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C O N F I D E N T I A L SECTION 01 OF 03 SARAJEVO 001174 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR D (SMITH), P (BAME), EUR (DICARLO), EUR/SCE 
(ENGLISH, SAINZ, FOOKS), NSC FOR BRAUN, USNIC FOR WEBER, 
GREGORIAN 
 
E.O. 12958: DECL: 05/10/2016 
TAGS: PREL PGOV BK
SUBJECT: BOSNIA:  BREAKAWAY CROAT "HDZ 1990" BUILDS ITS 
RANKS 
 
 
Classified By: AMBASSADOR DOUGLAS MCELHANEY.  REASON:  1.4 (B) AND (D). 
 
¶1.  (C)  SUMMARY AND COMMENT:  Breakaway ethnic Croat "HDZ 
1990" made a dramatic entry into BiH politics on April 26, 
when it co-opted enough key parliamentary votes to block 
constitutional reform.  Since then, it has tried to ride on 
the momentum as it builds local party structures.  Lacking 
definition, HDZ 1990 is currently running on negatives:  "no" 
to constitutional reform, "no" to the entity structure, "no" 
to Covic (the leader of the mainstream HDZ party), "no" to 
the international community and the U.S..  And while HDZ 
1990's party president, Bozo Ljubic, once tried to position 
himself as a pro-European moderate, he is increasingly waving 
his hardline credentials.  That is no surprise; many of HDZ 
1990s members have a well-established reputation as Croat 
nationalists (some associated with the discredited "Third 
Entity" movement).  HDZ 1990's appeal to the nationalist 
right likely means that Covic's HDZ will increasingly run to 
the right as well; both will seek coalition partners among 
the small Croat parties.  HDZ 1990's success in the elections 
depends on its ability to gain backing from them as well as 
from the Catholic church (and potentially the HDZ in 
Croatia).  For now, Covic dismisses HDZ 1990 as lacking both 
structure and votes (he thinks they will be unable to cross 
the minimum vote threshold come October).  Publicly, Covic -- 
a tough streetfighter not to be underestimated -- is trying 
to remain above the fray, while ensuring that he throws every 
legal obstacle possible into HDZ 1990's path.   END SUMMARY. 
 
FIRST, STOP CONSTITUTIONAL REFORM . . . 
 
¶2.  (C)  Over the past few weeks, breakaway ethnic Croat "HDZ 
1990" has focused on defining its public profile.  To gain 
traction with Croat voters, HDZ 1990 needed to be seen as 
more than the by-product of the poisonous personal 
relationship between its leader, Bozo Ljubic, and HDZ's party 
president, Dragan Covic.  Ljubic (whose bid for the HDZ 
Presidency last June failed due to a -- probably fraudulent 
-- vote count at the party congress) found his defining issue 
in the BiH Parliament:  the U.S.-brokered, EU-backed 
constitutional reform.  With Covic among the reform's 
negotiators, Ljubic calculated that he could position himself 
as the "true" protector of Croat interests, while at the same 
time differentiating his party from Covic's HDZ.  As a 
result, Ljubic sped up his breakaway party's formation, 
holding a hasty founding Congress on April 8; the party's 
first "proper" Congress will be held in July. 
 
¶3.  (C)  Ljubic drew valuable backing from Croats burned by 
Covic's autocratic attitude.  Covic's decision in November 
2005 to kick the speaker of the BiH House of Representatives, 
Martin Raguz, out of HDZ's ranks backfired.  Raguz joined 
Ljubic in HDZ 1990; eventually, Raguz' influence in the House 
meant that HDZ 1990 was able to pull four of five HDZ 
parliamentary delegates into the "no" column when 
constitutional reform came to a vote on April 26.  During 
end-game negotiations, it became clear that HDZ 1990's 
delegates would not agree to ANY compromise proposal 
(including a retrograde idea to give Croats an ethnic veto 
over all legislation).  Rather, HDZ 1990 argued that the 
elections should be postponed two-three months, giving them 
much-needed time to consolidate their party while pretending 
to "negotiate."  Their ploy failed; the parties backing 
constitutional reform recognized it as an effort to whittle 
away at the solid 26 votes in favor of the package and expand 
the 16 against, and went ahead with the vote in parliament -- 
regrettably, however, failing to reach the required 
two-thirds majority by two votes. 
 
. . . THEN DEFINE A PLATFORM 
 
¶4.  (C)  Ljubic has trumpeted the failure of constitutional 
reform as a victory for his nascent party, and is counting on 
it to give him momentum.  But he still has to define HDZ 1990 
more broadly.  This is no alliance of moderates; HDZ 1990 
will run to the right, not the center.  Raguz' relative 
moderation in the BiH parliament over the past couple of 
years had helped him overcome his former association with the 
"Third Entity" movement (which favored construction of a 
Croat-majority entity in Herzegovina and was disbanded by the 
High Representative in 2002).  However, Raguz has returned to 
his roots.  Other troubling hardliners can also be counted 
among HDZ 1990's adherents: Vinko Zoric, a Croat member of 
the BiH House of Representatives (a known advocate of Croat 
self-rule), Slavica Josipovic, Pero Markovic, and Ivo 
 
SARAJEVO 00001174  002 OF 003 
 
 
Lozanzic.  Ljubic, who last year was trying to cast himself 
as a pro-European moderate, has taken on as his advisor 
Drazenko Primorac, a former associate of the (now-convicted) 
one-time Croat member of the BiH Presidency, Ante Jelevic. 
 
¶5.  (C)  Ljubic's recent rhetoric, both public and private, 
confirms his swing toward a hardline defense of Croat 
interests.  On May 19, he told us that he would "never" 
compromise his principles on constitutional reform, which 
would only cement the entity system and weaken Croat 
influence in state institutions.  He claimed it was up to the 
U.S. to bring the Bosnian Serbs to a (different, presumably 
pro-Croat) compromise.  When asked how BiH would pursue 
reforms needed for EU membership in the absence of U.S. or 
OHR initiatives, Ljubic shrugged, saying "Maybe we'll just go 
back to fighting each other then." 
 
¶6.  (C)  So far, Ljubic is hyping his credentials as a 
defender of Croat interests generally, waiting until the 
upcoming party congress to define further specifics on 
issues.  Avoiding Bosnian domestic issues means that Ljubic 
is increasingly running against the international community 
and the U.S.  In one recent example, Ljubic publicly averred 
that the referendum in Montenegro was somehow linked to 
constitutional reform -- reform here, he claimed, was part of 
a plan to compensate (presumably Serb) losses at the expense 
of Croats in BiH. 
 
BUILDING A BASE 
 
¶7.  (C)  Meanwhile, the race is on between Ljubic and Covic 
for HDZ voters and assets.  HDZ is asking the BiH Election 
Commission to prevent HDZ 1990 from registering for the 
elections in October, and is also fighting for control of the 
party symbol, name, etc.  Rumor has it that the two will also 
be battling over party properties.  There are also reports 
that Croatian political figure Ivic Pasalic is bankrolling 
Ljubic and the HDZ 1990, though that remains also in the 
realm of rumor. 
 
¶8.  (C)  At the grassroots level, HDZ 1990 is quickly 
establishing its party infrastructure by forming municipal 
boards, though their regional strength varies considerably. 
In Capljina (a stronghold of Ljubic associate Pero Markovic), 
11 city councillors have opted for HDZ 1990, with only four 
still loyal to Covic.  But some in Covic's HDZ argue that 
Capljina (and Ravno municipality) are making a huge mistake, 
as Covic still has influence over Cantonal officials who 
control municipal purse strings.  In Siroki Brijeg and Grude 
municipalities, Covic's support is holding firm, though that 
may change; this is a Vinko Zoric (HDZ 1990) stronghold. 
Ruza Sopta, the HDZ representative in the BiH House of 
Representatives who has so far stuck with HDZ, is probably a 
weak link; she voted with HDZ 1990 against constitutional 
reform, claiming she "could not go home" to Siroki Brijeg 
otherwise.  Mostar is (so far) considered to be a Covic 
stronghold, though HDZ 1990 is building its organization 
there.  In addition, having shown its strength in the BiH 
parliament, HDZ 1990 quickly established its caucus in the 
entity-level Federation parliament (six representatives plus 
one member of the House of Peoples). 
 
¶9.  (C)  But nascent party structures in key locations does 
not mean that HDZ 1990 is on a winning streak.  HDZ president 
Covic is clearly biding his time, in part due to the imminent 
conclusion of his own court case.  Covic -- a tough and canny 
politician -- told the Ambassador that he believed HDZ 1990 
was so structurally weak that it would not be able to 
surmount the minimum vote threshold for representation in the 
BiH parliament in October.  Covic also believes that the 
declining number of Bosnian Croat voters in BiH means that 
there will be only four, not five Croats (from exclusively 
Croat parties, as opposed to Croats running in multi-ethnic 
parties like the SDP) in the next parliament.  Though Covic's 
assessment is self-serving, it is not wrong, at least not 
now.  It remains an open question whether HDZ 1990 can build 
a functional party structure that will be effective in 
October. 
 
LJUBIC FOR PRESIDENT? 
 
¶10.  (C)  All signs are that Ljubic has his eyes on what he 
considers the big prize:  election as the Croat member of the 
BiH Tri-Presidency.  He believes he will get the job, 
provided he can gain support from small Croat parties. 
 
SARAJEVO 00001174  003 OF 003 
 
 
Sources cite recent meetings between Ljubic and HSP (Croat 
Party of Rights, a small far-right party) leader Jurisic; HSP 
has agreed to open negotiations with HDZ 1990 despite 
Jurisic's own open pretentions to the Tri-Presidency slot. 
Negotiations continue amid rumors that Cardinal Puljic 
favored the coalition; other coalition partners may also be 
available if HSP falls through.  But undoubtedly Covic and 
his HDZ supporters are also looking for coalition partners, 
making a deal potentially expensive. 
 
¶11.  (C)  Backing from Catholic Church officials will also be 
important; their opposition to constitutional reform brought 
with it a natural alignment with HDZ 1990's stance.  HDZ 
Zagreb's views may also play a role.  So far, it has remained 
above the fray.  But Croat citizens resident in BiH also vote 
in Croatian elections as the eleventh electoral district of 
Croatia (they did in the 2004 Croatian presidential 
elections), so HDZ Zagreb may have to deal with the split 
sooner or later.  Croatian Prime Minister Sanader (no fan of 
HDZ president Covic) recently told Bosnian High 
Representative Christian Schwarz-Schilling that he regretted 
the fractures in the Bosnian Croat political scene and 
believed that "reunification" of the various HDZ factions was 
possible and even likely -- presumably he was contemplating 
the possibility that Covic will finally be convicted for 
financial misdeeds in the ongoing BiH court case, which would 
open the door for HDZ breakaways to rejoin the mother party. 
 
COMMENT 
 
¶12.  (C) The turmoil in the Croat camp has both positive and 
negative aspects for political developments here.  Croats 
themselves bemoan the fact that their representation, already 
small, is ever more fractured.  Those fractures, however, are 
a function of internecine fighting and personal animosities, 
not international interference or pressure.  Indeed, 
breakaway Croat political figures with aspirations to the 
country's Presidency and Parliament have used the figleaf of 
constitutional reform to seize the spotlight by opposing the 
reform, not because it in any way damages Croat interests but 
because such opposition distinguishes them from fellow Croat 
politicians -- namely Covic -- who accept the reform mandate. 
 The atomization of the Croat political front, which for 
years has been highly monolithic, is not in and of itself a 
bad thing, opening the door for a greater plurality of voices 
(though most Croat parties run to the right, not the center). 
 It will also, however, make it more difficult to negotiate 
coherent agreements with the Croats, particularly on issues 
like constitutional reform.  Even if the HDZ eventually comes 
together again, these fissures are likely to remain, and 
lobbying the restive Croat body politic will become 
increasingly more complex over time.  End comment. 
MCELHANEY