THE BRAZILIAN CONNECTION WITH IRAN AND

UNCLAS SECTION 01 OF 02 BRASILIA 13835

FOR OFFICIAL USE ONLY

E.O.12356: N/A
TAGS: PARM PREL BR IR HO NU CE
SUBJECT: THE BRAZILIAN CONNECTION WITH IRAN AND
THE CONTRAS

REFS: (A)BRASILIA 13511, (B)BRASILIA 4799


1. (U) WITH THE UNRAVELING OF THE IRANIAN
ARMS/CONTRA AID SCANDAL, THE BRAZILIAN PRESS
CONTINUES TO POINT TO A SO-CALLED "BRAZILIAN
CONNECTION". WEEKLY NEWS MAGAZINE "VEJA" AND
CONSERVATIVE "O ESTADO DE SAO PAULO" RAN STORIES
IN THE LAST FEW DAYS ON THE SUPPOSED BRAZILIAN
INVOLVEMENT.


2. "ESTADO'S" DEFENSE EDITOR ROBERTO GODOY WROTE
ABOUT ALLEGED U.S. ATTEMPTS TO OBTAIN HAWK
MISSILES FROM BRAZIL IN 1986, AN UNUSUAL REQUEST,
ACCORDING TO GODOY, FOR BRAZIL DOES NOT HAVE SUCH
SYSTEM IN ITS INVENTORY. THE FIRST CONTACT, GODOY
SAID, WAS MADE IN EARLY 1986 BY AN "ADVISOR" TO H.
ROSS PEROT TO A LOCAL ARMS PRODUCER, AND THE
SECOND IN MAY, TO A FORMER MEMBER OF THE BRAZILIAN
NATIONAL SECURITY COUNCIL INVOLVED WITH THE ARMS
INDUSTRY. GODOY EXPLAINED THAT THE AMERICAN
PROPOSED TO TRADE HAWKS FOR THE MORE ADVANCED
SPARROW, NOT SPECIFYING WHERE THE WEAPONS WOULD
GO. IN BOTH INSTANCES, HE CONTINUED, THE AMERICAN
WAS TURNED DOWN BECAUSE THE BRAZILIANS SUSPECTED
THE CONTRAS OR IRAN AS RECIPIENTS AND SAID
GOVERNMENT RULES WOULD NOT ALLOW SUCH "NEBULOUS"
TRANSFERS OR SALES TO A NATION AT WAR. GODOY ALSO
REFERRED TO JAIRO IWAMASSA GUINOZA'S CONNECTION
(SEE REFTEL A) RESTATING THAT GUINOZA WAS NEVER
ABLE TO PURCHASE ANY ARMS FROM BRAZILIAN
MANUFACTURERS.


3. "VEJA'S" STORY CLAIMS TO PRESENT "PROOF" OF
BRAZILIAN INVOLVEMENT WITH THE CONTRAS AND IRAN,
BUT IT IS SHORT ON EVIDENCE AND SOURCES. ONE OF
THE "PROOFS" IS A RECENT PHOTOGRAPH OF FIVE BOXES
OF HAND GRENADES MADE BY COMPANHIA DE EXPLOSIVOS
VALPARAIBA IN SAO PAULO. ACCORDING TO THE
ARTICLE, THE GRENADES WERE SHIPPED TO SRI LANKA IN
1984 AND IT SPECULATES THAT SOME OF THEM WERE
DIVERTED TO HONDURAS FROM SOUTH AFRICA, A PORT
STOP ALONG THE WAY. "VEJA" DOES NOT KNOW HOW MANY
CONTRABAND WEAPONS ENDED UP IN THE CONTRA'S
TRAINING CAMP, NOR THE SIZE OF THE ORIGINAL
SHIPMENT TO COLOMBO, BUT SUGGESTS THAT THE
TRANSFER WAS MADE WITH THE CONSENT OF THE BUYER,
FOR SRI LANKA DID NOT PROTEST THE INCOMPLETE
SHIPMENT. ANOTHER "PROOF" WAS FINDING TWO
HONDURAN AIR FORCE OFFICERS TRAINING AT EMBRAER
ALSO IN 1984. HONDURAS HAD SIGNED A US DOLS 10
MILLION CONTRACT "FINANCED BY RONALD REAGAN'S
GOVERNMENT" FOR THE PURCHASE OF TUCANOS. IN
"VEJA'S" OPINION, NICARAGUA NOW HAS EVIDENCE TO
MAKE A CLAIM FROM ITAMARATY ON BRAZIL'S SUPPORT TO
NICARAGUA'S FOES.


4. (U) "VEJA" ALSO REHASHES THE STORY OF U.S.
CITIZEN GEORGE PERRY'S DEATH IN 1983 IN NEW YORK.
SUPPOSEDLY PERRY WAS KILLED BECAUSE HE DIDN'T
FULFILL HIS PART ON A US DOLS 20 MILLION DEAL TO
DELIVER ARMS TO IRAN, AND THE GOB'S VISA REFUSAL
FOR THE U.S. INVESTIGATOR OF THE CRIME. IN
ADDITION, VARIOUS ATTEMPTS AT SHADY SALES TO
AFRICA AND THE MIDDLE EAST IN THE EARLY 80'S ARE
DESCRIBED. THE STORY ENDS WITH THE UNDOCUMENTED
ASSERTION THAT IRAN PURCHASED IN 1983 US DOLS 500
MILLION WORTH OF "EXPLOSIVES" AND THAT SINCE THEN
THE GOB HAS "TENDED TO IRAN'S REQUESTS" INCLUDING
SENDING A "PLANE LOAD OF ARMS" LAST WEEK.


5. (LOU) COMMENT: THE BRAZILIAN PRESS IS
SEARCHING FOR BRAZILIAN INVOLVEMENT IN THE
US/IRAN/CONTRA ARMS TRAFFIC BUT SO FAR THE
EVIDENCE IS NOT CONVINCING. MOST OF THE INSTANCES
CITED BY THE PRESS OCCURRED A FEW YEARS BEFORE THE
U.S. BEGAN ITS SECRET CONTACTS. ATTEMPTS AT SALES
MUST HAVE CERTAINLY BEEN MADE INDEPENDENT OF U.S.
EFFORTS. IN ADDITION TO THE ABOVE, "JORNAL DO
BRASIL" REPORTED IN JUNE 1984 NEGOTIATIONS FOR THE
SALE OF ONE MILLION GRENADES TO A SUBSIDIARY OF
THE VALPARAIBA COMPANY MENTIONED ABOVE. ENOUGH
TALES OF INTRIGUE AND POTENTIALLY EMBARRASSING
SHADY ARMS DEALS MIGHT MAKE THE GOB CONSIDER THE
ADVANTAGES OF REQUIRING A NON-TRANSFER TO THIRD
PARTIES CLAUSE IN THEIR ARMS SALES CONTRACTS, A
REQUIREMENT NOT INCLUDED IN THEIR CURRENT ARMS
SALES POLICY GUIDELINES (SEE REFTEL B).


SHLAUDEMAN