152299    5/4/2008 11:30    08ISLAMABAD1735    Embassy Islamabad    CONFIDENTIAL    08ISLAMABAD1702    "VZCZCXRO4934OO RUEHLH RUEHPWDE RUEHIL #1735/01 1251130ZNY CCCCC ZZHO 041130Z MAY 08FM AMEMBASSY ISLAMABADTO RUEHC/SECSTATE WASHDC IMMEDIATE 6773INFO RUEHBUL/AMEMBASSY KABUL PRIORITY 8516RUEHLO/AMEMBASSY LONDON PRIORITY 7826RUEHKP/AMCONSUL KARACHI PRIORITY 9655RUEHLH/AMCONSUL LAHORE PRIORITY 5404RUEHPW/AMCONSUL PESHAWAR PRIORITY 4141RUEKJCS/SECDEF WASHINGTON DC PRIORITYRUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL PRIORITYRHWSMRC/USCINCCENT MACDILL AFB FL PRIORITYRUEAIIA/CIA WASHDC PRIORITY"    "C O N F I D E N T I A L SECTION 01 OF 03 ISLAMABAD 001735

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/08/2018TAGS: PGOV, PREL, PKSUBJECT: HELPING RESOLVE THE DEADLOCK OVER THE JUDGES

REF: ISLAMABAD 1702

Classified By: Anne W. Patterson, for reasons 1.4 (b)(d)

1.  (C)  Summary:  Pakistan People's Party (PPP) Co-Chair Asif Zardari still seems determined to limit the power theformer Chief Justice, but Nawaz Sharif has succeeded in changing the debate to how, not if, Iftikhar Chaudhry will berestored.   Zardari's motivation is not to help President Musharraf stay in office, as his relations with Musharraf andISI are fraying badly, but to protect himself.  Zardari claims ISI has sought to embarrass and endanger him; thisprompted Zardari to put a hold on the new South Waziristan “peace deal” (see septel for details).

2. (C)  The most credible formulation of the judges' restoration involves a term limit for the former Chief Justice, a restriction on the court's ability to interject itself in any topic (suo moto), and curtailing the Chief Justice's ability to make case assignments.  Zardari wants UK help in urging Pakistan Muslim League-N (PML-N) leader Nawaz Sharif to work with him.  Zardari said definitively he would not break up his coalition with Nawaz, since his majoritywould be razor thin, or he would be dependent on Musharraf's Pakistan Muslim League (PML) party. For the first time, Zardari said Musharraf “has to go sometime.”   Saying he was broke, Zardari also requested USG help with security.

3.  (C)  Separately,  Musharraf indicated he is not concerned about the former Chief Justice's return to the bench, if it is temporary.  Musharraf asked for our help in convincing Zardari that he is better off without Nawaz and to urge that Zardari ally instead with the PML.  Embassy believes this will be difficult, if not impossible.  Zardari does need help, however.  It may be time for a high-level Washington call to Musharraf asking him to reach out to Zardari in amore positive way, including calling off his supporters' maneuvers against Zardari and weighing in with his UAE contacts to pressure Nawaz to back down.  End Summary

4. (C)  Ambassador met with PPP co-chairman Asif Zardari May 3 at his request.  Zardari emotionally conveyed a long litany of complaints against Musharraf and particularly ISI Chief General Nadeem Taj.  He said Nadeem Taj had tried to embarrass and endanger him:  he was going “to instruct (National Security Advisor to the Prime Minister) Durrani tofire him.”  Zardari claimed the intelligence agencies were behind shots fired at his Karachi home - he had complained to Taj, who claimed not to know firing had occurred.   “Nadeem Taj should be fired for incompetence if he didn't know about the attack on my house, or he thinks I am a fool,” said Zardari.

5. (C)  Zardari criticized  Musharraf's handling of the visit of Iranian President Ahmadinejad saying, this is “not an image I want to convey to the western world,” and Musharraf's trip to China, in which he had bought “costly new toys.”  He also alleged that Musharraf was attempting to force the PPP into an alliance with PML President Chaudhry Shujaat Hussain. Zardari noted that ISI was not honest with him on the components of the new South Waziristan “peace deal,” which he has now told Interior Minister Rehman Malik to delay. Zardari also alleged that Musharraf is still holding some corruption cases over his head.  Zardari concluded  “I am Musharraf's lifeline, but he just doesn't get it.”

6.  (C)  Alarmingly, Zardari noted his personal security was inadequate and wondered why there were no threats against Nawaz Sharif.   Zardari had “his own boys” around the house but he could not continue to pay them their modest salaries much longer.  In a comment that may not bode well for the future, Zardari said flatly that he was broke, with high expenses and almost no income.  He asked for USG help with security.

7.  (C)  Ambassador said it made absolutely no sense for Musharraf to try and undermine Zardari and she did not believe it.  But she supposed no one could rule out rogue elements in the intelligence agencies and misguided PML supporters.  Zardari said (for the first time) that “Musharraf must eventually go.”

Controlling the Former Chief Justice------------------------------------

8. (C)  Zardari then candidly outlined his reasons for his determination to curtail the powers of the former Chief Justice:  (1) If the former Chief Justice ousted Musharraf, there would be the vexing question of who should become President; a debate on a new president was not in his interest; (2)  Zardari is still worried about the court's overturning the National Reconciliation Ordinance which granted him and others immunity from prosecution; Zardari noted there were still some cases pending against him.  He thinks he can resolve this issue in the package of constitutional reforms; (3)  Zardari said that, for family reasons, he does not want to become Prime Minister right now, but he did not rule out taking the job in the next five years.  He is concerned that, if restored, the former Chief Justice would not only declare Musharraf ineligible to be President but would absolve Nawaz of corruption charges and thus pave the way for Nawaz to run for parliament (a necessary requirement to be Prime Minister).  At this point,he does not think Nawaz has the two/thirds majority required to overturn the two-term limit on prime ministers. To block Nawaz's chances, Zardari said he was going to try to get the June 18 parliamentary by-elections delayed.

9.  (C)  Zardari outlined several options for restoring the judges:  bringing back Iftikhar Chaudhry, but not as chief justice; limiting the former Chief Justice's term to three years, which would expire in June, 30, 2008; and curtailing his suo moto powers and his ability to assign judges to cases.   He said the most practical solution was limiting theterm of the Chief Justice to three years.   He asked for assistance in putting pressure on Nawaz through third parties, like the UK, where Nawaz and his children had businesses and assets.   He also said he had been in touch with leaders in Abu Dhabi who had agreed to reach out to Nawaz on his behalf.

10.  (C)  Zardari said flatly he was not going to break up the PPP/PML-N coalition.  If it came apart, the PPP's margin in the National Assembly would be razor thin.  If the PPP was forced into an alliance with the PML, the PPP would bedependent on Musharraf and PML President Chaudhry Shujaat Hussain.   There was no way, Zardari made clear, he was going to get into that position; working with Shujaat would kill him politically.

Musharraf: Sensing an Opportunity---------------------------------

11.  (C)  Separately, Ambassador met with President Musharraf May 2, at his request at the home of a third party. Musharraf seemed extremely relaxed and confident that the PPP could work out the judges issue.  Musharraf said the PPP's strategy was to seek an executive resolution, then a complicated constitutional amendment, to restore the deposed judges.  Musharraf seemed unconcerned with a scenario in which the former Chief Justice returned but with a restricted tenure that ended on June 30, 2008.  The PPP, recounted Musharraf, was convinced that Nawaz would not leave the coalition.  Musharraf knew Zadari was motivated by self-interest and not by an interest in keeping Musharraf in office.

12.  (C)  Musharraf mused that as a commando, he had been trained to plan for the worst case.  The PPP had no fallbackstrategy, Musharraf claimed.  If Nawaz left the coalition, the PPP would have a thin margin in the National Assembly (see reftel), but if they joined with PML, the margin would be comfortable.  “I would like your government's help,” Musharraf said, “in convincing Zardari that he should not insist on dumping the Chaudhrys (Shujaat and his cousin,National Assembly Opposition Leader Pervaiz Elahi) if the coalition with Nawaz breaks apart.  He will need PML.”   .13.  (C)  Ambassador asked if Zardari had told Musharraf that he would not accept the Chaudhrys.   Musharraf seemed not entirely clear on this point, perhaps since most of these discussions have been done through intermediaries.  Musharraf said he was under no illusions about the Chaudhrys, but they still controlled more of the PML party than anyone else. Moreover, the Chaudhrys had been loyal to him.  Musharraf said Zardari was really asking him to get rid of the Chaudhrys before any deal had been reached.  This would break up the PML, and Nawaz would be the winner.  If Zardari decided to get rid of Nawaz, however, there was more chance of keeping the PML together if it could join the coalition as a whole.

14.  (C)  Ambassador asked if the Muttahida Quami Movement (MQM) (a former member of Musharraf's government that recently had joined with the PPP in the Sindh provincial government) would exert a high price for their twenty-five votes in the National Assembly.  Musharraf recounted his long history with Altaf Hussain and said he could control the volatile MQM leader.  In response to a question, Musharraf said reports that he had agreed to give up his powers to dissolve the National Assembly (under article 58.2(B) of the constitution) were entirely untrue and ridiculous.  Repeal of this, he said, would be a recipe for martial law since it would leave no intermediate options.

15. (C)  Comment:  Zardari and Nawaz continue to play the long game to achieve their separate ambitions to be PrimeMinister.  The challenge is to focus them on the current challenge--a compromise agreement to restore the judiciary. Then, the new government can work on fighting the insurgency and fixing the economy.  This is still about who blinks first.  Despite Zardari's bravado, Nawaz has succeeded in changing the debate to how, not if, the former Chief Justice returns.  The PPP is under pressure from their own (the lawyers' movement); Nawaz is reaping the popular glory as principled protector of the judiciary; and now Zardari feels that Musharraf is working against him as well.

16.  (C)  With the PPP/PML-N deadlocked over the judges issue, Musharraf senses an opportunity to reopen theprospects for the PML to join the coalition.  ISI has been meddling, and the PML has been issuing statements offering to “help” the PPP resolve the judges issue.  An ISI front filed a case in the Supreme Court asking to block National Assembly consideration of the restoration of the judiciary (reftel), and key PML parliamentarians are being encouraged not to defect to Nawaz.  From PML's perspective, all this makes sense.  We believe, however, it will be impossible to convince Zardari to work with the PML right now.  Musharraf's best bet is to strengthen Zardari by calling off the PML and encouraging his friends in the UAE to pressure Nawaz.  A high-level Washington phone call to Musharraf may be in order.

17. (C)  See septel regarding Zardari's intent to delay the South Waziristan agreement.  If he is serious, this could prompt a showdown with the Army/ISI and affect the PPP's relationship with the Awami National Party.  We defer toWashington on what would be possible to enhance Zardari's security; it is not clear why the PPP-led government cannot do this for him.

PATTERSON ?