US embassy cable - 03AMMAN6393

C O N F I D E N T I A L AMMAN 006393 
 
 
TREASURY FOR GENERAL COUNSEL OFFICE 
TREASURY FOR OASIA/MILLS, DEMOPULOS 
NSC FOR JMYERS 
 
E.O. 12958: DECL: 10/05/2013 
TAGS: EFIN, ETTC, PTER, KPAL, JO 
SUBJECT: TERRORISM FINANCE: JORDAN: HAMAS STORY NOT OVER 
 
REF: AMMAN 06000 
 
CLASSIFIED BY: AMBASSADOR EDWARD W. GNEHM FOR REASONS 1.5 (B) AND (D) 
 
1. (C) SUMMARY.  A HEATED LOCAL CONTROVERSY OVER JORDAN'S 
CLUMSY HANDLING OF THE DECISION TO ORDER AND THEN CANCEL A 
FREEZE ON HAMAS-LINKED BANK ACCOUNTS HAS 1) JEOPARDIZED THE 
CAREER OF A SOUND CENTRAL BANK GOVERNOR, 2) POLITICIZED THE 
ISSUE OF THE INDEPENDENCE OF THE CENTRAL BANK, AND 3) LIKELY 
MADE IT MORE COMPLICATED FOR US TO WORK WITH THE JORDANIAN 
GOVERNMENT ON TERRORISM FINANCE ISSUES.  END SUMMARY. 
 
2. (C) SPEAKING CAREFULLY, BUT IN VERY DISTRESSED TONES, TO 
THE AMBASSADOR ON SEPTEMBER 30, CENTRAL BANK OF JORDAN (CBJ) 
GOVERNOR UMAYYA TOUKAN SAID THAT HE PERSONALLY AND THE 
CENTRAL BANK AS AN INSTITUTION HAD BEEN DEEPLY WOUNDED BY THE 
POLITICAL FIRESTORM THAT FOLLOWED HIS DECISION TO FREEZE 
HAMAS-CONNECTED FINANCIAL ASSETS IN JORDAN (REF).  THE 
GOVERNOR ADMITTED THAT HE HAD INITIALLY ORDERED THE FREEZE ON 
HIS OWN AUTHORITY ON THE BASIS OF A COPY WE SENT HIM OF A 
DIPLOMATIC NOTE TO THE FOREIGN MINISTRY.  HE BELIEVED, 
HOWEVER, THAT HE HAD DONE SO UNDER A "FRAMEWORK" TO TAKE 
ACTION AGAINST TERRORIST FINANCES THAT HE HAD LONG AGO AGREED 
WITH PRIME MINISTER ALI ABUL RAGHEB.  OBVIOUSLY, THE GOVERNOR 
SAID, HE HAD MISJUDGED THE POLITICS OF THE ISSUE.  WHEN HIS 
INSTRUCTIONS TO BANKS BECAME PUBLIC AND TOUCHED OFF A 
FIRESTORM IN PARLIAMENT DURING THE KING'S VISIT TO THE UNITED 
STATES, TOUKAN SAID HE WAS TOLD BY THE PRIME MINISTER ON THE 
PHONE FROM WASHINGTON TO RESCIND THE ORDER.  IN ANY CASE, 
TOUKAN SAID, NO ACCOUNTS LINKED TO THE HAMAS NAMES HAD BEEN 
FOUND IN JORDAN.  (NOTE: HE WAS LESS CLEAR ABOUT ACCOUNTS OF 
THE HAMAS-LINKED CHARITIES, BUT DID NOT SUGGEST THAT THERE 
WERE ANY SUCH ASSETS IN JORDAN.) 
 
3. (C) TOUKAN FELT THAT THE OTHER SHOE HAD NOT YET DROPPED 
AND THAT HIS PROFESSIONAL FATE WAS UNCERTAIN.  HE HAD GAINED 
A RESPITE BY THE TWO-MONTH PARLIAMENTARY RECESS THAT BEGAN 
OCTOBER 1, AND SAID THAT 30 OF THE 70 MEMBERS WHO SIGNED A 
PETITION CALLING FOR HIM TO BE FIRED HAD WITHDRAWN THEIR 
SIGNATURES.  THE PRIME MINISTER HAD ALSO ASSURED HIM THAT THE 
MATTER WOULD BLOW OVER.  NONETHELESS, TOUKAN WAS PERSONALLY 
WOUNDED.  HE HAD MADE HIS CAREER OUTSIDE POLITICS AS A 
"TECHNOCRAT", AND FELT HIS WORD AND PERSONAL CREDIBILITY HAD 
BEEN IMPUGNED. 
 
4. (C) BUT THE GOVERNOR WAS EVEN MORE DISTRAUGHT ABOUT WHAT 
HE SAW AS THE DAMAGE THE AFFAIR HAD DONE TO THE CREDIBILITY 
AND HARD-WON INDEPENDENCE OF THE CBJ AS AN INSTITUTION.  SOME 
IN JORDAN WERE CALLING INTO QUESTION THE BANK'S INDEPENDENCE 
FROM POLITICAL CONTROL, WITHOUT REALLY UNDERSTANDING WHAT 
THIS MEANT, HE SAID.  THE GOVERNOR HAD THAT SAME DAY PHONED 
LEADERS OF PARLIAMENTARY BLOCS TO OFFER TO MEET TO EXPLAIN 
THE CONCEPT OF CENTRAL BANK INDEPENDENCE IN MONETARY POLICY 
AND BANK SUPERVISION MATTERS. 
 
5. (C) COMMENT:  JORDAN HAS BEEN VERY COOPERATIVE OVERALL ON 
TERRORIST FINANCE ISSUES.  AS THIS INCIDENT SHOWS, HOWEVER, 
TAKING ACTION AGAINST PALESTINIAN GROUPS, ESPECIALLY THOSE 
LIKE HAMAS THAT PROVIDE "HUMANITARIAN" SERVICES TO 
PALESTINIAN CIVILIANS, IS POLITICALLY MORE COMPLICATED. 
TOUKAN MADE VERY CLEAR THAT HE WOULD FREEZE ACCOUNTS IN THE 
FUTURE ONLY ON THE EXPLICIT INSTRUCTION OF THE PRIME 
MINISTER.  IN AN OCTOBER 5 MEETING WITH FOREIGN MINISTER 
MUASHER, THE AMBASSADOR STRESSED THAT THE GOVERNMENT NEEDED 
TO FIND A WAY TO WORK WITH US ON THESE ISSUES.  THIS INCLUDES 
IN CLARIFYING THE ACTION JORDAN HAS TAKEN AGAINST ACCOUNTS OF 
HAMAS-CONNECTED CHARITIES, IF ANY INDEED EXIST IN JORDAN. 
 
6.  (C)  COMMENT CONTINUED:  TOUKAN IS A PERSON OF INTEGRITY 
WHO HAS MADE A CAREER OUTSIDE POLITICS BUILDING THE CBJ INTO 
A MAJOR JORDANIAN INSTITUTION.  WE AGREE THAT HIS 
PROFESSIONAL FATE REMAINS VERY SHAKY.  THIS IS A SECOND 
UNFORTUNATE BRUSH WITH CONTROVERSY THAT MARRED A ROYAL TRIP: 
NEWS OF THE SHAMAYLEH BANK FRAUD SCANDAL SIMILARLY BROKE WHEN 
THE KING WAS IN WASHINGTON IN JANUARY 2002.  THE CLUMSILY 
HANDLING OF THE CURRENT INCIDENT NO DOUBT GOT ABUL RAGHEB AND 
TOUKAN IN HOT WATER WITH THE KING AS WELL.  AS FOR TOUKAN'S 
BELOVED BANK, WE THINK THE INSTITUTION WILL RETAIN ITS 
CREDIBILITY AND INDEPENDENCE, BUT WILL KEEP A CLOSE EYE ON 
DEVELOPMENTS. 
 
 
GNEHM