COTABATO MAYOR PROTESTS USAID PROJECT SUSPENSION

UNCLAS SECTION 01 OF 03 MANILA 001961

SIPDIS

SENSITIVE

DEPARTMENT FOR EAP/PMBS, INR/EAP, USIP - SOLOMON
NSC FOR GREEN
SEOUL FOR ERIC JOHN

E.O. 12958: N/A
TAGS: PTER EAID KISL PINS ASEC CASC RP
SUBJECT: COTABATO MAYOR PROTESTS USAID PROJECT SUSPENSION

REF: 04 MANILA 5141

Summary
--------------


1. (SBU) Cotabato City Mayor Muslimin Sema has attempted to
instigate a local media and public outcry against the US, and
specifically USAID activities in his municipality. His
agitation is in response to a letter from USAID Mission
Director Yates, at the direction of Ambassador, informing the
Mayor that a USAID-funded road project will be suspended
following information indicating international financiers,
affiliated with terrorist elements, have been traversing
Cotabato "repeatedly" with his knowledge and support (full
text in Para 4). Sema has engineered an angry unsigned
letter faxed to USAID's largest contractor in Mindanao on
April 28, and a street protest of 2,000-3,000 in Cotabato
City on April 29. The mayor had responded positively when we
had raised such reports with him in the past. We are keeping
communication channels open to the mayor, and allowing him
space to retreat and once again address our concerns at the
ability of terrorists and terrorist financiers to transit
Cotabato with his apparent connivance. USAID maintains many
other projects in Cotabato and throughout Mindanao. We
continue to stress that communities and leaders willing to
work against terrorism will reap the benefits of peace and US
assistance, while those making the wrong choice will lose
international development assistance to improve the quality
of life in their jurisdictions. We consider the current
travel warning as sufficient but will continue to monitor the
Cotabato security situation throughout the weekend. End
Summary.

Background To the Case
--------------


2. (SBU) Cotabato City, population 241,000, is 800 miles
southeast of Manila. The city lies on a river delta on
Mindanao's western mainland edge. The city's inhabitants are
roughly half Muslim and half Christian. USAID has several
successful projects, administered through the contract Growth
Equity in Mindanao (GEM) and other programs in Cotabato.
Mission has offered a particular incentive to Cotabato Mayor
Muslimin Sema over the past year to deny Cotabato City as a
transit and logistics hub for transnational terrorists. At
times, he has made a show of cooperating with law enforcement
and military authorities. Several terrorists have been
arrested in Cotabato City, which is near the isolated
Liguasan Marsh -- home base of several troublesome Moro
Islamic Liberation Front "base commands" and a preferred
sanctuary of Jemmah Islamiyah and Abu Sayyaf Group
terrorists.


3. (SBU) As reported in reftel, we have maintained a
transparent and no-nonsense relationship with Mayor Sema
regarding USAID development assistance, making sure he
understood that projects can not be approved and implemented
where terrorists are allowed to operate. Immediately at
issue is a USD 1 million grant for a bypass road, a
desperately needed thoroughfare for traffic-plagued Cotabato.
This is a handsome political plum for the mayor who could
use the project to help legitimize his contested election.
Upon confronting the mayor over alleged terror suspects
operating in Cotabato last October, he sprang into action
calling local security authorities to pursue and deny
Cotabato City as a welcoming place for terrorism.


4. (SBU) In February, in response to Sema's apparent
improved cooperation and the improved security climate,
Ambassador publicly announced in Cotabato, with Sema at his
side, that the bypass road could move forward. Recent
classified reporting indicates, however, that Sema has met
with suspected foreign terrorist financiers. As a result,
USAID Mission Director -- in a private letter dated April 25
-- stressed to Mayor Sema...

Begin Full Text:

I very much regret that we continue to receive information
that international financiers, affiliated with terrorist
elements, are traversing Cotabato, reputedly with your
knowledge and support.

Given these developments, the United States is constrained to
suspend all work on the Cotabato bypass road, effective
immediately.

Ambassador Ricciardone and I will be in Cotabato City briefly
this week and would be available to discuss this matter with
you personally, should you desire.

Cordially,

Michael Yates, USAID Mission Director

End Full Text.


While visiting Cotabato to open more USAID education projects
in the area on April 28, Ambassador spoke with Mayor Sema via
telephone to discuss the same concerns spelled out in the
letter.

Recent Flare Up
--------------


5. (SBU) Sema immediately went public with the substance of
the letter and has been attempting to stoke public resentment
against the Ambassador, USAID, and the US Government.
Several local radio and TV outlets have interviewed Mayor
Sema, who is portraying himself as a victim. Call-in shows
have reportedly broadcast anti-US diatribes. The local GEM
office received via fax an unsigned "open letter" addressed
to Ambassador and "all USAID officers and employees." The
document condemned USAID and Ambassador for "devilish
insinuations" against Cotabato City and the mayor. The
letter characterizes the Ambassador and "his flocks of
employees" as "lackeys," and vows the "rejection of all USAID
projects in this homeland." (Note: We have not received any
direct threats of physical harm against US citizens or
interests, and national media have not picked up the story as
of late on April 29. End Note.)


6. (SBU) There are reports on April 29 of a small-scale
public protest in Cotabato City of up to 2,000-3,000 people.
So far there are no signs of public reaction outside Sema's
jurisdiction. We are in close touch with Secretary Jesus
Dureza, the Presidential Assistant for Mindanao, who is
following the situation. GEM's host-national staff are
monitoring the situation throughout Mindanao. They currently
plan to continue normal business operations, but project
staff located in Cotabato closed the office early on April 29.

Sema Wants Apology and Disclosure
--------------


7. (SBU) Poloff contacted Mayor Sema to suggest that he can
best resolve our concerns through direct communication, and
appropriate cooperation on his part with GRP authorities when
any foreigners transit Cotabato for less than transparently
legitimate purposes -- as the Ambassador had recommended on
April 28. Sema said he had taken offense at the allegations,
and that meeting people is part of his job as mayor. He said
the police and the "national intelligence authorities" should
have informed him of such allegations. He claimed it is not
his responsibility to report details of his foreign contacts
to national authorities. Sema is pushing for disclosure of
the suspected terrorists' names to clear the issue once and
for all. He also is demanding an apology.

Mission Reaction And Comment:
--------------


8. (SBU) It is not yet clear whether Sema's agitation is
producing the support he evidently seeks. For now, any
public backlash appears limited and Sema does not seem to be
interested in a quieter, more effective resolution of the
issue. The road suspension, while a sizeable loss, is a very
small percentage of the entire scope of USAID assistance in
Mindanao. Other GEM projects remain ongoing in Cotabato and
elsewhere in Mindanao. Sema has proven to be a useful
partner in the past. We are keeping lines open to him and
leaving him room to retreat. His posturing to the media is a
standard political tool in Mindanao and throughout the
Philippines. We continue to reiterate publicly and privately
that our assistance programs will benefit only those who are
committed to peace, prosperity, and eradicating terrorism.

9. (SBU) Mission considers the current national travel
warning as sufficient but will continue to monitor the
security situation in Cotabato throughout the weekend.

Visit Embassy Manila's Classified SIPRNET website:
http://www.state.sgov.gov/p/eap/manila/index. cfm

You can also access this site through the State Department's
Classified SIPRNET website:
http://www.state.sgov.gov/
Ricciardone