THE POLITICAL COUNTDOWN: TOWARDS KADIMA PRIMARIES SEPT 17

UNCLAS SECTION 01 OF 02 TEL AVIV 002078 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PREL PGOV PINR IS SUBJECT: THE POLITICAL COUNTDOWN: TOWARDS KADIMA PRIMARIES SEPT 17 OR POSSIBLE INDICTMENT OF THE PRIME MINISTER -------------- SUMMARY AND INTRODUCTION -------------- ¶1. (SBU) The Kadima primaries are only a week away. Front-runners Tzipi Livni and Shaul Mofaz, already labeled by the local media as the Obama and McCain of Israeli politics, are locked in campaign combat. They offer daily interviews, sound bites and policy statements to a public weary with the saga of which will come first: the indictment of the incumbent prime minister or his resignation. Speculation was fueled again this week by the Israel Police recommendation that Olmert be indicted, not only for fraud, breach of trust, money laundering and tax evasion but also for bribery. The indictment decision will be that of Attorney General Meni Mazuz. Amidst speculation as to whether he will abide by a commitment (circa May 2008) to resign immediately if indicted, PM Olmert conducts business as usual. There are signs of strain, however, in his enervated appearance and in a verbal broadside he launched against Defense Minister Barak at the September 7 cabinet meeting. As the tension rises on all fronts, the prospect of general elections early next year cannot be discounted. The latest opinion polls show Likud's Binyamin Netanyahu maintaining his lead. -------------- THE FRAUD SQUAD GOES PUBLIC -------------- ¶2. (U) At the close of a months-long investigation of PM Olmert, the Israel Police this week finalized their recommendation to the State Attorney's office. Dramatically, the Fraud Squad recommended that PM Olmert be indicted on charges of bribery in the Talansky affair, as well as reception of goods, fraud, breach of trust, money laundering and tax offenses, in both the Talansky and RishonTours investigations. While a police recommendation at the close of an investigation is standard practice, publication of its contents is highly controversial, if not prejudicial. Justice Ministry officials were quoted voicing skepticism as to the possibility of a charge of bribery, and Olmert's attorneys issued a statement noting that "the only person authorized by law to decide whether to indict the prime minister is the attorney general. He has the authority and he bears the responsibility. We will wait patiently for the decision by the attorney general who in contrast to the police is well aware of the heavy responsibility he bears." In the prevailing atmosphere in which Justice Minister Daniel Friedmann has sought to curb the powers of both the Attorney General and the Supreme Court, the invocation of "responsibility" could be read as a veiled threat. One pundit summed up Mazuz's dilemma: he must indict Olmert or face pressure to resign the office of Attorney General if he fails to do so. -------------- EHUD VERSUS EHUD -------------- ¶3. (SBU) At the weekly cabinet meeting on September 7, PM Olmert's strained appearance was matched by an outburst of personal aggravation directed at Defense Minister Ehud Barak. Ostensibly, PM Olmert was striving for a business-as-usual atmosphere with a cabinet agenda that included weighty items, notably a proposal by Justice Minister Friedmann to deprive the Supreme Court of its current power to overturn Knesset legislation. Barak, as Labor party chairman, ventured to suggest that such an issue required agreement by the coalition members and added that "at this point in time, in the present reality, in this political situation, it is not right to hold this discussion." Olmert lashed out with a broadside against Barak accusing him of breaking every agreement he ever made, of failing to consult, of leaking sensitive matters and finally, of the ultimate offense of "chutzpah" (impudence) in lecturing the prime minister about honoring agreements. Barak did not back down, and later that day dealt the prime minister a back-handed blow when he told a Labor party rally: "Our prime minister has had an especially hard day and I do not want to make it harder for him, but I will not change my adamant positions on any of the matters I handle." Although Barak has suffered in the polls, there is no active move within the Labor Party to remove him. -------------- PRIMARIES AND ELECTIONS -------------- ¶4. (SBU) The run-up to the Kadima primaries has provided few surprises, with Tzipi Livni consistently polling ahead of the second front-runner Shaul Mofaz. The most recent poll (Haaretz and Channel 10) was conducted September 4, and gave Livni the coveted 40 percent minimum requirement to win the primaries outright in the first round on September 17. The same poll gave Mofaz 20 percent of the vote. If accurate, such results would obviate the need for a second round on September 24. However, most pundits distrust polling data of a Kadima electorate that is amorphous and new, and many observers surmise that Mofaz will fare better than the polls predict. A TEL AVIV 00002078 002 OF 002 number of contacts familiar with Mofaz's political organization share his optimism that he will stage an upset. By far the most interesting finding of the poll was that 28 percent of those canvassed had not decided for whom they would vote. ¶5. (SBU) Whatever the primaries' outcome, the issue of early general elections issue remains on the horizon, if only because there is no guarantee that whoever wins the Kadima primaries will seamlessly transition to a new coalition. Even so, Livni's political advisors are hoping that a decisive primary win, combined with her avowed openness to early elections, will actually work to cement a coalition from the current Knesset, many of whose members would lose their seats in the event of early elections. Livni is sounding out Labor leaders such as Ophir Pines-Paz and Eitan Cabel about their willingness to remain in the coalition under her leadership, and she has dispatched senior political operatives, including former Cabinet Secretary Israel Maimon and Eyal Arad, to encourage the Shas Party to stick with her. Livni remains open to including the opposition Likud Party in her coalition, but the Likud leadership is only likely to accept such an offer following elections, which polls suggest will hand Likud 30 seats (compared to the 12 they hold now). Should Mofaz win the Kadima primary, many predict early elections will be a foregone conclusion, and split the Kadima Party into its constituent elements: with Mofaz forced to return to Likud - and Livni forming her own party and marrying up with Labor. CUNNINGHAM