VZCZCXRO6985
OO RUEHBC RUEHDE RUEHIHL RUEHKUK
DE RUEHRH #9095/01 3501418
ZNY SSSSS ZZH
O 161418Z DEC 06
FM AMEMBASSY RIYADH
TO RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 3751
RHEHNSC/NSC WASHDC IMMEDIATE
INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY

S E C R E T SECTION 01 OF 02 RIYADH 009095

SIPDIS

NOFORN
SIPDIS

E.O. 12958: DECL: 12/04/2016
TAGS: PREL EFIN PTER IZ IR SA
SUBJECT: xxxxxxxxxxxx ON IRANIAN THREATS 

Classified By: Ambassador James C. Oberwetter for reasons 1.5 (b) and (
d).

(S/NF) Summary: xxxxxxxxxxxx told Assistant to the President for Homeland
Security and Counterterrorism Frances Fragos Townsend that he
was speaking for the King when he urged action to counter
Iranian threats. xxxxxxxxxxxx said he worries more about an
Iranian missile launch against Saudi oil facilities than a
terrorist attack against them, because he can take
preventative measures against terrorism but not against
Iranian missiles. On the Iranian banking initiative, xxxxxxxxxxxx
urged getting action from the UAEG to freeze what he claimed
was up to $12 billion in Iranian assets in Dubai-based banks.
xxxxxxxxxxxx also discussed the failure to establish a charities
commission, and the need to replace the head of Saudi's
financial intelligence unit, as well as the King's personal
security measures. End Summary.

Iranian Bank Assets and Transactions
-------------------------------------

¶2. (S/NF) In an early hour meeting at his palace in Riyadh
November 15, xxxxxxxxxxxx began by asking APHSCT Townsend if
there were any follow-up items from her meetings the prior
day with Prince xxxxxxxxxxxx or Prince xxxxxxxxxxxx.
Townsend noted that xxxxxxxxxxxx had a list of banking institutions
doing business with Iran. We need to use leverage with them,
she added, to get them to do what UBS and Credit Suisse have
done. xxxxxxxxxxxx agreed. He suggested we need to have an
approach, either openly declare the policy as governments or
perhaps get some of the banks to announce a new policy
towards Iran by themselves.

¶3. (S/NF) xxxxxxxxxxxx saw Dubai as the problem for this new
initiative. He said Dubai has 8-12 banks with extensive
links with Iran, holding up to $12 billion in Iranian assets.
xxxxxxxxxxxx indicated he had met with MBR and MBZ and that MBZ
was supportive of our efforts. We need to send someone
quickly to the UAE to freeze these assets before the Iranians
begin to unload them. In addition, he continued, the Saudi
Monetary Authority should issue a caution to Saudi banks to
refrain from Iranian transactions or else jeopardize their
international dealings.

Terrorist and Iranian Missile Threats to Saudi Energy
Facilities
--------------------------------------------- -----

¶4. (S/NF) Townsend next raised recent threat information
about Saudi energy facilities. xxxxxxxxxxxx noted that the
Security Facilities Service aims to reach 35,000 personnel,
with all military services contributing to it. xxxxxxxxxxxx said
he was relatively confident in the SAG's ability to handle
terrorist threats to the energy facilities by deploying more
forces and building perimeters. The more dangerous threat,
in his view, is a SCUD missile launch from Iran, which could
happen with short or no notice. The Iranians would target
Saudi facilities at Ras Tanura and Jubail, also perhaps the
US bases in Qatar and Bahrain, which would cause the Saudis
to be involved as well, he said. His concern was that
tightening sanctions on Iran will cause Iran to up the ante,
triggering an escalation leading to a missile launch. Given
the possibility of this scenario, he speculated on the option
of a pre-emptive strike. "I would rather be on the offensive
since we are the target," he said, later adding that he meant
a state of military readiness, not offensive action. xxxxxxxxxxxx
stressed that this sense of urgency came from King Abdallah,
he was not freelancing. He added that he, Prince xxxxxxxxxxxx and
Prince xxxxxxxxxxxx were getting together an "Iran
to-do list."

¶5. (S/NF) On the Europeans' positions, xxxxxxxxxxxx asserted that
French President Chirac wants to be satisfied we've done
everything possible politically. However he is not prepared
to accept Iran as a nuclear nation. Russia got an earful
from King Abdalllah, he claimed, on relations with Iran and
Syria.

Counterterrorism Cooperation
----------------------------

¶6. (S/NF) xxxxxxxxxxxx sees an "alliance of convenience" between
Iran and al-Qaida. He and Prince xxxxxxxxxxxx agree that Iran
would try two terrorist tracks against Saudi Arabia: al-Qaida
elements and the "mini-Hizballah" in the Eastern Province.
Asked by Townsend on how other GCC countries are cooperating
on CT, xxxxxxxxxxxx said he is very satisfied with UAE, not
unsatisfied with Bahrain, but not comfortable with Kuwait's

Riyadh 00009095 002 of 002


position. Townsend, who had met with the Amir of Kuwait on
November 14, agreed the Amir is focused only on what happens
in Kuwait, xxxxxxxxxxxx said there was a disagreement in Kuwait on
CT measures. xxxxxxxxxxxx said his main channel there is the
foreign minister who has a steady hand and who is not
comfortable with what he sees. Oman, xxxxxxxxxxxx continued,
thinks it's safe because it is too far away. xxxxxxxxxxxx said he
hoped the December 9/10 GCC Summit would include a clear
statement on counterterrorism cooperation.

¶7. (S/NF) Townsend raised the status of the commission to
monitor and regulate Saudi charities, saying that since this
commission was announced publicly long ago and not yet
established, it is now a credibility issue. xxxxxxxxxxxx agreed,
noting that the Government was going slowly because of fears
of being attacked by the religious people, But he said it was
time to bring it to the King and get a decision. "Since we
often get accused of being autocratic, we might as well be
autocratic once in a while." He added that if pious Saudis
wanted to help the poor, there were plenty of poor Saudis
they could help and thus no need to fund outside charities.
When Townsend raised the importance of the Joint Terrorist
Finance Task Force, xxxxxxxxxxxx replied that he wants to resolve
this so they could get items like this off the agenda and
focus on the real strategic threat -- Iran. Townsend said
she would be thrilled if she didn't have to raise it again on
her next visit.

¶8. (S/NF) On counterterror financing issues, xxxxxxxxxxxx said
Muhammad bin Nayef was unhappy with the head of the Saudi
Financial Intelligence Unit xxxxxxxxxxxx, and
would replace him. Bandar claimed that Muhammad bin Nayef
reports having frozen 189 bank accounts, with nearly $20
million in frozen assets. xxxxxxxxxxxx asserted that the SAG
shared our interest fully in going after terrorist financing,
but that we need to do it intelligently so as not to create
economic martyrs for the religious extremists.

The King's Personal Security
----------------------------

¶9. (S/NF) Townsend raised recent measures to provide new
equipment, which xxxxxxxxxxxx thanked her for. He added that he
was trying to convince the King to buy 3 or 4 helicopters,
including a medical helicopter, Lockheed Martin models,
similar to those used by POTUS. But the King says he cares
first about the security of the country, and less about his
personal security. If the King doesn't use them, xxxxxxxxxxxx said
they would find another use for them.

¶10. (U) APSCT Townsend has cleared this cable.

Gfoeller