POST SUPPORTS DELAY OF HEZBOLLAH TRI-BORDER AREA

S E C R E T BUENOS AIRES 002590

SIPDIS

NOFORN
SIPDIS

NSC -- ZARATE
TREASURY FOR TFI -- HEFFERNAN
DHS FOR ICE -- D.THOMPSON
STATE FOR S/CT -- NOYES
STATE FOR WHA -- MCCARTHY/CROFT
STATE FOR EB/ESC -- DAS SIMONS AND JEAN CLARK

E.O. 12958: DECL: 11/19/2026
TAGS: KFTFN EFIN PTER SNAR ETTC PREL AR
SUBJECT: POST SUPPORTS DELAY OF HEZBOLLAH TRI-BORDER AREA
TERRORIST FINANCE DESIGNATIONS

REF: A. BRASILIA 2420


B. 11/15 JEAN CLARK EMAIL

Classified By: AMBASSADOR E.A. WAYNE FOR REASONS 1.4 (B AND D).

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

1. (S/NF) Post understands that Treasury proposes the
designation under E.O. 13224, on November 21, of nine
individuals and two organizations operating in the tri-border
region. Post does not object to the specific individuals and
organizations that will be subject to the designation.
However, Post believes that for operational and political
reasons the decision and announcement should be postponed.
Post believes the eventual designation of these targets would
be more effective if approached on a case by case basis.
Post fully supports AmEmbassy Brasilia arguments (Ref a),
particularly with regards to taking into account local
sensitivities, the need to coordinate with local and regional
security and intelligence agencies, and the timing in
relation to the early December 3 plus 1 meeting.
Furthermore, we note that an announcement not coordinated
with our regional partners could jeopardize ongoing DEA and
SIMO operations targeting several of these individuals and
organizations. Finally, this is a particularly sensitive
time in Argentina following the release of the AMIA
investigative report/indictment. Moving too rapidly and
without coordinating the public designation of these
individuals could be counterproductive and reverse the
positive momentum building in recent weeks and months. While
fully supporting the designations, Post recommends Treasury
postpone them until they can be integrated into and
coordinated with ongoing operational timetables. End Summary.

InterAgency Agreement to Postpone Nov. 21 Designation
-------------- --------------

2. (S/NF) We understand from the State Department (Ref B)
that Treasury is proposing to designate under E.O. 13224 on
November 21, 2006, nine individuals and two organizations
operating in the tri-border region in support of Hezbollah.
While none of the individuals/organizations on the list is
from Argentina, Post has significant equities at stake that
could be jeopardized by an uncoordinated and precipitous
announcement. Member agencies of Post's Law Enforcement
Committee, including Legatt, DEA, SIMO, DAO, Treasury OTA,
ECON, and POL sections, have contributed and cleared on the
following response. We appreciate the opportunity to provide
input into this process.

Post's Concerns with Uncoordinated Designation
-------------- -

3. (S/NF) The majority of these individuals and organizations
are well known to agencies at Post. We strongly support
their eventual designation under E.O. 13224. However, we
have serious concerns regarding the timing of the proposed
designations and the lack of advance warning to our GoA
interlocutors.

-- (S/NF) Ongoing enforcement operations are targeting most
of the individuals and organizations listed, and publicly
aligning them with terrorism and terrorist activities,
without coordinating with the agencies undertaking the
operations -- or collaborating with local and regional
security and intelligence services -- would jeopardize the
tremendous amount of operational equities in place.

-- (S/NF) As AmEmbassy Brasilia notes (Ref A),the
governments of Brazil, Argentina, and Paraguay deny that
there is evidence of ""operational acts of terrorism"" in the
tri-border area, and we publicly agreed with this statement
in the 2005 3 plus 1 meeting communique. We also committed
to ""the prompt exchange of information in order to deter
illegal acts."" Therefore, public designation of individuals

and organizations operating in this region, and without prior
notification to and discussions with the other countries
involved, would be seen as a repudiation of our previous
public statement, and could disrupt the early December 3 plus
1 discussions.

GoA Reaction and Case for Delay
--------------

4. (S/NF) There is a strong potential for political fallout
locally from the sudden U.S. domestic designation of these
individuals and entities. Although we do not believe the GoA
would object in principle to any of the targets proposed for
domestic designation, we do expect that the GoA, and
particularly Argentine security and intel agencies, would
object strenuously to an uncoordinated announcement. This
would complicate and likely hinder future bilateral law
enforcement cooperation. We argue, therefore, that the case
for postponing the designations is compelling:

-- (S/NF) Delaying the designations would give Post agencies
time to collaborate locally and integrate the coming
designations into specific ongoing operations, and would
further allow us to use the publicity to best effect. Moving
forward with the designations on the current timetable would,
on the contrary, contribute to souring relations with local
law enforcement contacts.

-- (S/NF) In addition, there is relatively strong
anti-American sentiment in Argentina, and the Kirchner
administration's natural inclination is to reject U.S.
pressure. Therefore, a rushed and uncoordinated designation
could contribute to alienating both bilateral and public
support, just as the fallout from the AMIA investigative
report and indictments is aligning Argentine and U.S.
interests and driving a wedge between the public and
Hezbollah supported groups and activities. Not only might
this play a role in undermining GoA support in the tri-border
region, it could complicate our longer term effort to
convince the GoA to designate Hezbollah as a terrorist group.
Already some press reports have accused the GoA of being a
tool of the U.S. and Israel on the AMIA case. These
sentiments could easily find widespread echo if the U.S. acts
unilaterally.

Post Comment and Recommendation
--------------

5. (S/NF) Post is extremely supportive of Treasury overall
goals of designating terrorist organizations, facilitators,
financiers, and inciters, and they are a crucial aspect of
the overall effort to target and take down terrorist groups
and individuals. However, they will be more effective if we
integrate them into an overall operational plan.
Specifically, if Treasury's actions are organized to coincide
with takedowns, arrests, and seizures by local authorities,
the impact would be much greater and further reaching. At a
minimum, close consultation and coordination with local
authorities will help assure much more productive results.
Therefore, we invite Treasury officials to visit Argentina
and the region, participate in meetings with local security
and Intel forces, and discuss how to move forward with the
designations -- case by case -- so that they serve as the
culmination of successful, multilateral counter-terrorist
operations. End Comment.
WAYNE