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TO RUEHC/SECSTATE WASHDC IMMEDIATE 2722
INFO RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
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RUEHDT/AMEMBASSY DILI 2047

S E C R E T SECTION 01 OF 03 DILI 000327 
 
SIPDIS 
 
NOFORN 
 
DEPT FOR EAP/MTS 
NSC FOR HOLLY MORROW 
USUN FOR GORDON OLSON AND RICHARD MCCURRY 
USPACOM FOR JOC AND POLAD 
SIPDIS 
 
E.O. 12958: DECL:  6/22/2016 
TAGS: PGOV MOPS ASEC KPKO MY AS TT
SUBJECT: EAST TIMOR SITREP: PRESIDENT WILL RESIGN TOMORROW UNLESS 
PRIME MINISTER RESIGNS FIRST 
 
REF: A) DILI  316; B) DILI 322; C) CANBERRA 952 
 
DILI 00000327  001.2 OF 003 
 
 
CLASSIFIED BY: Grover Joseph Rees, Ambassador, U.S. Embassy 
Dili, Department of State. 
REASON: 1.4 (b), (d) 
 
 
 
¶1. (U) Summary: 
--- President will resign tomorrow if Prime Minister does not; 
--- Ex-Minister Lobato arrested; 
--- More anti-Alkatiri demonstrators arrive in Dili.. 
End summary. 
 
President will resign tomorrow if Prime Minister does not 
--------------------------------------------- -------------- 
------------- 
 
¶2. (U) President Xanana Gusmao announced late this afternoon 
(June 22) that unless Prime Minister Mari Alkatiri submits his 
resignation by tomorrow morning, "it is I who will send a letter 
to the National Parliament, to inform them that I will step down 
as President of the Republic, because I am ashamed at the 
State's bad behavior toward the people and I no longer dare to 
face the people." 
 
¶3. (SBU) Prime Minister Alkatiri had told President Gusmao late 
yesterday afternoon that he would seriously consider the 
President's demand that he resign, but that he needed a day or 
so to consult with his colleagues in the Fretilin Party (see Ref 
B).  Today, however, Alkatiri responded instead with a 
counterproposal.  The Prime Minister proposed that he remain in 
office but appoint two Vice Prime Ministers who would assume 
some of his responsibilities.  This was a variant on a 
suggestion that had been made by Foreign Minister Jose 
Ramos-Horta three weeks ago, before the current accusations that 
Alkatiri had engaged in serious criminal conduct including the 
creation of an armed group to kill various Alkatiri critics. 
The earlier Ramos-Horta proposal for a strong deputy prime 
minister had been part of a package of reforms and personnel 
changes that would have created a "government of national 
unity."  Alkatiri had summarily dismissed the proposal at the 
time, and today's version lacked most of the conciliatory 
features of the previous proposal.  The two Vice Prime Ministers 
under today's proposal were to be current Minister of State 
Administration Ana Pessoa, who is Alkatiri's closest ally and 
confidante, and Minister of Health Rui Araujo, who is highly 
regarded but has not made waves in his four years as an Alkatiri 
cabinet member.  The proposal was presented to the President by 
Ramos-Horta at about noon today.  Embassy has not yet 
ascertained whether Ramos-Horta endorsed the proposal or merely 
offered to be an intermediary. 
 
(4) (SBU)  It was widely assumed today that the President would 
reject Alkatiri's counterproposal, since his recent call for 
Alkatiri's resignation was based not on concerns about the 
structure of the Cabinet but on the President's belief that 
Alkatiri had committed serious crimes and could not be trusted. 
Nevertheless, late this afternoon an advisor to Ramos Horta told 
Emboff that the President was currently "considering" the 
proposal, and a source in the President's office indicated that 
the ongoing discussions would not end today. 
 
(5) (SBU) At approximately 4:00pm today, Jose Reis, one of the 
Fretilin Party's two deputy secretary generals and a close ally 
of Prime Minister Alkatiri, made a public statement on behalf of 
the Party in which he said that the Party will not ask Alkatiri 
to resign. During the same press conference, Reis announced that 
the Prime Minister would give up his portfolio as Minister for 
Natural Resources and that a new minister would be named to fill 
that closely held ministry.  He continued by stating that two 
new Vice Prime Minister positions would be created. 
 
 
DILI 00000327  002.2 OF 003 
 
 
(6) (U) At about 5:00 p.m. President Gusmao began a lengthy 
speech to domestic and foreign journalists gathered outside his 
office.  The speech set forth a broad array of criticisms of 
various Fretilin leaders, particularly Alkatiri and other 
members of his "Mozambique group".  It made clear that the 
President regards the recent Fretilin Party Congress, in which 
Alkatiri was reelected by a show of hands instead of the legally 
mandated secret ballot, as invalid and illegal.  Gusmao said the 
abolition of the secret ballot violated both the Constitution 
and the law governing political parties (Article 18c of the 
latter specifies that leaders of political parties are to be 
elected via secret ballot).  At the close of his speech, the 
President stated that he could no longer face the people under 
the current circumstances.  He demanded that Alkatiri assume 
responsibility for the current crisis and step down immediately. 
  He also demanded that Fretilin hold an extraordinary Congress 
within the week to elect new party leaders with a secret ballot. 
 If Alkatiri did not resign, he said, he himself would send a 
letter to Parliament in the morning tendering his own 
resignation. Under the Timorese Constitution, if the President 
resigns the President of Parliament, Francisco Lu'Olo Guterres, 
will become the interim President and elections for a new 
President must be held within ninety days.  Lu'Olo is also the 
President of Fretilin, re-elected along with party Secretary 
General Alkatiri at the Party Congress whose procedures 
President Gusmao declared illegal in his speech today. 
 
(7) (U) In a telephone interview with a Portuguese journalist 
shortly after the President's speech, Alkatiri reiterated his 
intention not to resign.  He stated that "the current situation 
is so complex that a precipitous decision could complicate 
things even further." 
 
(8) (S/NF) Comment:  While it was predictable that Alkatiri 
would not resign, see Ref B, it is not clear why President 
Gusmao now intends to tender his own resignation rather than 
exercise his constitutional power to dismiss the Prime Minister 
as he had recently indicated he would do.  See Ref A.  One 
possibility is that the President's former legal advisor, 
Portuguese law professor Pedro Barcelar Vasconcelas, who had 
reportedly advised the President that article 112 of East 
Timor's Constitution authorizes him to dismiss the Prime 
Minister in the current circumstances, might have changed his 
position and urged the President not to dismiss Alkatiri. 
Embassy had received reports that members of the tight-knit 
Portuguese expatriate community in Dili, which is overwhelmingly 
pro-Alkatiri, were making efforts to enlist Vasconcelas. 
Professor Vasconcelas' legal advice was reportedly instrumental 
in the President's decision last year to support Prime Minister 
Alkatiri during the May 2005 anti-Alkatiri demonstration led by 
East Timor's Catholic Bishops. 
 
(8) (SBU)  Comment continued: Another possibility, more 
consistent with some of the President's recent conversations 
with Ambassador Rees and others, is that he still believes he 
has the constitutional authority to dismiss Alkatiri, but that 
he also believes Alkatiri might succeed in painting him as the 
perpetrator of an unconstitutional coup d'etat.  By using the 
imminent threat of his own resignation as his only weapon in the 
struggle against the Prime Minister, Gusmao hopes to make clear 
that he is seeking the good of the country, not personal power. 
Nevertheless, the President has now put himself in a position 
that may well force him to resign tomorrow. 
 
(9) (SBU) Comment continued: It is possible, although unlikely, 
that the President could run in the election that must be held 
within 90 days to fill the vacancy created by his own 
resignation.  If he did run he would presumably seek a popular 
mandate for his plan to dismiss the Government.   End Comment. 
 
Ex-Minister Lobato arrested 
--------------------------------------------- - 
 
DILI 00000327  003.2 OF 003 
 
 
 
(10) (C) As reported in reftel, former Minister of Interior 
Rogerio Lobato was taken into custody by a prosecutor working in 
the office of East Timor's Prosecutor General at about 9:20am. 
Although neither Australian forces nor police were technically 
involved in the arrest, the arresting prosecutor was reportedly 
accompanied by a legal officer from the Joint Task Force (JTF), 
and armed members of the Australian Defense Force (ADF) were 
reportedly standing nearby.  Lobato reportedly put up no 
resistance, despite earlier concerns that he was armed.  Lobato 
was subsequently brought before a judge for a detention review 
hearing.  According to Prosecutor General Longinhos Monteiro, 
the presiding judge accepted the prosecution's request that 
Lobato remain in custody pending further proceedings, but the 
judge questioned whether the Prosecutor General's office could 
guarantee Lobato's safety if he were held in the Becora facility 
in Dili.  As the Prosecutor General could provide no such 
guarantee, the judge decided to keep Lobato under house arrest. 
 
More anti-Alkatiri demonstrators arrive in Dili 
----------------------------------------- 
 
(11) (SBU) A large number of demonstrators arrived on the 
western outskirts of Dili late this afternoon.  According to 
Malaysian forces posted at the first checkpoint through which 
vehicles arriving from the West must pass, there are currently 
114 vehicles waiting at the checkpoint.  Many of these vehicles 
are reportedly large trucks, each of which can carry up to 40 
people.  Early this evening Malaysian and Australian forces were 
working on security arrangements for conducting the entry of the 
demonstrators into Dili and for ensuring security thereafter. It 
had been reported that they might require the demonstrators to 
remain outside of Dili overnight and allow them to enter in the 
morning.  Approximately 1,000 demonstrators appear to have 
entered the city today, possibly before a decision was made to 
delay further entries.   Australian forces report that those who 
are already in the city are being allowed to proceed with 
demonstrating, but will be closely monitored.  At approximately 
9 p.m Emboffs saw numerous vehicles full of probable 
demonstrators entering the city, suggesting that a decision had 
been made to permit entry to at least some of the demonstrators 
who had been waiting at the western checkpoint. 
 
(12) (SBU) Embassy has received reports from the Australian 
forces that a decision has been made to not embed international 
forces with the protestors, as was done during the smaller June 
6 demonstration.  Instead, international troops and police 
report that they are focusing on containing the demonstrators by 
providing extensive perimeter security. 
 
(13) (U)  It is possible that the situation could become more 
volatile once the demonstrators become aware of the President's 
threat to resign tomorrow morning. 
REES