SALEH DEMARCHE ON AL-MOAYED AND CT SUPPORT

1. (S) SUMMARY: President Saleh July 30 pressed Ambassador
and Legatt-designate for an arrangement on al-Moayed to avoid
political embarrassment to Yemen. Legatt briefed Saleh on
FBI proposal for Yemeni investigators to come to New York and
cooperate on al-Moayed case. Saleh also pressed for
additional CT resources. Ambassador briefed Saleh on pending
contract for Marib power plant that would adversely affect
American investment in Yemen. END SUMMARY.



2. (S) At President Saleh's request, Ambassador, ORCA Chief
and Legatt-designate met with him July 30. Ambassador
presented Saleh initially with chart that depicted history of
American company Delma's effort to win contract for Marib
power plant. Chart outlined steps since 1998 that Delma had
taken in accordance with Yemeni contracting procedure only to
be informed recently that a Yemeni company (NATCO) was to be
awarded the contract on the basis of its bid which appeared
to be based on and marginally improved Delma's offer.
Ambassador emphasized that virtually no American business
would be interested in investment in Yemen if Delma's
multi-million dollar effort was frustrated due to
irregularities in the Yemen bid process. Saleh took the
point and phoned the Minister of Electricity to direct that
all documents be forwarded to the President's office for
review.



3. (S) Saleh then raised next tranche of ORCA support for
Yemen's counter terrorism effort. ORCA chief briefed Saleh
on recent discussions with PSO Chief Gamish and reiterated
documentation required. It was agreed that Yemeni government
would provide bank statements as needed.



4. (S) Saleh then turned to al-Moayed case and reviewed his
telcon with FBI Director Mueller and "understanding" that US
and Yemen would cooperate in resolving the issue. Saleh
argued that al-Moayed was an unimportant personality, unlike
other al-Qa'ida figures like Nashiri, and that political cost
to ROYG and US of his extradition outweighed potential CT
gain. In response, Legatt-designate briefed Saleh on letter
now being translated from him to Interior Minister Alimi
which would provide basis of US case and an invitation to
three Yemeni officials to come to New York to work with the
prosecutors and FBI case agents, on al-Moayed's case.
Legatt-designate stressed importance of al-Moayed and
corroborating evidence from several sources of his
association with Al-Qa'ida. Ambassador noted that
al-Moayed's crime involved collecting funds in the US and
from Americans which reinforced US determination to pursue
his case vigorously.



5. (S) Saleh agreed that Interior Minister Alimi,
Legatt-designate and Ambassador should work further to
determine how to deal with the issue. He emphasized the
political embarrassment the ROYG will suffer if al-Moyad is
extradited. He agreed to study the FBI invitation but did
not commit to sending a Yemeni team. Ambassador noted that
al-Moayed was associated with the Islah party which had
several suspect associations including Sheikh Abdul Magid
Zindani with al-Qa'ida and the Al Aqsa fund which financed
Hammas. Within Palestinian circles, it was known that Islah
fundraising for Palestine was rife with corruption. ROYG
should not associate itself with the Islah party and
specifically al-Moayed, Ambassador advised.



6. (S) Legatt-designate briefed Saleh on ongoing training of
Interior Ministry officials on crime scene investigation and
conveyed personal greetings from FBI Director Mueller. Saleh
expressed interest and appreciation for the training and
reciprocated Muller's greetings.



7. (S) COMMENT: Saleh remains personally engaged on the
al-Moayed case. The sheikh's charitable works in Sana'a have
made him a popular figure here. Saleh continues to hope that
his extradition to the US can be avoided and it will take
continuing effort on our part to get the ROYG to acquiesce
and work with the USG. Ambassador and Legatt-designate will
follow up with Interior Minister and try to move toward
US-Yemeni cooperation rather than confrontation.
HULL