RAYTHEON'S RECENT VISIT AND RUMBLINGS FROM THE

UNCLAS E F T O BANDAR SERI BEGAWAN 000024

SENSITIVE
NOFORN

SIPDIS

STATE PASS FOR EAP/MTS/COPPOLAMG
STATE PASS USTR/EHLERSK
BANGKOK FOR FCS/NESSJ
SINGAPORE FOR DAO/SEABAUGHHK

E.O. 12958: N/A
TAGS: PREL PGOV USTR KIPR KINR ECON BX
SUBJECT: RAYTHEON'S RECENT VISIT AND RUMBLINGS FROM THE
MINISTRY OF DEFENSE

SUMMARY
--------------


1. (SBU/NF) The Raytheon team recently briefed the Ambassador
about a recent turn of events where Deputy Minister of
Defense Pehin Yasmin revived a pet project, developing and
building Brunei's National Modeling and Simulation Center,
that a subordinate of his, Ministry of Defense Permanent
Secretary Dato Mustapha had derailed while Yasmin was out ill
for several months. Raytheon reported being issued a short
fuse deadline from Pehin Yasmin during their meetings to sign
an agreement within the next four weeks. They were
instructed to finalize negotiations and move forward with
commencing this important project for the Government of
Brunei (GOB). Raytheon further elaborated that this directive
came, during their meeting with defense officials, on the
heels of a heated exchange between Pehin Yasmin and Dato
Mustapha regarding contract negotiations. During his
one-on-one private dinner with the Ambassador, Pehin Yasmin
praised both the Ambassador and the U.S. Mission as being one
of the most active and engaged diplomatic missions to ever
serve in Brunei. Pehin Yasmin also discussed his rumored
upcoming possible retirement, assured the Ambassador the
Raytheon deal would get done and shared some cautionary words
about the conservative Brunei Muslim community. The apparent
home stretch indicators from Raytheon and the Ministry of
Defense is welcome news for both parties. However, negative
comments regarding religious freedom by a conservative
element in the Muslim community, as noted by Pehin Yasmin,
corroborates Ambassador's concerns regarding the true status
of intra and inter faith relations. End Summary.

RAYTHEON, WE HAVE LIFT OFF (ALMOST)
--------------


2. (SBU/NF) The Ambassador met with Raytheon Corporation
executives Ray Corrigan (Brunei Country Manager),and Matthew
Murray (Director of Global Strategy and Solutions) after
their series of meetings held with the Brunei Ministry of
Defense (MOD). Months of silence from the MOD followed the
sour turn of events last July when the MOD presented Raytheon
with an almost impossible list of demands to reach any
contractual agreement to build and develop a National
Modeling and Simulation Center. This all changed for the
better during Raytheon's most recent visit. Both Ray and
Matt expressed genuine excitement and belief that the deal,
and more importantly the MOD, was back on track to bring
negotiations to a close and proceed with this important
project.


3. (SBU/NF) Raytheon officials reported on their visit with
the MOD, which included a tour of the newly constructed and
completed seven-story Knowledge Hub at Anggerek Desa. This
is the second phase of three for the "iCentre" being
developed by the Brunei Economic Development Board (BEDB).
The top two floors to be occupied by the MOD are the
envisioned location for the Raytheon designed Modeling
Center. The building reportedly cost B$4.8 million and is
the first "green" building in Brunei with partial solar
power, motion sensor lighting and other "green" initiatives.
During the tour Pehin Yasmin expressed concern that none of
the committed occupants had yet begun the move in process.
TelBru and the University of Brunei both have floors booked
along with other commercial investors. According to the
Raytheon team, with ongoing efforts of the MOD to gain
approval for His Majesty the Sultan of Brunei to officiate
the opening ceremony, Pehin Yasmin repeatedly complained that
His Majesty would not cut any ribbon on an empty building.


4. (SBU/NF) In a subsequent private meeting with Pehin
Yasmin and Dato Mustapha, the Raytheon team questioned again
why on going negotiations had stalled and if there was any
hope of reviving the deal for the modeling center. Raytheon
told the Ambassador that when Pehin discovered, evidently for
the first time, the massive concessions Raytheon had offered
to meet the GOB's demands, he became visibly upset with Dato
Mustapha. Dato Mustapha had not yet shared those concessions
with Pehin Yasmin as he was still locking down a technical
consultant prior to discussing further any terms and
conditions for such an agreement. Pehin proceeded to
verbally berate him about the delays and stove piping of
information eventually switching to Malay further driving
home his displeasure all in front of the Raytheon team. In
the end Pehin Yasmin insisted that Dato Mustapha and Raytheon

expedite the process and requested a finalized agreement for
signature by both parties within four weeks time.

REMINISCING WITH DEPUTY MINISTER OF DEFENSE PEHIN YASMIN
-------------- --------------


5. (SBU/NF) Ambassador and Pehin Yasmin shared a private
one-on-one dinner for almost two hours, covering a wide range
of topics. Pehin was extremely complimentary with regards to
the excellent performance of the U.S. Mission and in
particular the Ambassador's willingness to take on tough
issues in the public forum such as Intellectual Property
Rights, Trafficking in Persons and Religious Freedom. Pehin
said that when His Majesty the Sultan speaks of the
diplomatic corps, he often refers directly to the U.S.
Ambassador as the most active representative of the diplomats
serving in Brunei. He did say that he expects, but can't yet
confirm, to be leaving in May when the GOB reviews all the
ministerial level positions for rotation. More importantly,
he discussed the rumor that Dato Mustapha has a good chance
of ascending to Deputy Minister of Defense as his successor.
Pehin assured the Ambassador that if the rumors of his
retirement turned out to be true, he would make sure the
Raytheon project was locked in before he left.


6. (SBU/NF) As the conversation progressed, the Ambassador
asked Pehin for any advice on how to be even more effective
in his work with the GOB. Pehin cautioned the Ambassador
about current feelings within the more conservative elements
of the Muslim community in Brunei. He indicated they were
upset with the Department of State Religious Freedom report
and the negative light in which Brunei was portrayed. They
thought the U.S. Mission should have interceded Brunei's
behalf to soften the harsh tone with the perceived power his
position holds. Pehin further mused that it was ironic that
they complained about this particular issue as he said,
"Culturally these people (the bearded ones) do not believe in
religious freedom. They only see the Muslim faith as the one
true recognized faith." He further elaborated by saying,
"These people are not only sympathetic to the recent
religious attacks taking place in Malaysia but would burn
churches in Brunei if given the opportunity." However, he
did reassure the Ambassador though that, "The more tolerant
Muslims, like myself, and the GOB, are keeping this small
element in check and that Brunei does not tolerate any level
of extremism regardless." (Note: The comments from Pehin
Yasmin on religious freedom are a clear reminder that while
Brunei enjoys a relatively relaxed environment for other
religions, there is clearly a potential element not in favor
of this tolerance. The continued uphill battle on allowing
religious teaching in classrooms for non-Muslim faiths
appears to be some degree of evidence this element exists and
has at least a degree of influence within the GOB. End Note)

COMMENT
--------------


7. We will continue to monitor closely the negotiations
between the MOD and Raytheon for this agreement. If the
signature takes place within the proposed time frame of four
weeks, the deal will be effectively in full swing prior to
any potential departure of Pehin Yasmin. In light of Dato
Mustapha's public undressing in front of the Raytheon team,
it will be interesting to see what potential roadblocks he
throws up either if given early notice of impending ascension
or vice versa if Pehin Yasmin sees another term assignment.
It appears critical, regardless of the outcome in upcoming
ministerial rotations, for Raytheon to get Dato Mustapha
going the same direction and ensure that all parties have
access to key information going forward after the loss of
time and progress thanks to his recent and effective
stovepipe efforts. End Comment.
TODD