Oct 232014


Reference ID Created Released Classification Origin
05MANILA2356 2005-05-23 07:21 2011-08-30 01:44 CONFIDENTIAL Embassy Manila
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 03 MANILA 002356



E.O. 12958: DECL: 05/23/2015

¶B. MANILA 2124
¶C. MANILA 2042
¶D. MANILA 2016
¶E. MANILA 1549
¶F. MANILA 1098
¶G. 04 MANILA 3564
¶H. 04 MANILA 3675

Classified By: Political Officer Joseph Saus
for reasons 1.4 (b) and (d)

¶1. (C) Summary. A variety of local and international
charities and non-governmental organizations (NGOs) with
Islamic connections operate in the Philippines but under
increasing scrutiny. Police and immigration authorities have
lamented the lack of resources and enforcement mechanisms to
keep tabs on them. The tendency throughout Muslim
communities in Mindanao to accept all Islamic charity and
missionary activity with no questions asked contributes to
the problem. Many extremist proponents and terrorist
operatives evade immigration controls, remaining in
difficult-to-police areas such as the isolated interior of
central Mindanao. Their funding continues to flow using
couriers and other difficult-to-trace transactions that take
place outside the formal banking system. Several Islamic NGO
contacts in Manila have voiced their commitment to
eliminating extremist tendencies and rejecting terrorism in
their development and humanitarian activities. Embassy will
continue to hold our Islamic NGO contacts to their
commitments to reject terrorism, and will remain vigilant
regarding suspicious NGO activity. End Summary.

NGOs In The Philippines

¶2. (C) Despite a mountain of regulatory and reporting
requirements for NGOs operating here, many Embassy contacts
have acknowledged that monitoring and enforcement are spotty,
and sanctions for false disclosure or non-compliance with
periodic reporting requirements are rarely implemented. All
NGOs are required by law to register with the Securities and
Exchange Commission (SEC) to establish themselves as legal
entities, a process similar to incorporation. Embassy
contacts have noted, however, that SEC registration is easy
to obtain. NGOs that focus on social welfare and development
(typically helping children, youth, women, the disabled, the
elderly, and disaster victims) are also required to register
for licensing and accreditation with the Department of Social
Welfare and Development (DSWD). DSWD officials admitted
privately that these are aimed primarily at standardizing
development work and not at protecting national security,
although an official of the DSWD Project Management Bureau
cited one case “several years back” when one NGO was
dissolved for running guns to Communist rebels.

¶3. (SBU) The Anti-Money Laundering Council (AMLC), a product
of the 2001 Anti-Money Laundering Act, is the financial
intelligence unit of the Philippines. The AMLC is properly
equipped, trained, and funded to track money-laundering
offenses. However, regulations governing charities and NGOs
are weak because the 2001 legislation failed to define how
banks, non-bank, and other financial institutions should deal
with them. As a result, charities and NGOs are not required
to comply with AMLC reporting requirements for suspicious and
covered transactions. (Comment: Embassy is working with GRP
to improve its financial intelligence capabilities. The GRP
is petitioning to join the June Egmont Plenary of financial
intelligence units — ref a. End Comment.)

¶4. (C) NGOs have apparently been used as cover for illicit
activity in the past, and not just for terrorist finance.
Deposed President Joseph Estrada allegedly used his “ERAP
Muslim Youth Foundation” to launder illegal gambling
proceeds. The International Islamic Relief Organization
(IIRO) — a subsidiary of the Saudi-based and funded Muslim
World League (MWL) — was active here in the late 1980s and
early 1990s. Operated by Usama Bin Laden’s brother-in-law,
Saudi businessman Mohammed Jamal Khalifa, and with links to
captured al-Qaeda lieutenant Khalid Shaikh Mohammed, the IIRO
served as a legal front to conceal the transfer of al-Qaeda
funding and materiel to the Abu Sayyaf Group and possibly
other insurgents or terrorists operating in the Philippines.
Although Khalifa left the Philippines in 1994 and the IIRO
was shut down, there remain concerns that his network and
associates may still be operating here.
¶5. (C) DSWD has registered about 2,700 NGOs. Islamic NGOs
are demographically and geographically proportionate to the
Muslim population here (e.g., 5 percent); most are in
Mindanao or in predominant Muslim enclaves of Manila. Islamic
NGO funding is in high demand throughout the Philippines.
During an April 2005 visit by senior MWL officials hosted by
the Presidential Office of Muslim Affairs (OMA), local
clerics, madrassah administrators, and NGO representatives —
armed with reams of project proposals — almost mobbed the
entourage, according to OMA Deputy Director Tahir Lidasan,
Jr. He commented to poloff that there is no transparency and
accountability regarding NGO funding: “You might release
funds for a three-story madrassah and end up with a one-story
room, with no explanation of how the money was spent or where
it ends up.” According to observers, while Islamic NGOs
typically fund scholarships, madaris, mosques, and clinics,
given the lack of internal monitoring and control in the
Philippines, virtually any NGO could either wittingly or
unwittingly serve as a cover for illicit activity.

The Peaceful Public Face Of Quasi-Governmental Islamic NGOs
——————————————— ————–

¶6. (C) The MWL, which professes to reject extremism and
militant teaching and to embrace moderation, continues to
play a predominate role among Islamic NGOs here. During
their April visit, MWL representatives met with senior-level
GRP officials, including Executive Secretary Eduardo Ermita
and Secretary of Interior and Local Government Angelo Reyes,
and toured several Mindanao cities. According to Saudi
Ambassador Mohammed Ameen Wali, the trip focused on joint
MWL-GRP efforts to achieve peace and to provide assistance in
education and health, with a focus on the southern
Philippines. Dr. Rafat Ahmed Mirza Al Sayed, a Saudi Embassy
official in charge of NGO affairs, speaking separately to
poloff, stressed that the MWL opposed terrorism and rejected
all forms of violence.

¶7. (C) The Libyan-based and supported World Islamic Call
Society (WICS) is also active in the Philippines. According
to its Manila representative, Gamal N. Ahmed, the WICS also
rejects terrorism. Emphasizing that “we do not support
extremists,” Ahmed offered to cooperate with USAID and US
military humanitarian efforts in Mindanao. Noting WICS’
focus on medical clinics and education, Ahmed claimed that
WICS projects are “open to all,” stressing there is no
religious favoritism or proselytization associated with its

But A Different Reality?

¶8. (C) According to Lt. Col. Winnie Quidato, a Philippine
National Police officer seconded to the Bureau of
Immigration, some NGOs do not know that their foreign
contacts are involved in terrorist finance. Separately,
Department of Foreign Affairs (DFA) Pakistan Desk Officer
Nathan Imperial told poloff that some Islamic (unnamed) NGOs
are recruiting young Filipino Muslims for training in radical
Pakistani madaris, passing them through Bangkok as tourists
on their way to Pakistan. Imperial admitted the GRP had no
clear idea of the number of Filipino students studying in

¶9. (C) Embassy contacts have noted that, given the
Philippines’ extremely porous borders, terrorist operatives
do not necessarily even need an NGO “cover story.” Many
Muslim communities and their leaders accept any form of
assistance with little or no concern of its source, intent,
or quid pro quo. According to Lt. Col. Quidato, lax
immigration and border control — especially in Mindanao’s
“southern backdoor” that leads to Malaysia or Indonesia —
enables criminals and terrorist financiers to come and go
with impunity. These couriers sometimes travel with cash,
bypassing banks or other traceable financial transactions, to
fund and support suspected terrorists in sanctuaries in
central Mindanao.

Comment: Remain Vigilant

¶10. (C) Anecdotal evidence (refs B through E), and other
reporting indicates that at least some Islamic NGO activity
is not innocuous, and may be used as a cover for terrorist
finance. Despite the legal and regulatory requirements,
Philippine authorities do not have the capacity to monitor
suspect NGOs carefully. The loose nature of NGO regulation
and the absence of effective safeguards allow for suspect
activity, despite GRP concern. Inadequate financial,
immigration, and border controls also enable suspected
terrorists and their funds to move through the Philippines
with relative impunity. We continue to hold our Muslim NGO
interlocutors to their commitment to combat terrorism and
will heighten cooperation with the GRP to be on the lookout
for indications of any NGOs acting as cover for terrorist
activities. End Comment.



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