VZCZCXRO1324
PP RUEHROV
DE RUEHTV #1967/01 2420408
ZNR UUUUU ZZH
P 290408Z AUG 08
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 8219
INFO RUEHXK/ARAB ISRAELI COLLECTIVE

UNCLAS SECTION 01 OF 02 TEL AVIV 001967 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PINR IS
SUBJECT:  THE OLMERT SUCCESSION: PROSPECTS FOR A SMOOTH TRANSITION 
VERSUS EARLY ELECTIONS 
 
------------------------ 
SUMMARY AND INTRODUCTION 
------------------------ 
 
¶1.  (SBU) A rumor floated by the Prime Minister's office around 
midnight August 24 raised the media specter of PM Olmert's 
resignation. The background: the absence of a government majority 
for passage of the 2009 draft budget, although strenuous 
negotiations past midnight secured the budget's passage by a single 
vote [13-12]. Olmert's rumored resignation, which might have 
disrupted the best-laid plans of the Kadima Primaries candidates, 
was averted. But it served to remind the political echelon of the 
uncertain prospects for a smooth transition of government and the 
need to prepare for early elections if the winner of Kadima's 
leadership primaries fails to form a viable government. 
 
----------------------------------- 
CANDIDATES MUST COVER ALL THE BASES 
----------------------------------- 
 
¶2.  (SBU) Now that registration of candidates has closed and the 
Kadima primaries are on track for mid-September, the candidates are 
trying to lay the groundwork, not only for individual victory, but 
for the work of coalition-building which must follow. They do so in 
the knowledge that in the absence of a smooth transition, the 
"Olmert succession" will necessitate early elections. The 
candidates, whether in the Kadima primaries or in eventual elections 
to the Knesset, must also prepare for additional scenarios which may 
derive from the resignation or possible suspension of the prime 
minister. 
 
 
------------- 
THE PM'S PLOY 
------------- 
 
¶3.  (SBU) Sunday night's rumor of Olmert's possible resignation 
against the background of an unruly coalition raises the prospect 
that this threat may be repeated when the 2009 draft budget comes to 
a critical plenary vote after the Knesset reconvenes in late 
October. PM Olmert could stop short of resignation and emulate his 
predecessor Ariel Sharon who, in 2005, fired cabinet ministers who 
voted against the budget in the Knesset. Sharon's well-padded 
cabinet could afford the luxury; in Olmert's depleted coalition this 
would spark a crisis -- but its deterrent value might outweigh the 
risk: Few of his coalition partners would gamble away a certainty of 
government office for a shot at membership in a hypothetical future 
coalition that might be equally incapable of passing a draft budget. 
Olmert is banking on it. Failure to pass the budget law results, 
ultimately, in dissolution of the Knesset. 
 
 
---------------------------------- 
OLMERT AND THE INDICTMENT SCENARIO 
---------------------------------- 
 
¶4. (SBU) Punctuating this uncertain prelude to the Kadima primaries 
are intermittent "noises offstage" from the Israel Police 
investigators, who say that in the next two weeks, they may 
recommend Olmert's indictment on criminal charges in three current 
investigations. PM Olmert is being questioned with increasing 
frequency -- most recently on 22 August -- and for incrementally 
extended durations. An indictment that would trigger his resignation 
or suspension from office would have significant implications for 
Kadima, rival political parties and the Israeli electorate. The 
scheduled September 17 date of the first round of the Kadima 
primaries makes the likelihood of a prior indictment minimal. PM 
Olmert is on record as saying, "If Attorney General Menachem Mazuz 
decides to file an indictment against me I shall resign immediately, 
even though I am not required to do so by law." 
 
---------------------- 
ENTER THE PRESIDENT... 
---------------------- 
 
¶5.  (SBU) In the event of an indictment, and if Olmert chooses to 
abide by this commitment, he sets in motion a constitutional process 
whereby President Peres tasks a Member of Knesset with the formation 
of a government. In doing so the President would be free to 
disregard the Kadima primaries' schedule and turn to other party 
leaders -- though not to Labor's Ehud Barak, since he is not a 
member of the Knesset -- to form a government. President Peres could 
also consider tasking Vice Premier Haim Ramon or Alternate Premier 
Tzipi Livni, both of them members of Kadima, or Kadima itself might 
seek to bring its primaries forward if it thought this might affect 
the President's choice. 
 
 
------------------------- 
A POST-PRIMARIES SCENARIO 
 
TEL AVIV 00001967  002 OF 002 
 
 
------------------------- 
 
¶6.  (SBU) A month ago, in a dramatic personal statement to the 
nation on prime time television, PM Olmert announced that he would 
not be contesting the Kadima primaries and took the unusual step of 
declaring his intention to resign once a new Kadima leader had been 
chosen. Olmert did not provide a timeframe: "I decided that I will 
not run in the Kadima Party primaries. In addition, I have no 
intention of interfering in the internal elections which will take 
place, as decided at my initiative, and I will gladly accept the 
results....When a new chairperson for the party is elected, I will 
resign my post as prime minister in order to allow the elected 
chairperson to assemble another government swiftly and efficiently." 
 
 
 
----------------------------------- 
THE DEFAULT OPTION: EARLY ELECTIONS 
----------------------------------- 
 
¶7.  (SBU) The key word "immediately" which Olmert used ten weeks 
earlier to qualify his intention to resign, if indicted, was missing 
from this later statement. Its absence has left the pundits guessing 
as to just when the PM might implement this commitment in the wake 
of the Kadima primaries. Articles 19 and 7-11 of the Basic Law: the 
Government allow a maximum delay of just over 6 months for the 
tasking of MKs with the formation of a government or alternatively 
for agreement on a date for early elections. Under the law's 
provisions, the constitutional clock does not start ticking through 
the 6-month delay until the Prime Minister's resignation goes into 
effect, which is why Olmert's lack of specificity on a time frame in 
this regard has been noted by politicians and pundits alike. There 
is also a consensus among commentators that regardless of who 
secures the leadership of Kadima in the coming primaries contest, 
the victor will encounter serious problems in forming a viable 
coalition, making early elections highly probable within 6 months of 
Olmert's as yet undetermined resignation.