VZCZCXRO5712
RR RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHCG #0327/01 3160757
ZNR UUUUU ZZH
R 120757Z NOV 09
FM AMCONSUL CHENNAI
TO RUEHC/SECSTATE WASHDC 2526
RUEHNE/AMEMBASSY NEW DELHI 3901
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 02 CHENNAI 000327 
 
SENSITIVE 
 
SIPDIS 
 
C O R R E C T E D C O P Y (TEXT ADDED) 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM KIRF IN
SUBJECT: SOUTH INDIA'S FIRST BJP GOVERNMENT MUDDLES THROUGH A 
CRISIS 
 
REFS:  A) CHENNAI 213, B) 08 CHENNAI 350 
 
CHENNAI 00000327  001.2 OF 002 
 
 
¶1. (SBU) Summary:  South India's first state government led by the 
Bharatiya Janata Party (BJP) teetered on the verge of collapse for 
nearly two weeks as Karnataka's Chief Minister fought off attempts 
by the Tourism Minister to unseat him.  National-level BJP 
authorities brokered a truce on November 9, but several observers 
have told us that the peace is tenuous, and expect that it will be 
difficult for the government to rule effectively.  Members of 
minority religious communities have said that they fear the lack of 
stability may create an environment that encourages tension among 
religious communities.  End Summary. 
 
Girlfriend brings the government to the brink 
--------------------------------------------- 
 
¶2. (SBU) B.S. Yeddyurappa, the first BJP Chief Minister in South 
India, appears poised to continue to head Karnataka's government, 
despite Janaradhana Reddy's (the state's Tourism Minister) bitter 
attempt to unseat him.  National BJP officials enforced a truce on 
November 9, ending the insurrection, at least for now.  Publicly, 
Reddy maintained that the main reason for his demand that 
Yeddyurappa resign as Chief Minister was the favoritism shown to 
Shobha Karandlaje, the Minister for Rural Development and the only 
woman in the cabinet, who doubles as Yeddyurappa's girlfriend. 
(Yeddyurappa is a widower.) 
 
Mining's millions the real culprit 
---------------------------------- 
 
¶3. (SBU) Others have told us, however that the real reason for the 
insurrection was Reddy's desire to protect his core business, 
iron-ore mining.  Reddy and his brother, Karunakara Reddy, 
Karnataka's Infrastructure Minister, have grown rich from allegedly 
illegal mining operations in Karnataka and Andhra Pradesh.  They 
used their fortunes to fund the rise of the BJP in the state, and 
have long been irritated because they feel that they were given 
largely peripheral posts in the government when the BJP assumed 
power in May 2008. 
 
¶4. (SBU) The editor of a local-language newspaper told us 
Yeddyurappa's office, increasingly embarrassed by the attention 
attracted by the Reddys' shady mining interests, had decided clip 
their political wings, a plot the brothers sniffed out and wanted to 
avenge by seeking the Chief Minister's ouster.  The editor said that 
the immediate cause of the Reddys' rebellion was the state's 
decision to impose a fee of INR 1000 (about USD 21) tax on all 
trucks transporting iron ore in the state, levied to raise funds to 
assist the victims of October's flooding in northern Karnataka.  In 
addition, the state's Department of Forestry began investigations 
into the Reddys' mining activities, looking for possible legal 
violations. 
 
National leadership instills peace, for now 
------------------------------------------- 
 
¶5. (U) While the BJP's national leadership ensured Yeddyurappa 
retained his post, the Reddys got their pound of flesh, succeeding 
in securing the removal of both the Chief Minister's 
girlfriend/Minister for Rural Development and his aide reportedly 
responsible for targeting the Reddys' interests.  The BJP leadership 
also created a "core committee" of faction leaders in the state 
party to vet major political decisions in the state. 
 
Observers skeptical about the future 
------------------------------------ 
 
¶6. (SBU) Our contacts are unsure whether this arrangement will last, 
or even allow for the government to function properly.  A 
Bangalore-based political correspondent for one of India's major 
English-language dailies told us that the core committee would sit 
uneasily with Yeddyurappa's leadership style, which involves "a 
minimum of consultation."  He also added that the committee 
consisted of people with "diametrically opposite views," making it 
difficult for them to formulate a coherent administrative strategy. 
A high-level state bureaucrat agreed, saying that he feared the 
state's administration would be pulled in many different directions. 
He also said he believed that the Reddys were the winner in the 
brouhaha, and that the mining lobby in the state will now ensure 
that the state's administration serves that lobby's interests. 
 
¶7. (U) The "peace deal" however, is seen as a big loss for the Chief 
Minister. Apart from his girlfriend and aide's removal, he has also 
been forced to rescind the transfer of key officials who were suspected 
to have helped build the Reddy brothers business empire. The "core 
committee" established is headed by the Chief Minister's opponent 
Ananth Kumar. Another of the Chief Minister's rivals, state assembly 
speaker Jagdish Shettar, is likely to be inducted into the cabinet - 
something that the Chief Minister desperately tried to avoid. The deal 
also reflects the growing Nagpur-Delhi struggle between the RSS and the 
Advani BJP camp. The Chief Minister's girlfriend is also a staunch RSS 
loyalist. The Reddy brothers are close to senior BJP leader Sushma 
Swaraj, an Advani loyalist, who together within another Advani man, 
Venkaiah Naidu, brokered the peace deal and then forced the Chief 
Minister to accept it when he balked. 
 
Minority leaders fear attacks by Hindu extremists 
--------------------------------------------- ---- 
 
¶8. (SBU) Meanwhile, leaders of minority religious communities, 
already nervous about religiously-tinged, episodic violence in the 
state, worry that the current scenario might create an environment 
that encourages tension among religious communities.  A Muslim 
member of the state's legislative assembly told us that the economic 
 
CHENNAI 00000327  002.2 OF 002 
 
 
slowdown has ensured that there are a number of angry young men in 
all religious communities who could be easily incited to violence. 
A prominent Christian leader told us the same, noting that he fears 
attacks on churches similar to those in September 2008 at Mangalore. 
 He opined that those attacks occurred when the BJP government was 
attempting to attract political support and reckoned that the 
current situation may also encourage extremists.  Thus far, however, 
there is no evidence of an upswing in religious violence in 
Karnataka. 
 
Comment 
------- 
 
¶9. (SBU) Yeddyurappa's government can point to few accomplishments 
in its 18 months in office other than its continued existence, and 
the spectacle the state has witnessed over the past several weeks 
does little to inspire confidence that his government will 
accomplish anything major in the near future.  This is unfortunate 
in a state in desperate need of a firm hand at the wheel to direct 
the many infrastructure projects in the works. 
SIMKIN