US embassy cable - 04KUWAIT494

S E C R E T SECTION 01 OF 03 KUWAIT 000494 
 
SIPDIS 
 
STATE FOR EB/ESC/TFS GGLASS AND NROTHSTEIN 
STATE FOR S/CT FOR SFOX; IO/PHO FOR APEREZ 
NSC FOR GPETERS; TREASURY GENERAL COUNSEL FOR DAUFHAUSER 
TREASURY FOR OFAC DIRECTOR RNEWCOMB; TREASURY FOR JZARATE 
TREASURY TASK FORCE ON TERRORIST FINANCING 
PARIS FOR PETER KUJAWINSKI AND UZRA ZEYA 
TUNIS FOR NATALIE BROWN 
 
E.O. 12958: DECL: 02/03/2014 
TAGS: EFIN, ECON, ETTC, PTER, PREL, KU 
SUBJECT: (C) TERRORIST FINANCE: LDI ATTEMPTS TO CLEAR ITS 
NAME WITH OFAC 
 
REF: A.) 03 KUWAIT 4840 B.) 03 KUWAIT 958 C.) 04 
     PARIS 379 
 
Classified By: CDA Frank C. Urbancic for reasons 1.4 (b) and (d) 
 
1. (C) Summary: OFAC Director Richard Newcomb met with 
representatives of Kuwaiti charity Lajnat al-Dawa al-Islamiya 
(LDI) and its parent organization, the Social Reform Society 
(SRS) at the Kuwaiti Ministry of Foreign Affairs (MFA) on 
January 19.  The group discussed a number of issues 
outstanding from OFAC's October 2003 visit to Kuwait (Refs A 
and B), including transactions made by LDI and SRS following 
LDI's designation by the US and UN as a supporter of 
terrorism. During the meeting LDI representatives gave 
conflicting responses to questions posed by the OFAC 
delegation regarding the presence of overseas offices and 
LDI's relationship with SRS.  LDI denied the existence of a 
US branch even when confronted with US registration documents 
listing LDI officials as President and Secretary of the 
branch. LDI confirmed that the Pakistan branch of LDI was 
headed by Zahed Shaykh Mohammed, brother of 9/11 mastermind 
Khalid Shaykh Mohammed.  The Kuwaiti delegation, led by 
Islamist MP Nasser Al-Sane, mounted an energetic defense of 
LDI's activities, and welcomed the opportunity to review any 
negative information OFAC could provide them on the charity. 
Also present was Ambassador Khaled Maqamis, head of the 
MFA,s Follow-Up Department. End Summary. 
 
2. (C) On January 19, an OFAC delegation led by Director 
Richard Newcomb met with representatives of LDI (notably LDI 
head Abdulatif Al-Hajeri)and SRS, headed by MP Nasser 
Al-Sane. (Note: Al-Sane is a member of the Islamic 
Constitutional Movement, the political wing of SRS.  End 
Note.)  Al-Sane said he had tried to reach Newcomb regarding 
the designation of Kuwaiti charities and other matters 
discussed in the October 2003 meeting with OFAC (Ref. A), but 
had been unsuccessful in doing so.  Al-Sane said he had 
double-checked with Kuwait Finance House (KFH) and the 
Central Bank of Kuwait (CBK) and confirmed that LDI funds 
were frozen in March 2003. (Note: KFH told USG that it froze 
LDI accounts February 6, 2003. End Note.)  Responding to 
questions by Newcomb, Al-Sane said that some of LDI's 
beneficiaries had received funds through SRS after the 
freeze, and stipulated that the funds were used to continue 
ongoing charity works which the freezing of LDI funds had 
halted.  "The beneficiary has no link with LDI," he added. 
Al-Sane stated that LDI is no longer functioning, "period." 
 
Relationship between SRS and LDI 
 
3. (C) Newcomb repeatedly asked Al-Sane for an explanation of 
the relationship between SRS and LDI.  Al-Sane claimed the 
two "coordinated with each other," but were essentially 
different entities with independent financing and leadership. 
 After multiple attempts to get him to further clarify this, 
Al-Sane finally admitted that LDI was legally subordinate to 
SRS, per Kuwaiti charity law.  However, he reiterated, SRS 
does not control or give instructions to LDI. (Note: KFH 
stated that LDI was not a legal or separate entity, but was 
one and the same as SRS.  As such, KFH officials inquired as 
to why USG had only designated LDI and not SRS. End Note.) 
 
Busted: LDI's 'forgotten' North American branch 
 
4. (C) Al-Sane and LDI head Abdulatif Al-Hajeri began the 
meeting by declaring that LDI had  foreign branch offices in 
Pakistan and Afghanistan only.  When asked, they explicitly 
denied there was a North American branch.  However, when 
Newcomb began to read U.S. corporate registration documents 
listing members of the Kuwaiti delegation as officers of 
"Lajnat al-D'awa, North America Office" located in Colorado 
(Al-Hajeri was listed as the President), the Kuwaitis were 
hard-pressed for an answer.  They acknowledged knowing the 
founder of the US branch, Mohammed Abdulrahman, and stated he 
had just "used our names" back in 1995 in order to gain 
financial backing.  They insisted that the group was 
"completely unrelated" to LDI in Kuwait.  When the Kuwaitis 
claimed the group had not been active in the U.S for many 
years, Newcomb pointed out that as late as 2000, LDI officers 
Al-Hajeri and Al-Jeeran were listed as officers of the US 
branch.  (Note: At this point, Ambassador Maqamis, who had 
remained silent throughout the discussion, left the room for 
a brief period of time.  We have no way of knowing for what 
purpose.  End Note.) 
 
On French conversations with LDI and Foreign Minister 
 
5. (C) Al-Sane insisted that LDI had been unfairly accused of 
supporting terrorist activities, and argued that the 
designation was causing severe damage to an organization 
dedicated to charity work.  He said LDI had been invited by 
Ambassador William B. Taylor to conduct its charity 
activities in Afghanistan in November 2002, but subsequently 
had had its assets frozen.  Responding to a question about 
Kuwaiti conversations with the French on LDI's designation, 
Al-Sane said FM Dr. Mohammed had raised the matter with 
French FM Dominique de Villepin during his recent visit.  De 
Villepin said he would look into the matter.  According to 
Al-Sane, the French claim the LDI office in Pakistan was used 
to make calls to Al-Qaeda operatives; Al-Sane says the calls 
occurred before LDI occupied the office.  The French, he 
said, claim there are LDI branches in Burkina Faso and 
Bahrain; Al-Sane maintains there are not.  (Note: In the 
October 5, 2003 meeting with Newcomb, an LDI representative 
conceded that LDI had a branch office in Russia, after 
claiming they only used offices in Kuwait and Pakistan (Ref. 
A).  End Note.) The French claim 9/11 mastermind Khaled 
Shaykh Mohammed was heading up the Pakistan LDI branch; in 
reality, Al-Sane said, Mohammed was in Qatar.  The French 
claim LDI transferred Euros to Libya; Al-Sane says LDI never 
used Euros.  "We think the French took their claims from 
Pakistani newspapers," he added incredulously. 
 
6. (C) Al-Sane said the Kuwaiti and French UN missions are 
working closely to resolve the issue, and noted that he had 
visited the UN personally in August to unofficially address 
members of the committee responsible for the UN designation. 
During this time, he also met with the French mission, who 
told him France would drop its support of the designation if 
Kuwait could get the US to do the same.  Al-Sane said Kuwait 
has not yet filed a formal petition for de-listing. (Note: 
Al-Sane's account sharply contradicts French claims from 
January 15, 2004 in Ref. C that LDI's connection to Al-Qaeda 
is "rock-solid."  The GOF also stated that it is important 
for the USG and the GOF to work together to ensure LDI 
remains on the UN 1267 sanctions list.  End Note.) 
 
Accounts at KFH are frozen 
 
7. (C) The CBK Governor, Shaykh Salem Al-Sabah, Al-Sane and 
Al-Hajeri all confirmed that LDI accounts at Kuwait Finance 
House were frozen.  Additionally, LDI said the organization 
had accounts in every major Kuwaiti bank when their assets 
were frozen. Al-Sane also stated that SRS continues to hold 
active accounts at KFH. 
 
On ties to other charities 
 
8. (S) Al-Sane said that prior to designation, LDI cooperated 
with other charities such as Mercy International.  Although 
LDI and Mercy International shared officers and directors, 
LDI claimed the organizations were not related.  (Note: 
Financial records obtained by USG indicate LDI transferred to 
Mercy International at least $950,000 from February 2001 to 
January 2003. End Note.)  LDI confirmed that the Pakistan 
branches of LDI and Mercy International were headed by Zahed 
Shaykh Mohammed, brother of 9/11 mastermind Khalid Shaykh 
Mohammed.  Al-Sane said LDI had no knowledge of the current 
whereabouts of Zahed Shaykh Mohammed. 
 
9. (C) Concluding the meeting, Al-Sane said he would welcome 
an opportunity to see OFAC's information related to the 
designation of LDI to be able to properly respond to any and 
all questions about LDI's past activities.  He assured 
Newcomb that LDI was not involved in terrorist financing 
activities and asked for his help in differentiating between 
the good works LDI has undertaken, and the deeds of terrorist 
organizations. 
 
10. (U) This message was cleared in MemCon format by OFAC 
Director Richard Newcomb. 
URBANCIC