PM SARGSIAN HOPES FOR "BIG TENT" COALITION

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000658

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/18/2017
TAGS: PGOV PHUM AM
SUBJECT: PM SARGSIAN HOPES FOR "BIG TENT" COALITION

REF: A. YEREVAN 649


B. YEREVAN 608

YEREVAN 00000658 001.2 OF 002


Classified By: CDA A.F.Godfrey for reason 1.4 (b, d)

Summary
--------------


1. (C) PM Sargsian told CDA on May 17 that he plans to form
as large a coalition as he can, to include the new
pro-government Prosperous Armenia (PA) party as well as
former coalition partner ARF-Dashnaktsutyun (the Dashnaks).
Armenia's constitution gives him until the end of June to
propose his cabinet, but some decisions have already been
taken. FM Oskanian will certainly remain, at least through
Armenia's presidential elections and longer, if the N-K
process has momentum. On elections, Sargsian expressed pride
not just at the result for his party, but for the openness of
the process to competition. He acknowledged that there were
shortcomings, however, and said that there would be
investigations of allegations of wrongdoing. CDA raised
current human rights concerns, including the death in police
custody of Levon Ghulyan and the detention of former FM
Alexander Arzumanian. End Summary.

Sargsian Wants a Big Coalition
--------------


2. (C) On May 17, PM Serzh Sargsian met one-on-one with CDA
for an hour in his office. Sargsian was relaxed, but still
recovering from the long election run. He said that he had
spoken with EUR DAS Matt Bryza earlier in the week, and
continued to value highly U.S. engagement with Armenia.
While Armenia's constitution gives him plenty of time to come
to decisions regarding coalitions, Sargsian said he was eager
to move quickly to form as large a coalition as possible.
(Note: The newly-elected parliament will meet for the first
time on May 31. The President could wait up to ten days to
appoint a Prime Minister, who would then have up to 20 days
to appoint a cabinet. While we presume that things will move
more quickly than this, Armenia's new cabinet could,
technically, not be formed until July. End Note.)


3. (C) Sargsian said that "naturally," he hoped to form a
coalition with Prosperous Armenia, but hoped also that he
would be able to come to agreement with the Dashnaks.
Sargsian agreed that it would be better to have the Dashnaks
on side rather than in opposition. He added that he sought
to take advantage of key Dashnak leaders, who had proven to
be effective in senior leadership positions in the previous
coalition. He particularly hoped that he would be able to
convince Agriculture Minister David Lokian to continue his
service. The new parliament would have a Chairman, two
Deputy Chairmen and nine committees, Sargsian explained.
While the Republicans would insist on keeping the position of
Chairman (Speaker),the two deputy positions could go to
coalition partners. As to committee chairmen, no decisions
had been taken, but Sargsian said he expected to assign
former Justice Minister David Harutyunian to head the
powerful Legislation committee.

FM Oskanian Will Stay
--------------


4. (C) Sargsian said he had met with FM Vartan Oskanian (who
has no party affiliation) and had asked him to stay on as
Foreign Minister. Oskanian's intimate knowledge of every
stage of the N-K negotiations made him practically
irreplaceable. Sargsian said that Oskanian had readily
committed to serve at least through the presidential election
in early Spring 2008, and would reconsider after that,
depending on the status of the N-K negotiations.


5. (C) CDA asked Sargsian whether Mikhail Harutunian would
remain in his position as Defense Minister. (Note:
Harutunian, who until Sargsian's appointment as PM was Chief
of the General Staff, was a non-partisan nomination which
attracted little political attention during the campaign.
End Note.) Sargsian said that he had originally planned to
nominate former "N-K Defense Minister" Seyran Ohanian to this
position sooner, but would wait for this potentially
contentious nomination until after the presidential election.
Sargsian said he would leave Harutunian, a capable
technocrat, as Defense Minister while Ohanian "got a better
sense of the scale of the task he would face." While Ohanian
had proved himself capable in leading a defense force,
Sargsian explained, managing the Ministry is a much more
complex task. (Comment: Sargsian likely also seeks to avoid
the urban Yerevan mistrust of "too many Karabakhtsi" in the
run-up to the presidential election. End Comment.)


YEREVAN 00000658 002.2 OF 002


Republican Dominance Thanks to Opposition Bickering
-------------- --------------


6. (C) Sargsian was pleased with the way the campaign had
finished. He said that the results tracked largely with what
late private polls told him his party should expect.
Sargsian credited the opposition's inability to form a
pre-election coalition with ensuring his party's dominance of
the next government. Many parties which had received votes
did not pass the five-percent threshold, and the seats which
would have been apportioned to them were divided among those
parties which did clear the bar. He said that all parties
had in general stuck by the rules agreed long in advance with
President Kocharian. While charitable works were considered
above board, mass vote-buying was out. He noted that had PA
engaged in this practice on a large scale, the Republicans
would have been forced to respond in kind. The election was
intended to be a real contest for the support of the voters,
and he was pleased that his party had fared so well. He
noted that PA's biggest problem was its leader. Gagik
Tsarukyan, with his coarse looks and uneducated speech, was

SIPDIS
hardly an ideal public figure. "Had he been able to keep to
the background, PA might have been more successful," Sargsian
said.

Investigating Election Flaws
--------------


7. (C) Sargsian acknowledged that the election process was
not without flaws. CDA pressed that for the election process
to gain credibility, there had to be credible investigations
and prosecutions. Sargsian agreed, and said that several
investigations were ongoing (none of which involved
allegations against the Republican Party).

CDA Raises New Human Rights Cases
--------------


8. (C) CDA used the opportunity to raise two human rights
cases. On May 12, Levon Ghulyan died under suspicious
circumstances while in police custody (ref a). Sargsian said
he was aware of the case, but had not seen evidence that the
police were to blame. Citing similar cases in recent U.S.
history, CDA urged full transparency and speedy
investigation. On the case of Alexander Arzumanian (ref b),
the former Foreign Minister now in detention on money
laundering charges, we acknowledged that our contacts in the
Central Bank's Financial Intelligence Unit had alerted us to
suspicious transactions, but we questioned whether the
detention was politically motivated. Arzumanian was a
sympathetic figure, and his Amcit spouse was a strong
advocate. Sargsian agreed that pursuing the case made no
political sense. He knew Arzumanian personally, and thought
of him as a good, "but impulsive" man who could take erratic
decisions. Sargsian said that the evidence was strong and
the case could not simply be dismissed. He suggested that,
after the new cabinet was formed, he would approach the
President to take a "political decision" to release
Arzumanian.
GODFREY