
to affect such a coalition, repeatedly stating that it would be
"so difficult". Moreover, he referenced the fact that formal
coalitions must combine to submit a single list, something he
seems unwilling to do. Finally, he expressed his view of the
CNRT as representing the potential for real reform and that he
therefore did not want it to be diluted through compromise with
other parties. Whether this reflects a genuine refusal to
consider coalition building remains to be seen. Gusmao
expressed some confusion regarding what was possible under the
law regarding both pre- and post- election coalitions. Most
sources regard the law as allowing only the single party with
the most seats, even if no majority is obtained, to form a
government. We understand that Gusmao and the rest of the CNRT
leadership are still reviewing their strategy and our sources in
other opposition indicate that discussions are ongoing.
NAGY