VZCZCXRO3793
PP RUEHAST
DE RUEHVL #0470/01 1430730
ZNR UUUUU ZZH
P 230730Z MAY 06
FM AMEMBASSY VILNIUS
TO RUEHC/SECSTATE WASHDC PRIORITY 0182
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 VILNIUS 000470 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958:N/A 
TAGS: PREL PGOV LH
SUBJECT: LITHUANIA'S RULING COALITION ENCOUNTERS MORE TROUBLE 
 
REFS:  A. Vilnius 431 
 
  ¶B. Vilnius 376 and previous 
  ¶C. Vilnius 469 
 
VILNIUS 00000470  001.2 OF 002 
 
 
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SUMMARY 
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¶1. (SBU) Lithuania's three-party governing coalition is defending 
itself against yet another challenge to its rule, even as a new 
party is maneuvering to join.  New Parliament Speaker Viktoras 
Muntianas is leading the new Civil Democracy Party bid for coalition 
membership, demanding a cabinet seat and parliamentary committee 
spots.  Meanwhile the coalition's largest party faces an 
investigation into allegations of bribe-taking and the opposition 
leadership is threatening votes of no-confidence against up to three 
sitting cabinet ministers.  While we do not expect that the 
opposition will take the government down, these are not the happiest 
of times for the coalition.  End summary. 
 
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A NEW PARTY 
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¶2. (SBU) Split-away Labor Party members, non-affiliated MPs, and 
some Liberal Democrats formally established the Civil Democracy 
Party on May 14, electing the Speaker of Parliament, Viktoras 
Muntianas, its chairman.  While the Civil Democracy group's 12 MPs 
declared support for the coalition's program, they have expressed 
dissatisfaction with the ongoing negotiations of a special agreement 
among parliamentary groups that would grant it secondary status. 
 
¶3. (U) The Civil Democracy group's size in Parliament makes it the 
third largest of four parliamentary groups that support the 
government coalition.  The new party is holding out for full 
coalition partnership and an agreement between the parties (rather 
than parliamentary groups), hinting to the media that it may make a 
claim for a cabineQat.  The new party is also arguing to hold 
onto vice-minister posts, parliamentary committee chairs, and Seimas 
Speaker slot.  Coalition Council meetings are planned for this week 
and should address the role of the Civil Democracy Party in the 
coalition. 
 
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A PARTY UNDER INVESTIGATION 
--------------------------- 
 
¶4. (SBU) The Labor Party that Muntianas and friends exited is 
currently under investigation.  The State Security Department (VSD) 
and the Prosecutor General's Office searched the headquarters of the 
Labor Party on May 19, reportedly confiscating records and 
computers.  The Prosecutor's Office stated that it is investigating 
suspicions that the Labor Party might have received kickbacks for 
funneling EU financial support to particular companies.  Media 
speculate that the VSD is also investigating information that the 
Labor party might have received funds from offshore companies with 
ties to Russia's special services.  Loreta Grauziniene, the Labor 
Party's Deputy Chairperson, publicly accused law enforcement 
institutions of carrying out a political order.  Gediminas Kirkilas, 
Social Democrat Defense Minister, told media that Labor should 
explain the situation to the coalition partners. 
 
¶5. (SBU) Led by Prime Minister Brazauskas, the Coalition Council 
agreed on May 22 to keep on working together despite earlier 
statements from members expressing concern over the investigations. 
Labor Party support for party leader Uspaskich remains high.  After 
the meeting, Labor announced it will not consider suspending the 
party leader's membership as the investigations continue. 
 
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OPPOSITION STRATEGY 
------------------- 
 
¶6. (SBU) The Government, having already lost two ministers since its 
formation and with the departure of two more imminent, can withstand 
the loss of only three more ministers before Lithuanian law requires 
Parliament to dissolve the Government and identify a new prime 
minister.  The opposition is targeting Health Minister Zilvinas 
Padaiga for his alleged failure to introduce health sector reforms, 
Finance Minister Balcytis for failing to lead Lithuania to the 
Eurozone on schedule (ref C), and Culture Minister Vladimiras 
Prudnikovas for conflict of interest.  The opposition parties have 
declared support for a hearing to question Prudnikovas, and believe 
they have the 29 votes necessary to initiate the process. 
Conservatives are also discussing the possibility of initiating a 
vote of no-confidence in Prime Minister Brazauskas in June. 
 
--------------------------------------------- -- 
PRESIDENT HOLDS OFF ON APPOINTING NEW MINISTERS 
--------------------------------------------- -- 
 
¶7. (SBU) Meanwhile, President Valdas Adamkus has stated he will sign 
 
VILNIUS 00000470  002.2 OF 002 
 
 
a decree to appoint Petras Vaitiekunas, Lithuania's ambassador to 
Belarus, as Foreign Minister in the near future, but the position 
remains open.  The President has not yet declared his support for 
Loreta Grauziniene, elder of Labor parliamentary group, for the post 
of Labor Minister and canceled a May 22 scheduled meeting with her. 
 
 
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COMMENT 
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¶8. (SBU) The ruling coalition is on the ropes - a familiar spot, but 
one which it has escaped from in the past.  Reduced to only 62 seats 
in Parliament, it needs the Civil Democracy group (with 12 MPs) more 
than that Party needs the coalition, and it will likely strike a 
deal quickly at least to regain a majority.  The Labor Party's 
current vulnerability improves Civil Democracy's chance of bumping 
the formeQ candidate for Social Affairs Minister and holding on to 
all its other leadership positions.  The opposition is on a roll, 
but, without enough seats to take over, they will do best to gather 
strength while the Government struggles. 
 
KELLY