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FM AMEMBASSY RIYADH
TO RHEHNSC/NSC WASHDC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 4470
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUCNIRA/IRAN COLLECTIVE PRIORITY
RUCNRAQ/IRAQ COLLECTIVE PRIORITY
RUCNISL/ISLAMIC COLLECTIVE PRIORITY
RUEHJI/AMCONSUL JEDDAH PRIORITY 8359

S E C R E T SECTION 01 OF 03 RIYADH 000367

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/24/2017
TAGS: PTER PGOV PREL PINR EFIN KTFN MEPP KPAL SA
SUBJECT: APHSCT TOWNSEND FEBRUARY 6 MEETING WITH FOREIGN
MINISTER PRINCE SAUD AL-FAISAL

REF: 06 RIYADH 9083

Classified By: Ambassador James C. Oberwetter
for reasons 1.4 (b) and (d).

¶1.  (S) SUMMARY: Assistant to the President for Homeland
Security and Counterterrorism Francis Fragos Townsend covered
both counterterrorism cooperation and regional political
issues in her meeting with Foreign Minister Prince Saud
Al-Faisal at his home in Jeddah on February 6.  Saud
described the February 2 arrests of ten suspected terrorism
financiers in Jeddah and Medina as a positive step that could
well result in other leads and arrests.  On the proposed
Charities Commission, Saud said that the SAG is leaning
toward establishing a government entity that directly
disburses charitable funds.  He characterized engagement with
Iran as a two-pronged approach involving frank dialogue and
security pressure.  "We will supply the logic and you supply
the pressure," he said, adding that the US Navy's recent
strengthening of presence in the Gulf was a good example of
the force element.  In response to APHSCT Townsend's request
to use SAG influence with Arabsat to block Al-Manar
broadcasting, Prince Saud replied that Iranian-financed
cultural centers in Lebanon, Iraq and Afghanistan are a
greater source of Iranian influence in the region than
Al-Manar television.  On Arab-Israeli issues, Prince Saud
hoped Secretary Rice would return to the region soon to
address the "key substantive issues" of Jerusalem and
Palestinian refugees.  In a subsequent private meeting,
APHSCT Townsend renewed US concerns about the Saudi
Ambassador in the Philippines; Saud said that the ambassador
would be ending his tour shortly. END SUMMARY.

¶2.  (S)  APHSCT Townsend commended Prince Saud on efforts to
counter terrorist financing but urged more progress. She
noted that the President was quite concerned about bilateral
cooperation in this area and that she had a letter for King
Abdullah from the President on this subject.  Prince Saud
replied that the arrests of ten terror financing suspects on
February 2 was "good progress" but that "more needs to be
done."  Questioning these suspects could lead to more leads
and arrests, he noted.  APHSCT Townsend said she had just met
with Finance Minister al-Assaf to ask about the royal decree
on declaring cash upon exit and entry.  The King had issued
the decree over one year ago but it has yet to be
implemented. Prince Saud noted that the Customs people are
not the most capable, and that he was surprised at the lack
of implementation.

¶3.  (S) Asked by Prince Saud what the Ministry of Foreign
Affairs could do to help on counterterrorism cooperation,
APHSCT Townsend raised establishment of the Charities
Commission, which was announced two years ago but not yet
implemented. She noted that it could be set up in either of
two ways: as a government body which is responsible for
disbursing charitable donations; or as a regulatory body to
oversee acts of the private charities, which is the way the
US does it.  She stressed that a decision, either way, is
needed.   Saud said the SAG was leaning towards an
organization that has direct responsibility for disbursing
charitable funds.   He noted there are Islamic law
implications, implying that these implications are slowing
down the decision process but are important to consider
carefully.  APHSCT Townsend raised the issue of continuing
activity by remnants of the UN-sanctioned al-Haramain
organization.  Saud responded that any proposed illegal
transfers are being monitored and stopped.  By following the
trail of illegal transfers, the SAG has found and stopped the
source of funding in many investigations-- sending a strong
preventative message to others engaging in similar, illegal
activities.  APHSCT Townsend thanked Prince Saud for the
SAG's efforts in this area

¶4.  (C) Asked by APHSCT Townsend about his views of
developments in Iran, Prince Saud described the recent
Iranian message, brought by Larijani, offering to help
prevent a Sunni/Shi'ite sectarian divide.  Saud said his
government is focused on Iranian actions, not words.  The
Saudis had earlier warned the Iranians against pursuing a
"dangerous" policy of sectarian division, especially in Iraq.
He said Iran was embarking on a dangerous path of "fitna"
(dissention) within the Muslim community.  Although there is
a Shi'ite majority in Iraq, elsewhere in the region the Shi'a
are a minority.  A sectarian-based policy in Iraq could
jeopardize the situation of these Shi'ite minorities outside

RIYADH 00000367  002 OF 003

Iraq, he noted.

¶5.  (C) Saud compared the Iranian influence in Iraq with
Iranian influence in Lebanon, commenting that he saw
positive signs in Lebanon, where Iran urged Hizbollah to stop
street protests and go back to their homes.   Saud said that
it is SAG policy to pursue very frank discussions with the
Iranians; we need a joint policy of frankness and security
pressure, he stressed.  Strengthening the US Navy presence in
the Gulf sent a good message.  "You provide the pressure and
we'll provide the logic," he said.

¶6.  (C) APHSCT Townsend said that Hizbollah does not appear
to the US to have toned down its rhetoric, and she raised the
request for Saudi help with Arabsat to block the broadcast of
al-Manar television.  Blocking al-Manar would help reduce
Hizbollah's sphere of influence, she said.  The French have
agreed not to permit the broadcast of al-Manar, she noted.
Prince Saud replied that the "more important problem" is the
Hizbollah cultural center, which exercises greater influence
than al-Manar television and could be closed down by  the
multi-national forces, he asserted.  The Iranians also fund
such centers in Afghanistan and Iraq, he said.

¶7.  C)  Ambassador Oberwetter asked Prince Saud about media
reports ahead of Russian President Putin's visit to Saudi
Arabia on February 11-12 regarding a Russian interest in
discussing a "Middle East Security Regime."  Prince Saud said
that he was unaware of such a plan, and that the scheduled
visit will focus on bilateral relations, including military
cooperation and economic agreements.  He noted that the
Saudis will raise the possible purchase of military equipment
from the Russians because "your people told us it would be
better purchased from Russia, because they are cheaper and
just as good."  He said he did not know why the US had told
the Kingdom to go to the Russians, but that they would
nonetheless.  He added that the Saudis will raise UN Security
Council issues, especially the tribunal to look into the
Hariri assassination, and the Quartet issues.

¶8.  (S) On Arab-Israeli issues, Prince Saud said that he
talked with Secretary Rice via telephone on February 4 about
the Fatah-Hamas reconciliation meeting in Mecca. He said if
they reach an agreement, the Saudis would hope for a positive
US reaction.  He hoped that there would not be too many
conditions placed upon Hamas in order for it to enter into a
national unity government.  APHSCT Townsend said they US
expected Hamas to stop fighting and to make progress on peace
with Israel. More important than what they say is what they
do, she stressed.  Saud stressed the importance of having
clear guidelines and goals, which are applied to both sides
of the conflict.  He said he expects Secretary Rice to return
to the region, to meet with Prime Minister Olmert and
President Abu Mazen.  He said he hopes she will address the
substantive issues - Jerusalem and Palestinian refugees --
and noted that it has been seven years since anyone has
discussed the status of Jerusalem.  The side issues, for
instance opening a passage between Gaza and the West Bank,
should be handled at a different level, by Assistant
Secretary Welch, he suggested.

SIPDIS

¶9.  (S) In a following private meeting with Saud, attended
only by the Ambassador, APHSCT Townsend raised US concerns
with the potential involvement of the Saudi ambassador to the
Philippines Muhammad Amin Waly in terrorism facilitation,
particularly his intervention to get two members of IIRO out
of prison.  Prince Saud said some of his actions may have
involved bad judgment rather than intentional support for
terrorism.  Waly had been investigated, he said, and no
evidence was found regarding his involvement.  Since this
Ambassador's assignment in Manila would be ending in several
months,  Saud asked for USG evidence of his involvement.
APHSCT Townsend said the USG would cooperate with the
Mubahith in providing evidence.

¶10.  (S) Prince Saud then raised in the private meeting the
Saudi Embassy in Washington's problems with the US bank that
handles the Embassy account.  He asserted that the US bank is
performing audits on the Saudi Embassy bank accounts beyond
what is required by US law, and asking inappropriate and
aggressive questions.  He noted that the Saudi Embassy enjoys
diplomatic immunity.  If this is the bank's initiative, he
asked for USG intercession.  APHSCT Townsend said we would
look into it.

RIYADH 00000367  003 OF 003

¶11.  (U) This cable has been cleared by APHSCT Townsend.

OBERWETTER