US AERONAUTICS COMPANY BREAKS DEAL WITH GOV

C O N F I D E N T I A L CARACAS 002140 SIPDIS NSC FOR CBARTON HQSOUTHCOM ALSO FOR POLAD E.O. 12958: DECL: 05/04/2015 TAGS: PGOV PREL MASS VE SUBJECT: US AERONAUTICS COMPANY BREAKS DEAL WITH GOV REF: A. IIR 7 500 0267 05 ¶B. IIR 7 500 0404 05 Classified By: POLITICAL COUNSELOR ABELARDO A. ARIAS FOR 1.4 (D) -------------- Summary -------------- ¶1. (C) Concerned about safety issues since the expulsion of US personnel from Venezuelan military bases, Lockheed Martin plans to withdraw its engineer responsible for servicing the Venezuelan Air Force's F-16 squadron. The engineer told poloff July 12 he met Israeli contractors at the base who were negotiating upgrades to the aircraft. He added that the F-16 squadron was decaying and its personnel had a poor work ethic. According to DAO, the Venezuelan Air Force can keep the planes in the air for years if it uses parts from its 13 grounded planes and steals or otherwise illegally procures foreign technology and expertise. We can expect the GOV to continue to ignore the terms of US contracts and to seek materiel from other countries. End summary. ¶2. (C) Lockheed Martin plans to withdraw its engineer responsible for servicing Venezuelan F-16s at El Libertador Air Base near Maracay, effectively breaking a contract for which the GOV has already paid. Jaime Gabella, the Lockheed engineer, told poloff July 12 his company had been concerned about his safety since the GOV had removed all US personnel from Venezuelan bases. (Note: DAO does not believe Gabella is in any danger.) Gabella said he planned to leave Venezuela on July 30 without giving notice so the Venezuelan Air Force would not demand that he stay. -------------- Israeli Meddling -------------- ¶3. (C) Gabella noted the presence of Israelis at the airbase, who admitted to him they were negotiating upgrades to the F-16s (REFTELS). The former US personnel exchange program (PEP) officer at El Libertador saw what he described as targeting pods attached to the planes, although he could not confirm they were operational. According to DAO, only Israel has technicians in Venezuela capable of installing such additions. A Venezuelan Air Force aficionado website also reports that Israel is close to inking a deal with Venezuela to upgrade the avionics of the F-16, which would allow the jet more combat capability. -------------- Grupo 16 Struggling -------------- ¶4. (C) Gabella estimated that Grupo 16, the F-16 squadron, would survive no longer than a year because of its dilapidated aircraft and its unprofessional personnel. Gabella said he thought Grupo 16 wanted to keep flying, and President Hugo Chavez had told the squadron he planned to maintain the F-16 program. Chavez promoted the group commander, Jose Alexis Colina, to Brig. General on July 5. Nonetheless, Gabella said he thought Chavez was planning to let Grupo 16 die because of his scorn for US materiel. The Grupo 16 officers, moreover, worked little and lacked an agenda, according to Gabella. He described the pro-Chavez members of the group as unsophisticated, saying they would believe anything they were told about the United States. These personnel were also non-confrontational, he said; they would back down rather than argue their anti-US views. ¶5. (C) According to DAO, Gabella's reporting on the status of the aircraft is unreliable because Gabella seemed uninterested in examining the planes and relied on the US PEP officer to deal with the Venezuelan personnel. DAO noted that eight (Gabella said six) of the 21 aircraft are flyable and three to five are mission capable. These planes could last years if the Air Force were to cannibalize the grounded F-16s for parts and to steal or otherwise illegally obtain foreign expertise, according to DAO and MILGROUP. -------------- Comment -------------- ¶6. (C) We have no hard evidence that Israel and Venezuela have begun modifying the planes illegally. Under the terms of the US-Venezuelan contract, third parties cannot upgrade the aircraft without US permission or sell US parts without an export license. These obligations, however, will not constrain the GOV. The Venezuelan military has not yet allowed an inspection required under the General Security of Military Information Agreement to verify they are properly handling classified information. They neither sought permission nor notified the USG before giving 11 US T-34 aircraft to Bolivia in August 2004. Although the GOV will not close a deal for Russian fighters in the foreseeable future, Chavez will continue to try to seek other suppliers as potential alternative sources to US planes and parts. Brownfield NNNN 2005CARACA02140 - CONFIDENTIAL