TERRORISM FINANCE: JORDAN: HAMAS STORY NOT OVER

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PETITION CALLING FOR HIM TO BE FIRED HAD WITHDRAWN THEIR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