US embassy cable - 05MANILA2356

C O N F I D E N T I A L SECTION 01 OF 03 MANILA 002356 
 
SIPDIS 
 
STATE FOR EAP/PMBS, NEA, INR/EAP, INR/NEA, S/CT 
NSC FOR GREEN 
 
E.O. 12958: DECL: 05/23/2015 
TAGS: PTER, KISL, EAID, PINS, PREL, EFIN, KTFN, LY, SA, PK, TH, RP 
SUBJECT: ISLAMIC NGOS IN THE PHILIPPINES 
 
REF: A. MANILA 2168 
     B. MANILA 2124 
     C. MANILA 2042 
     D. MANILA 2016 
     E. MANILA 1549 
     F. MANILA 1098 
     G. 04 MANILA 3564 
     H. 04 MANILA 3675 
 
Classified By: Political Officer Joseph Saus 
for reasons 1.4 (b) and (d) 
 
1.  (C) Summary.  A variety of local and international 
charities and non-governmental organizations (NGOs) with 
Islamic connections operate in the Philippines but under 
increasing scrutiny.  Police and immigration authorities have 
lamented the lack of resources and enforcement mechanisms to 
keep tabs on them.  The tendency throughout Muslim 
communities in Mindanao to accept all Islamic charity and 
missionary activity with no questions asked contributes to 
the problem.  Many extremist proponents and terrorist 
operatives evade immigration controls, remaining in 
difficult-to-police areas such as the isolated interior of 
central Mindanao.  Their funding continues to flow using 
couriers and other difficult-to-trace transactions that take 
place outside the formal banking system.  Several Islamic NGO 
contacts in Manila have voiced their commitment to 
eliminating extremist tendencies and rejecting terrorism in 
their development and humanitarian activities.  Embassy will 
continue to hold our Islamic NGO contacts to their 
commitments to reject terrorism, and will remain vigilant 
regarding suspicious NGO activity.  End Summary. 
 
NGOs In The Philippines 
----------------------- 
 
2.  (C) Despite a mountain of regulatory and reporting 
requirements for NGOs operating here, many Embassy contacts 
have acknowledged that monitoring and enforcement are spotty, 
and sanctions for false disclosure or non-compliance with 
periodic reporting requirements are rarely implemented.  All 
NGOs are required by law to register with the Securities and 
Exchange Commission (SEC) to establish themselves as legal 
entities, a process similar to incorporation.  Embassy 
contacts have noted, however, that SEC registration is easy 
to obtain.  NGOs that focus on social welfare and development 
(typically helping children, youth, women, the disabled, the 
elderly, and disaster victims) are also required to register 
for licensing and accreditation with the Department of Social 
Welfare and Development (DSWD).  DSWD officials admitted 
privately that these are aimed primarily at standardizing 
development work and not at protecting national security, 
although an official of the DSWD Project Management Bureau 
cited one case "several years back" when one NGO was 
dissolved for running guns to Communist rebels. 
 
3.  (SBU) The Anti-Money Laundering Council (AMLC), a product 
of the 2001 Anti-Money Laundering Act, is the financial 
intelligence unit of the Philippines.  The AMLC is properly 
equipped, trained, and funded to track money-laundering 
offenses.  However, regulations governing charities and NGOs 
are weak because the 2001 legislation failed to define how 
banks, non-bank, and other financial institutions should deal 
with them.  As a result, charities and NGOs are not required 
to comply with AMLC reporting requirements for suspicious and 
covered transactions.  (Comment: Embassy is working with GRP 
to improve its financial intelligence capabilities.  The GRP 
is petitioning to join the June Egmont Plenary of financial 
intelligence units -- ref a.  End Comment.) 
 
4.  (C) NGOs have apparently been used as cover for illicit 
activity in the past, and not just for terrorist finance. 
Deposed President Joseph Estrada allegedly used his "ERAP 
Muslim Youth Foundation" to launder illegal gambling 
proceeds. The International Islamic Relief Organization 
(IIRO) -- a subsidiary of the Saudi-based and funded Muslim 
World League (MWL) -- was active here in the late 1980s and 
early 1990s.  Operated by Usama Bin Laden's brother-in-law, 
Saudi businessman Mohammed Jamal Khalifa, and with links to 
captured al-Qaeda lieutenant Khalid Shaikh Mohammed, the IIRO 
served as a legal front to conceal the transfer of al-Qaeda 
funding and materiel to the Abu Sayyaf Group and possibly 
other insurgents or terrorists operating in the Philippines. 
Although Khalifa left the Philippines in 1994 and the IIRO 
was shut down, there remain concerns that his network and 
associates may still be operating here. 
5.  (C)  DSWD has registered about 2,700 NGOs.  Islamic NGOs 
are demographically and geographically proportionate to the 
Muslim population here (e.g., 5 percent); most are in 
Mindanao or in predominant Muslim enclaves of Manila. Islamic 
NGO funding is in high demand throughout the Philippines. 
During an April 2005 visit by senior MWL officials hosted by 
the Presidential Office of Muslim Affairs (OMA), local 
clerics, madrassah administrators, and NGO representatives -- 
armed with reams of project proposals -- almost mobbed the 
entourage, according to OMA Deputy Director Tahir Lidasan, 
Jr.  He commented to poloff that there is no transparency and 
accountability regarding NGO funding: "You might release 
funds for a three-story madrassah and end up with a one-story 
room, with no explanation of how the money was spent or where 
it ends up."  According to observers, while Islamic NGOs 
typically fund scholarships, madaris, mosques, and clinics, 
given the lack of internal monitoring and control in the 
Philippines, virtually any NGO could either wittingly or 
unwittingly serve as a cover for illicit activity. 
 
The Peaceful Public Face Of Quasi-Governmental Islamic NGOs 
--------------------------------------------- -------------- 
 
6.  (C) The MWL, which professes to reject extremism and 
militant teaching and to embrace moderation, continues to 
play a predominate role among Islamic NGOs here.  During 
their April visit, MWL representatives met with senior-level 
GRP officials, including Executive Secretary Eduardo Ermita 
and Secretary of Interior and Local Government Angelo Reyes, 
and toured several Mindanao cities.  According to Saudi 
Ambassador Mohammed Ameen Wali, the trip focused on joint 
MWL-GRP efforts to achieve peace and to provide assistance in 
education and health, with a focus on the southern 
Philippines.  Dr. Rafat Ahmed Mirza Al Sayed, a Saudi Embassy 
official in charge of NGO affairs, speaking separately to 
poloff, stressed that the MWL opposed terrorism and rejected 
all forms of violence. 
 
7.  (C) The Libyan-based and supported World Islamic Call 
Society (WICS) is also active in the Philippines.  According 
to its Manila representative, Gamal N. Ahmed, the WICS also 
rejects terrorism.  Emphasizing that "we do not support 
extremists," Ahmed offered to cooperate with USAID and US 
military humanitarian efforts in Mindanao.  Noting WICS' 
focus on medical clinics and education, Ahmed claimed that 
WICS projects are "open to all," stressing there is no 
religious favoritism or proselytization associated with its 
efforts. 
 
But A Different Reality? 
------------------------ 
 
8.  (C)  According to Lt. Col. Winnie Quidato, a Philippine 
National Police officer seconded to the Bureau of 
Immigration, some NGOs do not know that their foreign 
contacts are involved in terrorist finance.  Separately, 
Department of Foreign Affairs (DFA) Pakistan Desk Officer 
Nathan Imperial told poloff that some Islamic (unnamed) NGOs 
are recruiting young Filipino Muslims for training in radical 
Pakistani madaris, passing them through Bangkok as tourists 
on their way to Pakistan.  Imperial admitted the GRP had no 
clear idea of the number of Filipino students studying in 
Pakistan. 
 
9.  (C) Embassy contacts have noted that, given the 
Philippines' extremely porous borders, terrorist operatives 
do not necessarily even need an NGO "cover story."  Many 
Muslim communities and their leaders accept any form of 
assistance with little or no concern of its source, intent, 
or quid pro quo.  According to Lt. Col. Quidato, lax 
immigration and border control -- especially in Mindanao's 
"southern backdoor" that leads to Malaysia or Indonesia -- 
enables criminals and terrorist financiers to come and go 
with impunity.  These couriers sometimes travel with cash, 
bypassing banks or other traceable financial transactions, to 
fund and support suspected terrorists in sanctuaries in 
central Mindanao. 
 
Comment: Remain Vigilant 
------------------------ 
 
10.  (C) Anecdotal evidence (refs B through E), and other 
reporting indicates that at least some Islamic NGO activity 
is not innocuous, and may be used as a cover for terrorist 
finance.  Despite the legal and regulatory requirements, 
Philippine authorities do not have the capacity to monitor 
suspect NGOs carefully.  The loose nature of NGO regulation 
and the absence of effective safeguards allow for suspect 
activity, despite GRP concern.  Inadequate financial, 
immigration, and border controls also enable suspected 
terrorists and their funds to move through the Philippines 
with relative impunity.  We continue to hold our Muslim NGO 
interlocutors to their commitment to combat terrorism and 
will heighten cooperation with the GRP to be on the lookout 
for indications of any NGOs acting as cover for terrorist 
activities.  End Comment. 
MUSSOMELI