S E C R E T SECTION 01 OF 02 SOFIA 001686

SIPDIS

NOFORN
SIPDIS

DEPT. FOR PM, EUR/NCE

E.O. 12958: DECL: 12/19/2016
TAGS: ETTC PARM PTER EG BU
SUBJECT: BULGARIA: ARMS DEALER WARNS THAT EGYPT IS HUNTING
FOR MANPADS

REF: A. SOFIA 1119

B. SOFIA 1204

C. STATE 146913

Classified By: CDA Alex Karagiannis, for reasons 1.4 (b) and (d).


1. (S) SUMMARY: In a December 18 meeting with an Embassy
Political Officer, a well-connected Bulgarian arms broker
told us that he had recently rebuffed an Egyptian MoD order
for Bulgarian MANPADS, which he viewed as a proliferation
risk. He warned that the Egyptians seemed to view the order
as very time-sensitive and that they were likely to seek
MANPADS elsewhere in the Balkans after being turned down in
Bulgaria. Post has reason to suspect the source's motive for
sharing this information with us; we have no way of verifying
its veracity. END SUMMARY.


2. (S) On December 18, Nikolai Gigov called a lunch meeting
with Poloff at the offices of his company -- the arms trading
firm Delta Group (commonly known as "Delta G"). The purpose
was to inform us that he had recently received a large order
from the Egyptian Ministry of Defense. He had accepted part
of the order -- for T-72 tank rounds and parts; however, he
claimed to have declined the Ministry's order for 150 Strela
MANPADS systems. Gigov appeared unaware of the
U.S.-Bulgarian MANPADS agreement, which is classified in both
countries at the Secret level. He claimed to have rebuffed
the Egyptians of his own initiative, because of his doubts
about the type of missiles ordered and the urgency with which
the MoD seemed to require them.


3. (S) Gigov reported being confused as to why Egypt would
place an order for outdated Strela missiles (he did not
specify the specific model). "If you're a state," he asked
rhetorically, "why not buy something better -- an Igla or
Mistral system, or a Stinger?" Military planes have
effective countermeasures for MANPADS such as the Strela,
Gigov said -- "The only thing they're good for is shooting
down a civilian aircraft." Gigov speculated openly that the

weapons may have been intended to be diverted elsewhere.
When asked specifically if the order had come from Arab
International Optronics, an Egyptian MoD-owned firm that has
bought MANPADS parts from Bulgaria in the past (reftels),
Gigov hedged, before restating that the order came "from the
MoD."


4. (S) Gigov said that such deals typically were slow-moving
affairs, but he emphasized the sense of urgency that he
perceived from the Egyptian side on this particular deal.
The Egyptians did not specifically describe the deal as
time-sensitive, he said; however, the frequent phone calls
and follow-up messages he had received from their side
indicated to him that this was the case. After declining the
MANPADS portion of the order, he reported being contacted by
the Egyptian defense attache with a request for an
explanation.

Background:


5. (S/NF) Nikolai Gigov is an extremely well-connected
businessman, whose legitimate business interests besides
Delta G include insurance and private security ventures as
well as ownership of Sofia's Lokomotiv soccer club. He is
widely alleged to have brokered arms deals with the former
Yugoslavia in violation of UN embargoes, and may have an
ongoing role in illegal traffic in methamphetamines. He has
family ties to Serbia, and displays a vocal antipathy toward
Muslims. Through a combination of personal ties and liberal
political donations, Gigov counts many of Bulgaria's most
powerful figures as "close personal friends," including
President Parvanov, Interior Minister Petkov, and Sofia Mayor
Borisov. He recently put these ties to use as the local
agent for EADS, helping the European consortium win the MoD's
competition to supply the Bulgarian military with Eurocopter
helicopters. He has also worked with General Dynamics to
supply Bulgarian-origin weapons and munitions to the Afghan
National Army, and has indicated to us that he is interested
in representing either Boeing or Lockheed in the MoD's
anticipated tender for fighter aircraft.

Comment:


6. (S) We believe that Gigov was attempting to curry favor
with us by calling this meeting, but have no way of verifying
the facts of his story. He badly wants a relationship with

SOFIA 00001686 002 OF 002


the U.S. Embassy -- possibly for commercial reasons and
possibly in an attempt to clean up his reputation. It is
possible that he is merely shopping rumors in an attempt to
convince us of his bona fides; however it is impossible to
dismiss his allegations. As reftels indicate, Egypt has been
a traditional customer for Bulgarian MANPADS, and the detail
with which Gigov recounts the purported order would make for
a very ambitious fabrication.


7. (U) XXXXXXXXXXXX

KARAGIANNIS