C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 000662
STATE FOR EUR/NB
E.O. 12958: DECL: 06/21/2014
TAGS: PGOV PREL LH
SUBJECT: LITHUANIA'S GOVERNING COALITION: "LET'S STAY
REF: A. VILNIUS 636
Â¶B. VILNIUS 504
Classified By: Pol/Econ Officer Nancy Cohen for reasons 1.4 (b) and (d)
Â¶1. (C) SUMMARY: Lithuania's ruling coalition shows every
indication of surviving the resignation of Minister of
Economy Viktor Uspaskich, and Uspaskich's Labor Party shows
signs it will emerge from this episode intact. The Prime
Minister and President look likely to accept Labor's nominee
to replace Uspaskich in the Cabinet. One potential source of
instability remains -- the PM's party continues to seek to
meddle in Labor's internal politics in a risky gambit to
reduce Uspaskich's influence. For his part, the ex-Economy
Minister plans to stay on as head of the party he
established. Uspaskich says he will appeal the decision of
the Ethics Commission that found he had used his public
office to promote private interests. If he succeeds, he will
likely run in elections this fall for the parliamentary seat
he just relinquished. Despite internal political turmoil,
Lithuania's strong support for U.S. foreign policy objectives
remains solid. End Summary.
Â¶2. (C) Cabinet members representing the three largest parties
in the ruling coalition told the Ambassador that Uspaskich's
Labor Party would remain in the coalition, despite its
leader's resignation from both government office and the
Seimas. FM Antanas Valionis (Social Liberal) on June 20 said
that he did not expect the Labor Party would pull out of the
coalition over Uspaskich's reverses. Defense Minister
Gediminas Kirkilas (Social Democrat) told the Ambassador that
the coalition would be around "for at least another year,"
and Interior Minister Ginataras Furmanavicius (Labor) said
the partners would work to ensure that the coalition endured
until the end of its mandate in 2008. Furmanavicius noted
that the Labor Party (which controls 40 seats in the 141-seat
parliament) had done the math: Labor is unable go it alone,
and the numbers and politics do not add up for any other mix
of coalition partners. For his part, President Valdas
Adamkus told the Ambassador that he is content that the
coalition will survive, opining that reorganizing government
now would drain everyone's attention and energy and impede
progress on all other matters of concern.
"More Trips to America!"
Â¶3. (U) The Labor Party moved quickly following Uspaskich's
resignation, and on June 23 nominated Kestutis Dauksys to
become the next Minister of Economy. Dauksys (45), who
currently chairs the Labor Party's Finance and Tax Committee,
is a member of the parliamentary Economics and Finance
Committee and heads the Intelligence Oversight Committee.
Like many in the Labor Party including the party leader, he
comes to government from business. Dauksys studied
economics at Vilnius University, going on to be an assistant
in the university economics department, and studied
international marketing in Moscow. PM Algirdas Brazauskas
has announced he will recommend Dauksys to the President.
Pending completion of Dauksys's background investigation and
a green light from Lithuania's Special Investigative Service,
media and the Ambassador's contacts in the Cabinet anticipate
that Adamkus will approve the appointment on or about July 1.
Ever the wag, Uspaskich told the press June 22 that his first
piece of advice to Dauksys if he is confirmed will be to
avoid travel to Moscow. "More trips to America!" he said.
Uspaskich: A Power on the Sidelines
Â¶4. (C) DefMin Kirkilas acknowledged to the Ambassador that
the Social Democrats' efforts to stage a coup within the
Labor Party -- which he had confidently previewed to the
Ambassador the week before -- had gained no traction.
Kirkilas insisted, however, that the Social Democratic Party
would continue to pursue its plan. It still was "picking up
whispers" in the corridors of the Seimas, he said, that some
within the party may attempt to challenge Uspaskich for the
party leadership. In a separate meeting June 20,
Furmanavicius dismissed suggestions that there would be any
real challenge to Uspaskich and said that comments of other
party officials to that effect had been cited out of context.
The Labor Party may lose a few members, Furmanavicius
acknowledged, but will retain its strength.
Â¶5. (C) Uspaskich has indicated he will stay on as leader of
the Labor Party he founded less than two years ago. Deputy
Speaker of Parliament (Labor) Vydas Gedvilas told us that
Uspaskich will also continue to participate in the
coalition's Political Council. The press reports that Labor
is attempting to expand the purview of the Council, proposing
to amend the coalition agreement to authorize the Council
(and hence Uspaskich) to discuss, among other issues, the
national budget -- normally the prerogative of the Government
and Parliament, both of which bodies Uspaskich just resigned.
...Planning his Return
Â¶6. (C) Gedvilas said that Uspaskich will focus on appealing
the ruling of the government Ethics Commission (ref A) that
he had violated the law prohibiting conflict of interest
among public servants, and will await the decision of the
three parliamentary commissions currently investigating him.
Should he clear his name, Gedvilas said, Uspaskich will run
in fall elections in his home district of Kedainiai to
reclaim the parliament seat he just vacated.
Â¶7. (C) Uspaskich remains the unquestioned strongman of a very
disciplined party, despite his recent dual resignation.
While some ambitious opportunists may seek to take Uspaskich
on within the party, it is hard to see how they would succeed
given that Uspaskich bankrolls the party and is its
charismatic public face. Off-message comments of some Labor
Party members do not necessarily presage a party coup, but
rather suggest predictable growing pains in Lithuania's young
Â¶8. (C) What is striking in all this apparent turmoil is that
neither the Government, nor the Labor Party, nor, really,
Labor's embattled leader have folded -- even as the
coalition's second largest party, the PSD, continues to wage
a covert campaign to manipulate events in the largest party.
We attribute the coalition's endurance to the fact that there
is currently no viable alternative to the uneasy partnership
currently in power.
Â¶9. (C) Lithuania's continuing internal political turmoil,
while exhausting and aggravating to most Lithuanians, has had
no visible impact on its continued strong support for and
activism on issues of key importance to the U.S. -- from
promoting democracy in Belarus to helping stabilize
Afghanistan. It is significant that while the latest
political crisis was unfolding, we were making a pitch at the
highest levels for Lithuania's continued commitment to deploy
troops in Iraq. Not a single interlocutor indicated there
would be a problem, in spite of the political storms.