DCM's DECEMBER 3-4 VISIT TO BANJA LUKA

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SUBJECT: DCM's DECEMBER 3-4 VISIT TO BANJA LUKA


1. (SBU) SUMMARY. During a two-day visit to Banja Luka on December
3 and 4, Deputy Chief of Mission (DCM) Judith Cefkin met with a
series of key Republika Srpska (RS) political leaders on topics
including the recent Prud/Odzak agreement, developments within in RS
political parties, and the recent RS criminal charges against
international and BiH officials. She delivered USG positions, with
a focus on the need for a constitutional amendment on Brcko. In
separate meetings with Former RS President Dragan Cavic and with
Party for Democratic Progress (PDP) Vice President Branislav
Borenovic, the two outlined their dissatisfaction with the current
state of affairs and previewed possible plans to strike an
independent course. The DCM also visited the homes of two Croat
returnee families that received funding to repair their roofs
through the PRM Ambassador's fund; and met separately with high
school participants in the CIVITAS program, with alumni of US
exchange programs, and with representatives of Transparency
International. END SUMMARY.

RS OFFICIALS ADVOCATE A LAW ON BRCKO


2. (SBU) Both RS National Assembly (RSNA) speaker Igor Radojicic
and RS President Rajko Kuzmanovic told the DCM that the best way to
resolve the issue of Brcko is to quickly pass a law based on the
Odzak/Prud agreement, while leaving open the possibility of a
constitutional amendment (CA),"later." Both argued that it will be
difficult, if not impossible, to garner the consensus necessary to
adopt a CA on Brcko. (Note: Radojicic is a Vice President in RS
Prime Minister Milorad Dodik's Alliance of Independent Social
Democrats (SNSD) and Kuzmanovic, although officially unaffiliated,
ran as an SNSD candidate and firmly supports SNSD positions. End
Note.)


3. (SBU) The DCM warned them that a law alone cannot bind the BiH
Constitutional Court (CC),and reiterated that we see a CA as the
best means of completing the Brcko Final Award. She added that the
USG has a special responsibility for Brcko and will not be willing
to declare the Peace Implementation Council (PIC) objective on Brcko
met unless we are fully confident of the resolution. Radojicic and
Kuzmanovic insisted that Brcko cannot become a third entity. The
DCM reminded them that the USG does not support the creation of a
third entity, and assured them that a CA will not give Brcko such
status.


4. (SBU) When the DCM asked Radojicic if the RS accepts the Brcko
Final Award, Radojicic dodged the question by claiming that, "there
has been full implementation of the final award over the past ten
years." He added that, "it is not possible to complain about the
RS's behavior" towards Brcko. He added that if a law on Brcko is
passed, then the RSNA could pass a resolution supporting that law
and overturning its 1999 decision on the Brcko Final Award.
RS OFFICIALS OPTIMISTIC ABOUT THE PRUD/ODZAK AGREEMENT


5. (SBU) Radojicic and Kuzmanovic told the DCM that the SNSD is
working to achieve adoption of the Prud/Odzak agreement. Radojicic
said that, "it looks optimistic" that the BiH Parliament will adopt
a law on state property, while adding that, "anything is possible -
this is still BiH."

RADOJICIC ALLEGES "FOREIGN INFLULENCE" ON JUDICIARY


6. (SBU) The DCM stressed USG concern over the RS Government's
filing of "charges" against nine international and local officials,
including the Principal Deputy High Representative (PDHR) Raffi
Gregorian, stating that we view this as misuse of legal processes to
advance political goals. Radojicic responded by complaining about
what he termed, "foreign influence and pressure" on the BiH
judiciary. He said that the judiciary should be fully independent
from all foreign and domestic pressures. The DCM emphasized that
PDHR Gregorian has full U.S. support and will stay in BiH until his
work is done.

"DODIK IS MISUNDERSTOOD, AND BIH INSTUTIONS WORK JUST FINE"


7. (SBU) RS President Kuzmanovic spoke at length about how Dodik is
not, "a nationalist or an autocrat," but is just, "misunderstood."
He urged the DCM to not pay attention to Dodik's rhetoric,
explaining that Dodik is, "an emotional politician... and easily
provoked," which, he said, "is a problem." Kuzmanovic insisted that
the RS is part of BiH, not, "a foreign body in BiH," adding that the
RS only wants what it is entitled to under Dayton. He asserted that
despite the rhetoric, "objectively speaking, RS leaders are fully
cooperative." The DCM expressed USG concern over the rhetoric,
insisting that, "words have consequences." She emphasized USG
support for a functional BiH government. Kuzmanovic said that the
situation in BiH is, "less dire" than people say. He claimed that
BiH institutions, "function well" and that Serb officials, "never
obstruct them." He claimed that, "RS officials are energetically
working to achieve a maximum degree of compromise."


8. (SBU) Kuzmanovic said that constitutional reform is needed for
BiH, but that "Dayton" must remain the framework. He explained that
the RS is ready to increase the efficiency of BiH state
institutions, by supporting constitutional amendments to increase
the number of deputies in the BiH House of Representatives (HoR),
empower the chairman of the BiH Council of Ministers, and to
establish a single rotating BiH President (to replace the current
three-member Presidency). But he stressed that the RS will not
consent to changes in entity voting.

PDP STILL "TORN" ABOUT BREAKING WITH THE SNSD


9. (SBU) In a meeting with PDP Vice President Branislav Borenovic,
Borenovic complained bitterly that his party's coalition partner -
SNSD -- never consults PDP on anything, but nevertheless expects
PDP's, "obedience" when it is time to vote in the RSNA. He said
that PDP officials found out about the criminal charges that the RS
Government filed through the media, and are angry that Dodik did
this without consulting them.


10. (SBU) Borenovic claimed that he, PDP President Mladen Ivanic,
and the other Vice Presidents all strongly support a break with the
SNSD. However, he admitted that Ivanic is, "torn" about actually
going through with it, and said that the next two years will be very
difficult for PDP if they make this move. He said that PDP will
hold a main board session before the end of the year, to discuss the
party's options.

SDS TURMOIL CONTINUES, CAVIC READY TO START A NEW PARTY


11. (SBU) In a December 3 meeting, Former RS President Dragan Cavic
told the DCM that before the end of December he will either take
over and reform the SDS or launch his own party. He acknowledged
that ousting party President Mladen Bosic as the head of SDS would
be difficult. Regarding the option of starting a new party, Cavic
said that a deciding factor will be whether he can persuade any SDS
deputies in the RSNA to join him. He said that ten deputies,
including seven from the RSNA, two from the BiH HoR and one from the
BiH House of Peoples, have expressed their support for him. He
admitted that he will be lucky if two or three of them transfer to
the new party immediately, but said that he believed that many more
SDS deputies share his views and might eventually join him. Cavic
said that his party will be a "free-market oriented, center moderate
people's party" that is more conservative than "social democratic."
He said the party will accept Dayton as the basis of the BiH state,
but will also acknowledge that it can be improved to increase the
functionality of the state.


12. (SBU) (Note: Borenovic later told us that despite declining
support for Bosic, he believes only two to three SDS Deputies (out
of 17) are ready to, "turn in their membership cards," and go with
Cavic, while other members of the anti-Bosic camp are calculating
their chances of being re-elected in 2010 if they were to make such
a move. Therefore, he doubted that Cavic would succeed if he
launches his own party. According to Borenovic, SDS voters are too
emotionally attached to the "SDS label" to leave the party, and
Cavic lacks support in traditional SDS strongholds such as Doboj,
Bijeljina and the eastern RS. End Note.)
TI STRUGGLING TO SURVIVE IN THE RS


13. (SBU) In their unmarked office in Banja Luka, Transparency
International (TI) Country Director Srdjan Blagovcanin and member of
the TI Board of Directors Aleksandra Martinovic painted a grim
picture of the environment in which NGOs operate in the RS.
Blagovcanin claimed that RS Government officials frequently refer to
TI publicly as a, "criminal organization" and that TI is subject to
complete, "media isolation" in the RS. He said that they cannot
even organize a press conference because no media would come, and
even worse, "the regime would most likely send someone who would
cause an incident." Despite the ongoing pressure, Blagovcanin said
that TI continues to investigate endemic corruption in the RS, as
well as in the Federation, though he described the problem in the RS
as much more ominous. According to Blagovcanin, Dodik keeps the RS
public in a state of constant fear of Bosniaks and the IC.
Blagovcanin explained that as long as people in the RS continue to
see Dodik as the only one who can protect them, then they will never
support any corruption investigation against Dodik.

TRISIC-BABIC ALLEGES MALFEASANCE IN AMONG BOSNIAKS


14. (SBU) BiH Deputy Foreign Affairs Minister Ana Trisic-Babic
complained that the IC focuses on Dodik and Party for BiH President
Haris Silajdzic, while ignoring, "the good work of Nebojsa
Radmanovic and Nikola Spiric, who are working to build the state."
She commented that Silajdzic should be held criminally liable for
numerous financial improprieties, including recently giving an
expensive Lipizzaner horse to Libyan leader Muammar al-Qadhafi,
which she claims was not his to give in his official capacity. She
questioned why Dodik is the only one being investigated.
Trisic-Babic also told the DCM she is seriously considering filing
charges against BiH Foreign Affairs Minister Sven Alkalaj. She
claimed that he has committed slander and misused his position. She
admitted that she is no longer on speaking terms with Alkalaj.

PUBLIC DIPLOMACY IN BANJA LUKA


15. (SBU) During the visit the DCM, together with Embassy Public
Affairs and Branch Office staff, met with an inspiring group of high
school studets who participate in the CIVITAS program. The
tudents outlined their projects to improve life intheir schools
and communities including ecologicl actions, combating drugs and
fighting corruptio in education. The DCM also gave a lecture at
the American Corner and met with alumni of U.S. exchange programs,
who talked about their experiences in the U.S.

SITE VISIT TO AMBASSADOR'S FUND CROAT GRANTEE BENEFICIARIES


16. (SBU) A highlight of the Banja Luka program was a visit to the
homes of two Croat returnee families who were the recipients of
Ambassador's Fund/Democracy Commission funding for the
reconstruction of their roofs. RS Minister of Refugees Omer
Brankovic and the head of CARITAS of the Banja Luka Archdiocese
Miljenko Anicic joined the DCM for the event, where they all
emphasized the importance of supporting the sustainable return of
displaced persons from all ethnic groups. The families, who
participated actively in the project by contributing materials and
manpower, described their life in Banja Luka today, saying that they
do not experience discrimination.

COMMENT


17. (SBU) The DCM's visit provided some perspective into several of
the trends that have been developing in the RS in recent months.
Dodik remains as strong as ever, with his party and the RS public
standing fully firmly behind him. Dodik and his team are united in
their support for the Prud/Odzak agreement, including the provision
calling for a law (not a CA) on Brcko. Banja Luka continues to
project its own version of reality -- one that stands in stark
contrast to the reality perceived in Sarajevo. RS officials and the
RS media they completely control have repeated their own version of
reality so many times that they and the RS public now believe it
completely. In their version, Dodik is an innocent man and
protector of the Serbs, who is wrongly being prosecuted by Bosniak
and international forces who will stop at nothing to bring him down.
In their version of reality, Serbs in BiH institutions are
valiantly working to save BiH, despite efforts by Bosniak
politicians to destroy the state (by calling for the abolishment of
the RS, and by trying to block the Prud agreement).
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