IS NEW ZEALAND AWASH IN BAATHISTS?

S E C R E T SECTION 01 OF 03 WELLINGTON 000363

SIPDIS

NOFORN

STATE FOR EAP/ANP, SA/PB, NEA/NGA, AND S/CT
DHAKA FOR AMBASSADOR THOMAS AND DCM CHAMMAS

E.O. 12958: DECL: 05/04/2015
TAGS: PREL PGOV PTER SMIG NZ
SUBJECT: IS NEW ZEALAND AWASH IN BAATHISTS?

REF: A. HADDA/DEPARTMENT/DHAKA MAY 1 E-MAILS (NOTAL)


B. AMBASSADOR THOMAS/DEPARTMENT 04 OCTOBER E-MAIL
(NOTAL)

Classified By: DCM David Burnett,
For Reasons 1.4 (b) and (d)


1. (C) Summary: An opposition politician threatened early
this week to reveal the identity of a member of Saddam's
regime who is reportedly seeking residence in New Zealand.
The Government responded by revoking the visitor's permit...
of the wrong Iraqi. The Government's action was taken
against former Iraqi Diplomat Zuhair Mohammed Al-Omar, whose
background we had disclosed to NZ officials half a year ago.
But the Iraqi whose name was revealed by the opposition
yesterday is an alleged former cabinet official, Amer Mahdi
Saleh Khashaly (AKA Amer Mahdi Alkashali) who arrived in New
Zealand only last month.


2. (S/NOFORN) The media has played up the fact that there
could be as many as five more Baathists on the loose in New
Zealand, and the Government's humiliation over the incident
is palpable. The anti-immigration party that revealed the
name of the cabinet official will milk the story for all it's
worth in the run up to elections later in the year. The fact
that both men received visas from New Zealand's embassy in
Bangkok, already cited for consular impropriety, will
increase the Government's woes and could lead to career
trouble for the head of Immigration and others. Blame may
also eventually fall on Prime Minister Clark in her role as
Minister in charge of the Security Intelligence Service
(SIS). The possibility is clearly not lost on her and she
has reportedly hounded the SIS head daily for updates.


3. (C) Under NZ immigration law, classified information to
be used to bar entry to visa applicants judged to be security
risks, but hearings to determine refugee status -- an
entirely separate process -- are open and can therefore not
include classified evidence. An ongoing case has already
allowed a former Algerian politician with reported terrorist
links to take advantage of this loophole. Ironically, having
been drawn into the spotlight the Iraqis may now be more
likely to apply for refugee status, especially if the
Government withdraws their right to stay here as the result
of the opposition's claims. This could be the real election
issue, as liberal voters tend to see the asylum seekers as
victims of bad intelligence while more conservative voters
accuse the Government of providing an open door to
terrorists.


4. (C) If the Iraqis ask for refugee status, we expect our
New Zealand counterparts will ask us for any open source
information we can provide that would enable to enable the
Kiwis to show the gentlemen the door. NZ officials plan to
brief us fully on the cases over the next few days. End
Summary.

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BACKGROUND
--------------


5. (C) We were called over the weekend by a contact in the
Ministry of Foreign Affairs and Trade (MFAT) who asked
whether the NZ Government could release publicly information
that we had shared with them last October about Z.M. Al Omar,
a former Iraqi Ambassador to Bangladesh. MFAT told us that
the head of the anti-immigration New Zealand First Party,
former Prime Minister Winston Peters, had threatened to
reveal that an Iraqi official was in the country and the NZ
authorities were doing nothing about it.


6. (C) The information we had passed along in October, which
noted that Al Omar was an unreconstructed Baathist who had
tried to organize Islamic extremists to foment violence
against U.S. facilities in Dhaka, had been provided to
Ambassador Thomas by Bangladesh's Foreign Secretary (Ref B).
The Foreign Secretary also claimed that Al Omar was seeking
political asylum in New Zealand.


7. (S/NOFORN) SIS has the power to declare any alien in New
Zealand a Security Risk based on classified information, but
New Zealand officials are extremely wary to use this option
now that the Government is engaged in a high-profile,
embarrassing court battle in connection to a former Algerian
MP, Ahmed Zaoui. The Government claimed he presented a
security risk, and sought to expel him based on classified
evidence. His lawyers demanded to see the intelligence,
claiming it was spurious, but the third country provider of
the information refused to declassify it. Meanwhile, Zaoui
was determined to be a refugee under the entirely separate
refugee process. Zaoui claims his human rights have been
violated by the use of the intelligence that he cannot see.
His lawyers, the media, and much of the public regard him as
a persecuted martyr, and he has even been granted safe haven
by a monastery as his case slogs through the courts.
Government officials, who have told us they expect to lose
the Zaoui case, have not yet revised the laws to close the
loophole. In the meantime they want to avoid similar
situations, which is why MFAT asked us if they could
publicize the information that we had provided to them on
Al-Omar.


8. (S/NOFORN) After receiving the weekend's request from
MFAT, we asked Embassy Dhaka to seek GOB approval to release
the information (Ref A) and asked Embassy Baghdad if the GOI
had any information about Al Omar. We also suggested that NZ
law enforcement officials look into Al Omar's financial
arrangements, as he may be using Hussein government funds to
cover his costs.


9. (C) On Monday, May 2, MFAT informed us that NZ
Immigration had determined that they could cancel Al Omar's
visitor's permit on the basis of his application form. He
had not in fact applied for asylum or refugee status. News
that the Government had revoked the permit of an Iraqi
diplomat (but which did not reveal his name) hit the media
that night, following reports that Peters was to reveal the
Iraqi's name in Parliament the next day.
--------------
IT'S THE "WRONG" IRAQI
--------------


10. (SBU) On Tuesday, May 3, Peters revealed to Parliament
the identity of the Iraqi official, as promised. To the
government's chagrin, the name he cited was not Al-Omar but
Amer Mahdi Saleh Khashaly (AKA Amer Mahdi Alkashali),an
alleged 1980s Iraqi Cabinet Minister who arrived in New
Zealand last month. Apparently, Khashaly entered New Zealand
on an Iraqi passport but used a UN passport to support his
visa application. Incredibly, his current whereabouts are
unknown, and Peters roundly criticized the Government for
failing to track him down.


11. (SBU) The press, already tipped off by government
officials about Al-Omar's identity,
gave wide play to the story that Peters had forced the
government's hand into revealing the identity of the "wrong"
Iraqi. The media also reported that Al-Omar lives in New
Zealand with his son, a New Zealand citizen. Despite the
information we have heard about Al-Omar, his son insists his
career pre-dates the Baathists and that he has police
clearance from the current Iraqi regime. Peters declared that
the Government went looking for a wolf and found a rabbit.



12. (SBU) The Government's problems have been compounded by
the fact that both Iraqis were issued visas by New Zealand's
Embassy in Bangkok, where an employee was fired in 2003 after
being accused of selling visas. Al-Omar reportedly received
his visa even though the issuing officers knew of his
background. The officers had failed to do the right
background checks on Khashaly. Immigration Minister Paul
Swain declared that he had lost all confidence in Bangkok,
and ordered that from now on all visa applications involving
nationals from "high risk" countries are to be processed in
New Zealand. The Government's embarrassment has increased,
as a search through Immigration files has revealed that "many
more" Iraqis associated with the Hussein regime -- the press
says five so far -- may have been allowed entry into the
country.

--------------
Something is Broken
--------------


13. (SBU) So far, the focus of media attention has been on
Labor Department Workforce Deputy Secretary May Ann Thompson
(who used to be advisor to the Prime Minister) and
Immigration Minister Swain. Peters claimed Swain, "... does
not have the remotest idea of which Arab -- Osama bin Laden
or anybody else -- may be in the country and what he is doing
here." It seems more and more likely that Swain and others
may pay for the embarrassment with their jobs. As of now,
the Prime Minister has been spared from strong criticism, and
she even managed a joke at Peter's expense, chiding him for
his hyperbolic claim during his presentation to Parliament
that half the Iraqi cabinet was in New Zealand.


14. (S/NOFORN) Behind the scenes, however, there is less
levity. The Prime Minister is reportedly hounding the head
of SIS daily for updates. Our MFAT source tells us a
Government task force is meeting daily, and ministries have
said they will brief us about the controversy within the next
few days.


15. (C) As we have often remarked, the Prime Minister has
proven herself capable time and time again of distancing
herself from the scandals that have arisen during the past
months, such as the financial questions surrounding outspoken
Labour MP John Tamihere. But this latest dust-up could have a
real negative impact on both her (as Minister in charge of
Intelligence) and the Labor government in the run-up to the
elections. Even if all Iraqis are declared not to be
security risks, the fact that both were able to enter and
live in New Zealand without detection may raise concerns
among voters. If they apply for refugee status, the
government faces months of embarrassing trials that will
expose them to criticism from liberals, who will regard the
Iraqis as innocent victims of U.S. and other countries'
intelligence, and conservatives, who will declare New Zealand
a haven for terrorists. Law and order is already a campaign
issue here. Adding lax immigration controls could prove a
volatile mix.


16. (C/NOFORN) Elections aside, the incident raises real
questions about New Zealand's border controls and
coordination among ministries involved with immigration.
MFAT has admitted to us that despite their and SIS's repeated
prodding, Immigration failed to look into Al-Omar until
Peters' threat. We have heard that Immigration may also have
been the source of Peter's revelation. If so, there may be
dissatisfaction within the ranks about the agency's
performance.

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INFORMATION APPRECIATED
--------------


17. (C) MFAT tells us that at this point they do not need any
information from us about either Iraqi already named because
neither has asked for refugee status. But it seems likely
that one or both may. Al-Omar, having had his visa revoked,
would have no other way of staying with his son here over the
longer term. The Bangladeshi Foreign Secretary had also
reported that Al-Omar would ask for asylum. News reports
claim Khashaly arrived in New Zealand to ask for help from
Zaoui's lawyers in getting political asylum for him and his
son.


18. (C) In anticipation that Government officials will ask us
for open source information in the event that Al-Omar and or
Khashaly ask for refugee status, post would appreciate any
information that agencies/Embassy Dhaka/Embassy Baghdad could
provide. We will also provide more names if and when they
arise.

19: (U) Minimize Considered.
Swindells