ANTIGUA'S RULING PARTY UNDER PRESSURE FROM COURT

C O N F I D E N T I A L BRIDGETOWN 000358


E.O. 12958: DECL: 06/09/2029
TAGS: PGOV PINR CN XL
SUBJECT: ANTIGUA'S RULING PARTY UNDER PRESSURE FROM COURT
BATTLES AND INTERNAL DISSENSION

Classified By: Charge d'Affaires, a.i. D. Brent Hardt, for reasons 1.4
(b) and (d).

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SUMMARY
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1. (C) In the three months since the election that saw the
United Progressive Party (UPP) returned to power in Antigua,
the government has found itself under pressure from legal
challenges to election results from opposition Antigua Labor
Party (ALP) and internal party infighting. The Antiguan
courts have agreed to hear cases for five constituencies,
which are expected to last until November. The UPP was dealt
anther blow when Deputy Prime Minister Wilmoth Daniel
publicly broke with PM Spencer and asked to be relieved of
his duties as Deputy. This instability has many concerned
that the government could fall, leading to either new
elections or the formation of a new government coalition that
could bring the ALP to power. The Government, however, has
its own ace in the hole in the form of an inquiry about
corruption during the ALP,s years in power whose damaging
report could soon be made public. End Summary.

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UPP Victory Challenged In Court
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2. (C) Antigua and Barbuda's March 12 election ended with
the United Progressive Party (UPP) winning a slim majority,
taking 9 of the 17 seats. The narrow victory was marred by
problems at polling stations on the day of election that led
many stations to open late. The opposition Antigua Labour
Party (ALP) has filed legal complaints covering five of the
17 constituencies, alleging that their late opening, ranging
from two to six hours, disenfranchised voters. Attorney
General Justin Simon explained to PolOff in a recent meeting
that the government has retained legal counsel from Trinidad
and expects to begin its defense in court in June. The exact
date of the hearings has yet to be determined, however the AG
does not expect a verdict to be reached before sometime in
November.


3. (C) ALP MP Robin Yearwood recently told PolOff that the
ALP had decided to challenge five of the elections on legal
grounds; however, he believes that only two of the cases have
real merit. In those two cases the margin of victory was low
and the voter turnout was significantly below the turnout for
the previous election. Many political observers have told us
that the ALP has a less than fifty percent chance of winning
any of the cases, but if they were to win it would be in only
one or two of the districts where the court might rule that
voter disenfranchisement changed the election outcome. If
this were to happen, explained several contacts including AG
Simon, Prime Minister Spencer would likely call national
elections because he would not allow the ALP to cherry
pick, constituencies for reelection.

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UPP Defections
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4. (C) In mid-May, UPP Deputy PM and Health Minister Wilmoth
Daniel sent a letter to the Prime Minister asking to be
relieved of his position as the Deputy PM. His letter of
resignation outlined a series of disagreements between
himself and the PM and stated that he could no longer serve
as his deputy. The principal disagreement had to do with
Daniel,s desire to move his ministry to new quarters at a
higher lease cost. When questions were raised about the
move, Spencer failed to support Daniel. As a result of this,
Daniel told PolOff that he and PM Spencer were no longer
speaking outside of their official functions. The PM, Daniel
reiterated, had failed to support him when he came under
attack from opposition forces and refused his counsel on
several issues under his purview. He claimed that this
situation has prevailed for some time, and that while he had
tolerated it previously, the direction of the country has led
him to change his position. (Note: Daniel won his seat by
the largest majority of any of the candidates in the previous
election, winning by an almost 2 to 1 margin and is extremely
popular in his own district. End note.)


5. (C) According to Daniel, there is a "kitchen cabinet"
around the PM, most of whom are not elected, who make all of
the real decisions in Antigua. He claimed that the PM is
very close to the Venezuelans, the Chinese and the Iranians
-- the latter two through his close ties to the Shoul family
on the island. The Shouls are a wealthy family of Lebanese
descent who are closely connected to the PM and the UPP. The
PM has decided it is in Antigua,s interest to play in the
world of superpower politics, Daniel lamented.

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Growing Indebtedness to the Chinese
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6. (C) He shared his concern about the sheer volume of
projects purported to be funded by the Chinese over the next
few years, which will put his heavily indebted nation
millions of dollars further in debt. He said the Chinese are
building an expansion of the international airport, a new
power plant, and have just completed a feasibility study to
redo the port. The PRC recently completed a new hospital,
which is the largest in the Eastern Caribbean, and a new
cricket stadium, which combined reportedly cost well over
US$200 million. These projects are reportedly financed
largely though low interest loans and will be constructed
with imported Chinese labor. The PM has been selling these
projects with the promise that the Chinese may forgive much
of this debt in the future, Daniel noted.

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The Fallout From a Daniel Defection
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7. (C) The Independent Barbuda People's Movement (BPM) MP
Trevor Walker explained to PolOff in a recent meeting that
Daniel is constitutionally barred from leaving the UPP to
join the ALP. However, if he were to resign his cabinet
position he could inform the Governor General that he intends
to leave the UPP and sit as an independent. Were this to
happen, Walker explained, he would personally feel compelled
to support his "long-time friend" and leave the government.
(Note: Walker formed a coalition government with the UPP and
is the Minister of Public Works.) Moreover, he conjectured
that it would only be a matter of time before others from the
UPP defected from the PM and perhaps formed a third party,
which could then form a new coalition government with the
ALP.

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ALP Corruption Remains Achilles Heel
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8. (C) The problem with this scenario, however, is that the
government holds its own ace in the form of a soon to be
completed inquiry into major high-level corruption during the
many years of Lester Bird,s leadership. The government is
in possession of a potentially very damaging report, which
the UK High Commission passed to the Embassy, that would
undermine the ALP,s credibility as an alternative to the
current government.

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Chinese Concerns about Antigua "Stability"
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9. (C) The PRC,s Ambassador to Antigua and Barbuda Chen
Ligang asked PolOff at a recent dinner hosted by a local real
estate developer for his opinion on the "political
instability" in Antigua. Chen explained that his government
was concerned that the UPP will fall given the large number
of projects that they have running on the island. Chen said
he was unaware that some of the proposed projects were
controversial on the island, and insisted that China was only
trying to help on projects at the request of the Antiguan
government. When asked how much money his country had
involved in projects on the island he said he was not aware
of the exact amount, but estimated that it would be hundreds
of millions of U.S. dollars after all of the recently
announced projects are completed.

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Comment
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10. (C) Antigua's political power structure is divided by
the thinnest of margins. A one seat swing in the last
election would have left the two parties tied, which is why
so many have taken the announcement by Minister Daniel
seriously. Given his close relationship with Walker and the
potential for one (or both) of them to covet the Prime
Minister's chair, it is possible that Daniel could bring the
government down. The outcome of the court cases could make
this move unnecessary -- though this is unlikely. China's
apparent consternation over the raucous nature of Antigua's
political system is understandable given that they have a
significant amount of money invested in their relationship
with UPP and that the ALP has pledged publicly to reevaluate
Antigua's cozy relationship with China. Personal
self-interest tends to win out in the local political
calculus, however, which could in the end keep all the UPP
stars in their current orbit to keep the UPP in power.

HARDT