NICARAGUA: BLUE LANTERN CASE NUMBER: 050137870: PRE-LICENSE CHECK

C O N F I D E N T I A L MANAGUA 000042 SIPDIS PM/DTCC - BLUE LANTERN COORDINATOR PLEASE PASS TO WHA/CEN -AKRAAIMOORE E.O. 12958: DECL: 01/14/2019 TAGS: ETTC KOMC NU SUBJECT: NICARAGUA: BLUE LANTERN CASE NUMBER: 050137870: PRE-LICENSE CHECK REF: 08 SECSTATE 133426 Classified By: Ambassador Robert J. Callahan for reasons 1.4 (b) and (d). ¶1. (SBU) Per reftel, Econoff conducted a pre-license check on December 30, 2008, at the El Cazador gun store located on Avenida Iglesia El Calvario, Managua, Nicaragua. Econoff met with Carlos Melendez, general manager and one of the co-owners in the business. Melendez has been a co-owner since December 2007 with a 15% share in the company. ¶2. (SBU) El Cazador has been in business since 1994 and offers a selection of handguns, longarms, ammunition, and shooting/hunting accessories. According to Melendez, 87% of the sales are to private citizens and the company also sells to security firms. The store sells weapons and accessories purchased from U.S. companies such as Remington Arms, Luo Police, Valor Corporation, Phoenix, and Smith and Wesson. The company also sells weapons and accessories purchased from Trust Halcon (Spain),Armscore (Philippines),Zeta (Czech Republic),Akkar (Turkey),and used arms from El Salvador. ¶3. (SBU) In 2008, El Cazador sold a limited number of weapons and ammunition to the Government of Nicaragua (GON), specifically to its security guard staff, for the following institutions: the National Police; ENACAL, the national water utility responsible for distribution, supply, and sanitation; Petronic, the parastatal company responsible for the development, distribution, and sale of Nicaragua's hydrocarbon resources; and CARUNA, a "private company" that provides microcredit to rural communities at low interest rates. CARUNA is closely affiliated with the Sandinista party and is the primary conduit of funding from the Government of Venezuela through the Bolivarian Alternative of the Americas Initiative (ALBA). El Cazador would like to do business with the Nicaraguan Army. ¶4. (SBU) Melendez showed Econoff copies of all invoices related to purchases from U.S. and foreign companies beginning in 2006 until 2008. He provided Econoff a copy of a purchase order to receive 80 revolvers from Smith and Wesson which were shipped from the U.S. on December 15, 2008. Melendez also provided a copy of the purchase order for Smith and Wesson products related to this pre-license check. El Cazador maintains electronic files of all purchases and submits a list every month to the police with the names of the customers and a description of their purchases. Melendez was familiar with the Arms Export Control Act and International Traffic in Arms Regulations. ¶5. (SBU) The store has a controlled access entry with rotating security guards stationed in the front entrance 24 hours a day, 7 days per week. The security guard inspects all customers before they enter the store. Once the security finishes the inspection, he gives a signal to the customer service representative to electronically open the door. El Cazador has two gun storage areas with alarms and video surveillance. The doors to the storage facilities have dead bolt locks as reinforcement. ¶6. (SBU) A request for bio data on all of the owners of El Cazador resulted in the following information: Ricardo Jose Melendez Quintanilla (DOB 10-JUN-52); Mauricio Valenzuela Sotomayor (DOB 20-AUG-1955); Ernesto Gallo Schaffer (DOB 03-JUN-1987); Carlos Augusto Melendez Rodriguez (04-DEC-1978); Glenda Auxiliadora Ramirez Noguera (09-SEP-1957); and Carlos Zamora Herrera (25-JUL-1955). All of the owners are Nicaraguan nationals. Econoff asked about Zamora's role in El Cazador. Melendez said that Zamora, a founding member of El Cazador along with Gallo, was previously general manager but now is only a co-owner with an 18% share in the company. ¶7. (C) Local name checks conducted by Post's Regional Security Office, Defense Attache Office, Regional Affairs Office, and the Drug Enforcement Agency revealed only that Ramirez was a Minister of Family Affairs from January 2007 until February 2007. She is considered a Sandinista hardliner but she was fired in February 2007 because she did not receive permission from First Lady Rosario Murillo to give an interview to a local newspaper. Local name checks did not provide derogatory information on Zamora. Post could not verify ties between Zamora and Roberto Calderon Meza, the former Sandinista General. ¶8. (SBU) Based on the information available, Post has no evidence of illicit arms deals involving El Cazador. ¶9. (SBU) Comment: We note that this company, one of its owners, and some of its clients are closely associated with the Sandinista regime. The U.S. and other donors have recently cut or suspended aid in response to electoral fraud committed in the November 9 municipal elections and increasing anti-democratic measures taken by the governments. End Comment. CALLAHAN