1. (C) Summary. Pakistan People's Party (PPP) leader
Sherry Rehman urged the U.S. to "give us time" to form a
coalition with Nawaz Sharif because "he is too powerful to
have in opposition." There was no PPP decision yet on a
candidate for Prime Minister, but Rehman made it clear she
did not favor Amin Faheem. Nawaz was proving stubborn on the
issue of restoring the judiciary, but Rehman firmly believes
that it would be a disaster to restore the former Chief
Justice to power. Rehman was cautiously optimistic that,
given time, the PPP can bring Nawaz into the tent, but the
party is struggling to make this coalition a reality. End
Summary.

2. (C) Polcouns met February 28 with Sherry Rehman,
Pakistan People's Party (PPP) Information Secretary and close
advisor to PPP Co-Chair Asif Zardari. For the past few days,
the PPP, she said, has been in non-stop meetings with the
Pakistan Muslim League-Nawaz (PML-N), coalition partner the
Awami National Party (ANP), journalists, and business
delegations. (Note: Zardari hosted a lunch meeting February
27 for several hundred supporters which has been interpreted
as a "show of strength" by the local media. In press
statements at the lunch, Nawaz continued to press for
restoration of the judiciary, while Zardari pointedly avoided
discussing any substantive topics.)

Restoring the Judiciary


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



3. (C) Nawaz has moved back a bit on pressing for
impeachment of Musharraf, said Rehman, but he remains
"stubborn" on restoring former Chief Justice Chaudhry, whom
Nawaz believes will use his judiciary power to oust the
President. The PPP continues to try and convince Nawaz that
this will paralyze the new government. Our goal, insisted
Rehman, is to send the issue to a group of lawyers who will
meet over the next week to hammer out a compromise that can
be referred to a parliamentary committee. Ultimately, she
said, the PPP believes that this issue cannot be resolved
without a constitutional amendment. She believed this could
somehow be accomplished despite Musharraf's continuing
control over the Senate. "We are in no hurry; if the
deliberations in committee are prolonged, that is not a
problem for us. We cannot allow Chaudhry to return and try
to rule Pakistan by "suo moto" (legal fiat) again. It would
be a disaster."

4. (C) Rehman reported that she had been in constant
contact with the lawyers' movement and human rights advocates
like Asma Jehangir, "who agrees with us completely." PPP
activist Aitzaz Ahsan has now been convinced, asserted
Rehman, that he should back down on grand plans to organize a
"long march" of lawyers on Islamabad. He would be
confronting his own party, said Rehman, and playing into
Nawaz's hands.

5. (C) Asked if Nawaz would back out of a coalition if the
PPP does not yield on this issue, Rehman replied that Nawaz's
party wants return to government. Admitting the PPP had
little leverage on Nawaz, she asked about the Ambassador's
meeting with Nawaz (reftel) and whether the U.S. had a sense
of where Nawaz was going. Polcouns said Nawaz was
noncommittal on whether to appoint ministers to a coalition
government and appeared to be sticking to what he deemed "his
principles" on the judiciary. Rehman noted that in the past
Nawaz had been willing to compromise those principles,
especially on independence of the judiciary.

Working with Musharraf's Partners


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



6. (C) Rehman ruled out including Musharraf's Pakistan
Muslim League (PML) party in the PPP coalition. "Musharraf
has to understand that the people have clearly rejected his
party and his policies." Polcouns noted that there were
rumors that Musharraf might abandon his political allies, the
Chaudhrys, in order to make the party more acceptable as a
coalition partner with the PPP. Rehman responded that the
Chaudhrys were "increasingly irrelevant." The PML was

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"falling apart" and even PML General Secretary Mushahid
Hussain was putting out feelers on cooperation with the PPP.
Those abandoning the PML were, she regretted, "going home" to
Nawaz.

7. (C) Regarding an alliance with the Muttahida Quami
Movement (MQM) party at the national and provincial levels,
Rehman acknowledged there was deep opposition within the PPP
to working with MQM. But, Rehman cautioned, history has
shown that excluding MQM just leads to violence. "We have
worked with them in the past and need to find a way to do it
again. I know what they are: they killed my driver in the
May 12 demonstrations. But we cannot afford to open another
front in Karachi--we have too many other challenges." She
confirmed that the PPP has sent a delegation to talk with MQM
about joining the coalition.

PM: No Decisions Yet


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



8. (C) Refusing to be draw into a discussion of the PPP's
choice for Prime Minister, Rehman said it was an ongoing
topic of discussion. Implying she was discussing Amin
Faheem's candidacy, Rehman said only that the PPP would need
a "strong PM who can be tough in negotiating coalition
politics" and "someone willing to work hard into the night,
every night." On possible ministerial appointments, Rehman
said the PPP would insist on keeping the Foreign Ministry and
the Interior Ministry. If Nawaz wants the Finance Ministry,
"let him have it -- (former Finance Minister under Nawaz)
Ishaq Dar is very competent, and we can work with him."

9. (C) Asked if she thought Nawaz would run in a
by-election, Rehman replied "if he does, so will we." But
neither Zardari nor Nawaz, she predicted, would be PM
candidates "any time soon." Despite press reports that GOP
has withdrawn corruption cases against Zardari, Rehman said
this has not happened.

Silence from the Army


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



10. (C) Rehman said the PPP has not heard from Chief of
Army Staff General Kayani, but praised him for staying out of
the political fray. She hoped the military would not
intervene to protect Musharraf and will allow the PPP to make
key foreign policy and defense decisions.

Regional Negotiations


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



11. (C) Rehman said the PPP had convinced 14 of the
independent candidates to ally with the PPP: this included 12
from tribal areas who traditionally vote with the President.
She claimed the PPP continues to make inroads with
independents from Balochistan and is working to form a
provisional government there in opposition to the top vote
winner, the PML. She noted that despite press reports, the
PPP had not been consulted on Musharraf's February 27
decision to name a new governor of Balochistan, and "we are
not happy with the choice." She admitted Nawaz has the votes
to form a government in Punjab, and "he increasingly appears
concentrated on this goal." But, Rehman insisted, the PPP is
a national party and has to concentrate on keeping the
federation together.

Business Outreach


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



12. (C) Rehman said the PPP had been meeting with multiple
delegations from the Pakistani chambers of commerce. Given
our platform, she admitted, "we needed to convince
businessmen that we have no intentions of putting lots of new
taxes on them." She thought the delegations were pleased and
relieved with the PPP's answers to their questions about the
PPP's plans for the economy but did not elaborate.

13. (C) The PPP has also been working on outreach to
businessmen to push for increased trade with India.
Pakistanis need jobs, said Rehman, and there are enormous
opportunities to work with India. Pakistan is never going to
"solve" the big issues on Kashmir, she noted, but it is
possible to help the people in the northern area improve

ISLAMABAD 00000876 003 OF 003


their living conditions. There are so many Chinese goods in
the market that it is foolish to use the fear of a flood of
Indian products as an excuse to prevent the growth of trade.

Give Us Time


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



14. (C) The political reality, said Rehman, is that the PPP
wants Nawaz on board in the coalition. "We don't know
whether he will agree to participate with ministers, but he
is too powerful to have in opposition." "Give us time," she
urged, to bring him around so that the PPP can have a strong
majority in the next parliament. Without Nawaz, the PPP can
govern but with only a "slim majority." Rehman thought it
would take another two weeks to come to closure on the
coalition. It would be okay to start with a "shadow or
skeleton" cabinet at first if necessary. The real work of
coalition cooperation, Rehman indicated, would take place
behind the scenes through Zardari and Nawaz.

15. (C) Comment: Rehman is widely rumored to want the job
as Foreign Minister, so it is no surprise that she suggested
this portfolio remain in PPP hands. She and Zardari have
made no secret that the believe Faheem is weak and lazy, but
they do not appear to have found a suitable alternate
candidate yet. Rehman continues to believe the PPP can bring
Nawaz into the tent, but Nawaz is proving a tough negotiator,
and the PPP is struggling to find the right levers to make
this coalition a reality.








PATTERSON