This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 000322 
 
SIPDIS 
 
NOFORN 
 
STATE FOR T, NP/MNA, EAP/ANP AND NP/RA 
 
E.O. 12958: DECL: 02/17/2015 
TAGS: PREL AORC PARM AS IAEA
SUBJECT: NPT ENVOY AMBASSADOR SANDERS HEARS AUSTRALIAN 
IDEAS TO PREVENT A THIRD TERM FOR IAEA DG ELBARADEI 
 
REF: A. STATE 18228 
 
     ¶B. 04 STATE 264699 (NOTAL) 
     ¶C. 04 CANBERRA 2356 (NOTAL) 
 
Classified By: POLCOUNS WOO LEE FOR REASONS 1.4 (B AND D). 
 
¶1.  (C/NF) SUMMARY:  In a February 9 lunch with Australian 
officials, Ambassador Jackie Sanders, Special Representative 
of the President for the Nonproliferation of Nuclear Weapons, 
discussed mainly IAEA matters, hearing Canberra's views on 
the prospects of a third term for IAEA DG ElBaradei and ideas 
to convince the Iranian leadership that its pursuit of 
uranium enrichment was economically counterproductive. 
Australian officials did not believe that the necessary 12 
votes against ElBaradei could be found at the IAEA Board of 
Governors (BOG) to deny him a third term, but that did not 
stop them from speculating on ways to try to prevent his 
re-election.  Separately, Australian Safeguards and 
Nonproliferation Office (ASNO) Director General John Carlson 
(protect throughout) passed us his informal and uncleared 
thoughts on the damage done to the NonProliferation Treaty 
(NPT) and IAEA by the behavior of both the Iranian Government 
and DG ElBaradei.  Ambassador Sanders' consultations on the 
NPT Review Conference (RevCon) reported septel.  End Summary. 
 
 
¶2.  (C)  Ambassador Jackie Sanders, Special Representative of 
the President for the Nonproliferation of Nuclear Weapons, 
had lunch with Department of Foreign Affairs and Trade (DFAT) 
Arms Control Office Director David Mason and Australian 
Safeguards and Nonproliferation Office (ASNO) Director 
General John Carlson upon arrival in Canberra on February 9. 
Saving their discussion of preparations for the 2005 NPT 
RevCon (ref A) for the more formal discussions on February 
10, Mason, Carlson, Sanders and her delegation focused on 
IAEA issues, primarily IAEA DG Mohamed ElBaradei's intention 
to seek a third term and related issues of Iran's 
non-compliance with its IAEA safeguards.  Carlson stated that 
Australia strongly supported the two-term rule for UN 
leadership, but in the absence of a contender for ElBaradei's 
job, there was a "chicken and egg" problem.  Many states did 
not support him and would therefore support a challenger if 
one came forward, but unless the incumbent left the stage, no 
challenger would come forward.  Consequently, states were 
left with little choice but to vote for the incumbent. 
Carlson commented that ElBaradei was a very bad manager and 
morale throughout the IAEA staff was "appalling."  Although 
he acknowledged that the personnel in the DG's office were 
very loyal to him, Carlson claimed no one below them was.  He 
related that both Deputy DG Pierre Goldschmidt and Technical 
Safeguards specialist Ollie Heinonen had complained to him 
about ElBaradei's poor management practices.  He said relying 
on the two-term rule would not be enough to end ElBaradei's 
candidacy and he suggested "dredging up" the DG's failed 
Technical Cooperation projects to help build support against 
him.  Carlson did not think there were 12 "nay" votes out 
there among the Board of Governors (BOG) member states -- the 
number required to deny ElBaradei a third term.  It would 
take a candidate from a G-77 country coming forward in order 
to divide that group. 
 
¶3.  (C) Carlson told Sanders that an Australian candidate 
would not be viable as a challenger to ElBaradei.  OSD NP 
Policy Officer Jake Mentz asked if that would still be the 
case if an Australian official were to be "drafted."  Carlson 
replied that that could work only if ElBaradei had already 
withdrawn his nomination.  Carlson's personal opinion was 
that FM Downer had never been a "serious candidate" to 
replace ElBaradei, and Downer would have been even less 
inclined to pursue the IAEA DG job after the Howard 
Government's convincing re-election in October 2004.  Mason 
pointed out that, of the 35 members of the BOG, 18 came from 
GRULAC, African or NAM countries, all of which had already 
endorsed ElBaradei for a third term, so the numbers did not 
appear to be there.  Sanders responded that there had been a 
time in the past when the numbers of ElBaradei non-supporters 
were there, and the issue was not over yet.  Carlson observed 
that in a secret ballot, anything could happen.  It might be 
useful to put the word out in Vienna that ElBaradei could 
fail.  He thought several countries had doubts about some of 
ElBaradei's recent multilateral initiatives that were seen as 
self-serving. 
 
¶4.  (C) Regarding ElBaradei's role in Iran's violations of 
its Safeguards agreement, Carlson asserted that Iran was 
perverting and misinterpreting NPT Article IV as a "right" to 
nuclear technology, yet ElBaradei's lengthy moratorium idea 
while new guidelines on peaceful nuclear technology transfers 
were being worked out was not practical.  Even Australia had 
interests in preserving the option to enrich uranium, in 
contrast to the separate moratorium idea proposed by the U.S. 
 Although Australia was interested in limiting research 
projects in some manner, Carlson saw problems with 
definitions such as limiting research in "regions of 
tension."  That could mean that Japan would not have the 
right to nuclear research if NorthEast Asia were declared 
such a region. 
 
¶5.  (C) Asked about U.S. efforts to curb nuclear technology 
transfers in the G-8 context, Sanders noted the good news 
that more countries were recognizing there was a problem with 
Article IV that needed to be addressed.  ElBaradei recognized 
it too.  Carlson mentioned that he had sat in on GOI lead 
nuclear negotiator Rohani's "bombastic" meeting with FM 
Downer in August 2004, during which Downer had "pulled no 
punches."  Carlson thought it a "fairly basic rule" that a 
country had to be in good standing with respect to its NPT 
Article II and III obligations before being allowed peaceful 
technology transfers under Article IV.  Since Iran was in 
clear violation of Articles II and III, how could it claim 
benefits under Article IV?   He suggested one argument that 
might make headway to push the Iranian leadership away from 
enrichment could be by demonstrating how much it was costing 
them economically, both by the diversion of scarce resources 
to the enrichment program and in lost trade and trust. 
 
¶6.  (C/NF) The next day, ASNO DG Carlson (protect) passed to 
us for informal USG consideration a document he had written, 
but had not yet cleared through his interagency, which laid 
out a legalistic case that could be made against both Iran 
and IAEA DG ElBaradei.  (NOTE: Carlson's background is an 
international lawyer.  He is the chair of SAGSI (I forget 
what the acronym stands for), the technical safeguards review 
body at the IAEA.  FM Downer also nominated him a year ago as 
the potential replacement for DDG Goldschmidt, although both 
Downer and Carlson fully understand that there is little 
chance that ElBaradei, should he stay on for a third term, 
would select Carlson as his Deputy.  End Note.) 
 
BEGIN TEXT OF INFORMAL CARLSON DOCUMENT 
--------------------------------------- 
 
¶7.  (C/NF) IRAN - THE CASE AGAINST ELBARADEI 
 
 
--  Legitimacy is important to the Iranian regime.  The 
regime constantly emphasises Iran's "legal right" to pursue 
uranium enrichment.  Loss of legitimacy would be a serious 
blow - it would undermine Iran's international support, and 
make the Iranian public aware that the regime is breaking 
international law. 
 
--  It is beyond any argument that Iran is in non-compliance 
with its safeguards agreement - and with the NPT.  A 
non-compliance finding by the IAEA Board would strip Iran of 
legitimacy.  This is why Iran has fought so hard against such 
a finding - although the Iranians say they "do not care" if 
the case is referred to the Security Council, their efforts 
to avoid this indicate otherwise. 
 
--  The IAEA Statute requires the DG to transmit the Board 
any non-compliance report from the IAEA's inspectors.  This 
implies a judgment from the inspectors and/or the DG that the 
behavior concerned constitutes non-compliance. 
 
--  The Iranian situation was complicated by the requirement 
in the IAEA Statute for non-compliance to be reported to the 
Security Council, and the belief by some that if that 
happened Iran would cease cooperation with the IAEA, or even 
leave the NPT.  Hence the opportunity was presented for the 
Iranians to introduce plea-bargaining - until now an alien 
concept in IAEA practice. 
 
--  A number of parties - including ElBaradei as well as the 
EU3 - share the view that referring Iran to the Security 
Council would achieve nothing, because of the prospect of an 
impasse amongst the P5, and therefore that negotiations with 
Iran should be attempted outside the Security Council. 
Unhelpfully, ElBaradei himself sought to insert himself into 
the negotiation process, attempting to broker a deal with the 
Iranians (at the same time, the IAEA's website was touting 
ElBaradei's merits for the Nobel Peace Prize). 
 
--  The EU3 and ElBaradei approach runs counter to the IAEA's 
role as set out in the Statute - if the IAEA comes across a 
matter that is within the Security Council's 
responsibilities, the matter is to be referred to the 
Council.  That might result in a negotiating process outside 
the Council, as in the case of the DPRK, but this is for the 
Council, not the IAEA, to manage. 
 
--  If ElBaradei had shown leadership on the non-compliance 
issue by expressing the judgment that Iran's conduct was 
non-compliance, the Board would have found it very hard to 
find otherwise.  Instead, ElBaradei took the view this is a 
"political" decision, to be made by the Board.  The effect 
was to turn a largely technical issue into a political one, 
politicizing the Board.  This played nicely into the hands of 
Iran which had encouraged the formation of a NAM chapter in 
Vienna, to present a "NAM position" in the Board. 
 
--  ElBaradei's reports to the Board appear to have been 
composed with the object of stalling a non-compliance 
finding.  As well as avoiding the "N"-word, there were 
extraordinary statements like "there is no evidence that the 
... undeclared nuclear material and activities ... were 
related to a nuclear weapons programme", confusing the 
question of the standard of proof for a non-compliance 
finding. 
 
--  Iran's success in avoiding a non-compliance finding has 
emboldened it to press on with the nuclear program.  It seems 
likely the situation will end in confrontation through the 
Iranians' failure to understand the strength of opposition to 
Iran becoming a nuclear power.  Meanwhile, the handling of 
the non-compliance issue has seriously damaged the integrity 
and credibility of the IAEA's processes.  A change is needed 
in the IAEA leadership, to return the Agency to its technical 
function. 
 
END TEXT. 
 
¶8.  (U) Renick Smith, Special Advisor to Ambassador Sanders, 
Dr. Elizabeth Murphy from the Office of Multilateral Nuclear 
Affairs, Special Assistant for Nuclear Nonproliferation 
Policy John Mentz from the Office of the Secretary of 
Defense, and Polmiloff accompanied Ambassador Sanders to the 
lunch. 
 
¶9.  (U) Ambassador Sanders and the delegation have cleared 
this cable. 
SCHIEFFER