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