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RUEHDT/AMEMBASSY DILI 2056

C O N F I D E N T I A L SECTION 01 OF 04 DILI 000333 
 
SIPDIS 
 
DEPT FOR EAP/MTS 
NSC FOR HOLLY MORROW 
USPACOM FOR JOC AND POLAD 
SIPDIS 
 
E.O. 12958: DECL:  6/26/2016 
TAGS: PGOV MOPS ASEC KCRM AS TT
SUBJECT: EAST TIMOR SITREP: PRESIDENT ACCEPTS PRIME MINISTER'S 
RESIGNATION 
 
REF: (A) DILI 316; (B) DILI  329 
 
DILI 00000333  001.2 OF 004 
 
 
CLASSIFIED BY: Grover Joseph Rees, Ambassador, U.S. Embassy 
Dili, Department of State. 
REASON: 1.4 (b), (d) 
 
 
 
(1) (U) Summary: 
---   President accepts Prime Minister's resignation; 
---   Alkatiri requested concessions, including amnesty; 
---   President to consult Council of State tomorrow on 
transition government; 
---   Ramos-Horta remains in office; 
---   Demonstrators happy, but counter-demonstrators may arrive 
tomorrow; 
---   Security in Dili. 
End Summary. 
 
President accepts Prime Minister's resignation 
--------------------------------------------- -------------- 
---------- 
 
(U)  Prime Minister Mari Alkatiri sent a letter of resignation 
to President Xanana Gusmao late this afternoon.  The President 
immediately accepted the resignation. 
 
(SBU) The resignation came almost a week after President Gusmao 
had demanded Alkatiri's resignation and threatened to dismiss 
him if he did not resign.  In the interim Alkatiri repeatedly 
told the President and other interlocutors that he was "willing" 
or "ready" to resign,  only to step back from the decision and 
propose alternative solutions and/or further dialogue.  Even 
Alkatiri's public announcement this morning, which was reported 
as a resignation by the international press, was actually only 
another announcement of "readiness" to resign.  The Prime 
Minister also announced that he was "ready" to engage in 
dialogue with the President about a transitional government and 
to "help" with the national budget.  Observers close to the 
situation, including the President, interpreted this statement 
not as a resignation but as an indication of willingness to 
engage in dialogue about the possibility of resignation.  The 
President reportedly sent a message to the Alkatiri camp that he 
would consider transitional arrangements only after receiving an 
unequivocal letter of resignation from the Prime Minister.  Late 
this afternoon the President finally received such a letter. 
The letter also reportedly offered to remain as Prime Minister 
until such time as the national budget is approved by Parliament 
--- a process that could take weeks or even months --- but the 
President has issued a press release saying he had "informed Dr. 
Alkatiri that his resignation enters into effect as from today." 
 
Alkatiri requested concessions, including amnesty 
--------------------------------------------- -------------- 
-------------- 
 
(SBU) Some of the then-Prime Minister's transitional concerns 
had to do with his personal situation.  Foreign Minister Jose 
Ramos-Horta, who has acted as an intermediary between Gusmao and 
Alkatiri, told the Dili diplomatic corps this morning that on 
Friday the Prime Minister had said he would resign but had 
stated three concerns:  whether he would be allowed to retain 
his government residence; whether his six-person security detail 
could be protected from retaliation, suggesting that such 
protection might come in the form of emigration to Australia or 
some other country; and whether he would be permitted to take a 
foreign vacation for several months before returning to Timor. 
This last concern may have arisen from reports that prosecutors 
may be prepared to charge Alkatiri with illegal distribution of 
arms.  According to Ramos-Horta, the Prime Minister raised these 
three concerns with him again this morning, plus an additional 
item:  Alkatiri suggested a general amnesty for everyone who had 
committed crimes in connection with the crisis that has gripped 
the country since April 28. 
 
(SBU) Another set of transition concerns were political. 
 
DILI 00000333  002.2 OF 004 
 
 
Although the ruling Fretilin party's Central Committee (CCF) 
unanimously passed a resolution yesterday to oppose Alkatiri's 
resignation, this may have been part of a strategy to extract a 
commitment from the President to accept a Fretilin insider as 
the new Prime Minister.  A CCF delegation consisting of Minister 
of State Administration Ana Pessoa, Minister of Agriculture 
Estanislau Da Silva, Minister of Labor Arsenio Bano, and Timor 
Sea Designated Authority Director Jose Lobato had requested a 
meeting with the President this morning to discuss transition 
arrangements, even before the Prime Minister's announcement of 
"readiness" to resign.  The delegation reportedly intended to 
propose Pessoa as a successor Prime Minister.  The President did 
not meet with the delegation today. 
 
(SBU) Comment:  The President's acceptance of prime Minister's 
Alkatiri's resignation does not rule out the possibility of 
addressing some or all of the Fretilin leadership's political 
concerns, or even the former Prime Minister's personal concerns. 
 It does, however, suggest that these concerns will now be 
addressed on their merits rather than as preconditions for a 
solution to the political crisis. End Comment. 
 
President to consult Council of State tomorrow on transition 
government 
--------------------------------------------- -------------- 
---------------- 
 
(U) In the press release announcing his acceptance of the Prime 
Minister's resignation, the President also announced that he has 
called a meeting of the Council of State for tomorrow morning, 
June 27.  The Council of State, which met last week to consider 
President Gusmao's proposal that Alkatiri either resign or be 
dismissed (see Ref A), is also charged by the Constitution to 
"advise the President of the Republic in the exercise of his or 
her functions, as requested by the President." 
 
(C) Gusmao's decision to meet immediately with the Council of 
State, rather than to meet first with the Fretilin leadership, 
took some observers by surprise.  Article 106 of the 
Constitution states that a new Prime Minister is nominated by 
the "political party or alliance of political parties with a 
parliamentary majority" and appointed by the President after 
consultation with all parties in Parliament.  The President has 
stated recently, however, that there is currently no legally 
elected Fretilin leadership to propose a new Prime Minister, 
since the recent Fretilin Congress elected party officers by 
show of hands rather than secret ballot as required by law --- a 
surprise maneuver that may well have affected the outcome of the 
election.  See Ref A.  Last week he requested that the delegates 
to the Fretilin Congress be recalled to elect party officers in 
accordance with law.  See Ref A.  This weekend's CCF meeting was 
expected to address the President's request, but did not do so. 
 
(C) According to his Chief of Staff, Agio Pereira, President 
Gusmao may seek to moot the legal issue by asking someone --- 
most likely Ramos-Horta --- to attempt to form a government by 
consulting directly with members of Parliament, not with party 
committees.  Ramos-Horta could comply with the Constitution by 
forming a government acceptable to the Fretilin Members of 
Parliament, even if it were not acceptable to the CCF, which is 
dominated by members of the "Mozambique group" and other close 
Alkatiri associates.  Alternatively, he could form a government 
acceptable to an "alliance of parties with a parliamentary 
majority" if 15 or so of the 55 Fretilin members of Parliament 
could be persuaded to join 30 or so of the 33 opposition 
members.  If, after diligent efforts, it appeared impossible to 
form a government acceptable both to the majority party or 
alliance in Parliament and to the President, the President could 
invoke article 86 of the Constitution, which gives him the 
authority to dissolve the National Parliament and hold new 
elections in cases of "serious institutional crisis preventing 
the formation of a government." 
 
(C) Among candidates for Prime Minister reportedly favored by 
the current leadership of Fretilin are Minister Pessoa and 
 
DILI 00000333  003.2 OF 004 
 
 
Minister Da Silva.  Although both of these candidates --- like 
Alkatiri --- are regarded as capable, and neither is tainted 
with the allegations of criminal activity and personal 
corruption that have been made against Alkatiri, both are 
members of the Mozambique group and have been regarded as among 
Alkatiri's closest political allies.  It is far from clear that 
the replacement of Alkatiri with Pessoa or Da Silva would help 
to end the ongoing politial crisis. 
 
(SBU)  Bishop Alberto Ricardo Da Silva of Dili, who met with the 
President this afternoon, later told the press that he had urged 
the President to select someone with broad popular appeal, such 
as Ramos-Horta or Jose Luis Guterres, East Timor's Ambassador to 
the United Nations and to the United States. Many observers, 
including President Gusmao, believe Guterres would have defeated 
Alkatiri for Fretilin's top leadership position (Secretary 
General) in May if the vote had been by secret ballot as 
required by law.  Ambassador Guterres is reportedly en route 
from New York to East Timor. 
 
(SBU) A possible compromise candidate is Minister of Health Rui 
De Araujo, a highly regarded official who is not a Fretilin 
party member but who is reportedly on a list of candidates 
recommended by Alkatiri. 
 
Ramos-Horta remains in office 
------------------------------------------- 
 
(SBU) Alkatiri's resignation also mooted, at least for the 
duration of the crisis, the announced resignation of 
Foreign/Defense Minister Ramos-Horta.  Late yesterday (June 25), 
 Ramos-Horta had announced that he would resign from both 
Cabinet positions but would remain on the job until a successor 
or successors are chosen.  This announcement appears to have 
been intended primarily as a means to apply greater pressure on 
Alkatiri to resign, since it was unlikely that Prime Minister 
Alkatiri and President Gusmao could have reached agreement on 
new Ministers of Foreign Affairs and Defense at any time in the 
foreseeable future.  In subsequent statements Ramos-Horta made 
it clear that he would be available to serve in a new cabinet if 
called upon to do so.  Horta's resignation announcement was 
followed by similar resignation announcements from 
Transportation Minister Ovidio Amaral, Vice Minister of Health 
Luis Lobato, and the Prime Minister's Gender Advisor, Domingas 
Alves.  Rumors proliferated overnight that additional cabinet 
members would soon resign, but these rumors died down after word 
got out of Alkatiri's latest announcement. 
 
Demonstrators happy, but counter-demonstrators may arrive 
tomorrow 
--------------------------------------------- -------------- 
------------ 
 
(SBU) The anti-Alkatiri demonstration in Dili, consisting of at 
least several thousand demonstrators and perhaps up to 20,000, 
continued today.  The news of Alkatiri's resignation was met 
with cheers and honking of horns, and the demonstration now 
appears to have transformed into a giant street party.  Many, 
but not most, of the demonstrators appear to have left Dili in 
response to the news of Alkatiri's resignation. 
 
(SBU) Embassy continues to receive reports that pro-Alkatiri 
demonstrators may enter from the East.  As of this writing, 
approximately 30 vehicles carrying an estimated 700 to 800 
pro-Alkatiri demonstrators are in Metinaro (approximately 40 
minutes east of Dili by road) where they stopped to allow their 
whole convoy to assemble  before entering Dili.  There remains a 
small chance that they will head into Dili this evening, but it 
is more likely that they will arrive tomorrow, and it is also 
possible that today's events will persuade some or all of them 
not to come at all.  According to Foreign Minister Ramos-Horta, 
many of these demonstrators have been misled by Fretilin 
organizers who have told them that President Gusmao is about to 
be overthrown by the Australian forces, and that they believe 
they will be demonstrating in support of East Timor's 
 
DILI 00000333  004.2 OF 004 
 
 
sovereignty rather than of Alkatiri personally.  Emboff traveled 
to Metinaro today and found the crowd to be more antagonistic 
than the current crowds in Dili.  There are concerns that their 
arrival could create a more volatile environment in Dili, but 
the Australian-led Joint Task Force (JTF) plans to keep the two 
groups of demonstrators separate. 
 
Security in Dili 
--------------------- 
 
(U) The Australian Federal Police (AFP) reported a minor fire 
near the Palacio do Governo over the weekend and several 
gunshots in the Fatuhada and Marconi neighborhoods.  Three 
Timorese in a green SUV were reportedly stopped by demonstrators 
near the Portuguese Ambassador's residence.  Portuguese special 
police (GNR) intervened, but not before the incident reportedly 
resulted in a broken windshield. 
REES