VZCZCXRO3812
RR RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHVJ #1899/01 3581714
ZNY CCCCC ZZH
R 231714Z DEC 08
FM AMEMBASSY SARAJEVO
TO RUEHC/SECSTATE WASHDC 9439
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUZEJAA/USNIC SARAJEVO
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUEKJCS/JCS WASHINGTON DC
RUEKJCS/SECDEF WASHDC

C O N F I D E N T I A L SECTION 01 OF 04 SARAJEVO 001899 
 
SIPDIS 
 
EUR/SCE (HYLAND, FOOKS), NSC FOR HELGERSON 
 
E.O. 12958: DECL: 12/23/2018 
TAGS: EUR SCE HYLAND FOOKS NSC FOR HELGERSON
SUBJECT: BOSNIA - DODIK, TIHIC, COVIC WORK TO KEEP PRUD 
ALIVE; DODIK WILLING TO TALK ABOUT BRCKO AMENDMENTS 
 
REF: A. A. SARAJEVO 1869 
     ¶B. B. SARAJEVO 1655 
     ¶C. C. SARAJEVO 1862 
 
Classified By: Ambassador Charles English.  Reasons 1.4 (b) and (d). 
 
¶1. (C) SUMMARY: In an effort to sustain momentum on the 
November 8 Prud Agreement (ref A), the three signatories to 
the agreement -- Party of Democratic Action (SDA) chairman 
Sulejman Tihic, Croatian Democratic Union (HDZ-BiH) chairman 
Dragan Covic, and Alliance of Independent Social Democrats 
(SNSD) chairman Milorad Dodik -- met on December 22 to devise 
a strategy for implementing elements of Prud.  The three men 
signed three documents -- addressing the 2009 budget, the 
census and return of refugees and displaced persons, and 
constitutional reform -- and drafted an annex dealing with 
state property.  The state property annex, by calling for the 
establishment of an Agency for State Property and 
establishing a deadline for adopting the Law on State 
Property, portends some concrete progress in this area. 
However, the State Property Commission in its December 22 
meeting came no closer to an agreement, largely because of 
contention over the details of the property registration 
process. 
 
¶2. (C) SUMMARY CONTINUED: On Brcko, Dodik stressed to 
Ambassador at a December 22 meeting that international 
engagement had led him to reassess his position and that he 
would consider constitutional amendments.  Dodik, Tihic, and 
Covic at their meeting also discussed the possible 
reshuffling of the state government, which Tihic and Covic 
subsequently raised with Social Democratic Party (SDP) leader 
Zlatko Lagumdzija, whom Tihic and Covic are courting to join 
the state and Federation governments -- or support a minority 
coalition -- if the current coalitions fall.  Lagumdzija and 
SDP plan to deliberate on this proposal and reply to their 
interlocutors within two days.  We continue to applaud 
efforts by the Prud signatories to make progress on the 
agreement in order to assure the public and each other of 
their commitment to its implementation.  Yet given 
intra-party rifts and inter-party battles over details, we 
are a long way from realizing the promises of Prud.  We are 
also not ready to bank Dodik's promise that he would support 
constitutional amendments on Brcko, given his history of 
walking back on private commitments to us.  END SUMMARY 
 
Tihic, Covic, Dodik Meet to Reinvigorate Prud 
--------------------------------------------- 
 
¶3. (SBU) On December 22, Tihic, Covic, and Dodik met in 
Sarajevo to discuss the implementation of the Prud Agreement 
(ref A).  Speculation that Prud might collapse has grown in 
recent weeks after: 1) the State Property Commission failed 
to reach agreement on draft legislation consistent with Prud; 
2) the Bosniak and Croat members of the Tri-Presidency -- 
Haris Silajdzic and Zeljko Komsic, respectively -- endorsed a 
state budget inconsistent with Prud, over the objections of 
Serb Tri-Presidency member Nebojsa Radmanovic; and 3) 
parliamentary debate over census legislation became entangled 
in a Bosniak-Serb dispute over plans by the Republika Srpska 
(RS) to remove the adjective "Bosanski" from several towns in 
the RS.  At the same time, Prud opponent Haris Silajdzic has 
been diligently seeking to discredit the agreement and drive 
a wedge between Tihic and the more conservative wing of the 
SDA by claming that Tihic's compromises with Dodik (and 
Covic) pose a fundamental threat to Bosniak interests. 
 
¶4. (SBU) Tihic, Covic, and Dodik at their December 22 meeting 
signed three documents and drafted an annex, which were 
designed to clarify elements of the Prud Agreement and 
sustain the positive political momentum many observers 
believed the initial agreement created.  The three signed 
documents deal with the 2009 budget, the census and return of 
refugees and displaced persons, and constitutional reform. 
 
-- On the budget, the three men re-endorsed the 2009 budget 
framework as agreed by the National Fiscal Council, but 
concluded that the allocation of funds within the budget was 
a matter for the state parliament (and, in the case of the 
entity budgets, the entity parliaments). 
-- On the census/returns, the three men proposed that the 
Council of Ministers create an inter-agency working group 
charged with drafting a law on the census, devising a program 
 
SARAJEVO 00001899  002 OF 004 
 
 
of measures to assist sustainable returns for the period 
2009-2014, and exploring the possibility of securing 
favorable international loans or issuing bonds to finance the 
program of measures. 
-- On constitutional reform, the three men called on their 
party caucuses in the state parliament to draft legislation 
creating a special parliamentary commission that would 
prepare amendments to the Constitution consistent with the 
principles outlined in Prud.  The commission would take 
decisions by consensus. 
 
State Property Annex Portends Progress, but Stalls 
--------------------------------------------- ----- 
 
¶5. (C) The fourth document, the annex, deals with state 
property, paving the way for incremental progress on this 
element of Prud but languishing amid contentious discussions 
within the State Property Commission on details.  The annex 
indicates which property would be subject to the Law on State 
Property, calls for an inventory of all such property, and 
conveys the necessity of a subsequent agreement between 
executive bodies at all levels of government.  That 
agreement, per the annex, would first establish which 
property would be required for the state government to 
exercise its competencies, then enumerate the necessities for 
the lower levels.  Similarly, the annex proposes that all 
property should first be registered as state-level property 
and subsequently be registered at the lower levels.  (Note: 
Dodik told Ambassador on December 22 that he did not concede 
this point.  End Note)  Finally, the annex states the need to 
establish an Agency for State Property and gives a deadline 
of January 31 for adopting the Law on State Property. 
 
¶6. (C) Tihic, Covic, and Dodik sent this annex to the State 
Property Commission for its December 22 meeting, but although 
the Commission debated it, the discussion yielded no progress 
toward an agreement.  The group reached a stalemate on a 
number of questions, such as the order in which the Law, 
inventory, agreement, and registration should proceed.  The 
Commission also did not review any of the draft laws 
submitted by the RS or Bosniak representatives or the 
Commission chair, ultimately agreeing to task state-level 
Public Attorney Dragica Miletic to devise a consolidated 
draft Law from the three drafts submitted to the Commission, 
taking into account the annex to Prud.  The Commission plans 
to deliberate on this draft at its next session, scheduled 
for December 30 in Banja Luka. 
 
Brcko: Potentially Constructive Step By Dodik 
--------------------------------------------- 
 
¶7. (C) At a December 22 luncheon with Dodik, Ambassador 
welcomed the constructive dialogue that had produced Prud and 
underscored the importance of maintaining momentum on the 
agreement, particularly given efforts by some political 
leaders to derail it.  Ambassador stressed that the U.S. had 
welcomed Prud after it was announced, adding that meaningful 
compromises on reforms were necessary for Bosnia's 
integration into Euro-Atlantic institutions and meeting the 
PIC's 5-plus-2 agenda.  (Note: Dodik has claimed publicly 
that "certain foreign embassies" are working against Prud. 
End Note)  However, Ambassador reiterated that from a legal 
perspective, the element pertaining to Brcko would not work. 
(Note: We have been privately stressing this point with RS 
leaders, senior members of Dodik's party, and key Dodik aides 
since the November PIC.  End Note)  Ambassador urged Dodik to 
reconsider his opposition to constitutional amendments on 
Brcko and to return to the type of constructive dialogue on 
Brcko that had characterized their exchanges in the first 
half of 2008. 
 
¶8. (C) Dodik confirmed that HighRep Miroslav Lajcak had 
raised Brcko with him during a December 15 meeting in Banja 
Luka, adding that this exchange -- coupled with his 
discussions with U.S. officials on the margins of the PIC -- 
had persuaded him to take another look at the issue.  Dodik 
underscored that if ensuring Brcko's access to the 
Constitutional Court was the only issue, then he was ready to 
work with the Supervisor, OHR, and the U.S. to find 
acceptable language for a constitutional amendment.  Dodik 
expressed concern about the first proposed amendment, which 
he claimed "went beyond the Final Award."  (Note: The first 
of the two proposed amendments defines Brcko as an 
 
SARAJEVO 00001899  003 OF 004 
 
 
institution of Bosnia, using language drawn directly from the 
Final Award.  End Note)  Dodik also proposed specific changes 
to the second amendment, which deals with the Constitutional 
Court issue.  Ambassador welcomed Dodik's new approach and 
urged him to present his specific proposals to OHR lawyers, 
who would be best positioned to assess them. 
 
Shuffling the State and Federation Governments 
--------------------------------------------- - 
 
¶9. (C) After their meeting with Dodik, Tihic and Covic met 
with Social Democratic Party (SDP) President Zlatko 
Lagumdzija on December 22 to discuss their efforts to 
implement Prud and their plans for shuffling the state and 
Federation governments.  Covic told us after the meeting that 
he believes Lagumdzija is favorably disposed to joining the 
Federation and state governments -- although he acknowledged 
that Lagumdzija was often unpredictable -- but only under the 
condition that SBiH and HDZ-1990 are not part of the 
coalition.  He also was sanguine about the prospect of Dodik 
accepting Lagumdzija in the state government, which in the 
past he has publicly refused to do.  Lagumdzija told the 
press after his discussion with Tihic and Covic that he had 
scheduled an SDP meeting for December 23 to decide whether to 
consider participating in a coalition government or 
supporting a minority government, and that his party would 
have an answer within two days.  Covic noted, though, that 
Tihic is balking at reshuffling the government in the near 
future, citing the need to pass budget bills at the state and 
entity level first.  Covic assessed that Tihic's push for 
passing these bills is a smokescreen for ensuring support 
from the rest of SDA for the government reshuffle. 
 
Comment 
------- 
 
¶10. (C) Although the three signatories to Prud continue to 
profess to support the agreement, we are scarcely closer to 
implementation of any element of Prud than we were at its 
signing.  Numerous obstacles stand in the way of immediate, 
tangible progress.  Tihic still faces opposition from restive 
elements of his party, particularly from SDA VP Bakir 
Izetbegovic and his allies, which could hamper Tihic's 
efforts to negotiate.  Tihic admitted to us that he is 
factoring this potential opposition into his careful steps on 
Prud.  Tihic needs to balance these risks with the immense 
political capital he would gain from the successful 
implementation of the Prud Agreement.  The fall of the state 
and Federation governments (government restructuring was part 
of Prud) -- which strikes us as a serious possibility given 
the negotiations underway with SDP -- could solidify Tihic's 
leadership within the party, but a failed attempt at bringing 
down the governments could politically finish him. 
 
¶11. (C) Dodik, although notionally striking a more 
conciliatory position on Brcko, has not yet convinced us that 
he fully backs constitutional amendments or is willing to 
make the tough compromises, such as those required on state 
property, to ensure Prud's implementation.  Izetbegovic has 
told us that he does not believe Dodik is serious at all 
about Prud.  Even Covic has stressed to us the need to test 
Dodik's sincerity.  Dodik has a habit of walking back from 
private promises to us and to others.  Bearing this in mind, 
we will continue to keep the pressure on him to do the right 
thing, particularly on Brcko, even as we applaud all of the 
Prud signatories for the steps they take toward implementing 
the agreement.  We will encourage them to bring the issues 
that are closest to completion, such as immoveable defense 
property, to closure as soon as possible so as to ensure 
continued momentum on the agreement, and to take advantage of 
Dodik's willingness, even if fleeting, to cooperate. 
 
Addendum: Ambassador Cautions Dodik on Rhetoric 
--------------------------------------------- -- 
 
¶12. (C) At the conclusion of their lunch, Ambassador pulled 
Dodik aside for a one-on-one exchange about Dodik's recent 
rhetoric, specifically his repeated public attacks on PDHR 
Gregorian (ref B).  Ambassador warned Dodik that his 
months-long campaign to vilify the PDHR had created an 
environment that had the potential to transform threats, 
however empty in themselves, into dangerous actions. 
Ambassador made clear that the U.S. expects Dodik and his 
 
SARAJEVO 00001899  004 OF 004 
 
 
allies to cease and desist, stressing that the U.S. would 
hold Dodik responsible if the RS media drumbeat against the 
PDHR compromises Gregorian's security in any way.  Dodik 
responded that this expectation was "unfair," that the RS 
feels that the PDHR has attacked them, and that he feels 
obligated to respond.  While rejecting possible 
responsibility for breaching the PDHR's security, and without 
agreeing to any course of action, Dodik nevertheless said 
that he "understands" the U.S. position.  Ambassador also 
rebuked Dodik for accusing the U.S. of "misusing" Dodik's 
comments about "Muslim" judges (ref C), stressing that 
Dodik's comments were crystal clear and not subject to benign 
interpretation.  If Dodik wished to avoid criticism for such 
clearly objectionable rhetoric, he ought to stop making such 
statements, Ambassador concluded. 
ENGLISH