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08DHAKA893 2008-08-21 10:26:00 CONFIDENTIAL Embassy Dhaka
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1. (C) Bangladesh's political debate currently centers
around the status of negotiations to release former Prime
Minister Khaleda Zia and her son Tarique Rahman from prison.
Both Zia loyalists and senior CTG officials tell us that a
deal is close, but that lack of trust between the two sides
is standing in the way of concluding negotiations. Zia's
release is a necessary, but not sufficient, condition for her
party to reunify and prepare to participate in elections.
All agree that Tarique Rahman will go into exile for the
immediate future, but there remain serious concerns in many
quarters regarding his longer term plans. We have clearly
indicated that the USG can not forget, or ignore, Tarique's
well deserved reputation for corruption and brutality. The
BNP must be convinced that it would benefit from
participating in the process, and at the same time, Khaleda
Zia must be made to realize that she does not hold a veto
over Bangladesh's political future.

Negotiators Claim to be Nearing a Deal

2. (C) Bangladeshi political observers are fixated on the
status of negotiations to release former Bangladesh
Nationalist Party Prime Minister Begum Khaleda Zia and her
notorious son Tarique Rahman from prison. A tentative deal
that would have released Zia immediately (and her son within
weeks) fell apart the weekend of August 15 -16, according to
Zia's attorneys. This prompted widespread speculation that
Chief of Army Staff General Moeen Uddin Ahmed vetoed the
agreement after he returned from a visit to China August 14.
In recent days, we have spoken with Advisers Ghulam Quader
and Hossain Zillur Rahman, the principal Caretaker Government
negotiators, who have assured us that the deal is still on
the table. In a meeting with Staffdel Yeo, General Moeen
said nothing to indicate that Zia and her son would remain in
prison indefinitely.

3. (C) Based on our conversations with all sides, it
appears that the negotiations might have stalled due to
lingering mistrust between Zia's family and the government.
Zia's agreement to be released first, with Tarique to follow
after a decent interval, had represented a breakthrough in
the talks. According to her attorney, Zia had second
thoughts after family members expressed concerns that the CTG
would fail to release Tarique. In discussions with the
Ambassador, the Advisers acknowledged this trust deficit and
said they were looking at a variety of possible confidence
building measures. Senior CTG officials, including the
Chief Adviser, have continued to state publicly that Zia
would be released from prison. Negotiators have also
explained that the pace of negotiations will be affected by
the many legal steps that will need to be taken to grant
Khaleda bail and Tarique a medical pardon prior to their

BNP Faces Long Road to Elections

4. (C) The Advisers and Army Chief explained that a desire
to see a strong and united BNP participate in elections
underpinned their willingness to pursue an agreement with Zia
and her son. The CTG hopes that once free from prison,
Khaleda Zia will take immediate steps to reunify the
disparate elements of the BNP and prepare the party to take
part in elections. Senior BNP officials of the "reformist"
faction have told us that they were willing to return to the
fold. With only four months remaining until national
elections, however, time is running out for the BNP to
reorganize the party's structures. The party cannot reunify
and be competitive in elections without Khaleda Zia, but her
presence alone will not guarantee this result.

5. (C) As Adviser Hossain Zillur Rahman told the
Ambassador, Khaleda Zia and her party must be convinced that
they have a stake in the political process and more to gain

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by participating than they do by staying on the sidelines.
General Moeen was adamant that elections will take place
regardless of who participates. That said, he and the CTG
Advisers understand that a boycott by the BNP and its
alliance partners could sow the seeds for future instability,
with the BNP just waiting in the wings for the right moment
to take on via street agitation the next elected government.

Whither Tarique?

6. (C) Releasing Tarique Rahman, who has become the poster
child for all that was wrong with Bangladeshi politics and
governance prior to January 11, 2007, would be a bitter pill
for the CTG and its supporters to swallow. At a minimum,
they will likely insist that Tarique agree to accept being
"exiled" for several years as a condition for being released
from prison. At present, it is most likely that Tarique will
decide to travel to the UK or Germany to seek medical
treatment and establish a residence. In meetings with CTG
Advisers, as well as informal confidantes of the Chief
Adviser, the Ambassador has emphasized the USG's desire to
see Tarique held accountable for his past actions. The
Ambassador has also emphasized that Tarique could be subject
to visa restrictions contained in our anti-kleptocracy
policy, should he seek to travel to the United States.


7. (C) Adviser Hossain Zillur Rahman told the Ambassador
that negotiations with Khaleda Zia needed to be concluded
soon, in order to allow the CTG and the parties to focus on
the many important transition issues that remain to be
resolved. While this sense of urgency is understandable, it
is also important that the CTG not be rushed into concluding
a bad deal--in particular one that leaves the door open for
Tarique Rahman to come to power. We agree with Hossain
Zillur's recommendation that the USG and others in the
international community should help convince the BNP and
Khaleda Zia to participate in the political process. At the
same time, Khaleda Zia should not be given the impression
that she holds all the cards, or that she has a veto over
whether elections will take place. In the coming days, we
will focus our public and private messages to reinforce these