THAKSIN PREDICTS NATIONAL UNITY GOVERNMENT,

C O N F I D E N T I A L SECTION 01 OF 02 BANGKOK 002243

SIPDIS

NSC FOR PHU

E.O. 12958: DECL: 07/23/2018
TAGS: PGOV PHUM KDEM KJUS TH
SUBJECT: THAKSIN PREDICTS NATIONAL UNITY GOVERNMENT,
PARDON, LIFE ABROAD

REF: A. BANGKOK 2226 (NO CLEAR PATH TO STABILITY)

B. BANGKOK 2092 (THAKSIN'S TEAM PESSIMISTIC)

C. BANGKOK 2091 (COURT RULINGS CLOUD FUTURE)

D. 07 BANGKOK 2994 (THAI RAK THAI DISSOLVED)

BANGKOK 00002243 001.2 OF 002


Classified By: Ambassador Eric G. John, reason: 1.4 (b) and (d).

SUMMARY
--------------


1. (C) Former Prime Minister Thaksin told the Ambassador in a
four-eyes meeting on July 23 that Prime Minister Samak had
received royal approval to form a government of national
unity in order to heal Thailand's political rifts. Thaksin
estimated this government, incorporating all political
parties, would likely last for a year and undertake
constitutional reform. In the near future, as part of the
deal, political figures, including Thaksin, would receive a
pardon; Thaksin would regain control over his frozen assets,
and he would give up politics and reside primarily abroad.
Thaksin also discussed his relationship with the King, Queen,
and Crown Prince. The concept of a national unity government
may help calm the current volatile and highly adversarial
political environment, but we are skeptical that the
arrangement that Thaksin outlined will truly resolve
fundamental conflicts between major interest groups in
Thailand. End Summary.

NATIONAL UNITY GOVERNMENT, PARDON:
A PATH TO STABILITY IN THAI POLITICS?
--------------


2. (C) Former Prime Minister Thaksin Shinawatra called on the
Ambassador at his Residence on July 23 for a four-eyes
discussion. Thaksin told the Ambassador he had requested the
meeting in part to bid farewell, as he anticipated he would
soon spend most of his time outside of Thailand. His
departure overseas would be part of an elaborate solution
intended to provide stability in Thai politics.


3. (C) Thaksin related that King Bhumibol had received Prime
Minister Samak Sundaravej for an audience on July 22. At
that audience, Samak had received approval for the creation
of a government of national unity, which would entail each
party holding positions in the cabinet in proportion to its
number of seats in the House of Representatives. Thaksin
appeared to presume -- but not to consider it certain -- that
Samak would remain as Prime Minister. The Democrat Party --
the second largest, currently the sole opposition party --
would receive some Deputy Prime Minister positions, as well
as Ministerial portfolios. Thaksin estimated the new
government of national unity would last up to one year;
during that time, the parliament would undertake a
constitutional reform process.


4. (C) Soon after the government's formation, Thaksin added,
a wide-ranging pardon would be issued. This was necessary in
part because Thaksin and his wife would be convicted in
ongoing court cases, most notably the "abuse of power" case
(ref B). Thaksin attributed this upcoming conviction to the
judiciary's bias against him, alleging that King Bhumibol had
conveyed to at least one Constitutional Court Justice during
a royal audience that the Court should, in Thaksin's words,
to do whatever was necessary to eliminate Thaksin.


5. (C) The upcoming pardon would allow Thaksin to regain
control over his frozen assets, Thaksin said. In return,
however, he would have to renounce politics forever and focus
instead on his business activities, while residing primarily
abroad. Thaksin told the Ambassador he was willing to abide
by these conditions. He added that, before his departure
overseas, he hoped that the King and Queen might receive him
for separate audiences; he said he would, on those occasions,
make sizeable donations to each of them. (Note: We presume
these donations would be directed toward foundations, not to
the King and Queen per se. End Note.)

BACKGROUND ON THAKSIN'S TIES TO THE PALACE

BANGKOK 00002243 002.2 OF 002


--------------


6. (C) Thaksin reflected that he had enjoyed a good
relationship with the King during his first term as Prime
Minister. The King was particularly grateful that Thaksin
had taken steps to improve Crown Property Bureau (CPB)
management of its assets, significantly increasing the CPB's
wealth. The King's attitude toward him soured after his Thai
Rak Thai party won a supermajority (377 out of 500 seats) in
the 2005 election. Thaksin said many figures at the palace
felt threatened by his political power and his popularity
with rural Thais, who appreciated his commitment to
eradicating poverty.


7. (C) Thaksin cited his decision to sell his Shin
Corporation conglomerate to Singaporean investment firm
Temasek as a key turning point in his relationship with the
King. Thaksin claimed he told the King about the sale in an
audience prior to a public announcement. On hearing that
Thaksin would sell the conglomerate to a foreign entity, the
King reportedly stiffened visibly and asked, "To whom?"
Thaksin told the Ambassador he had not heard the King's
question clearly and asked, "Pardon?" The King then erupted,
loudly and angrily repeating his question. Thaksin told the
Ambassador he had never before seen the King behave thusly.
After this incident, Thaksin said, his political opponents
effectively went on the offensive; the People's Alliance for
Democracy drew substantially more supporters to rallies, had
more funding at its disposal, and effectively manipulated the
issue of the Shin Corp sale, paving the way for popular
acceptance of the 2006 coup d'etat.


8. (C) Thaksin added that he believed that he still had a
good relationship with Crown Prince Vajiralongkorn. The
Crown Prince, however, had explained to Thaksin (at an
unspecified time post-coup) that he would be unable to meet
with Thaksin for an extended period of time, because of Queen
Sirikit's antipathy toward the former Prime Minister.

COMMENT
--------------


9. (C) Many key elements of the plan Thaksin outlined remain
unclear to us. Would the pardon of which Thaksin spoke
entail a legislative or royal act? Would it cover the 110
former Thai Rak Thai party executives who, along with
Thaksin, were stripped of their political rights in May 2007
(ref D)? Would the threat of further party dissolutions (ref
C) somehow be lifted? What sort of constitution would an
amendment process produce? Nevertheless, if a plan along
these lines does materialize, it may provide some valuable
breathing room and calm the current volatile and highly
adversarial political environment.


10. (C) We doubt, however, that either side in the
long-running dispute between Thaksin and the Palace will act
in good faith, or expect the other to do so. We note that
Thaksin has already repeatedly pledged publicly that he has
retired from politics, but he appears deeply involved in
governmental affairs. It is nearly inconceivable that Thai
politicians will stop consulting Thaksin, requesting his
financial support, and trying to tap into his popular support
for their own gain. And, if Thaksin is pardoned and has his
funds released, it is unclear how the Palace would ensure
that he upholds his side of the bargain.
JOHN