BLUE LANTERN: CHECK ON ELSAN DEFENSE AND

UNCLAS ANKARA 005202 SIPDIS PLS PASS TO PM/DTCC -- BLUE LANTERN COORDINATOR. E.O. 12958: N/A TAGS: KOMC ETTC TU SUBJECT: BLUE LANTERN: CHECK ON ELSAN DEFENSE AND COMMUNICATIONS INC REF: STATE 181000 ¶1. ON SEPTEMBER 10, 2004, EMBASSY BLUE LANTERN OFFICER MET WITH THE PRESIDENT AND SENIOR VICE PRESIDENT OF ELSAN CORPORATION AT ITS OFFICE LOCATED AT THE ADDRESS GIVEN IN REFTEL. DURING THE MEETING PRESIDENT ONUR GOKCE AND VP KEMAL CELIK OUTLINED THE STRUCTURE, ORGANIZATION AND OPERATIONS OF ELSAN CORPORATION, AND PROVIDED WRITTEN DETAILS OF THEIR CONTRACTS AND BUSINESS LICENSES WITH US COMPANIES. ¶2. THE ELSAN OFFICERS REPORTED HAVING CONTRACTUAL RELATIONSHIPS WITH TEN US COMPANIES INCLUDING SMITH AND WESSON, BOEING, AND HUGHES NETWORK SYSTEMS. THEY HAVE BEEN IN BUSINESS SINCE 1983 AND REPRESENT US COMPANIES IN TURKEY WHO SEEK TO SELL PRODUCTS. ACCORDING TO THE REPRESENTATIVES WE SPOKE WITH, ELSAN ITSELF SELLS NO PRODUCTS. ITS PARTICULAR SPECIALTY IS BROKERING SALES BETWEEN US COMPANIES AND THE TURKISH MILITARY AND CIVILIAN GOVERNMENT. THEY CHARACTERIZED THEIR BUSINESS SECTOR AS "MARKET MAKING", WHEREBY THEY ARE RETAINED BY FOREIGN COMPANIES TO IDENTIFY TURKISH CUSTOMERS. THEY RECEIVE A FEE BASED ON A CONTRACT OR COMMISSION FOR THE BROKERING OF DEALS BETWEEN THE TWO COMPANIES. ELSAN ALSO REPRESENTS ISRAELI DEFENSE COMPANIES IN TURKEY -- AZIMUTH TECHNOLOGIES BEING THEIR PRIMARY ISRAELI PARTNER. ELSAN STRESSED THAT THEY ARE NOT END-USERS OF ANY PRODUCT OR SERVICE, BUT RATHER INTERMEDIARIES TO THE END USER. ¶3. ADDITIONALLY, ELSAN CFO NESRIN FIRTINA REVIEWED WITH BLUE LANTERN OFFICER THE LICENSES AND REGISTRATION PAPERS REQUIRED BY TURKISH REGULATORY AUTHORITIES, PARTICULARLY IN TRANSACTIONS RELATED TO ARMAMENTS. THE COMPANY EMPLOYS CIRCA 30 PEOPLE, AND MAINTAINS AN OFFICE IN VIENNA, VIRGINIA. ¶4. BASED ON THE INFORMATION OBTAINED DURING THE MEETING, EMBASSY BELIEVES ELSAN TO BE A LEGITIMATE REGISTERED BROKER IN TURKEY. EDELMAN