UMNO SETS PARTY ELECTION FOR DECEMBER, ABDULLAH

C O N F I D E N T I A L SECTION 01 OF 02 KUALA LUMPUR 000223

SIPDIS

SIPDIS

FOR EAP/MTS AND INR

E.O. 12958: DECL: 03/28/2018
TAGS: PGOV KDEM MY
SUBJECT: UMNO SETS PARTY ELECTION FOR DECEMBER, ABDULLAH
LOSES TERENGGANU FIGHT

REF: A. KUALA LUMPUR 202 - KING VERSUS PRIME MINISTER

B. KUALA LUMPUR 178 - UMNO STOKES MALAY FEARS

C. KUALA LUMPUR 160 - MALAYSIA'S ELECTION SHOCK

Classified By: POLITICAL SECTION CHIEF MARK D. CLARK, REASON 1.4 (B AND
D).

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


1. (C) The March 27 Supreme Council meeting of Prime
Minister Abdullah Badawi's ruling United Malays National
Organization (UMNO) decided the party's election will be held
December 16-20, 2008. The election is widely anticipated to
feature a challenge to Abdullah's continued leadership. The
election process formally will kick off in July with local
UMNO branch contests. The Supreme Council also endorsed the
King's choice for Chief Minister in Terengganu state rather
than continue on with PM Abdullah's own candidate, an outcome
one UMNO division leader described as a "major slap" to the
Prime Minister. Meanwhile, UMNO veteran Tengku Razaleigh,
reportedly with the support of former Prime Minister
Mahathir, gathered a small host of UMNO leaders to his home
to press his own campaign for leadership change. Mahathir,
in an article published in the mainstream media on March 28,
upped the ante by suggesting the Prime Minister and members
of his family could be involved in corruption and called for
an investigation. The UMNO Supreme Council's announcement of
a timetable for party elections this year may help to thwart
calls within UMNO to move more quickly to reexamine Abdullah
Badawi's leadership, but the Prime Minister's battle for
survival is far from over. End Summary.

Party Election in December - UMNO Supreme Council
-------------- --------------


2. (U) The UMNO Supreme Council at its March 27 meeting
decided to hold the party election in late December. This
represented a compromise of sorts between calls for the
election to be held as early as August, and those who favored
postponing the poll until 2009. At the end of a four-hour
session, the UMNO Supreme Council announced that UMNO branch
level elections would take place July 17 - August 24,
divisional level elections October 9 - November 9, and the
election for the party supreme council would coincide with
the annual UMNO general assembly on December 16-20.


3. (SBU) Comment: As the UMNO election likely could feature
an attempt to oust PM Abdullah, a later date is seen as
favoring the politically wounded Prime Minister. UMNO's
constitution provides for party elections every three years,
with the possibility of postponing the election by up to 18
months. UMNO held its last election in September 2004,
indicating that the party poll must take place by March 2009.
End Comment.


4. (SBU) Party Information Chief Muhammad Muhammad Taib had
told reporters March 25 that several UMNO division and state
leaders who had been meeting party President PM Abdullah had
urged the President to defer the party polls to 2009 to avoid
"havoc and disaster." However, the UMNO management committee
in a meeting one day before the Supreme Council, recommended
the election be held this year. The committee is led by
Deputy President/Deputy Prime Minister Najib and includes
UMNO Vice President Muhiyiddin Yassin, both possible
successors to Abdullah.

Terengganu Fiasco
--------------


5. (SBU) In a major reversal for PM Abdullah, the UMNO
Supreme Council meeting also endorsed the appointment of
Ahmad Said as Terengganu Chief Minister, a man backed by the
Sultan of Terengganu who currently holds Malaysia's rotating
kingship. PM Abdullah had endorsed outgoing Chief Minister
Idris Jusoh to continue in the post, a decision ignored by
the King in a exercise of royal prerogative not seen since
the 1970's. PM Abdullah on March 23 had declared it would be
unconstitutional to appoint anyone but Idris. Nevertheless,
Abdullah told reporters after the UMNO Supreme Council
meeting that endorsing Ahmad's appointment was "the best
decision" based on the need to form the state government and
also given Idris' willingness to accept whatever decision was
made.


6. (C) An UMNO divisional leader in Kuala Lumpur told us on
March 28 that the PM realized after his March 26 meeting with
the King that Abdullah would not succeed in getting Idris

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reappointed as Chief Minister. Furthermore, an impasse in
the formation of the Terengganu state government would
further embarrass UMNO especially in the eyes of the UMNO
grassroots and the Malays. The Islamist opposition party PAS
had begun to take advantage of the situation by charging UMNO
with "derhaka" or treason for going against the King. The
divisional leader stated candidly, "this episode was a major
slap for Abdullah."

Razaleigh Continues Campaign
--------------


7. (C) While the UMNO Supreme Council was having its
meeting, veteran UMNO leader Tengku Razaleigh held court with
some 10 UMNO division leaders and 100 other party officials
at his "White House" styled mansion in Kuala Lumpur.
Razaleigh has lobbied UMNO divisions to hold an extraordinary
general meeting (EGM) on May 11, the anniversary of UMNO's
formation, and he has traveled the country seeking UMNO
grassroots support. While ostensibly addressing the reasons
for UMNO's set-back in the March 8 elections, the EGM is seen
as a means to challenge Abdullah's position and also promote
Razaleigh's own announced ambition to seek the UMNO
presidency. On March 25, a close associate of Mahathir told
us the former Prime Minister backs Razaleigh's efforts as a
means to depose Abdullah Badawi. We identified a number of
those attending Razaleigh's March 28 meeting as associates of
former Prime Minister Mahathir.


8. (U) According to press sources, the ten UMNO divisional
leaders who attended the meeting pledged their support for
Razaleigh to challenge Abdullah. They also pledged to launch
a campaign calling for the abolition or relaxation of UMNO
rules that require a challenger for the presidency to obtain
endorsements from 30 percent of UMNO divisions before his
name can appear on the ballot. In the 2004 party election,
Razaleigh attempted to challenge Abdullah for the presidency,
but only managed to secure one division's nomination.

Mahathir Raises First Family Corruption Rumors
-------------- -


9. (U) Mahathir upped the ante in his tussle with PM
Abdullah by launching corruption allegations against the
First Family in an article appearing in the March 28 edition
of the Sun, an English language daily owned by Mahathir crony
Vincent Tan. Related to the conflict between the King and
the Prime Minister in Terengganu, Mahathir suggested that
contracts for mega projects in the state "all went to one
person and (people) are suspicious that behind this person
are members of the First Family." According to rumors,
Mahathir wrote, "the Prime Minister might have influenced the
(Chief Minister) into doing wrong things." Mahathir called
for "foreign agencies" to launch an investigation.

Comment
--------------


10. (C) The UMNO Supreme Council's announcement of a
timetable for party elections this year may help to thwart
calls, such as those by Mahathir and Razaleigh, for UMNO to
move more quickly to reexamine Abdullah Badawi's leadership,
but Abdullah's battle for survival is far from over. The
establishment of the elections time frame will kick off
maneuvering at the branch and division levels to line up the
proper support for the December leadership contest, and money
politics likely will play a major role. Abdullah's political
capital hit another low as the UMNO Supreme Council failed to
produce a face-saving resolution for Terengganu and the Prime
Minister lost his public tug-of-war with the King. Prior to
the March 8 election, it would have been unthinkable for the
mainstream press to carry articles, such as Mahathir's, with
corruption allegations that named the Prime Minister and his
family; instead, such writings were confined to the
unregulated Internet media. As the publication of Mahathir's
article suggests, Malaysians are still testing the limits in
the post March 8 political environment and have yet to reach
any firm boundary.
KEITH