Pakistan’s government plans to seize control of charities and financial assets linked to Islamist leader Hafiz Saeed, who Washington has designated a terrorist, according to officials and documents reviewed by Reuters.

Pakistan’s civilian government detailed its plans in a secret order to various provincial and federal government departments on Dec. 19, three officials who attended one of several high-level meeting discussing the crackdown told Reuters.

Marked “secret”, a Dec. 19 document from the finance ministry directed law enforcement and governments in Pakistan’s five provinces to submit an action plan by Dec. 28 for a “takeover” of Saeed’s two charities, Jamaat-ud-Dawa (JuD) and the Falah-e-Insaniat Foundation. 

The United States has labelled JuD and FIF “terrorist fronts” for Lashkar-e-Taiba (“Army of the Pure” or LeT), a group Saeed founded in 1987 and which Washington and India blame for the 2008 attacks in Mumbai that killed 166 people.

 Saeed has repeatedly denied involvement in the Mumbai attacks and a Pakistani court saw insufficient evidence to convict him. The LeT could not be reached for comment. 

The Dec. 19 document, which refers to “Financial Action Task Force (FATF) issues”, names only Saeed’s two charities and “actions to be taken” against them.

The FATF, an international body that combats money laundering and terrorist financing, has warned Pakistan it faces inclusion on a watch list for failing to crack down on financing terrorism.

Asked about a crackdown on JuD and FIF, Interior Minister Ahsan Iqbal, who co-chaired one of the meetings on the plan, responded only generally, saying he has ordered authorities “to choke the fundraising of all proscribed outfits in Pakistan”.

In a written reply to Reuters, he also said Pakistan wasn’t taking action under U.S. pressure. “We’re not pleasing anyone. We’re working as a responsible nation to fulfil our obligations to our people and international community.”

In response to the Reuters article, JuD spokesman Yahya Mujahid said the organisation will go to court if the government decides to take over JuD and FIF.

“We will not keep silent. We will fight a legal battle,” Mujahid said in statement, terming the government move illegal.

Saeed could not be reached for comment. He has frequently denied having ties to militants and says the charitable organisations he founded and controls have no terrorism ties. He says he promotes an Islamic-oriented government through doing good works.

On Monday, some of the first directives from the proposed crackdown were put in place.

The country’s financial regulator, Securities and Exchange Commission of Pakistan (SECP), issued an order that “prohibits” all companies from donating money to Saeed, LeT, JuD, FiF and other groups and individuals who are named on the U.N. Security Council sanctions lists.

In the capital Islamabad, the district magistrate banned proscribed organisations from “fund-raising in any kind and social, political, welfare and religious activities by these groups”, according to an order reviewed by Reuters.

The two-month ban, which can be extended, was put into place “to curb the terrorist acts and assistance activities carried out by the proscribed organisations and their subsidiary welfare wings,” the document said.

FIRST MAJOR MOVE

If the government follows through with the plan, it would mark the first time Pakistan has made a major move against Saeed’s network, which includes 300 seminaries and schools, hospitals, a publishing house and ambulance services. The JuD and FIF alone have about 50,000 volunteers and hundreds of other paid workers, according to two counter-terrorism officials.

Participants at the meeting raised the possibility that the government’s failure to act against the charities could lead to U.N. sanctions, one of the three officials said. A U.N. Security Council team is due to visit Pakistan in late January to review progress against U.N.-designated “terrorist” groups.

“Any adverse comments or action suggested by the team can have far-reaching implications for Pakistan,” the official said.

The Dec. 19 document gave few details about how the state would take over Saeed’s charities, pending the plans submitted from the provincial governments. It did say it would involve government entities taking over ambulance services and accounting for other vehicles used by the charities.

It says law enforcement agencies will coordinate with Pakistan’s intelligence agencies to identify the assets of the two charities and examine how they raise money.

The document also directs that the name of JuD’s 200-acre headquarters, Markaz-e-Taiba, near the eastern city of Lahore be changed to something else “to make it known that the Government of “Punjab (province) solely manages and operates the Markaz(headquarters)”.

The move to seize the charities could spark some concern from the powerful military, which has proposed plans to steer Saeed and the JuD into mainstream politics. The military did not respond to a request for comment.

In August, JuD officials formed a new political party, the Milli Muslim League, and backed candidates who fared relatively strongly in two key parliamentary by-elections.

The JuD publicly disavows armed militancy inside Pakistan, but offers vocal support for the cause of rebel fighters in Indian-administered Kashmir and has called for Pakistan to retake Kashmir. Nuclear-armed India and Pakistan have fought two wars over the disputed region.

Washington, which has offered a $10 million reward for information leading to Saeed’s conviction over the Mumbai attacks, warned Islamabad of repercussions after a Pakistani court in late November released him from house arrest.

Punjab’s provincial government had put Saeed under house arrest for 10 months this year for violating anti-terrorism laws.

Writing on Twitter on Monday, U.S. President Donald Trump said the United States has “foolishly” handed Pakistan more than $33 billion in aid over the last 15 years while getting nothing in return and pledged to put a stop to it.

A new Pakistani political party controlled by an Islamist with a $10 million U.S. bounty on his head is backing a candidate in a by-election on Sunday, in what a former senior army officer says is a key step in a military-proposed plan to mainstream militant groups.

The Milli Muslim League party loyal to Hafiz Saeed – who the United States and India accuse of masterminding the 2008 Mumbai attacks that killed 166 people – has little chance of seeing its favoured candidate win the seat vacated when Prime Minister Nawaz Sharif was removed from office by the Supreme Court in July.

But the foray into politics by Saeed’s Islamist charity is following a blueprint that Sharif himself rejected when the military proposed it last year, retired Lieutenant General Amjad Shuaib told Reuters.

Three close Sharif confidants with knowledge of the discussions confirmed that Sharif had opposed the “mainstreaming” plan, which senior military figures and some analysts see as a way of steering ultra-religious groups away from violent jihad.

“We have to separate those elements who are peaceful from the elements who are picking up weapons,” Shuaib said.

Pakistan’s powerful military has long been accused of fostering militant groups as proxy fighters opposing neighbouring arch-enemy India, a charge the army denies.

“PATRIOTIC PEOPLE”

Saeed’s religious charity launched the Milli Muslim League party within two weeks after the court ousted Sharif over corruption allegations.

Yaqoob Sheikh, the Lahore candidate for Milli Muslim League, is standing as an independent after the Electoral Commission said the party was not yet legally registered.

But Saeed’s lieutenants, JUD workers and Milli Muslim League officials are running his campaign and portraits of Saeed adorn every poster promoting Sheikh.

Another Islamist designated a terrorist by the United States, Fazlur Rehman Khalil, has told Reuters he too plans to soon form his own party to advocate strict Islamic law.

“God willing, we will come into the mainstream – our country right now needs patriotic people,” Khalil said, vowing to turn Pakistan into a state government by strict Islamic law.

Saeed’s charity and Khalil’s Ansar ul-Umma organisation are both seen by the United States as fronts for militant groups the army has been accused of sponsoring. The military denies any policy of encouraging radical groups.

Both Islamist groups deny their political ambitions were engineered by the military. The official army spokesman was not available for comment after queries were sent to the press wing.

Still, hundreds of MML supporters, waving posters of Saeed and demanding his release from house arrest, chanted “Long live Hafiz Saeed! Long live the Pakistan army!” at political rallies during the past week.

“Anyone who is India’s friend is a traitor, a traitor,” went another campaign slogan, a reference to Sharif’s attempts to improve relations with long-time foe India that was a source of tension with the military.

‘DERADICALISATION’ PLAN

Both Saeed and Khalil are proponents of a strict interpretation of Islam and have a history of supporting violence – each man was reportedly a signatory to al Qaeda leader Osama bin Laden’s 1998 fatwa declaring war on the United States.

They have since established religious groups that they say are unconnected to violence, though the United States maintains those groups are fronts for funnelling money and fighters to militants targeting India.

Analyst Khaled Ahmed, who has researched Saeed’s Jamaat-ud-Dawa charity and its connections to the military, says the new political party is clearly an attempt by the generals to pursue an alternative to dismantling its militant proxies.

“One thing is the army wants these guys to survive,” Ahmed said. “The other thing is that they want to also balance the politicians who are more and more inclined to normalise relations with India.”

The military’s Inter-Services Intelligence agency first began pushing the political mainstreaming plan in April 2016, according to retired general Shuaib, a former director of the army’s military intelligence wing that is separate from the ISI.

He said the proposal was shared with him in writing by the then-ISI chief, adding that he himself had spoken with Khalil as well as Saeed in an unofficial capacity about the plan.

“Fazlur Rehman Khalil was very positive. Hafiz Saeed was very positive,” Shuaib said. “My conversation with them was just to confirm those things which I had been told by the ISI and other people.”

Saeed has been under house arrest since January at his house in the eastern city of Lahore. The United States has offered a $10 million reward for information leading to his conviction over the Mumbai attacks.

Then-Prime Minister Sharif, however, was strongly against the military’s mainstreaming plan, according to Shuaib and three members of Sharif’s inner circle, including one who was in some of the tense meetings over the issue.

Sharif wanted to completely dismantle groups like JuD. Disagreement on what to do about anti-India proxy fighters was a major source of rancour with the military, according to one of the close Sharif confidants.

In recent weeks several senior figures from the ruling PML-N party have publicly implied that elements of the military – which has run Pakistan for almost half its modern history and previously ousted Sharif in a 1999 coup – had a hand in the court ouster of Sharif, a charge both the army and the court reject.

A representative of the PML-N, which last month replaced him as prime minister with close ally Shahid Khaqi Abbasi, said the party was “not aware” of any mainstreaming plan being brought to the table.

RELIGION AND POLITICS

Some analysts worry that mainstreaming such controversial groups would be a risky strategy for Pakistan.

U.S. President Donald Trump’s administration has threatened sanctions against members of Pakistan’s military and even raised the spectre of declaring Pakistan a state sponsor of terrorism.

“It will send a wrong message,” said analyst Zahid Hussain, who nevertheless thought that Saeed’s new party would have a “negligible” effect on Pakistani elections because religious parties have never won more than a few seats in parliament.

Others are not so sure.

Sheikh, the MML candidate in Sunday’s by-election who says he was handpicked by Hafiz Saeed, vowed to establish strict Islamic rule and “break” liberalism and secularism.

Analyst Ahmed warned that few existing religious parties have a charismatic leader like Saeed, and Pakistan may find itself unable to control a rising tide of Islamist sentiment.

“If Hafiz Saeed comes into the mainstream, it’s not that he is going to be politicised,” he added. “It’s that he is going to make politics more religious.”