ENDGAME FOR ABDULLAH

C O N F I D E N T I A L SECTION 01 OF 03 KUALA LUMPUR 000858

SIPDIS

FOR EAP AND INR

E.O. 12958: DECL: 09/26/2018
TAGS: PGOV PREL PINR KDEM MY
SUBJECT: ENDGAME FOR ABDULLAH

REF: A. KUALA LUMPUR 847 - PM REGROUPS

B. KUALA LUMPUR 833 - SEPT 18 SETBACK

C. KUALA LUMPUR 821 - ABDULLAH TAKES DEFENSE MINISTRY

D. KUALA LUMPUR 815 - SEPT 16 ANTI-CLIMAX

E. KUALA LUMPUR 810 - UPROAR OVER ISA

Classified By: Political Section Chief Mark D. Clark for reasons 1.4 (b
and d).

SUMMARY AND COMMENT
--------------


1. (C) An emergency leadership meeting of the ruling United
Malay National Organization (UMNO) on September 26 seemingly
spelled out the endgame for embattled party leader and Prime
Minister Abdullah Badawi. The UMNO Supreme Council postponed
party elections from December to March 2009, but apparently
with the understanding that Abdullah does not seek
reelection. Abdullah, who as recently as few days ago had
insisted on remaining in place through 2010, told the press
he would announce his decision on whether to contest the next
election by October 9, the date when UMNO division elections
begin. However, a number of participants in the meeting such
as UMNO VP Muhyiddin Yassin indicated March was the firm
deadline for Abdullah's departure. UMNO veteran Tengku
Razaleigh, who aspires to win the party presidency, attacked
UMNO's continued focus on "transition" rather than election,
while opposition leaders, like Anwar Ibrahim, focused
criticism on UMNO's unreformed personality politics.


2. (C) Comment: This appears to us as the endgame for Prime
Minister Abdullah; we expect Abdullah to announce he will not
seek reelection as party president. While a deal -- yet to
be officially confirmed -- seems to be struck for Abdullah's
exit in March 2009, an earlier departure cannot be ruled out
for the unpopular party president. It is too early to
conclude that the UMNO leadership struggle is over, as
intense politicking will continue to play out at least
through the UMNO divisional elections. The political
situation remains fluid and UMNO's house far from settled.
Those who appear to lose from the deal include Tengku
Razaleigh and Abdullah's ambitious son-in-law Khairy
Jamaluddin. By itself, we do not believe this emerging
outcome lessens the risk that UMNO invokes harsh measures,
like arrests under the Internal Security Act, against Anwar
Ibrahim and the opposition. Abdullah's de facto transition
to Najib would mean that Malaysia could be represented by
either leader at upcoming summits, such as APEC and ASEAN.
Given the approaching Muslim holidays, October 1-2, and with
most politicians headed home to their respective states, next
week should be relatively quiet absent any bombshells from
Anwar Ibrahim, but the UMNO political game will pick up again
the week of October 6. End Summary and Comment.

TROUBLE BREWING
--------------


3. (SBU) Days of intense internal politicking preceded the
September 26 UMNO Supreme Council meeting. Early in the
week, Abdullah consulted with party leaders in the key states
of Johor and Selangor to rally support for his 2010
transition plan, but failed to garner their backing. Deputy
Prime Minister Najib, PM Abdullah's would-be successor,
unexpectedly canceled his trip to the U.S. late on September
24, where he was to represent Malaysia at the UN General
Assembly. Instead of flying to New York, Najib chaired a
hastily-called meeting of UMNO management committee,
including leaders pushing for Abdullah's early removal such
as UMNO VP Muhyiddin Yassin and Women's chief Rafidah Aziz.
The following day Abdullah and Najib met in a four-eyes
meeting that lasted several hours. After their meeting, word
leaked out of a special UMNO Supreme Council meeting called
for September 26 and intended to discuss, again, Abdullah's
plans to step down in favor of Najib in June 2010. (Comment:
A heated Supreme Council meeting on September 18 failed to
endorse the transition and featured calls for Abdullah to
step down, ref B. End Comment.)

RUMORS THAT TRANSITION CUT SHORT
--------------


4. (U) Rumors circulated prior to today's meeting that
Abdullah would be forced to cut short his transition by one

KUALA LUMP 00000858 002 OF 003


year, namely to June 2009, and that UMNO would delay the
party elections until that time, a postponement of six months
from their original December 2008 schedule. Abdullah and
Najib spoke again privately for 30 minutes before the start
of today's emergency session. The Supreme Council then met
behind closed doors for some two hours.

PARTY ELECTION SHIFTED TO MARCH, ABDULLAH APPEARS "LOST"
-------------- --------------


5. (C) In a press encounter immediately following the
meeting, Abdullah "appeared lost" as he announced that the
UMNO general assembly meeting and election would be deferred
from December 2008 until March 2009, according to our contact
on the scene. When asked for the reason for the three-month
delay, Abdullah hesitated and turned to Najib (seated next to
the Prime Minister),who whispered to Abdullah, "to
facilitate the transition," and the PM repeated Najib's
words, per the first-hand account of our source. Regarding
his plan to transfer power to Najib in 2010, Abdullah
reportedly said, "If we want to make it before 2010, it is
not an issue." As to whether Abdullah would seek reelection,
the Prime Minister replied that he would announce his
decision by October 9, the start date for the UMNO division
elections (which elect delegates for the national party
polls; the UMNO meeting affirmed the original schedule for
the division polls).


6. (C) The Embassy source at the press event told us that
UMNO VP Muhyiddin appeared confident at the scene of the
Supreme Council meeting. Muhyiddin reportedly walked into
the meeting room with a copy of the UMNO constitution in his
hand. Our contact suspected that Muhyiddin had argued that
based on the party constitution the UMNO election could not
be postponed beyond March. (Comment: We share in this
interpretation of the UMNO constitution, which requires an
election no later than four and one half years after the
preceding election. UMNO's last party poll was in September

2004. End Comment.)

MUHYIDDIN, OTHERS SUGGEST MARCH DEADLINE
--------------


7. (U) UMNO leaders began to put their spin on the results
of the Supreme Council meeting. Muhyiddin, one of the most
outspoken proponents of Abdullah's early exit, stated that
the postponement of the party elections until next March is
tantamount to setting a new date for Abdullah to step down:
"It was earlier decided 2010 (for Abdullah to hand over to
Najib),but at today's meeting the president and deputy
president indicated that the postponement from December to
March is to facilitate earlier transition.... As far as I am
concerned, maybe a new deadline has been set, but let the
president make the announcement." Some other participants in
the meeting echoed Muhyiddin's theme and tone, including
Women's chief Rafidah Aziz, who said, "It (the Supreme
Council decision) is to facilitate an earlier transition, so
take it as that." The official news agency Bernama reported
that Najib called the postponement of the UMNO elections a
"wise move" in line with the wishes of the party's
grassroots.

RAZALEIGH LASHES OUT
--------------


8. (SBU) Prominent UMNO veteran leader Tengku Razaleigh
Hamzah, who is not Supreme Council member, took a different
view and lashed out at the party's developments, which, he
wrote, showed Malaysia to be a "banana republic."
Razaleigh described the talk of "transition" as "designed to
save two individuals (Najib and, possibly, Muhyiddin) from
the inconvenience of facing elections. Their personal
careers appear to be more important than the future of the
nation." (Comment: Razaleigh aspires to be elected UMNO
president and stands to lose if the party pre-selects Najib
and possibly Muhyiddin to win the contest. End Comment.)

ANWAR AND OPPOSITION SWIPES AT UMNO
--------------


9. (SBU) Opposition leader Anwar Ibrahim traveled to Hong
Kong and delivered the keynote address at an investors
conference on the U.S. financial turmoil and prospects for

KUALA LUMP 00000858 003 OF 003


ASEAN economies. Speaking on September 26 on the margins of
the conference, Anwar used news of the UMNO meeting to take
swipes at the ruling party: "They (UMNO) have lost the
mandate of the people." He added that, "The issue is not
Abdullah or his deputy," but a transfer of power to his
opposition coalition. Prominent opposition politician Lim
Kit Siang called the UMNO meeting a "coup d'etat" against
Abdullah, and questioned whether the Prime Minister would
last another six months. Immediate Internet media commentary
described the UMNO decision as a blow to Abdullah, setting
the stage for the Prime Minister's exit in March 2009.
KEITH