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### Viewing cable 10LONDON19, S/NF) UK: NO ENGAGEMENT WITH ANY HAMAS ARM; DIFFICULT INTERPAL DYNAMICS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
10LONDON19 | 2010-01-05 17:05 | 2011-02-04 21:09 | SECRET//NOFORN | Embassy London

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    VZCZCXRO1075
    PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL
    DE RUEHLO #0019/01 0051716
    ZNY SSSSS ZZH
    P 051716Z JAN 10
    FM AMEMBASSY LONDON
    TO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
    RUEHC/SECSTATE WASHDC PRIORITY 4556
    INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
    RUEHAM/AMEMBASSY AMMAN PRIORITY 0637
    RUEHEG/AMEMBASSY CAIRO PRIORITY 0787
    RUEHTV/AMEMBASSY TEL AVIV PRIORITY 0620
    RUEHJM/AMCONSUL JERUSALEM PRIORITY 0347
    RUEAIIA/CIA WASHINGTON DC PRIORITY
    RHEHNSC/NSC WASHDC PRIORITY

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    S E C R E T SECTION 01 OF 04 LONDON 000019

    NOFORN SIPDIS

    E.O. 12958: DECL: 01/05/2020

    TAGS: ECON KTFN PTER UK

    SUBJECT: (S/NF) UK: NO ENGAGEMENT WITH ANY HAMAS ARM; DIFFICULT INTERPAL DYNAMICS

    Classified By: Richard Albright, Economic Minister-Counselor, for reaso ns 1.4 b&d

    1.(S/NF) Summary: The UK fully agrees with and adheres to the EU policy of no contact with any Hamas element. The recent UK terrorism finance re-designation of Hamas' military wing, the Izz al-din Qassam Brigades was internal housekeeping, and not meant to distinguish between Hamas' political and military wings. The British government has asked the U.S. for additional information in its review of the UK charity Interpal's relationship with Hamas, as it continues to receive pressure from the Muslim charity and its supporters following UK banks' decision in late 2008 to restrict financial services to Interpal. End Summary

     No Relations with Hamas -----------------------

    2.(S/NF) HMG does not engage with any Hamas element - neither the military nor political wings. This stands in contrast to its split policy vis-a-vis Hezbollah where officials occasionally talk to the political wing, as they did previously with Sinn Fein, but not the Provisional IRA. In refusing to talk with any Hamas component, HMG is following the EU's designation in September 2003 of the Hamas leadership and its institutions as terrorists. According the British Cabinet office, an EU designation applies automatically to all Member States, including the UK.

    3.(S/NF) A confusing factor, however, relates to the UK designation of the Izz al-din al Qassam brigades (Hamas' "military wing") in November 2001, which preceded the EU designation of Izz al-din in December 2001. When the EU subsequently made its full designation of Hamas in September 2003, the UK felt it would be redundant to domestically list the entire group. According to a Cabinet Office official, who did not work there in 2003, HMG deemed it unnecessary and imprudent to remove Izz al-Din from the domestic listing, presumably because it would be misinterpreted by Hamas and its supporters as a softening of the overall EU position.

    4.(S/NF) On December 15, 2009, after an internal review of all its previous domestic designations, the UK re-designated Izz al-din under Terrorism Order 2009. The Cabinet Office described the review to us as "internal housekeeping" prompted by threatened UK legal cases. The British government feared its courts could have revoked the Izz al-din designation (as well as others) had the UK not undertaken the review. A revocation of the designation would not have had any practical effect had it taken place, as the EU designation of all of Hamas would still apply in the UK, but the government felt it would have "looked sloppy" to de-list Izz al-din. The bottom line is that the recent British re-designation of Izz al-din al Qassam Brigades was not meant to suggest political distinction between the military and political wings, the government assured us.

    Interpal --------

    5.(S/NF) We have continued to press the British government to take a more aggressive stance towards Interpal (officially, the Palestinian Relief and Development Fund), a major UK-based Palestinian aid NGO. Note: The USG designated Interpal in 2003 pursuant to Executive Order 13224 for providing financial support to Hamas. According to U.S. Treasury, "at the time of its designation, Interpal served as a fundraising coordinator for Hamas and acted as a conduit through which money flowed to Hamas from other charitable organizations." Interpal raised over GBP 5 Mn in 2007, of which GBP 1.5 Mn went towards "providing aid in the Occupied Palestinian Territories", according to a March 2009 Charity Commission report. End note. In July 2009, we provided the U.S. Treasury-produced analytical report demonstrating Interpal's links to Hamas to HM Treasury, the Foreign and Commonwealth Office (which subsequently shared it with the police and intelligence services), the Cabinet Office and the UK Charity Commission, and have delivered U.S. intelligence, in concordance with Washington agencies, that support our view. HM Treasury responded to the report in August 2009 with a letter requesting additional information and access to source material for the report. The Metropolitan Police's National Terrorist Finance Intelligence Unit (NTFIU) told us LONDON 00000019 002 OF 004 the report contained insufficient information for a full criminal investigation, and the Security Services consider it a priority three case - priority one being immediate threat to life.

    6.(S/NF) Interpal is politically connected and regularly presses elected leaders on its behalf. There is some political sympathy and public support in the UK for Interpal (or at the very least, for not moving against the group.) Interpal is commonly described in the charitable and Muslim press as a leading positive force in Palestinian areas. For example, the former head of the Muslim Council of Britain, Sir Iqbal Sacranie, met personally with PM Brown in late 2008 to complain about British banks' compliance with the U.S. designation of Interpal and the subsequent denial of banking services to the organization, British Cabinet Office and HMT officials told us. In addition, we have met - at their request - with two Labour Members of Parliament who argued the USG should either remove the Interpal designation or fully explain why the group was listed. Some of the MPs' key arguments: -The USG designation of Interpal (more so than with any other NGO) has caused wide-spread resentment in the British Muslim community and hurts the USG image and undermines support for the Obama Administration's Middle East policy. We noted we were aware of the possible negative reaction, but that the USG had taken a thorough review of Interpal's actions and relationships. -That other NGOs active in the Palestinian territory such as Oxfam and Save the Children were concerned they would be next to be designated. We tried to assuage such concerns, noting that the USG can discern between legitimate and questionable charities. -Interpal's charitable and humanitarian work in Palestinian areas has been disrupted, leaving a large vacuum in services. In response, we noted USAID is exploring ways to enhance its work in the region. -There is a general fear by British Muslims of "the system" (US, UK, UN) closing off banking services for Muslim NGOs and a sense this is anti-Muslim bias. This would also have the unintended effect of sending more money through the informal hawala system.

    7.(S/NF) Recently, we heard from HM Treasury staff that their Ministers (political-level in the government) have been pressing for more information on Interpal; particularly to learn the status of the group's petition to OFAC for removal from the Specially Designated Nationals list, apparently presented in July 2009. HMT explained to us it did not want to influence or speed up the OFAC process, but rather wanted to know where the petition stood, as its senior officials were getting pressure from Interpal, and wanted to know if Interpal was actually cooperating in the U.S. investigation, as its officials assured the British they were doing. (Note: the leader of Interpal, Ibrahim Hewitt, is a constituent of one of the HMT ministers, Stephen Timms, Financial Secretary to the Treasury.) Beyond the political circles, Interpal has undertaken a concerted lobbying campaign including with the press and other charities.

    8.(S/NF) HMT officials told us it was especially important to show the direct link between Interpal and Hamas since the UK Charity Commission - the UK's charity regulator- in its February 2009 review, had required Interpal sever all ties with Union for Good, a U.S-designated NGO operating in Palestinian areas that is linked to Hamas. The Charity Commission informed us that Interpal terminated its membership with Union for Good on March 14, 2009, and Dr. Essam Mustafa, the highly controversial member of both groups' boards, had resigned his office as Secretary General of the Union for Good. According to the Israeli Embassy in London, the Israelis have decided not to work further with the UK Charity Commission, which they feel does not take seriously the terrorist threat posed by Interpal, but instead focuses only on Interpal's governance issues. Comment: The Charity Commission's remit only pertains to UK territory, so they informed us they have limited awareness of actions on the ground in the Palestinian areas; although Commission officials say they are beginning to work more closely with LONDON 00000019 003 OF 004 British officials in Israel. End Comment.

    9.(S/NF) HMT officials told us privately they thought the Charity Commission had made a mistake in not requiring Interpal to force Mustafa to step down from its Board, and would have insisted, if they had had a voice in the report, upon Mustafa's removal. That said, HMT officials do not believe the evidence they've seen indicates Mustafa's role in Interpal alone warrants UK action against Interpal. One HMT official thought cutting Mustafa out of Interpal could be an option as part of any larger deal in the future to legitimatize the NGO. The UK has asked for any additional information we hold on Mustafa, and told us it has not designated Union for Good because the group has no UK presence, is not a UK-registered charity and has no funds in the UK. British officials also told us that due to Union for Good's links to other NGOs in the UK, the government is afraid acting against the group would have a knock-on effect through much of the British charitable sector. (HMG told us it understands a Norwegian group is currently working with Union for Good.)

    10.(S/NF) According to British Officials from HMT, the National Terrorist Finance Intelligence Unit and the Charity Commission, Interpal has been reduced to a fund-raising entity within the UK. The charity cannot transfer money to the Palestinian areas because of international banking restrictions (or fear of running afoul of U.S. sanctions), so distributes it to other Palestinian-oriented charities based in the UK. It is also holding onto a great deal of donations. In spite of these obstacles, Interpal continues to fund-raise at the same levels as prior to the UK banks' decisions to withdraw services from the group, the Charity Commission told us.

     Israeli Intentions? -------------------

    11.(S/NF) The Israeli Embassy has been lobbying Conservative MPs, journalists, civic groups, Jewish groups, and HMG for an Interpal designation. According to NTFIU and HMT officials, the Israelis gave a large amount of information on Interpal to the UK police, intelligence and treasury community in May 2009, which the British said was dated and relied too much on discrediting the Interpal-linked Union for Good and not enough on discrediting Interpal. Saying they are getting mixed messages from the Israelis, HMT and NTFIU officials told us they were confused about what they understood from Israeli officials to be a purported Israeli offer to Interpal to have the charity work through the Bank of Israel. HMG felt that if the Israeli government was entertaining the possibility of working with Interpal, the British government should not spend scant resources trying to shut off access to the group.

    Next Steps ----------

    12.(S/NF) Given the pressure on the UK government, from Interpal, other charities, and its supporters, without additional U.S. responses to UK requests, it would be difficult to get the government to act more aggressively against Interpal. In addition to the UK requests made in the August 2009 letter from HMT to U.S. Treasury (provided separately to Treasury's TFFC and State's NEA/IPA), the following information would be helpful in getting the UK to pursue further efforts against Interpal: -USG intelligence on post-designation transaction information by Al-Aqsa Foundation, to further the claims in the U.S. Treasury report of the financial transfers between Al-Aqsa Foundation and Interpal. -An updated unclassified report on Interpal, which we can share with MPs, the Charity Commission (only certain officials there have clearance to read our classified material), and other appropriate officials. Comment: It would not likely change many minds, but it could sow the seeds of doubt, which would help in taking pressure off political leaders. End Comment -Information on additional Union for Good funding streams or member-charities in the UK. LONDON 00000019 004 OF 004

    Will the Tories See Things Differently? ---------------------------------------

    13.(S/NF) Conservative thinking on counter terrorism and terrorist financing is in the very broad-stroke stage at this point. In general, they appear keen to maintain a strong posture and tell us privately they support the approach the Brown government is taking; although they also say they'd like to move more quickly at times and to be more aggressive. Given that elections will take place in the next five months, it is unlikely that political leaders on any side would tackle the Interpal issue directly.

    Comment -------

    14.(S/NF) It would be prudent not to press this issue at the political level, given the upcoming elections. However, Washington-based and Embassy-based officials should continue to impress upon the permanent civil service the need to act against Interpal. Some in HM Treasury acknowledge Interpal's relations with Hamas are a problem, but say we haven't made the legal case they need to take action. To increase the possibility of greater HMG action, we will likely need to present a full case: releasing our intelligence on Interpal to HMG and asking other countries to share information directly with the UK when appropriate. Absent a "smoking gun" (i.e. proof of a bank transfer through Interpal to a Hamas entity, with confirmation that Interpal knew how the money would be used,) we are not convinced either a Labour or Tory government would take action against Interpal. But we should continue to keep up the pressure. End Comment. Visit London's Classified Website: XXXXXXXXXXXX
    LeBaron

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