ZEVALLOS ADVISOR HAS CLOSE TIES TO PERUVIAN

C O N F I D E N T I A L SECTION 01 OF 02 LIMA 003974 SIPDIS DEPT FOR WHA/AND, EB/TRA/AN TREASURY FOR OFAC FAA MAIMI FOR JAY RODRIGUEZ EMBASSY YAOUNDE FOR MALABO OFFICE E.O. 12958: DECL: 09/13/2015 TAGS: EAIR SNAR CASC PGOV PE SUBJECT: ZEVALLOS ADVISOR HAS CLOSE TIES TO PERUVIAN CONGRESSMAN REF: A. LIMA 2796 ¶B. LIMA 2053 Classified By: AMBASSADOR J. CURTIS STRUBLE FOR REASONS 1.4 (B) AND (D) . ¶1. (C) Summary. OFAC-listed Narcotics Kingpin Fernando Zevallos, who sold two planes to cargo carrier Air Guinea in January, has enlisted Ricardo Hernandez as a front man in the transaction. Hernandez is a close advisor of Peruvian Congressman Victor Valdez, Chairman of the Congressional Transportation Committee and member of President Toledo's Peru Posible party. Valdez is also related to the mayor of Pucallpa, a nacrotrafficker. Valdez's staff, which is investigating the recent TANS crash and alleged corruption within the DGAC, has requested technical assistance from the Embassy, FAA and NTSB. When asked about the direct relationship between Congressman Valdez and Zevallos, Valdez's staff acknowledge that the two run in the same circles and that Zevallos may have contributed to Valdez' congressional campaign. End Summary. No Payment for Planes -------------- ¶2. (C) In late December 2004, Zevallos sold and shipped two AeroContinente planes, one Boeing 727, Registration Number OB-1752-P and one Boeing 737, Registration Number BO 1759-P, to Air Guinea Cargo, located in Equatorial Guinea (Ref A). According to DGAC documents, these planes left Peru this past January. According to signed DGAC documents, American citizen Hector Gerardo Valentin, who owns Holiday Airways in Miami, helped broker the deal between Zevallos and Spanish citizen Francisco Martin Sierra, owner of Air Guinea Cargo. (Note: Post passed information about Hector Valentin to the Department of the Treasury's Office of Foreign Assets Control for future investigation. End Note.) ¶3. (U) Peruvian daily "El Comercio" reported on September 4 that Zevallos claims that he has not yet received payment for his planes. The paper continued that Zevallos' representatives have attempted on several occasions to obtain payment to no avail. Zevallos' front man for this transaction, Ricardo Hernandez San Martin, traveled to Equatorial Guinea several times to meet with Air Guinea owner Francisco Martin Sierra, demanding payment and threatening a lawsuit. Hernandez gained access to Equatorial Guinean Congressman and business officials with the help of a document from Peruvian Congressman Victor Valdez (who is President of the Congressional Transport Committee). The Congressman's letter introduced Hernandez as one of his key advisors and an expert on aviation matters. Congressman Linked to Zevallos? -------------- ¶4. (C) The bizarre Zevallos saga further highlighted for Post a close link between Congressman Victor Valdez and Zevallos. DGAC sources noted several months ago that Valdez, whose Congressional Committee is investigating corruption within the DGAC, requested all DGAC personnel files, including salary and family information. According to former DGAC Wilson Benzaquen, Valdez passed that information to Zevallos, who may use it to manipulate DGAC officials. Valdez has in recent months regularly defended Zevallos and called for the development of new airlines, including AeroContinente EIRL. ¶5. (C) We met with two of Valdez's advisors on September 7 to discuss Valdez's role in the Transport Committee and the ongoing TANS investigation. (Note: these advisors visited the FAA Miami office on August 30 to request assistance and discuss corruption within the DGAC. End Note.) After listening to their request for technical assistance from the FAA and NTSB for the ongoing investigation, EconCouns inquired about the "El Comercio" article and the relationship between Zevallos and Valdez. The advisors emphasized that Valdez sent the letter to the Government of Equatorial Guinea in an effort to protect Peruvian companies, not to help Zevallos per se. They acknowledged a clear relationship between Valdez and Hernandez, who also advises Zevallos on aviation issues. They also noted that Zevallos, who is from the same region as Congressman Valdez, has mutual acquaintances and contacts. They did not deny a direct relationship between the two, but insinuated that Zevallos, as a donor to many political campaigns, may have contributed to Valdez's campaign. The advisors also noted that Zevallos had infiltrated the Transport Committee, exerting influence over some of its members. Comment -------------- ¶6. (C) We suspect that there is a strong relationship between Zevallos and Congressman Valdez, despite the feeble response from the Congressman's office. Valdez, who is the nephew of Pucallpa Mayor Luis Valdez (an alleged narcotrafficker with ties to Zevallos),has been seen in public with Zevallos in recent months and continues to pressure the DGAC on Zevallos' behalf. Zevallos has shown that he is well connected in Peru; it appears that Valdez is one more person in Zevallos' pocketbook. STRUBLE