C O N F I D E N T I A L SECTION 01 OF 03 TEGUCIGALPA 001780

SIPDIS

STATE FOR PPC, WHA/CEN

E.O. 12958: DECL: 06/17/22
TAGS: PREL PGOV HO
SUBJECT: CERRO LA MOLE RADAR--THE UNREQUITED PACT

Classified by PolChief Francisco Palmieri, Reasons 1.5
(b) and (d).


1. (U) Summary: In 1993, the U.S. entered into an
agreement with GOH regarding the maintenance of the radar
located at Cerro La Mole. The U.S. agreed to pay 75% of
all maintenance costs up to a limit of $400,000 per year,
while the GOH agreed to pay 25% of the maintenance costs,
in addition to the manpower needed to maintain the radar.
To date, the U.S. has paid nothing under the agreement,
while the GOH has paid for all maintenance costs of the
equipment. U.S. noncompliance with the agreement
increasingly is becoming an issue in bilateral relations
between the U.S. military and the Honduran Armed Forces
(HOAF). The radar equipment is part of an integrated
counterdrug radar architecture in the region, and post
seeks guidance on how to resolve the unsettled issue of
the U.S.'s obligations under the agreement. End Summary.




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THE AGREEMENT ITSELF
--------------


2. (U) In 1993 the U.S. and GOH signed a Memorandum of
Understanding between the Government of the Republic of
Honduras and the Government of the United States of
America for the Expansion of the Radar Located in Cerro
La Mole in the Caribbean Basin Radar Network (MOU). The
purpose of the MOU was to reaffirm the cooperation of the
two governments in the international battle against
narcotics trafficking by expanding the radar capability
of the region as set forth in the Caribbean Basin Radar
Network agreement (CBRN) signed by the U.S. and the GOH
April 7, 1989. The MOU was designed to integrate the
Cerro La Mole radar (hereinafter referred to as "the
radar") into the operations of the CBRN.


3. (U) The core provisions of the MOU are as follows:

-The radar is owned and operated by the GOH.

-The costs of operation and maintenance of the radar are
to be borne by the GOH.

-The U.S. will have unrestricted access to the data from
the radar except in the case of a Honduran national
emergency (GOH will notify the U.S. in such instance).
Likewise, the U.S. will provide the HOAF access to data
from the U.S. owned radar on Calentura Hill.

-The U.S. and the GOH will develop a joint op

erations
plan for the operation of the radar.

-The U.S. will provide spare parts support and technical
assistance valued at a maximum of $400,000 per year, with
the GOH responsible for no less than 25 percent of the
total spare parts/technical assistance costs each year.

-Materials, equipment and services imported into Honduras
by the U.S. in connection with the operation and
maintenance of the radars are duty-free and exempt from
taxes.

-The GOH will provide land for installation of
communication equipment needed to operate the radars.

-The GOH has an option to purchase the U.S. installed
equipment at a price set by the parties pursuant to the
U.S. Foreign Military Sales Procedures during the
effective dates of the agreement.

-The financial obligations of the parties under the MOU
are subject to the availability of authorized and
appropriated funds of the parties.

-The MOU is effective from the date the parties exchanged
notes indicating that their respective constitutional
requirements have been met and remains in force until
April 7, 2009.

-The MOU may be extended by written agreement of the
parties, and may be terminated at any time by either
party upon one-year written notice to the other party.
Within the one-year period preceding the termination of
the MOU, the U.S. may remove any U.S. installed equipment
that the GOH has not purchased.

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THE DIPLOMACY PROBLEM
--------------


4. (C) The U.S. has not paid any of the maintenance
costs for the radar, as required in the MOU. Simply
stated, this is a source of tension between the HOAF
and the U.S. military personnel working in Honduras.
Additionally, it creates a diplomatic uncertainty for the
U.S. mission and the GOH. The resulting discomfort stems
from a variety of sources.
-Presumably the MOU is a legally binding contract entered
into by two sovereign nations. The U.S. has a
responsibility to abide by its terms.

-The U.S. military conducts a significant number of
engagement activities with the HOAF in Honduras.
Relations between the two militaries are adversely
affected by the fact that the U.S. has not performed
under the MOU.

-It is difficult to enforce proper end use of U.S.
training and equipment when HOAF officials repeatedly
point to the U.S.'s failure to abide by a properly
executed MOU.

-The MOU issue is repeatedly raised by the HOAF and,
therefore, takes up an inordinate amount of time and
manpower.

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THE DRUG WAR PROBLEM
--------------


5. (U) More and more frequently, Honduran waters are
used by narcotraffickers for transshipment of drugs from
Columbia to the U.S. The U.S. regularly asks the GOH to
assist in the drug war. The radar at Cerro La Mole is a
part of an integrated counterdrug radar architecture in
the SOUTHCOM area of responsibility. According to U.S.
military officials here in Honduras, there is essentially
a "hole" in the U.S. radar capability in the Western
Hemisphere. The Cerro La Mole radar would, if
functional, fill that void and foster counterdrug efforts
in the region. In this sense, the radar could serve a
useful purpose in support of U.S. interests in the
region.

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THE FINANCIAL PROBLEM
--------------


6. (U) The funding for payment of the U.S. obligation
to provide 75% of the radar maintenance cost apparently
exists--at least in theory. $400,000 is budgeted each
fiscal year and routed to Air Combat Command. However,
it is apparently unlawful to utilize these funds for the
maintenance of the radar for two reasons. First of all,
counterdrug money cannot fund recurring maintenance costs
of equipment not owned by the U.S. Secondly, Air Combat
Command is prohibited from paying recurring maintenance
costs of assets that do not belong to the U.S. As a
result, the $400,000 is turned back unused each year.

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THE POSSIBLE SOLUTIONS
--------------


7. (U) Post seeks guidance as to the appropriate
resolution of this ongoing issue. There are several
potential solutions:

-Keep the pact in place and take the steps necessary to
make the funding available for its intended purpose--
thereby honoring the original bargain. It is difficult
to predict the cost of this option, but it is safe to say
that the GOH has not spent anything close to the amount
that would require the U.S. to pay $400,000 per year for
the relevant MOU time frame.

-Negotiate a lump-sum buy-out of the U.S. obligation
under the MOU. This might cost anywhere between $400,000
and $3.6 million, according to our military sources.

-Pursuant to the terms of the MOU, notify the GOH of the
U.S.'s intention to terminate the MOU--then follow
through.

-Take the official position that, due to the funding
predicament, Article IX of the MOU eliminates the U.S.'s
responsibility for maintenance costs under the MOU.
Taking this stance, one must argue that U.S. financial
obligations have always been legally non-existent.

-Enter into negotiations with the GOH in order to
extricate the U.S. from the MOU. Post's recommendation
briefly described below is one way of accomplishing this
option.

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POST'S RECOMMENDATION
--------------


8. (C) Post maintains that it is in the best interest
of the U.S. to amicably resolve the U.S. obligations
pursuant to the MOU. Post recommends that we negotiate
an end to the MOU, while at the same time ensuring that
both U.S. and Honduran interests are addressed. One
possible solution is to offer to GOH the opportunity to
participate in the Cooperating Nations Intelligence
Exchange System (CNIES). CNIES is a system based in Key
West and operated by the Joint Inter-Agency Task Force
East (JIATFE). It provides images of portions of the
Western Hemisphere. CNIES is a system in which the GOH
is very interested, and post believes that if it were
possible to provide the GOH access to CNIES, the GOH
might well agree to relinquish any claims against the
U.S. under the MOU. This option would solve the U.S.'s
dilemma with respect to the MOU, and at the same time
would provide beneficial information (particularly in
terms of counter-drug efforts) to the GOH. Additionally,
it is noteworthy that this option would cost the U.S.
virtually nothing.

ALMAGUER