This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 MANILA 001961 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR EAP/PMBS, INR/EAP, USIP - SOLOMON 
NSC FOR GREEN 
SEOUL FOR ERIC JOHN 
 
E.O. 12958: N/A 
TAGS: PTER EAID KISL PINS ASEC CASC RP
SUBJECT: COTABATO MAYOR PROTESTS USAID PROJECT SUSPENSION 
 
REF: 04 MANILA 5141 
 
Summary 
-------- 
 
¶1.  (SBU) Cotabato City Mayor Muslimin Sema has attempted to 
instigate a local media and public outcry against the US, and 
specifically USAID activities in his municipality.  His 
agitation is in response to a letter from USAID Mission 
Director Yates, at the direction of Ambassador, informing the 
Mayor that a USAID-funded road project will be suspended 
following information indicating international financiers, 
affiliated with terrorist elements, have been traversing 
Cotabato "repeatedly" with his knowledge and support (full 
text in Para 4).  Sema has engineered an angry unsigned 
letter faxed to USAID's largest contractor in Mindanao on 
April 28, and a street protest of 2,000-3,000 in Cotabato 
City on April 29.  The mayor had responded positively when we 
had raised such reports with him in the past.  We are keeping 
communication channels open to the mayor, and allowing him 
space to retreat and once again address our concerns at the 
ability of terrorists and terrorist financiers to transit 
Cotabato with his apparent connivance.  USAID maintains many 
other projects in Cotabato and throughout Mindanao.  We 
continue to stress that communities and leaders willing to 
work against terrorism will reap the benefits of peace and US 
assistance, while those making the wrong choice will lose 
international development assistance to improve the quality 
of life in their jurisdictions.  We consider the current 
travel warning as sufficient but will continue to monitor the 
Cotabato security situation throughout the weekend.  End 
Summary. 
 
Background To the Case 
---------------------- 
 
¶2.  (SBU) Cotabato City, population 241,000, is 800 miles 
southeast of Manila.  The city lies on a river delta on 
Mindanao's western mainland edge.  The city's inhabitants are 
roughly half Muslim and half Christian.  USAID has several 
successful projects, administered through the contract Growth 
Equity in Mindanao (GEM) and other programs in Cotabato. 
Mission has offered a particular incentive to Cotabato Mayor 
Muslimin Sema over the past year to deny Cotabato City as a 
transit and logistics hub for transnational terrorists.  At 
times, he has made a show of cooperating with law enforcement 
and military authorities.  Several terrorists have been 
arrested in Cotabato City, which is near the isolated 
Liguasan Marsh -- home base of several troublesome Moro 
Islamic Liberation Front "base commands" and a preferred 
sanctuary of Jemmah Islamiyah and Abu Sayyaf Group 
terrorists. 
 
¶3.  (SBU) As reported in reftel, we have maintained a 
transparent and no-nonsense relationship with Mayor Sema 
regarding USAID development assistance, making sure he 
understood that projects can not be approved and implemented 
where terrorists are allowed to operate.  Immediately at 
issue is a USD 1 million grant for a bypass road, a 
desperately needed thoroughfare for traffic-plagued Cotabato. 
 This is a handsome political plum for the mayor who could 
use the project to help legitimize his contested election. 
Upon confronting the mayor over alleged terror suspects 
operating in Cotabato last October, he sprang into action 
calling local security authorities to pursue and deny 
Cotabato City as a welcoming place for terrorism. 
 
¶4.  (SBU) In February, in response to Sema's apparent 
improved cooperation and the improved security climate, 
Ambassador publicly announced in Cotabato, with Sema at his 
side, that the bypass road could move forward.  Recent 
classified reporting indicates, however, that Sema has met 
with suspected foreign terrorist financiers.  As a result, 
USAID Mission Director -- in a private letter dated April 25 
-- stressed to Mayor Sema... 
 
Begin Full Text: 
 
I very much regret that we continue to receive information 
that international financiers, affiliated with terrorist 
elements, are traversing Cotabato, reputedly with your 
knowledge and support. 
 
Given these developments, the United States is constrained to 
suspend all work on the Cotabato bypass road, effective 
immediately. 
 
Ambassador Ricciardone and I will be in Cotabato City briefly 
this week and would be available to discuss this matter with 
you personally, should you desire. 
 
Cordially, 
 
Michael Yates, USAID Mission Director 
 
End Full Text. 
 
 
While visiting Cotabato to open more USAID education projects 
in the area on April 28, Ambassador spoke with Mayor Sema via 
telephone to discuss the same concerns spelled out in the 
letter. 
 
Recent Flare Up 
--------------- 
 
¶5.  (SBU) Sema immediately went public with the substance of 
the letter and has been attempting to stoke public resentment 
against the Ambassador, USAID, and the US Government. 
Several local radio and TV outlets have interviewed Mayor 
Sema, who is portraying himself as a victim.  Call-in shows 
have reportedly broadcast anti-US diatribes.  The local GEM 
office received via fax an unsigned "open letter" addressed 
to Ambassador and "all USAID officers and employees."  The 
document condemned USAID and Ambassador for "devilish 
insinuations" against Cotabato City and the mayor.  The 
letter characterizes the Ambassador and "his flocks of 
employees" as "lackeys," and vows the "rejection of all USAID 
projects in this homeland."  (Note: We have not received any 
direct threats of physical harm against US citizens or 
interests, and national media have not picked up the story as 
of late on April 29.  End Note.) 
 
¶6.  (SBU) There are reports on April 29 of a small-scale 
public protest in Cotabato City of up to 2,000-3,000 people. 
So far there are no signs of public reaction outside Sema's 
jurisdiction.  We are in close touch with Secretary Jesus 
Dureza, the Presidential Assistant for Mindanao, who is 
following the situation.  GEM's host-national staff are 
monitoring the situation throughout Mindanao.  They currently 
plan to continue normal business operations, but project 
staff located in Cotabato closed the office early on April 29. 
 
Sema Wants Apology and Disclosure 
--------------------------------- 
 
¶7.  (SBU) Poloff contacted Mayor Sema to suggest that he can 
best resolve our concerns through direct communication, and 
appropriate cooperation on his part with GRP authorities when 
any foreigners transit Cotabato for less than transparently 
legitimate purposes -- as the Ambassador had recommended on 
April 28.  Sema said he had taken offense at the allegations, 
and that meeting people is part of his job as mayor.  He said 
the police and the "national intelligence authorities" should 
have informed him of such allegations.  He claimed it is not 
his responsibility to report details of his foreign contacts 
to national authorities.  Sema is pushing for disclosure of 
the suspected terrorists' names to clear the issue once and 
for all.  He also is demanding an apology. 
 
Mission Reaction And Comment: 
----------------------------- 
 
¶8.  (SBU) It is not yet clear whether Sema's agitation is 
producing the support he evidently seeks.  For now, any 
public backlash appears limited and Sema does not seem to be 
interested in a quieter, more effective resolution of the 
issue.  The road suspension, while a sizeable loss, is a very 
small percentage of the entire scope of USAID assistance in 
Mindanao.  Other GEM projects remain ongoing in Cotabato and 
elsewhere in Mindanao.  Sema has proven to be a useful 
partner in the past.  We are keeping lines open to him and 
leaving him room to retreat.  His posturing to the media is a 
standard political tool in Mindanao and throughout the 
Philippines.  We continue to reiterate publicly and privately 
that our assistance programs will benefit only those who are 
committed to peace, prosperity, and eradicating terrorism. 
¶9.  (SBU) Mission considers the current national travel 
warning as sufficient but will continue to monitor the 
security situation in Cotabato throughout the weekend. 
 
Visit Embassy Manila's Classified SIPRNET website: 
http://www.state.sgov.gov/p/eap/manila/index. cfm 
 
You can also access this site through the State Department's 
Classified SIPRNET website: 
http://www.state.sgov.gov/ 
Ricciardone