ANOTHER UNFAVORABLE BLUE LANTERN FOR ELINT ON CASE

UNCLAS MADRID 000908

SENSITIVE

SIPDIS

PM/DTCC - BLUE LANTERN COORDINATOR, TIM MAZZARELLI
EUR/WE - STACIE ZERDECKI AND ALEXANDRA MCKNIGHT

E.O. 12958: N/A
TAGS: ETTC KOMC SP
SUBJECT: ANOTHER UNFAVORABLE BLUE LANTERN FOR ELINT ON CASE
050177626

REF: A. STATE 75563

B. MADRID 453

C. MADRID 777

D. 8/21/09 MAZZARELLI-MURRAY E-MAIL WITH DSP-83 AND
OTHER ATTACHMENTS

E. 9/3/09 MURRAY-MAZZARELLI E-MAIL WITH DSP-83
ATTACHMENT


1. (SBU) SUMMARY: Foreign consignee Elint, S.A. appears to
have broken both Spanish and U.S. law with the submission of
documentation in support of a June 2009 export license
application submitted by N-Vision Optics LLC of Needham,
Massachusetts. Already under investigation by the Spanish
National Police (SNP) and charged with former U.S. supplier
ITT Night Vision with intellectual property violations, Elint
sought to procure an additional 862 U.S.-origin night vision
goggles ostensibly "to be used by the Spanish Marines for
anti-terrorist operations in support of Operation Enduring
Freedom (OEF) in Afghanistan and Lebanon." (NOTE: Spain,
which now has over 1200 troops deployed under the auspices of
NATO's International Security Assistance Force (ISAF) in
Afghanistan, does not have Marines participating in U.S.-led
OEF. END NOTE.) Post has reviewed the documentation
submitted by Elint and N-Vision Optics LLC in support of the
application and shared same with Spanish Ministry of Defense
contacts per action request in reftel A. Defense staff
concluded their study of the case upon resumption of normal
business hours the week of September 1 and affirmed September
3 "clear indications of wrongdoing." Evidence provided to
Pol-Mil Officer and ODC Chief by Spanish MOD on indicates
egregious alteration of a U.S. Non-Transfer and Use
Certificate (DSP-83) as well as fabrication of Spanish
Ministry of Defense documentation. Spanish officials remain
eager to cooperate with the USG and to coordinate enforcement
measures to deny Elint as an MOD supplier and bar Elint as a
supplier of U.S. Munitions List-controlled items,
respectively. MOD contacts assured Mission officers that no
other acquisitions via Elint were in process for the Spanish
Armed Forces, but nonetheless stressed Spanish willingness to
abide any delays in delivery due to denial of export licenses
involving Elint. END SUMMARY.


2. (SBU) Upon receipt of Post's initial inquiry (ref A) in
July 2009, Captain Eladio Ferreiro, Head of the Export
Control Unit within the Directorate General of Armament and
Materiel (DGAM) at the Spanish Ministry of Defense, expressed
concern about possible anomalies in the submitted
documentation. He sought clarification of contact
information and requested better quality copies of documents.
He also anticipated difficulty in locating the right people
in order to make PM's deadline. As of mid-August 2009,
elements within DGAM assured Post they were looking into a
series of unanswered questions. While he could not respond
officially while the investigation was ongoing, Colonel
Carlos Alonso Ausin (Chief of the U.S. Bilateral Relations
Unit) called the case "odd," and advised there was no
procurement order or budget on the part of the Spanish
Marines to correspond to an order for more than $2.7 million
in sensitive night vision equipment. Ausin requested better
copies of the U.S. Non-Transfer and Use Certificate (DSP-83)
in order to be sure. MOD urged the USG not to approve the
license in the face of so many unanswered questions and Ausin
assured the Office of Defense Cooperation that the case "had
everyone's attention."


3. (SBU) PM/DTCC provided clearer scans August 21 of the
supporting documents (ref D) mentioned in reftel A, and Post
forwarded the requested documents to Colonel Ausin. Ausin
subsequently confirmed verbally: "Based on the information
available as of August 21, the Marine Corps signed on June 3,
2009 a DSP-83 for sixty-two (62) AN/PVS-14 night vision
monocular generation 3." (NOTE: Per reftel A, Post and MOD
had been asked to confirm the existence of a contract or
purchase order with Elint for the full quantity and dollar
value of NVGs -- to wit, 462 AN/PVS-14 night vision monocular
generation 3 valued at $1,556,940.00 and 400 GT-14 night
vision monocular generation 3 valued at $1,084,000.00 as well
as 200 dual mounts for the GT14s valued at $95,000. END
NOTE.)


4. (SBU) At a September 3 meeting convoked by DGAM
Subdirector General for International Relations BG Jose Luis
Ceballos Porras, Ceballos and COL Ausin provided a
reproduction of the DSP-83 as it had left the Spanish Marine
Corps (ref E). A comparison of the two facsimiles showed, in
Ceballos's words, "clear indications of wrongdoing."
Ceballos confirmed the initial informal conclusion that the
original DSP-83 specifying 62 of one kind of NVG had been
clumsily altered sometime after it left the Spanish MOD,

showing additional quantity digits, line items, and dollar
values in a different typeface from the original. Ceballos
expressed concern that the Spanish requisite end-use
certificate had also been fabricated. It appeared to have
been cut and pasted onto fake MOD letterhead with a
non-existent point of contact and was stamped with the
Commandant of the Spanish Marine Corps seal by this
as-yet-unidentified procurement manager. Further, Ceballos
noted that whoever had generated the bogus document had had
enough open source information to come up with a plausible
end use statement -- in support of anti-terrorist operations
in Afghanistan and Lebanon -- to pass muster and facilitate
the license application.


5. (SBU) CONCLUSIONS: In answer to questions posed in
reftel A, Spanish MoD confirmed the existence of a contract
or purchase order with Elint S.A. for NVGs, but not for the
full quantity and dollar value listed on the document.
Spanish MoD could neither confirm nor deny the intended
end-use of the NVGs in Afghanistan and Lebanon. Further,
DGAM's Ceballos declared the legitimate acquisition attempt
null and void based on the false documentation. Ceballos
said he had advised Spain's military commands that "a minor
issue" could cause delays with NVG procurement. He was
hesitant to broadcast too widely a caution against doing
business with Elint, lest his administrative procedure
jeopardize the ongoing criminal investigation. Having
concluded his internal study, Ceballos planned to share the
same evidence of document tampering with Spanish security
officials. Pol-Mil Officer confirmed Ceballos's impression
that the USG takes issue with Elint only, and not/not with
the legitimate Spanish requirement for night vision devices
-- that neither the denial of this license nor a forthcoming
policy of denial toward Elint were a reflection on the
Spanish government. Ceballos sought U.S. guidance in
correcting the misperception among the Spanish services that
procurement delays were due to U.S. bureaucratic hurdles. He
appreciated the U.S. Commercial Service offer to facilitate
the acquisition process by identifying more reliable Spanish
distributors for U.S. defense equipment.
CHACON