Mideast funding of militants irks U.S.: WikiLeaks

A screen shot of a web browser displaying the WikiLeaks website with a picture of its founder Julian Assange in Bern December 4, 2010.

WASHINGTON (Reuters) - Top U.S. officials have grown frustrated over the resistance of allies in the Middle East to help shut the financial pipeline of terrorists, the New York Times reported on Sunday, citing secret diplomatic dispatches.

Internal State Department cables, obtained by WikiLeaks and made available to news organizations, indicate that millions of dollars are flowing to extremist groups, including al Qaeda and the Taliban, despite U.S. vows to cut off such funding.

A classified memo sent by U.S. Secretary of State Hillary Clinton last December made it clear that residents of Saudi Arabia and its neighbors were the chief supporters of many extremist activities, the newspaper said.

"It has been an ongoing challenge to persuade Saudi officials to treat terrorist financing emanating from Saudi Arabia as a strategic priority," according to the cable cited by the newspaper.

It concluded that "donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide" and offered similarly critical views about other countries in the region.

The United Arab Emirates was described as having a "strategic gap" that terrorists could exploit, while Qatar was seen as being "the worst in the region" on counterterrorism and Kuwait was dubbed "a key transit point."

The publication of the leaked U.S. embassy cables, which began late last month, has embarrassed Washington as well as foreign governments. Clinton has sharply criticized the leaks but said they will not harm important U.S. alliances.

The cables cited by the Times detailed a long list of methods that suspected terrorists are using to finance their activities, including a bank robbery in Yemen last year, drug activity in Afghanistan and the annual pilgrimages to Mecca.

One memo reported on a possible plot by Iranians to launder $5 billion to $10 billion through the UAE banks as part of a broader effort to "stir up trouble" among the Persian Gulf states, the Times said.

The Clinton cable stressed a need to "generate the political will necessary" to block money to terrorist networks -- groups she said were threatening stability in Pakistan and Afghanistan and targeting coalition soldiers, the Times said.

U.S. PRESSURE

But foreign leaders have resisted U.S. pressure for more aggressive crackdowns on suspected supporters of terrorism, according to the newspaper. In private meetings they have accused U.S. officials of pursuing Arab charities and individuals in a heavy-handed manner and on thin evidence.

Although many State Department cables conclude al Qaeda generates money almost at will from wealthy individuals and sympathetic groups in the Middle East, they suggest there is little evidence of significant financial support in the United States or Europe for militants in Afghanistan and Pakistan.

"UK financing is important, but the real money is in the Gulf," a senior British counterterrorism official told a U.S. Treasury Department official, according to a cable last year from the U.S. Embassy in London, the Times reported.

The Times also said cables published by WikiLeaks showed the worry of Iraqi leaders that interference from Iraq's neighboring countries threatened to worsen sectarian divisions and undermine efforts to build a stable government.

"All Iraq's neighbors were interfering, albeit in different ways, the Gulf and Saudi Arabia with money, Iran with money and political influence, and the Syrians by all means," Jalal Talabani, Iraq's president and the government's senior Kurdish official, told Defense Secretary Robert Gates in a December 10, 2009, meeting, according to a cable the Times cited.

"The Turks are 'polite' in their interference, but continue their attempts to influence Iraq's Turkmen community and Sunnis in Mosul," Talibani said, according to the cable.

Iraqi Prime Minister Nuri al-Maliki was so concerned, he asked President Barack Obama in July 2009 to stop the Saudis from intervening, and said Saudi efforts to rally the Sunnis were heightening sectarian tensions and giving Iran an excuse to intervene in Iraqis politics, according to an account of the Oval Office meeting.

A 2009 cable from then-U.S. Ambassador to Iraq Christopher Hill called Iran "a dominant player in Iraq's electoral politics," and estimated that Iran's annual support to political groups in Iraq was $100 million to $200 million, with about $70 million of that directed to the Islamic Supreme Council in Iraq, a leading Shiite party that has also worked closely with U.S. officials, the Times said.

(Writing by Paul Simao and Vicki Allen; editing by Mark Heinrich and Christopher Wilson)