REQUEST FOR AUTHORIZATION OF SIX USAID ASSISTANCE

UNCLAS JERUSALEM 000266 SENSITIVE SIPDIS NEA FOR FRONT OFFICE AND IPA, PRM FOR PRM/ANE; NSC FOR SHAPIRO/PASCUAL; L/FLA FOR PICKERING; TREASURY FOR PARODI/VINOGRAD/VELTRI; PLEASE PASS TO USAID FOR BORODIN/NANDY/LAUDATO E.O. 12958: N/A TAGS: EAID ECON PTER PGOV PHUM PREF KWBG IS SUBJECT: REQUEST FOR AUTHORIZATION OF SIX USAID ASSISTANCE ACTIVITIES IN GAZA REF: A. JERUSALEM 196 ¶B. JERUSALEM 80 ¶1. (SBU) Summary: Post recommends that the Department authorize six USAID assistance projects in Gaza, including water and sanitation projects and the provision of plastic sheeting to elementary schools. The projects will meet urgent humanitarian needs for the population of Gaza. Authorization is required in view of the "material support" provisions of U.S. law. Post notes that there are also practical and public diplomacy challenges in delivering aid in Gaza that may impact on our ability to implement these projects. These include Hamas de facto control in Gaza, its attempts to control assistance, and strict GOI controls over goods allowed into Gaza. Nevertheless, Post believes approval of these activities will demonstrate U.S. concern for the people of Gaza and support U.S. policy objectives. End summary. Legal Issues: Material Support -------------- ¶2. (SBU) Hamas exercises control over all aspects of public life in Gaza, including public schools, utilities, and government hospitals. U.S. criminal law generally makes it unlawful to knowingly provide "material support" to a Foreign Terrorist Organization (FTO),as Hamas is designated. Activities authorized at senior levels of the State Department and cleared by the Legal Advisor, however, can be conducted notwithstanding the "material support" statutes (18 U.S.C. sections 2339A and 2339B). ¶3. (SBU) In October 2007, the Secretary approved a general authorization for ongoing USG assistance for the West Bank and Gaza despite the fact that members of the general population may, in fact, include members of an FTO. The memo, however, does not cover assistance provided through an FTO-controlled intermediary, and it explicitly prohibits rehabilitation and other infrastructure projects to the extent the infrastructure is owned or controlled by an FTO or FTO-controlled municipality. For this reason, a specific authorization is required for such project activities. ¶4. (SBU) Three specific activities have been approved previously. In March 2006, the Secretary approved assistance related to avian influenza for, what was at the time, the Hamas-controlled Palestinian Authority (PA) Ministries of Health and Agriculture. In May 2006, the Secretary approved dialysis assistance for the Hamas-controlled PA Ministry of Health. In February 2008, the Deputy Secretary approved USD 500,000 in emergency assistance to the North Gaza Wastewater Treatment Plant, which is owned and operated by the Coastal Municipal Water Utility (CMWU),to prevent raw sewage overflowing a treatment pond in Beit Lahiya. ¶5. (SBU) Post recommends that the Department authorize the six additional USG assistance projects in Gaza described in paragraphs 10 and 11 below. The Gaza Water Utility as Beneficiary -------------- ¶6. (SBU) Repair of water and sanitation systems is a priority need in Gaza. Water and sanitation services are provided by the CMWU, which owns and operates the water and wastewater systems in Gaza. USAID has expertise in this area. USAID's water and infrastructure office has two senior-level engineers who are Gazans, know the infrastructure problems in Gaza, and can make site visits. USAID has an existing agreement with American Near East Refugee Aid (ANERA) to implement water and sanitation programs in Gaza. ANERA employs two project engineers in Gaza and has already participated in numerous post-conflict damage assessments in Gaza. ¶7. (SBU) The CMWU will be the recipient of the assistance. The CMWU is a semi-public entity established by the World Bank as the water and wastewater provider for Gaza. It consists of a Director General, whose salary is paid by the World Bank; a Board of Directors representing eight Gaza municipalities (five permanent and three rotating); a representative of the Ministry of Local Government (appointed by the Hamas-controlled government in Gaza); and a General Assembly made up of twenty five municipalities. All members of the Board of Directors are either appointed by Hamas or from Hamas-controlled municipalities. ¶8. (SBU) The chairman of the CMWU Board of Directors is Dr. Munjed Abu Ramadan, the de jure mayor of Gaza City (de facto control of Gaza City rests with Hamas). Abu Ramadan is a Fatah member. (Note: Despite removal of Ramadan from his position as Gaza City Mayor by the Hamas-controlled government in Gaza in late 2007, he remains the CMWU Chairman and signs all documents on behalf of the Board of Directors. End note.) The CMWU,s Director General and chief executive officer, Monther Shublak, is under contract to the World Bank. Abu Ramadan has successfully separated politics from the CMWU's operations, and the utility's core functions, including planning, finances, and operations and maintenance are handled by the management team established by the World Bank and led by Shublak. As Chairman of the CMWU Board of Directors, Abu Ramadan effectively controls decisions by the Board and shields the CMWU from political interference. Abu Ramadan and Shublak would serve as the points of contact for USAID. ¶9. (SBU) USAID would also coordinate activities with the Palestinian Water Authority (PWA). The PWA acts as the government regulator for water and wastewater in the West Bank and Gaza. The PWA,s Deputy Chairman, Rebhi al-Sheikh, is based in Gaza. He was appointed prior to the 2006 elections and was never replaced by Hamas. He is a Fatah member and reports to the PWA Chairman, Shaddad Atilli, who is based in the West Bank. The Hamas-controlled PA in Gaza has avoided taking control of the PWA, and the USG maintains contacts with the Deputy Chairman, Mr. Al-Sheikh. Water and Sanitation Projects with the CMWU -------------- ¶10. (SBU) The five proposed USG projects with the CMWU are: ¶A. Repair up to 12 Water Wells Twelve deep water wells in Gaza City and Beit Hanoun, Beit Lahiya and Jabaliya, which supply drinking water to over 800,000 residents, were damaged during the recent conflict. Electrical and mechanical equipment and pump repairs are needed to maintain a safe and regular supply of water. All twelve wells are owned and operated by the CMWU. Project planning and implementation would be done in close coordination with the PWA and Monther Shublak of the CMWU. USAID would manage the project(s) through its Emergency Water and Sanitization Program run by ANERA. ANERA would subcontract to vetted local companies. ¶B. Repairs to Water Distribution Network The main water pipeline system that transmits water from the north to central and south Gaza was damaged in the conflict. This damage adversely affects water supply to about 700,000 residents in north, central and south Gaza. The project would supply parts and make repairs to this water transmission system. The water transmission system is owned and operated by CMWU. Project planning and implementation would be done in close coordination with the PWA and Monther Shublak of the CMWU. USAID would manage the project through its emergency water and sanitization program run by ANERA. ANERA would subcontract to vetted local companies. ¶C. Waste Water Collection Network Repairs There was extensive damage to Gaza City and Jabaliya,s waste water distribution networks during the recent conflict. Damage to waste water lines was exacerbated by years of neglect and make-shift repairs. An initial assessment revealed that up to 3 kilometers of waste water lines need repair or need to be replaced, affecting waste water collection service to hundreds of thousands of Gaza residents. The entire Gaza waste water network is owned and operated by the CMWU. Project planning and implementation would be done in close coordination with the PWA and Monther Shublak of the CMWU. USAID would manage the project through its emergency water and sanitization program run by ANERA. ANERA would subcontract to vetted local companies. ¶D. Waste Water Facilities Repairs There was extensive damage to waste water treatment facilities in Gaza City and Beit Lahiya. Waste water backed up into many neighborhood streets and poses a health risk to hundreds of thousands of residents. The CMWU carried out some makeshift repairs following the cease-fire, but a comprehensive repair the facilities is needed to avert waste water flooding. USAID would repair and renovate up to four waste water treatment facilities and related pumping stations in Gaza City and northern Gaza cities of Beit Lahiya and Beit Hanoun. All Gaza waste water treatment facilities are owned and operated by the CMWU. Project planning and implementation would be done in close coordination with the PWA and Monther Shublak of the CMWU. USAID would manage the project through its emergency water and sanitization program run by ANERA. ANERA would subcontract to vetted local companies. ¶E. Jabaliya Water Tank Repair The main water tank for the Jabaliya area was damaged during the recent conflict. The damage to the water tank has left as many as 90,000 residents in the area without water or with only intermittent supplies. The Jabaliya water tank is owned and operated by the CMWU. Project planning and implementation would be done in close coordination with the PWA and Monther Shublak of the CMWU. USAID would manage the project through its emergency water and sanitization program run by ANERA. ANERA would subcontract to vetted local companies. Other Assistance: Plastic Sheeting for Schools -------------- -- ¶11. (SBU) Public elementary schools in Gaza need plastic sheeting to cover broken or missing windows. Plate glass is not currently allowed into Gaza, and it may be months before glass windows can be imported and installed. In the meantime, school children are exposed to the elements. Only USAID-financed U.S. NGOs have sufficient quantities of plastic sheeting in Gaza to meet emergency needs. Other donors have insignificant amounts of plastic sheeting available and have left this sector largely to USAID. Since January 1, USAID has procured USD 250,000 worth of plastic sheeting and ordered an additional USD 250,000. Headmasters of public schools have been calling NGOs begging for plastic sheeting. USAID-financed U.S. NGOs, however, are prohibited from providing plastic to public schools in Gaza due to the material support statutes. If such assistance is authorized, rolls of plastic sheeting and tape would be provided to needy elementary schools. USD 50-100 worth of plastic sheeting and tape is sufficient for one school. Given its temporary nature, the plastic sheeting would add no permanent value to a school building. The principal USAID subgrantee for the project would be CHF, but other subgrantees may also be asked to assist. No contact would take place with government officials above the level of each school's headmaster. Challenges of Providing Assistance and Reconstruction in Gaza: -------------- -------------- ¶12. (SBU) The USG will face practical and public diplomacy challenges in delivering aid in Gaza, including Hamas de facto control, its attempts to control assistance, and GOI restrictions over goods allowed into Gaza. ¶13. (SBU) Coordination with Hamas: Hamas is pressuring international organizations and NGOs to "coordinate" their activities with Hamas "ministries." Local NGOs, upon which U.S. NGOs depend to varying degrees to distribute commodities, perceive grave risks in this situation. The PA is competing to oversee Gaza assistance but does not exercise control on the ground. USAID partners will continue to comply with the USG "contact" policy, and avoid all contact with Hamas authorities in Gaza except for minimal administrative contact at the lowest possible level needed to implement USG approved activities, as provided for in the contact policy. If Hamas presses U.S. partners for more contact, they may not be able to implement these projects. ¶14. (SBU) Public Diplomacy: There is a real risk that Hamas, as the de facto power, will seek credit for rebuilding efforts, including for these specific projects. Post will work with our implementing partners to avoid this, but it may be impossible to avoid all efforts by Hamas to take advantage of the situation. Post believes this is a risk worth taking, as the humanitarian needs are compelling and the USG will benefit from any credit it receives. Post believes that USAID's work on the ground in its areas of expertise will provide both short- and long-term benefits to the people of Gaza, and will lay the groundwork for increased public diplomacy efforts at a later time. ¶15. (SBU) GOI Access Controls: Strict GOI controls on imports into Gaza, if unchanged, will hinder implementation of these assistance projects. The USG has witnessed cumbersome bureaucratic approval processes and time-consuming negotiations over entry for materials -- cement, pipes, steel reinforcement bar, water pumps, electrical materials, valves, etc. -- all of which are currently prohibited. Materials such as these will be required to implement the proposed water projects. ¶16. (SBU) USAID has cleared this message. WALLES