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