Archive for December, 2010

SCENESETTER: YOUR OCTOBER 10 VISIT TO ZURICH

Tuesday, December 14th, 2010
ID
09BERN432
SUBJECT
SCENESETTER: YOUR OCTOBER 10 VISIT TO ZURICH
DATE
2009-10-08 10:10:00
CLASSIFICATION
SECRET
ORIGIN
Embassy Bern
TEXT
S E C R E T BERN 000432 

SIPDIS

FOR THE SECRETARY FROM AMBASSADOR BEYER

EO 12958 DECL: 10/08/2019
TAGS PREL, OVIP, SZ
SUBJECT: SCENESETTER: YOUR OCTOBER 10 VISIT TO ZURICH

Classified By: Ambassador Donald S. Beyer; reasons 1.4(b) and (d).

¶1. (S) I and the rest of the Embassy Bern team are looking forward to your visit with great anticipation in what promises to be a landmark event in Armenian-Turkish relations with lasting benefits for Euro-Atlantic security. Foreign Minister Calmy-Rey is riding high on a series of foreign policy successes, from the Swiss government’s agreement with DOJ in the UBS matter, to Switzerland’s hosting of the October 1 P5 1 talks with Iran in Geneva, to the upcoming October 10 signing ceremony in Zurich to chart a path for normalization of relations between Turkey and Armenia.

¶2. (S) While Calmy-Rey has reasons to celebrate, her foreign policy activism is not universally appreciated across the domestic political spectrum in Switzerland. Swiss views are colored by Switzerland’s centuries-old tradition of neutrality. Issues that draw on the Swiss capacity for facilitation and mediation, such as Turkish-Armenian rapprochement, generally enjoy strong public support. On the other hand, foreign policy activism with a more partisan or “hard” security flavor, such as Calmy-Rey’s vociferous support for Kosovo independence, or her recent all out — but ultimately unsuccessful — effort to obtain a parliamentary mandate for Swiss military participation in the EU anti-piracy operation Atalanta, do not enjoy the same broad public support. The recent arrest at the Zurich airport of film director Roman Polanski was viewed by Calmy-Rey as putting a dent in Switzerland’s international image. Nevertheless, she has limited her criticism to remarking that the arrest lacked “finesse,” and surely is aware that Swiss public opinion favors Polanski’s extradition to the United States.

¶3. (S) Probably the biggest challenge on Switzerland’s foreign policy front is its continuing crisis with Libya, following the July 2008 arrest of Muammar Gaddafi’s son Hannibal Gaddafi in Geneva for allegedly brutally abusing his domestic staff. Swiss President Merz’s ill-fated visit to Tripoli in late August, during which he publicly apologized for what by all accounts was a justified police action, thus far has failed to win the freedom of two Swiss businessmen that the Libyan government has refused to allow to leave Libya for over a year. The two Swiss citizens are being refused departure purportedly because of visa irregularities, but it is clear to all that Tripoli views them as a bargaining chip in extracting maximum concessions from the Swiss. Moreover, after living under house arrest for the past year, the two businessmen recently were taken by Libyan officials to an undisclosed location, further raising concern in Bern about their fate. Calmy-Rey has asked for USG assistance in pressing the Libyans to allow the two Swiss to return to Switzerland. I strongly believe it is in our interest to do what we can, given Switzerland’s many efforts to assist U.S. citizens in Iran, including, most recently, the cases of the three hikers and the release earlier this year of Roxana Saberi.

¶4. (S) Finally, Calmy-Rey has been very active is urging the Swiss government to accept for resettlement in Switzerland several Guantanamo detainees who are slated for release. This idea is not at all popular with the Swiss public, but Calmy-Rey views it as a consequent gesture against the backdrop of the Swiss government’s past criticisms of Guantanamo. A Swiss team visited Guantanamo in August to interview four detainees, and is looking seriously at accepting an Uzbek and two Uighurs. The Swiss government, however, is concerned that agreeing to accept Uighurs would buy too much trouble with China at a time when Switzerland is seeking to conclude a trade agreement with Beijing. Personal encouragement from you to Calmy-Rey underlining how much the USG would appreciate Switzerland accepting Uighurs would be particularly timely while you are in Zurich.

¶5. (U) Minimize considered. BEYER

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http://www.wikileaks.ch/cable/2009/10/09BERN432.html

AZERBAIJAN: WHO OWNS WHAT VOL. 2 – THE MINISTER OF EMERGENCY SITUATIONS, BELUGA CAVIAR, AND FRUIT JUICE

Sunday, December 12th, 2010
ID
10BAKU127
SUBJECT
AZERBAIJAN: WHO OWNS WHAT VOL. 2 – THE MINISTER OF
DATE
2010-02-25 05:05:00
CLASSIFICATION
SECRET
ORIGIN
Embassy Baku
TEXT
S E C R E T SECTION 01 OF 04 BAKU 000127 

SIPDIS

COMMERCE FOR D.STARKS
EEB/CBA FOR T.GILMAN
DEPT PLEASE PASS TO USTR FOR C. MORROW AND P. BURKHEAD

EO 12958 DECL: 02/24/2020
TAGS ECON, EINV, EIND, ETRD, KCOR, PINR, PGOV, RS, KS, IR,
TU, AJ

SUBJECT: AZERBAIJAN: WHO OWNS WHAT VOL. 2 – THE MINISTER OF
EMERGENCY SITUATIONS, BELUGA CAVIAR, AND FRUIT JUICE (C-RE9-02494; C-RE9-02493; C-RE9-02492)
REF: BAKU 54

Classified By: XXXXXXXXXXXX a.i., for reasons 1.4(b) and ( d).

¶1. (S) SUMMARY: This cable is the second in a series that profiles the most powerful families in Azerbaijan, both in terms of economic and political power. This issue features Minister of Emergency Situations Kamaladdin Heydarov and his family. Heydarov was previously Chairman of the State Customs Committee, and his hand-picked successor now operates that agency, one of the most corrupt operations in Azerbaijan. The Heydarov family, which controls a business empire in Azerbaijan ranging from fruit juice production to real estate development, is the second most powerful commercial family in Azerbaijan, after the Pashayev family (into which President Aliyev married). End Summary.

The Man Behind the Power
————————

¶2. (S) Kamaladdin Heydarov is the most powerful member of this family, and some observers have said he might be even more powerful than the President himself. (COMMENT: Post does not believe this is true, although Heydarov controls more visible assets and wealth within the country than the President. End Comment.) His father, Fattah Heydarov, is a Member of Parliament from the mountainous Qabala district, which serves as a home base for the family outside Baku. Fattah was Secretary of the Ordubad (and later Julfa) District Party Committee during Soviet times, and served as Minister of the Welfare Service of Nakhchivan from 1976 to 1978 and later as Nakhchivan’s Minister of Culture from 1983 to 1995.

¶3. (S) Kamaladdin Heydarov was Chairman of the State Customs Committee for nine years, and since 2006 has been head of the para-military Ministry of Emergency Situations (MES), which acts as a super-Federal Emergency Management Agency, Fire Marshall, health and safety inspector, and overall regulator of many aspects of the economy. Born in 1961, he holds a degree in Geology and International Law from the Azerbaijan State University. He held executive positions in a number of private and public enterprises prior to his appointment at the ripe old age of 35 as Chairman of the State Customs Committee (SCC), an agency that is notoriously corrupt, even by Azerbaijani standards. Heydarov’s rise to power was partly a result of the strong relationship between his father Fattah and former President Heydar Aliyev (also from Nakhchivan), but also partly a result of Heydarov’s strong management skills. As he gained wealth for the ruling party, Heydar Aliyev’s respect for him grew, until finally he was entrusted with the valuable role of Chairman of the SCC.

¶4. (S) The State Customs position allowed him to gain his massive wealth, as significant illicit payments were paid “up the food chain” in an elaborate and well-orchestrated system of payoff and patronage. Heydarov likely still enjoys a sizeable income from the SCC, as it is controlled by his loyal successor. When President Ilham Aliyev appointed Heydarov as Minister of Emergency Situations in 2006, he was replaced at the SCC by his Deputy Aydin Aliyev. Aydin Aliyev is not related to President Aliyev, and Heydarov is Aydin Aliyev’s sole benefactor, a symbiotic relationship in which Aliyev presumably gives undying loyalty (and a hefty cut) to the powerful Heydarov in order to retain his position. When Charge first met Heydarov in 2007, the Minister had been in office for less than a year but had a chest full of military ribbons that would rival the U.S. Chairman of the Joint Chiefs. Presumably he transferred them directly from his old State Customs uniform.

The Ministry of Everything Significant (MES)
——————————————–

¶5. (SBU) The Ministry of Emergency Situations (MES) has consistently proven itself to be one of the most powerful ministries in Azerbaijan. It is suspected to have the largest revenue of any Ministry. It even has its own para-military unit, consistent with other such ministries in the CIS. Heydarov mentioned to a visiting Washington VIP in 2008 that his ministry had recently taken control of an anti-aircraft battery near Baku in which he had served as a young conscript during Soviet times. The Ministry now controls the fire departments and other emergency services, fire code inspections, state grain reserves, and construction licensing. This last area of responsibility (perhaps the most important for foreign entities operating in Azerbaijan) also covers building inspectors who can interfere with, delay, or stop any construction project they declare to be “unsafe.” In fact, MES staff have previously warned American and other foreign businessmen that their purview covers anything that is associated with temperature, pressure, or isotopes — categories broadly interpreted to include just about everything under the sun.

¶6. (SBU) It is often said mockingly that in Azerbaijan’s judicial system, one can only win a case if one is friends with the judge – or if introduced by Benjamin Franklin (read: significant cash). Of course being known to the judge as politically powerful is another path to courtroom victory. The path to certifying a building’s safety is likely similar, and the true structural integrity of Baku’s recent construction boom is suspect. In 2007, a multi-story high-rise under construction crashed to the ground, killing several workers. In January 2010, three workers were killed when they fell from a building under construction on high-rent Neftchiler Prospect (reftel). Suspect construction is widespread in Baku, as new, speculative real estate ventures in central Baku (including high-rise buildings) are largely vacant, while practical buyers bid up the prices of flats in “Stalin-ka” buildings that pre-date independence. These older buildings, which tend to be low-rise, are thought to have had higher construction standards and generally be safer and more dependable.

¶7. (S) These types of market developments do not bode well for the reputation of MES, which is widely viewed as a cash cow for Baku’s elite, and the Heydarov family in particular. If an event such as an earthquake led to widespread destruction of property, it is assumed that outrage would be private, rather than public, and would not boil over into attacks on contractors or corrupt bureaucrats, as was the case after the 1999 earthquake in Istanbul. Some less powerful contractors would become easy targets, but the true architects of disaster such as Heydarov’s MES would find a way to use its resources and the tools of the state to escape any reprisal.

His Boys and Their Toys
———————–

¶8. (S) Kamaladdin’s two sons, Nijat Heydarov and Tale Heydarov, have recently expressed a desire to purchase two Gulfstream jets, valued at $20 million each. The family also owns an Airbus A319 corporate jet that is presently undergoing cabin completion in BASEL, Switzerland. According to initial reports, ownership of the Gulfstreams would be shared between “Shams al Sahra FZCO” (registered in Dubai to Tale and Nijat) and Mr. Manouchehr Ahadpur Khangah, with Shams al Sahra and Kangah each holding 50 percent of each jet. Khangah was not previously known to the Embassy, but according to information from Gulfstream appears to be a citizen of both Iran and Azerbaijan (unclear if he also holds other passports). Purportedly as part of Patriot Act compliance, Gulfstream asked the Heydarovs for information that would confirm the lawful sources of their wealth. The Heydarovs provided Gulfstream an overview of their family holdings, and it appears they own more businesses than any other Azerbaijani family, including companies in food canning, construction materials, concrete, asphalt, chemicals, bricks, textiles, CD and DVD production (since licensed CDs or DVDs are generally unavailable on the local market, these are certainly all pirated), milk processing, tourism, gypsum materials, leather, agriculture, pianos, alcohol and spirits, juices, banking, insurance, and construction.

¶9. (C) One Embassy contact, XXXXXXXXXXXX referred to Khangah as the Chief Executive Officer or “front man” of a substantial portion of the Heydarov family conglomerate. This contact noted that while Khangah is listed as the official owner of various businesses, they are very much Heydarov-owned operations in which Khangah functions more as a manager. This source added that Khangah’s role was mirrored by an unnamed Turkish citizen who controls another segment of the family businesses.

¶10. (C) Many of the family,s operations are part of the “Gilan,” “Qabala,” “Jala,” or “United Enterprises International (UEI)” family of companies. Gilan Holdings is omnipresent in Baku, as the company is one of several major real estate developers and has been in the forefront of Baku’s highly speculative real estate market. Observers compare Gilan to Dubai World or Nakheel, although admittedly on a smaller scale. The Heydarovs have largely cornered the fruit juice market in Azerbaijan, maintaining extremely high prices for locally produced juices and watered-down juice drinks, while making life difficult — with the help of State Customs — for cheaper competitors from Turkey, Ukraine and Russia. When USAID tried to support the production and distribution of pomegranate products in Azerbaijan, they quickly learned that no one sells pomegranate juice, concentrate, or derivatives from Azerbaijan without Heydarov’s permission. Azerbaijan’s economy is largely dominated by monopolistic interests, and observers suggest that the Heydarovs are at the top of this mountain of non-competition. It is rumored that the Heydarovs also have interests in the local Pepsi bottler, the local license for Red Bull, British American Tobacco, Japan Tobacco, and Imperial Tobacco. Heydarov has readily admitted to visiting U.S. delegations that he owns and operates the Caspian Fish Company which controls the lucrative (and previously Russian Mafia-controlled) Beluga Caviar production in Azerbaijan.

¶11. (S) The Heydarovs are also active in cultural endeavors. Kamaladdin Heydarov is a composer and has written a song about former President Heydar Aliyev that was sung by Azeri singer Aghadadash Aghayev. His wife is ethnic Korean, and he himself is quite the Koreaphile; he is President of the Azerbaijan Taekwondo Federation and owner of the recently opened high-end Korean restaurant “Shilla.” Korean diplomats have confirmed that Heydarov was the protector for several major business deals, but have complained that many of these deals have gone awry after the Korean firms refused to pay adequate patronage to Heydarov.

¶12. (C) Heydarov’s son Tale is the President of The European Azerbaijan Society (TEAS), and has made rounds to U.S. embassies in European capitals from his London base. The “society” purports to be an independent advocacy group, but its talking points very much reflect the goals and objectives of the GOAJ. In recent meetings, Tale and his cohorts have raised “Armenian aggression” in Nagorno-Karabakh and “double standards” of U.S. human rights and democracy reporting in the region, and complained about efforts of the U.S. Congress to provide humanitarian assistance within the Nagorno-Karabakh enclave. Tale and/or Nijat also own the Qabala Football Club — perhaps as a small-scale effort to replicate the Chelsea antics of Russia’s Roman Abramovich. The Qabala squad is a virtual United Nations team, with players from across Europe, Latin America and Africa — the best team money can buy, at least for central Azerbaijan. Both sons were educated in London and presently live there. Tale holds a B.A. in International Relations and History from the London School of Economics and an M.A. in Security and Global Governance from Birkbeck College, while Nijat holds a B.A. in Politics and East European Studies from University College London and an M.A. in Management, Organizations, and Governance from the London School of Economics. Some newspapers have reported that Tale might return to Baku to become a Member of Parliament later this year.

It’s Good to Be King
——————–

¶13. (C) The family’s influence is strongest in the regions of Qabala, Masalli, and Lenkeran. Postsuspects that Heydarov continues to control the tate Customs Committee and wield influence over the Ministry of Taxes, the Ministry of Ecology and Natural Resources, and Ministry of Economic Development, which is now led by a former Ministry of Taxes official. Additionally, of course, Heydarov profits significantly from widespread activities of the Ministry of Emergency Situations. That ministry, according to observers, may be the most sought after employer in official Baku, as Heydarov has made a reputation for paying salaries on time and in full. Employees benefit from perks of MES employment, such as the ability to enroll children in one of Baku’s best-looking and best-financed public schools. Measures like these, contacts report, create a loyal following for the minister among his minions.

Turf Wars: Don’t Cross Kamaladdin
———————————

¶14. (S) Embassy contacts note that Kamaladdin Heydarov is currently in a “fight over grain” with Minister of Agriculture Ismat Abbasov, and wants Abbasov replaced by Member of Parliament Eldar Ibrahimov. Historically, those who have fought with Heydarov have always fared poorly: Farhad Aliyev and Heydar Babayev were (in succession) driven out as Minister of Economic Development in part after falling on Heydarov’s bad side. Both were billed as reformers, and the economic reforms they were seen to propose stood to hurt Heydarov’s interests at the State Customs Committee and the Ministry of Emergency Situations. In addition, some opposition newspapers had begun to call them potential candidates for the position of Prime Minister. Feeling threatened by their reform activity and growing power, Heydarov allegedly put his foot down. Both were removed from government and their business interests were seriously damaged. Rumors circulated in 2009 that Heydarov may have even been behind the assassination of Air Force Chief and Deputy Defense Minister General Rail Rzayev. The rumors point to the widely-reported forced landing of Heydarov’s helicopter after it took off without obtaining flight clearance.

¶15. (U) The next issue of “Who Owns What” will profile the family of Ziya Mammadov, the Minister of Transportation. With so much of the nation’s oil wealth being poured into road construction, the Mammadovs also control a significant source of rent-seeking. His holdings extend to the buses that run throughout Baku. A recent television report asked if the Mammadovs controlled mysterious construction company ZQAN Holding; the reporter pointed out the letters of ZQAN matched the initials of father Ziya, mother Qanira, son Anar, and daughter Nigar. A ZQAN representative brushed this aside as innuendo.

LU

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PORTUGAL: ACTION REQUEST FOR GUIDANCE ON PROPOSAL TO ESTABLISH BANKING RELATIONSHIP WITH IRAN

Sunday, December 12th, 2010

ID     10LISBON66
SUBJECT     PORTUGAL: ACTION REQUEST FOR GUIDANCE ON PROPOSAL
DATE     2010-02-12 00:00:00
CLASSIFICATION     CONFIDENTIAL//NOFORN
ORIGIN     Embassy Lisbon
TEXT     C O N F I D E N T I A L SECTION 01 OF 03 LISBON 000066

NOFORN
SIPDIS

TREASURY FOR OFAC
DEPT FOR IO/PSC AND EEB/ESC
DEPT ALSO FOR NEA/IR

E.O. 12958: DECL: 02/11/2020
TAGS: PINR, ECON, EFIN, EUN, PGOV, PREL, IR, PO
SUBJECT: PORTUGAL: ACTION REQUEST FOR GUIDANCE ON PROPOSAL TO ESTABLISH BANKING RELATIONSHIP WITH IRAN

REF: A. LISBON 52
B. 09 LISBON 146

Classified By: XXXXXXXXXXXX for reasons 1.4(b,d).

1. (U) This is an action request. See para 12.

2. (C/NF) Summary: In April 2009, officials of Millennium BCP, Portugal’s leading private bank, visited Iran at the invitation of the Iranian Embassy in Lisbon and met with the Central Bank and other entities in the financial sector to discuss Iran’s interest in establishing a business relationship with Millennium. On February 5, Millennium Executive Board Chairman Carlos Santos Ferreira discussed the proposal with Poleconoff and its possible benefit to the USG.
While he claimed that the costs could outweigh the benefits to Millennium, Ferreira is willing to establish a relationship with Iran to help the USG track Iranian assets and financial activities. Millennium has consulted with the Bank of Portugal and senior government officials, and would like our views on its proposed relationship with Iran and Washington’s interest in tracking Iranian accounts in Portugal. We request Washington guidance; our recommendation is that Millennium not pursue the relationship. However, given that Ferreira may do so regardless of USG recommendations, it might be prudent to maintain open channels of communication with Ferreira. Post will track developments and discourage deeper relations with Iran. (See para 12.) End Summary.

3. (C/NF) On February 5, Poleconoff met with Carlos Santos Ferreira, Chairman of the Executive Board of Millennium BCP (formerly the Portuguese Commercial Bank), at the request of
Ferreira’s advisor who is a longtime contact of the Embassy.
Ferreira discussed a proposal by the Iranian banking sector to establish a relationship with Millennium to further trade and commercial opportunities. He noted that Iran has other options in Europe but may be interested in Portugal for its less restrictive regulatory environment. (Iran already has relations with various European banks, including HSBC, Deutsche Bank, Danske, and Banque Commercial de Placement.)
Ferreira insisted that while the costs of the Iranian proposal could outweigh the benefits to Millennium, the bank would be open to establishing a relationship with Iran in order to help the USG track the financial activities of the Iranian government.

4. (C/NF) Early last year, the Iranian Embassy in Lisbon contacted Ferreira, who had previous contact with that embassy while serving as Chairman of the Board of Directors of Oeiras Foundation (1987-1989), a state entity that he says sold munitions to Iran more than 20 years ago. Millennium Bank advised Prime Minister Socrates and senior government officials, including the governor of the Bank of Portugal (Portugal’s central bank), of Iran’s interest in establishing a relationship with Millennium and having Millennium officials visit Iran for meetings.

5. (C/NF) In April 2009, a few weeks after Portuguese MFA Political Director Nuno Brito was in Tehran (Ref B), two Millennium officials — Jose Joao Guilherme, member of the Executive Board of Directors who is responsible for the bank’s international portfolio, and Duarte Pitta Ferraz, Head of the International Affairs Unit — visited Iran for five days at the invitation of the Iranian Embassy in Lisbon.
They met with senior representatives of the Central Bank, seven banks (including three private banks), the Organization for Investment, Economic, and Technical Assistance of Iran
(OIETAI), and the Portuguese Embassy to discuss EU restrictions on Iran and potential business opportunities within those constraints. The banks expressed interest in establishing relations with Millennium in the traditional areas of trade and finance.

6. (C/NF) Based on the meetings and information provided by officials of the Iranian Central Bank and the Iranian Ministry of Finance and Economic Affairs, Millennium selected four priority banks for further consideration: the Export Development Bank of Iran (EDBI), Bank Tejarat, Bank Parsian, and EN Bank, which have SWIFT codes. The EU is currently restricted by UN sanctions from doing business with Melli Iran Bank and Saderat Iran Bank. According to Millennium officials, no other Iranian bank is subject to UN sanctions.

In 2008 Iranian deposits in European banks totaled USD 46.7 billion, while foreign deposits in Iran decreased by USD 2.5 billion. France maintained a significant account, with USD 5.4 billion in Iranian banks. Iranian exports totaled USD 106 billion (80 percent from oil), while imports totaled U=H.QAfrica, and the Middle East.
According to the report, EDBI told Millennium officials that Brazil is not overly concerned about respecting international sanctions since “independent countries can make independent
decisions.” (PROTECT)

8. (C/NF) Portugal has very few Iranian residents and very little trade with Iran. Portugal’s trade with Iran totals less than 40 million euros per year, while Iranian oil represents about 9 percent of Portugal’s oil imports. In January 2010, Brito told Under Secretary of State Burns that Portugal had no intention of furthering its economic relationship with Iran at this time. However, Portugal is keeping its options open for future investments (Ref A).

9. (C/NF) Millennium anticipates engaging in the following activities, which Ferreira insists are in compliance with EU banking laws and regulations and UN sanctions, if it were to agree to establish a relationsh/MQQ7#^QQQ are not currently on any sanctions list and in accordance with the condition above; (3) undertake transactions on behalf of Iranian credit institutions with additional monitoring and oversight mechanisms to prevent money laundering and terrorism finance; and (4) continue to conduct, on a case-by-case basis, operations of support to
client companies that export to Iran.

10. (U) Millennium BCP is Portugal’s leading private financial group and among the top 100 in the world, with listings on more than 40 national and international stock markets. It ranks second in Portugal in terms of market share, credit, and client assets. (As of December 2008, it had 2.6 million clients and an estimated 22 percent market share.) Founded in 1985 as the Portuguese Commercial Bank, it now boasts the largest presence in Portugal with 918 branches nationwide. It also has branches in the U.S., Europe and Africa, including Poland, Greece, Mozambique, Angola, Romania, SWITZERLAND, and Turkey. The Embassy has been a Millennium client since 1997. Despite the financial crisis and the weak Portuguese economy, the bank reported a 201 million euro profit in 2008. On February 10, it reported a 12-percent increase in net profit in 2009, with 225 million euros, helped by the sale of a nearly 50 percent stake in its Angolan subsidiary. The GOP’s state-run Caixa Geral de Depositos has a small stake (2.5 percent as of June 2009) in Millennium. A suspended member of the Millennium Executive Board of Directors is under investigation, along with other Portuguese political and business figures, for allegations of corruption and influence peddling in a private business deal, which does not involve the bank.

11. (U) Carlos Ferreira, Chairman of the Executive Board of Directors of Millennium since January 2008, has extensive experience in the banking industry. Previously, he served as Chairman of the Board of Caixa Geral de Depositos, Chairman of Caixa – Banco de Investimento, Chairman of Caixa Seguros, and Member of the Board of the Steering and Strategy Committee of Foment Invest, among other positions. He also served as Member of Parliament for the Socialist Party and Vice Chairman of the Parliamentary Committee on Security and
Health (1976-1977), member of the management board of state-owned Airports and Aerial Navigation (ANA), member of the Tax Reform Commission, and Chairman of the Board of
Directors of the Macau Airport Company. Born in Lisbon in 1949, Ferreira earned a law degree in 1971 from the Faculty of Law of Classical University of Lisbon and subsequently taught at his alma mater, as well as at the Faculty of Law at Portugal’s Catholic University and the Faculty of Economics at the New University of Lisbon (1977-1988). He is a close contact of the Embassy and an influential member of the Portuguese banking sector. His son will soon be moving to New York to work for Deloitte Touche.

12. (C/NF) POST RECOMMENDATION/GUIDANCE REQUEST: Ferreira told us he would be willing to allow the USG to monitor the Iranian accounts in Millennium in a manner to be mutually agreed upon, and he seeks our views on such an arrangement.
Post recommendation is that our basic response to Ferreira be that Millennium not pursue any relationship with any Iranian entities. However, it is quite possible that Millennium will
pursue the relationship regardless of USG recommendations.
Therefore, post recommends that we maintain open channels of communication with Ferreira in order to maintain some visibility on the Iranian accounts should Millennium go ahead and set them up. Post requests Washington guidance in responding to Ferreira’s proposal, as well as views on Millennium’s proposed relationship with Iran. While Ferreira did not explicitly say so, post believes that the Portuguese MFA is, at a minimum, aware of his approach to the Embassy.
Ferreira is open to further communication with post should Washington need more information. Embassy ORA has cleared this cable.

For more reporting from Embassy Lisbon and information about Portugal, please see our Intelink site:

http://www.intelink.sgov.gov/wiki/portal:portugal

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Schweizer Entwicklungshilfe fürs Volk und Drogenmillionen für die Elite

Thursday, December 9th, 2010

Die Führungsriege Mosambiks steckt tief in Drogenhandel und Geldwäscherei, berichtet ein US-Diplomat. Letztes Jahr weilte deren Kopf noch in der Schweiz und wurde von Doris Leuthard mit allen Ehren empfangen: Man feierte 30 Jahre Entwicklungshilfe. von Christian Bütikofer

Mosambiks Präsident Armando Emilio Guebuza verbrachte Mitte 2009 noch erfrischende Tage mit Bundesrätin Doris Leuthard in Kehrsatz – man feierte 30 Jahre Schweizer Entwicklungshilfe in Mosambik.

Jetzt sorgen Wikileaks-Enthüllungen für betretene Gesichter in der Entourage des Präsidenten. Die kompromitierenden Berichte von US-Diplomat Todd Chapman über Mosambiks Führungselite wanderten diesen Januar vertraulich nach Washington, jetzt sind sie im Netz.

Der Inhalt der Depeschen zeigt auch, mit was für einem Umfeld und entsprechenden Schwierigkeiten sich die Direktion für Entwicklung und Zusammenarbeit (Deza) jeweils arrangieren muss – schliesslich kann sich die Deza die Führungs-Riege in den jeweiligen Ländern nicht selbst aussuchen. Mosambik ist ein Schwerpunktland des Dezas und laut der Schweizer Botschaft in Maputo ein Erfolg.

US-Diplomat Chapman traf sich unter anderem mit einem langjährigen Geschäftsmann, der mit allen wichtigen Personen Mosambiks bekannt und befreundet ist.

Der Unternehmer will das Land für immer verlassen.

Grund: Die Führungscrew sei derart korrupt und kriminell, dass er dort nicht mehr länger normal arbeiten könne.

So kontrollierten Präsident Guebuza von der dominierenden Partei Frente da Libertação de Moçambique (FRELIMO) und Mohamed Bashir Suleiman praktisch alle legalen wie illegalen Geschäfte.

Die Quelle ist mit Präsident Guebuza seit über 20 Jahren befreundet. Nun bezeichnet er ihn als «bösartigen Skorpion, der einen sticht».

Befreiungsbewegung FRELIMO so korrupt wie nie

Die ehemalige kommunistische Befreiungsbewegung und jetzige Partei FRELIMO habe kein Interesse, das Leben der Mosambiker zu verbessern sondern es gehe vielmehr um hemmungslose Selbstbereicherung.

Mohamed Bashir Suleiman dominierte die Geldwäscherei und den Drogenhandel und fülle in Form von Kickbacks die Taschen der FRELIMO-Funktionäre. Ebenfalls in dieser Gesellschaft befinde sich Zoll-Chef Domingos Tivane und die ehemalige Premierministerin Luisa Diogo.

Ohne Präsident Guebuza läuft gar nichts

Präsident Guebuza sei in allen wichtigen Gremien vertreten, beteiligte sich entweder direkt oder indirekt an allen Grossprojekten und verdiene so jährlich hohe Millionensummen. Die Auflistung seiner Beteiligungen in den Depeschen füllen ganze Abschnitte.

Ein Beispiel für Guebuzas Geschäfte sei die Übernahme des Staudammprojekts Cahora Bassa gewesen: Mosambik übernahm von der Portugiesischen Regierung den Staudamm für 950 Millionen Dollar.

700 Millionen wurden durch ein privates Konsortium von Banken abgewickelt, den Deal fädelte ein Guebuza-Vertrauter ein. Dafür soll der damals schon amtierende Präsident 35 bis 50 Millionen Dollar als «Kommission» eingestrichen haben.

Drogenzar dank Polit-Kontakten unberührbar

Sein Kollege Mohamed Bashir Suleiman unterhalte zum Zweck der Geldwäscherei Büros in Dubai. Er sei der Drogenkönig Mosambiks und unterhalte direkten Kontakt zu Präsident Guebuza und dessen Vorgänger Joaquim Chissano.

Deshalb sei Suleiman «unberührbar», könne schalten und walten wie er wolle. Die Profite illegaler Geschäfte würden von ihm gleich wieder in legale Märkte investiert und anschliessend die Konkurrenz durch Preisdumping oder plumpe Drohung an die Wand gefahren.

Die zum Teil unverständlichen Veränderungen in Mosambiks Geldwechsel-Kurs hingen mit Geldwäscherei zusammen: Dann würden jeweils Multimillionen-Transfers mit diesem Ziel  getätigt.

Eine Quelle innerhalb der FRELIMO erwähnte dem US-Botschafter gegenüber, dass in einem derart armen Land wie Mosambik die Bedürfnisse der legalen Wirtschaft zu klein seien für die monmentan existierenden zehn Banken und 30 registrierten Wechselhäuser.

Schiffladungen voller Heroin am Strand

Die Quelle meldete peinliche Zwischenfälle: In der Vergangenheit seien ganze Schiffladungen voller Marihuana und Heroin an die Strände geschwemmt worden. Die lokalen Medien hätten aber meist Angst, darüber zu berichten. Kein Journalist wolle ein zweiter Carlos Cardoso werden.

Cardoso war ein mutiger investigativer Journalist, der 2000 ermordet wurde. Er war mitten in einer Recherche über einen massiven Bankbetrug, wo die Familie von Ex-Präsident Joaquim Chissano die Finger im Spiel hatte.

Drogen-Hafen im Besitz des Präsidenten

Kürzlich wechselte das Management des Hafens in Nacala. Angeblicher Besitzer: Die Insitec Ltd von Celso Correia. In Wirklichkeit ist er der Strohmann von Präsident Guebuza. Die Übernahme beunruhigt die Amerikaner deshalb, weil die Hafenbehörde seit Jahren tatenlos zusieht, wie dort Unmengen Drogen von Südostasien durchgeschleust werden.

Präsident Guebuza hat inzwischen ein neues Betätigungsfeld gefunden: Die Glücksspiel-Gesetze wurden massiv gelockert – ein weiteres Vehikel für Geldwäscherei, befürchtet US-Diplomat Todd Chapman.

Wikileaks-Depeschen: 10MAPUTO8610MAPUTO80,09MAPUTO71309MAPUTO1291

 

IMPORTANT DRUG TRAFFICKING TRANSIT POINT FOR EAST AFRICA

Wednesday, December 8th, 2010
ID 09MAPUTO1291
SUBJECT IMPORTANT DRUG TRAFFICKING TRANSIT POINT FOR EAST
DATE 2009-11-16 07:07:00
CLASSIFICATION SECRET
ORIGIN Embassy Maputo
TEXT S E C R E T SECTION 01 OF 02 MAPUTO 001291 

SIPDIS

E.O. 12958: DECL: 11/17/2019
TAGS: PGOV PREL KCOR SNAR MZ
SUBJECT: IMPORTANT DRUG TRAFFICKING TRANSIT POINT FOR EAST AFRICA

REF: STATE 105731

Classified By: Charge d’Affaires Todd C. Chapman for reasons 1.4 (b and
d)

¶1. (SBU) SUMMARY: Drug trafficking is a growing problem in Mozambique, with illegal drugs entering via air and sea routes from South Asia and South America. Porous borders, lack of law enforcement resources, and rampant corruption allow drug traffickers to freely transit the country. END SUMMARY

———- Air Routes ———-

¶2. (S) The primary route for cocaine is by air to Maputo from Brazil via Johannesburg, Lisbon or Luanda. On arrival passengers and baggage do not pass through immigration and customs, which allows them to avoid he improved security at the airports of origin. Drugs (mostly cocaine) are smuggled overland to South Africa for local South African consumption or onward to Europe. Cocaine is often smuggled by mules and/or in suitcases with hidden compartments. The drug traffickers routinely bribe Mozambique police, immigration and customs officials in order to get the drugs into the country. The decrease in drug related arrests at Maputo International Airport is not attributable to improved interdiction efforts but rather increased police and customs involvement in drug smuggling. A high level law enforcement official admits most police drug seizures are not reported to his office because traffickers and police make on-the-spot arrangements to allow the drugs to continue to flow. Police and customs officials routinely detain drug smugglers and are then bribed to release the smugglers and the drugs are confiscated and resold. Domingos Tivane, the Director of Customs, is directly involved in facilitating drug shipments. Tivane has amassed a personal fortune in excess of a million dollars, to include numerous investments around Mozambique.

———- Sea Routes ———-

¶3. (S) Transport by sea is the preferred route for hashish, mandrax and heroin shipments, often involving large quantities. Drugs come from Pakistan, Afghanistan and India. They are then loaded onto a vessel that sails to Dar Es-Salam, Tanzania, or Mombasa, Kenya. Drugs are often concealed in containers with legitimate goods and are often offloaded and sent via land to Mozambique. Alternatively, the vessel offloads its cargo in the Ports of Maputo, Beira and especially Nacala. Drugs are then smuggled overland to South Africa or onward via air, to the U.S. and Europe.

———————————– Two Main Drug Trafficking Networks ———————————–

¶4. (S) There are two large drug trafficking networks that operate in Mozambique. Both of these networks have ties to South East Asia. Mohamed Bashir Suleiman (MBS) is the head of a well financed organized crime and money laundering network centered on the family owned and managed business conglomerate Grupo MBS. Suleiman uses Grupo MBS and proxies like Rassul Trading, run by Ghulam Rassul, and Niza Group, owned by the Ayoub family, to smuggle drugs from Pakistan via Dubai in containers carrying televisions, electrical equipment, cooking oil and automobiles. The Suleiman family has connections in South Africa, Somalia, Pakistan, Latin America and Portugal, and maintains a complex structure of businesses with a wide variety of commercial activities that serve as a cover for a multitude of illegal activities. Suleiman has a close relationship with former President of Mozambique Joaquim Chissano and current President Armando Guebuza, and enjoys ties to senior level Mozambican officials, including the Direct or of Customs, Tivane. Grupo MBS and the Suleiman family reportedly have connections in the Ibrahim Dawood international drug syndicate.

¶5. (S) Ghulam Rassul Moti is a Mozambique based ethnic South Asian narcotics trafficker who has smuggled hashish and heroin in the Nampula province of Northern Mozambique since at least 1993. He has been linked to several prominent international narcotics traffickers and uses these relationships and his political influence to avoid customs and police inspections at the seaports and borders. Moti owns Rassul Trading Co. and Grupo ARJ which are major narcotics importers in Nacala, and suspected in the trafficking of persons, mainly Pakistanis. Post is also seeing increased cooperation between West and East African based narcotics networks with Mozambique drug networks. The main drug organizations are rumored to support extremist Islamist elements in Mozambique.

——————————————— —- Corruption of Senior Level Government Officials ——————————————— —-

¶6. (S) A porous border, lack of resources for law enforcement as well as endemic corruption among Mozambique’s senior level officials leads to a situation where drug traffickers are able to freely transit the country. Mid-level Mozambican officials are afraid to go after people involved in the major drug networks because they know they have connections to senior level government officials. Senior members of the ruling FRELIMO party are seeking to hide the level of corruption from the press, the electorate and the international donor community. As a high level law enforcement official also said recently in private, ‘Some fish are too big to catch.’

CHAPMAN

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http://www.wikileaks.ch/cable/2009/11/09MAPUTO1291.html

RISING CONCERNS ABOUT NARCOTRAFFICKING AND MONEY LAUNDERING IN MOZAMBIQUE

Wednesday, December 8th, 2010
ID
09MAPUTO713
SUBJECT
RISING CONCERNS ABOUT NARCOTRAFFICKING AND MONEY
DATE
2009-07-01 04:04:00
CLASSIFICATION
SECRET//NOFORN
ORIGIN
Embassy Maputo
TEXT
S E C R E T SECTION 01 OF 03 MAPUTO 000713 

SIPDIS
NOFORN

E.O. 12958: DECL: 06/25/2019
TAGS: SNAR EFIN KCOR PTER PGOV PREL MZ
SUBJECT: RISING CONCERNS ABOUT NARCOTRAFFICKING AND MONEY LAUNDERING IN MOZAMBIQUE

REF: A. 08 MAPUTO 1228
¶B. 08 MAPUTO 1098

Classified By: Charge d’Affaires Todd C.Chapman, Reasons 1.4(b+d)

¶1. (S/NF) Summary: Large-scale narcotics shipments pass through Mozambique, taking advantage of a vast and lightly guarded coastline. Money laundering may be increasing. Narcotraffickers in the country have connections to South Asia, and some appear to have links to the ruling Frelimo party and the GRM. Using Department of State INL funds, the Embassy has led a successful border security program with the Portuguese Embassy that has resulted in the seizure of narcotics. The mission has also provided support via DoD and Treasury, and directed counternarcotic assessments by the Africa Command, LegAtt, and DEA. While not a thoroughly-corrupted narco-state, the trends in Mozambique suggest cause for concern unless the GRM takes quick action to address these growing problems. End Summary.

——————————- Large Scale Narcotics Shipments ——————————-

¶2. (S/NF) In a series of investigative reports late last year, Mozambique newsweekly Zambeze claimed Mozambique was considered by some estimates to be the second largest drug transit country in Africa after Guinea-Bissau. XXXXXXXXXXXXRecent incidents suggest that larger amounts of narcotics are indeed passing through the country, taking advantage of a coastline twice the length of California’s with minimal control. Long-time commentator on Mozambique Joseph Hanlon publicly declared in May that the value of illicit drugs passing through the country probably surpasses combined legal external trade. In mid-May, police seized $5 million in heroin at the Ressano Garcia-Lebombo border with South Africa. In mid-June, police destroyed 7,000 liters of precursor chemicals discovered at the port of Maputo from China en route to South Africa; the United Nations Office of Drug Control indicates that this port is heavily used to import chemicals used for meth production. XXXXXXXXXXXXhave described to P/E chief how Pakistani-owned trucking companies based in Sofala province over-declare imports at the Beira port as one way to hide the quantities of drugs coming into the country. Early on June 20, police discovered about one ton of hashish at Chongouene beach in Gaza province after receiving calls from local fishermen about suspicious vehicle movements in the area.

————————————- Signs of Money Laundering Proliferate ————————————-

¶3. (S/NF) A source inside the Frelimo party recently told the Embassy that Mozambique, with ten banks and thirty legally-registered exchange houses, has significantly more financial institutions than the market in such an impoverished country should be able to support with legitimate business. He also observed that 1500 construction projects are currently underway in Maputo–most financed with cash and mostly in real estate, and noted that it was unusual that housing prices in Maputo are increasing in spite of the world financial crisis. Separately, Hanlon indicates that the rapid growth in Mozambique’s stock market is suspect, as the value of stocks listed on the exchange is predicted to reach $100 million within two years of opening. Finally, lax regulation of casinos has raised concern by local radio and TV commentators about that sector’s role in money laundering.

————————— Criminal Ties to South Asia —————————

¶4. (S/NF) A USAID report issued in 2006 notes that commerce in Maputo depends on the financial acumen of a small number of Muslims of South Asian-descent who contribute generously to the FRELIMO party. A major contributor to former President Chissano and President Guebuza from this community, who resides less than a hundred meters from the Presidential Compound, Mohamed Bashir Suleman (MBS), is the owner of the commercial MBS Group. Contacts at all levels have advised Emboffs that MBS is a known large-scale narco-trafficker. They indicate that MBS uses his FRELIMO party connections, as well as his shopping mall, supermarkets, and hotels to import narcotics and launder money without official scrutiny. Other South Asian businessmen with ties to FRELIMO also operate a vast network of loosely-regulated money changing houses, which reportedly maintain financial ties with more radical organizations in Pakistan and elsewhere.

¶5. (S/NF) A business contact recently shared with P/E chief a copy of a letter from Mozambique’s Chamber of Business Associations (CTA) to the Prime Minister, expressing concern about one company selling imported vegetable oils at prices clearly below cost, noting that this type of price dumping could result in the withdrawal from the market of other companies and ultimately a monopoly to form. The contact said that the letter was in response to efforts by the MBS Group to consolidate control of this sector–but in reality the message had nothing to do with vegetable oil–rather, it was a veiled warning from the business community to the government that MBS Group’s use of vegetable oil to cover the import of illicit drugs was so brazen that it was no longer tolerable.

———————————— Narcotrafficking Connections in GRM? ————————————

¶6. (S/NF) The Frelimo source also told the Charge that MBS Group regularly uses phantom imports to launder money, and indicated that MBS and another immigrant, Ahmed Gassan (owner of the Home Center Furniture store) collude with the GRM’s head of customs (who he called “the King of Corruption”) to reduce scrutiny on imports. The source also indicated that Gassan’s business interests are personally protected by Minister of Planning and Development Aiuba Cuereneia.

——————————————— ———- USG Border Security, OTA, DoD Support, Other Assessments ——————————————— ———-

¶7. (C) Using Department of State INL bureau funds, the Embassy has a highly-successful joint project with the Embassy of Portugal to provide training for GRM border guards. With a very small investment of less than $200,000, this program has led to the seizure of $2.5 million in cash and the arrest of two Pakistani smugglers (ref B). While the program was denied funding in FY09, it may receive support again in FY10. Mozambique’s Tax Authority (AT) has garnered a reputation for honesty and transparency, and the AT’s director has publicly criticized the head of Customs about smuggling concerns. Via the Department of Treasury’s Office of Technical Assistance, the USG is providing training and capacity building to the AT, and is reviewing ways to specifically support the AT’s Financial Intelligence Unit. DoD provided maritime training, small boats , and coastal monitoring systems to the FADM and more of this type of support is programmed for the future. Finally, at the request of the Embassy, Africa Command, DEA, Treasury and LegAtt representatives visited Maputo in early June to conduct a joint assessment of the drug trafficking problem and the GRM’s capabilities. Initial findings validated the pervasiveness of the problem and identified the institutional weakness and level of corruption of Mozambican law enforcement agencies as core problems inhibiting a coherent government response.

¶8. (SBU) At the most recent mini-Dublin meeting chaired in late-May by the Portuguese Embassy, representatives from the Dutch, British and German embassies specifically pointed out weaknesses in the GRM’s enforcement activities, highlighting that concerns are widespread in the international community. These concerns were quickly borne out, as in a presentation at the meeting, a representative of the GRM’s Inter-agency Working Group on Narcotrafficking focused entirely on domestic consumption and addressing the health needs of local drug addicts.

——————————————— ———– Comment: Not Thoroughly-Corrupted, but Cause for Concern ——————————————— ———–

¶9. (S/NF) Mozambique most certainly is not yet a thoroughly-corrupted narco-state. However, it is becoming increasingly clear that the magnitude of the drug shipments passing through Mozambique may be on a much larger scale than previously understood, taking advantage of the country’s long and unprotected coast and the facility with which port and customs officials can be bribed. Money laundering, related government corruption (possibly even official support), and ties to South Asia mean that the problem has the potential to get much worse. While the mission has made initial steps to bring USG resources to bear, the road ahead will require a comprehensive and coordinated effort by the international community to staunch the flow of drugs, not to mention strengthen the political will of the GRM to take concrete action.

CHAPMAN

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http://www.wikileaks.ch/cable/2009/07/09MAPUTO713.html

NARCOTRAFFICKING ON UPSWING, CONCERNS ABOUT GOVERNMENT CONNECTIONS

Wednesday, December 8th, 2010
ID
10MAPUTO80
SUBJECT
NARCOTRAFFICKING ON UPSWING, CONCERNS ABOUT
DATE
2010-01-25 11:11:00
CLASSIFICATION
SECRET//NOFORN
ORIGIN
Embassy Maputo
TEXT
S E C R E T SECTION 01 OF 02 MAPUTO 000080

NOFORN
SIPDIS

E.O. 12958: DECL: 09/28/2019
TAGS: PGOV PREL KCOR SNAR MZ
SUBJECT: NARCOTRAFFICKING ON UPSWING, CONCERNS ABOUT
GOVERNMENT CONNECTIONS

REF: A. 09 MAPUTO 1309
¶B. 09 MAPUTO 1291
¶C. 09 MAPUTO 713
¶D. 08 MAPUTO 1228
¶E. 08 MAPUTO 1098

Classified By: Charge d’Affaires Todd Chapman for reasons 1.4 (b+d)

¶1. (S/NF) SUMMARY: Mozambique has been called the second most active narcotics transit point in Africa after Guinea Bissau (Ref C). Despite anti-corruption rhetoric, the ruling FRELIMO party has not shown much serious political will to combat narcotrafficking. Mohamed Bashir Suleman (MBS), described as the largest narcotrafficker in Mozambique, has direct ties to President Guebuza and former President Chissano. Other traffickers bribe both high and low level officials. Chief of Customs Domingos Tivane is a significant recipient of these narcotrafficking-related bribes. Police officials told Embassy officers that they are unwilling to go after “big fish” narcotraffickers because of their ties to senior officials. The Ministries of Interior and Finance have recently back-pedaled on U.S. efforts to engage and assist in narcotrafficking and money laundering, a significant associated problem. The management of the port of Nacala, infamous for allowing the flow of drug transshipments from southwest Asia, was recently taken over by Celso Correia, principal of Insitec, Ltd, a Guebuza front company. A new casino law reduces gambling restrictions in Mozambique, providing another avenue for money laundering. U.S. support to Border Security and the Mozambican military (FADM) has resulted in modest seizures of money and drugs. Post looks forward to an upcoming INL visit to help elaborate a comprehensive counter-narcotics trafficking (CNT) strategy. Any such CNT strategy, after first gauging political will which at this point is suspect, should consider the strengthening of land and maritime border security, professionalization of the police force, educational programming for prosecutors on Mozambican CNT laws already in place, and development of a financial intelligence capability. END SUMMARY.

——————————————– NARCOTRAFFICKERS BLANDISHING GRM AND FRELIMO ——————————————–

¶2. (S/NF) Mohamed Bashir Suleman (MBS), described by multiple contacts as the largest narcotrafficker in Mozambique, contributes heavily to FRELIMO’s coffers, and has provided significant financial backing to the campaigns of former President Joaquim Chissano and current President Armando Guebuza. (Note: See TD-314/085221-09 regarding written communication from the Office of the Presidency directing certain containers be exempted from standard scanning and scrutiny at the Port of Maputo. End Note.) Traffickers, including MBS, Gulam Rassul, and the Ayoub Family (Ref A) routinely bribe police, immigration and customs officials to ensure that drugs can enter the country. Domingos Tivane, Chief of the Customs Service, is a significant recipient of bribes from narcotraffickers (Ref B), and he recently purchased real estate in Maputo valued at well beyond what his government salary should be able to afford.

—————————————— POLICE UNWILLING TO PURSUE MANY DRUG CASES ——————————————

¶4. (S/NF) Senior members of the Mozambican Police (PRM) have told Emboffs that potential CNT training would only help them with small-scale traffickers, while other “big fish” would remain too large to catch. Of the more than ten cocaine and heroin seizures in 2009 at the Maputo airport, none have resulted in prosecutions. A senior law enforcement official has admitted to Emboffs that most drug seizures are not made public and not prosecuted because police and customs officials use such seizures to enrich themselves. Such officials extract bribes, and may retain the drugs seized for resale. Despite repeated requests, the Minister of Interior (charged with overall responsibility for police and for counter-narcotics) has refused to meet with the CDA to discuss increased joint CNT efforts. The GRM recently raised objections to an offer for a U.S. Department of Treasury official to be embedded into the Financial Crimes Unit, after initially agreeing to and supporting the offer.

——————————————— PROVINCIAL PORTS ATTRACTIVE FOR DRUG TRANSITS ———————————————

¶5. (S/NF) The port of Nacala in particular is believed to be a major recipient of narcotics from Southwest Asia. In July 2009, Celso Correia, who is a principal in Insitec, Ltd, (a company whose major shareholder is President Armando Guebuza-septel), was installed as head of the Northern Development Corridor (CDN) which includes the port of Nacala and the northern rail network. Shortly thereafter, Ghulam Rassul Moti, who has smuggled hashish and heroin into northern Mozambique since at least 1993 (Ref B) greatly reduced bribes to local Nacala and Nampula municipal authorities and made the payments instead directly to senior FRELIMO officials. Nampula Mayor Castro Serafim was reported to be particularly irritated that these monthly payments had been re-routed straight to higher-level FRELIMO leaders.

——————————– NEW CASINO LAW CAUSE FOR CONCERN ——————————–

¶6. (S) In January, President Guebuza signed into law a new “Casino Bill.” Passed by the National Assembly (AR) in June 2009, the law relaxes restrictions on gambling in Mozambique, reducing the minimum investment for a casino from $15 to $8 million, legalizing online gambling, and allowing slot machines to be positioned in otherwise non-gambling environments. The law also passes financial control of casinos from the Ministry of Finance to the less rigorous Ministry of Tourism. This bill was passed to encourage tourism; however, given Mozambique’s minimal financial controls, the law will effectively reduce the barriers to narcotraffickers looking to launder funds. Nazir Lunat, a FRELIMO parliamentarian and influential imam in Maputo, recently resigned from his position in the National Assembly (AR) because of concerns over the law allowing casino liberalizations.

————————————- USG SUPPORT HAS HAD POSITIVE OUTCOMES ————————————-

¶7. (S) With USG support, there has been some progress in combating drug trafficking. Using INL funds, Embassy Maputo, working with the Embassy of Portugal, provided training to border guards which resulted in the seizure of U.S. $2.5 million in cash and the arrest of two Pakistani smugglers (Ref E). In mid-May 2009 police seized U.S. $5 million in heroin at the Ressano Garcia border crossing into South Africa. Employing 7-meter, rigid hull inflatable boats donated by the DoD using Section 1206 funds, the Mozambican navy has interdicted several drug shipments near the coast, most recently in December.

—————————————— COMMENT: COMPREHENSIVE CNT STRATEGY NEEDED ——————————————

¶8. (S) Post looks forward to an upcoming INL visit to help elaborate a comprehensive CNT strategy. USG interests in CNT in Mozambique involve multiple USG departments, including State, DoD, DoJ, DHS, and Treasury. Our CNT strategy must first address ways to strengthen the GRM’s political will to address narcotrafficking, while preparing Mozambique with a host of programs, to include strengthening of land and maritime border security, professionalization of the police force, educational programming for prosecutors on Mozambican CNT laws already in place, and development of a financial intelligence capability.

 

 

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http://www.wikileaks.ch/cable/2010/01/10MAPUTO80.html

XXXXXXXXXXXX TALKS OF CORRUPTION AT THE HIGHEST LEVELS OF GOVERNMENT

Wednesday, December 8th, 2010
ID
10MAPUTO86
SUBJECT
XXXXXXXXXXXX TALKS OF CORRUPTION AT THE
DATE
2010-01-28 06:06:00
CLASSIFICATION
SECRET//NOFORN
ORIGIN
Embassy Maputo
TEXT
S E C R E T SECTION 01 OF 03 MAPUTO 000086 

NOFORN
SIPDIS

E.O. 12958: DECL: 01/28/2020
TAGS: PREL PGOV KDEM KMCA MCC SNAR EINV MZ
SUBJECT: XXXXXXXXXXXX TALKS OF CORRUPTION AT THE
HIGHEST LEVELS OF GOVERNMENT

REF: A. MAPUTO 80
¶B. 07 MAPUTO 1395

MAPUTO 00000086 001.2 OF 003

Classified By: Charge d’Affaires Todd Chapman for reasons 1.4 (b+d)

¶1. (S/NF) SUMMARY: The Charge recently met with XXXXXXXXXXXX–(“the source”) who described his frustrations with FRELIMO, PresidentGuebuza, and Mohamed Bashir Suleiman (MBS). He complained thatthey exercise complete control over the licit and illicit economy of Mozambique. The source, who has excellent connections within the Government of Mozambique (GRM), including the private numberof the President, as well as a personal relationship with MBS,said “I do not want to do business anymore in Mozambique“ because of this triumverate of control. He is liquidating hisassets and leaving Mozambique, and says that he now seesthe “malaise” in Mozambique as if “he had cataractsbut now see it all.”

¶2. (S/NF) The source describes President Guebuza, who he has known and befriended for the past twenty years as a “vicious scorpion who will sting you,” and has an even more grav assessment of MBS. He cautions that FRELIMO is not interested in bettering the life of Mozambique’s citizens, but rather its self-enrichment. In the licit economy, the ruling party, FRELIMO, and MBS work in tandem to control the legal and illegal economies and restrict the space for private sector growth by demanding a cut of all significant business transactions. In the illicit economy, MBS dominates money laundering and drug transshipment, providing kickbacks to FRELIMO. Other key players involved in pressuring the business community for bribes or percentage stakes, according to the source, are Domingos Tivane, head of Customs, and former Prime Minister Luisa Diogo. END SUMMARY.

———————————– MOHAMED BASHIR SULEIMAN AND GUEBUZA ———————————–

¶3. (S/NF) The source XXXXXXXXXXXX. He speculated that over the next term Guebuza would use his business proxiesto amass a still larger personal fortune. Guebuza manages his business interests through several front companies, including Celso Ismael Correia’s Insitec and Salimo Abdullah’s Intelec Holdings. The source said that MBS meets directly with President Guebuza, who has direct knowledge of MBS’ funding to both the FRELIMO party (underwriting the recent election campaign) and Guebuza’s front companies. The source, who described Correia as a “30 year-old pipsqueak,” stated that Correia has no business experience or university degree, but shows great loyalty to Guebuza.

¶4. (C) Guebuza’s business interests in Mozambique are legion. They include stakes in Mocambique Gestores (MG), Maputo Port Development Company (MPDC) which runs Maputo Port, Focus 21, Navique, Vodacom, and SASOL. Guebuza also has a share in Maputo Corridor Logistics Initiative (MCLI) which controls the toll road from Maputo to South Africa, according to the source. Guebuza has shares in a significant number of banks, including BCI Fomento (where Correia is Chairman), Mocambique Capitais, Moza Banco, and Geocapital. Through family members, Guebuza also controls Intelec Business Advisory and Consulting, Beira Grain Terminal, MBT Construction Ltd, Englob Consultants Ltd, Mozambique Power Industries, Macequece Ltd, and Mozambique Natural Resources Corp.

¶5. (S/NF) One new area that Guebuza appears to be interested in is the gaming industry. The source says that Guebuza forced the Constitutional Council (CC) to review and declare a recent law liberalizing the gaming industry as “constitutional” even though it calls for all casino assets to revert to the state after a defined period of time, in direct contravention of private property laws enshrined in the Constitution. The judges of the CC, who also ruled in favor of decisions during the elections to invalidate large numbers of opposition candidates in the legislative and presidential races, complained of the unconstitutionality of the new law, but were told to give it a favorable ruling, which they did.

¶6. (S/NF) The source elaborated on the depth of Guebuza’s business interests, which range across the economy. He said that Guebuza is in on almost all of the “mega-project” multi-million dollar deals via contractual stipulations to work with the Mozambican private sector. One example is Guebuza’s involvement in the 2007 purchase of Cahora Bassa Hydroelectric Dam (HCB) from the Portuguese Government for $950 million. $700 million of this was paid by a private consortium of banks, which was arranged by a Guebuza proxy, for which Guebuza received, while he was a sitting president, an estimated commission of between $35 and $50 million. The Portuguese bank which arranged the financing turned over its shares in BCI Fomento, one of the largest Mozambican commercial banks, to a Guebuza-controlled company.

————— MBS AND FRELIMO —————

¶7. (S/NF) The source, says that FRELIMO brazenly squeezes the business community for kickbacks. As an example, the source said that he has personally seen Manuel Tome, former FRELIMO Secretary General, senior member of the National Assembly, and relative of President Chissano, in MBS’ office receiving pay-offs quite openly. Head of Customs Domingos Tivane openly demands and receives payoffs from importers, including MBS. The source stated that one business contact remarked to him that when visiting Tivane’s expansive home to deliver a bribe he noticed that the bureaucrat had solid gold fixtures in his bathroom. The source also stated that former Prime Minister Luisa Diogo, until she was removed from the Cabinet (septel), was heavily involved in taking bribes for FRELIMO, of which she kept a percentage. Similar allegations were raised in the 21 January issue of Zambeze, regarding soft loans paid to Diogo’s husband Albano Silva, purchases of houses and buildings for a fraction of their value, as well as Diogo’s close ties to officials such as Diodino Cambaza, whose corruption trial is ongoing.

¶8. (S/NF) At the ports, the source commented that FRELIMO has its own clearing agent that handles FRELIMO and MBS business. The clearing agent chronically under-invoices items, avoids the 17% VAT, and also has an arrangement with Tivane’s Customs authorities to bypass the ports’ mandatory scanning. The source has documentary proof of the under-invoicing by MBS, and poloff has seen MBS’ trucks drive through the port without being scanned. Nonetheless, the source said that Government of Mozambique (GRM) officials routinely describe MBS as an “untouchable” due to his connections to Tivane and Guebuza, a situation which is reported to irk a cash-strapped Tax Authority (AT) President Rosario Fernandes.

————————- MBS AND OTHER BUSINESSMEN ————————-

¶9. (S/NF) Regarding MBS’ retail operation, the source states that MBS does not tolerate competition. The source’s milk processing facility was threatened by MBS who used VAT-avoidance and under-invoicing to dump vast quantities of imported condensed milk on the market in order to put the source out of business. Only after the source made an agreement with MBS for exclusive distribution of his milk products, with a 10% kickback on all sales to MBS, did MBS stop his dumping practices. Other businessmen have complained about similar practices in other commodities to include edible oil. The source complained that “even those who bribe” MBS or FRELIMO cannot make a profit under such conditions.

—————————— NARCOTICS AND MONEY LAUNDERING ——————————

¶10. (S/NF) The source says he only has second hand knowledge of drug trafficking and money laundering in Mozambique. He said that “MBS and the ‘Nacala dealers’ all have offices in Dubai” to facilitate money laundering operations in Mozambique. It is through these operations that after 15 years in business in Mozambique, MBS was able to pay $30 million in cash to establish his shopping plaza downtown, Maputo Shopping, which opened in 2007. The source said that he asked prominent Ismaili/Aga Khan businessman Mustaque Ali how MBS became so rich so fast, and Ali’s wry answer was “Johnson’s baby powder,” a euphemism for drugs. The source noted that the sometimes erratic changes in Mozambique’s foreign exchange position are due to sudden multi-million dollar transfers of cash overseas tied to money laundering. The source commented that in the past few years there have been several embarrassing situations in which shiploads of drugs, primarily hashish and heroin have washed ashore; however, the media is usually afraid to report on such incidents because no one wants to become another Carlos Cardoso, the courageous Mozambican journalist who was murdered in 2000 while investigating a massive bank fraud tied to then-President Chissano’s family.

——————————————— COMMENT: CANDID COMMENTS FROM A CONNECTED MAN ———————————————

¶11. (S/NF) The source, XXXXXXXXXXXX While he has an axe to grind because he is frustrated with the scope and depth of corruption in Mozambique, his statements corroborate what we have learned from other sources (Ref A). Ties with MBS and other known money launders and narcotraffickers by senior GRM officials are disturbing and demonstrate a short-sighted focus on self-enrichment. The source cautions against building long term relationships with FRELIMO, and fears that, having allowed the illicit economy to prosper, and having advertised Mozambique as a money laundering destination and drug transshipment hotspot, the ruling party will no longer be able to control the nefarious activities within its borders. Rumors and stories of corruption abound in Mozambique, but rarely will a successful well-connected XXXXXXXXXXXX be willing to share specific practices based on first-hand knowledge and participation in these practices.

CHAPMAN

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http://www.wikileaks.ch/cable/2010/01/10MAPUTO86.html

Nie mehr Wikileaks-Server suchen

Tuesday, December 7th, 2010

Ein Klick aufs Wikileaks-Logo und man wird immer zum nächsten Server weitergeleitet, der die geleakten Dokumente beherbergt.

Hintergrund: Die Wikileaks-Server werden momentan von verschiedenen Ländern zum Verschwinden gebracht. Ein Zensurversuch, der so im Internet zwar nicht einmalig, in seiner Grösse aber neu ist.

Die Aktion startete die deutsche linke Tageszeitung «Taz». Mehr dazu hier.

WikiLeaks

Und wenn wir schon dabei sind:


SPAIN DETAILS ITS STRATEGY TO COMBAT THE RUSSIAN MAFIA

Tuesday, December 7th, 2010

ID     10MADRID154
SUBJECT     SPAIN DETAILS ITS STRATEGY TO COMBAT THE RUSSIAN MAFIA
DATE     2010-02-08 00:00:00
CLASSIFICATION     SECRET//NOFORN
ORIGIN     Embassy Madrid
TEXT     S E C R E T SECTION 01 OF 05 MADRID 000154

NOFORN

SIPDIS

DEPARTMENT FOR EUR/WE (ALEX MCKNIGHT, STACIE ZERDECKI),
EUR/ERA (ALESSANDRO NARDI), INR/TNC (JENNIFER MCELVEEN,
STEPHEN WOROBEC), INL (ELIZABETH VERVILLE, SCOTT HARRIS), L
(KEN PROPP),
EMBASSY MOSCOW (THOMAS FIRESTONE)
DEPARTMENT PASS TO NSC (GREG GATJANIS)
DEPARTMENT PASS TO ODNI/NIC (JOHN REGAS, MAT BURROWS)
DEPARTMENT PASS TO FBI (BARRY M. BRAUN,KAREN GREENAWAY)
DEPARTMENT PASS TO DOJ (BRUCE SWARTZ, TOM OTT, BRUCE OHR,
LISA HOLTYN)
DEPARTMENT PASS TO TREASURY/OFFICE OF TERRORISM AND
FINANCIAL INTELLIGENCE (BOB WERNER)
EO 12958 DECL: 02/08/2035
TAGS KJUS, KHLS, PGOV, PREL, PTER, SP, PINS, KCOR, PINR,
XH, RS
SUBJECT: SPAIN DETAILS ITS STRATEGY TO COMBAT THE RUSSIAN MAFIA
REF: A. MADRID 76 B. 09 MADRID 869 C. 09 MADRID 870 D. 09 MADRID 1003
MADRID 00000154 001.2 OF 005

Classified By: POLCOUNS William H. Duncan for reasons 1.4 (b) and (d)

1. (C) SUMMARY AND COMMENT: National Court Prosecutor Jose “Pepe” Grinda Gonzalez on January 14 gave a detailed, frank assessment of the activities and reach of organized crime (OC) in both Eurasia and Spain and Spain’s strategy for how best to combat it in court. As he did so, he evaluated the levels of cooperation that Spain receives from numerous countries. Grinda presented his remarks on January 13 at the new US-Spain Counter-Terrorism and Organized Crime Experts Working Group meeting in Madrid (See Ref A). He provided a 17-page, English-language handout entitled, “The Organized Crime and the Russian Mafia”, which he used as the basis for his remarks, which were more explicit than the document is. (NOTE: Post will send a copy of the handout to interested parties.) Grinda’s comments are insightful and valuable, given his in-depth knowledge of the Eurasian mafia and his key role in Spain’s pioneering efforts to bring Eurasian mafia leaders to justice. END SUMMARY AND COMMENT.

//Bio Info//

2. (S//NF) Grinda, a Special Prosecutor for Corruption and Organized Crime, in early December wrapped up his prosecution of the alleged OC network led by Zahkar Kalashov, the Georgian-born, Russian citizen who allegedly is a “vor v zakone”, a “Thief in Law”, the highest echelon of Russian OC leadership) and reportedly the most senior Russian mafia figure jailed outside Russia. The defendants were arrested as part of Operation Avispa (see Refs B and C). A verdict is expected by early February, according to Belen Suarez, Deputy Prosecutor for Corruption and Organized Crime and one of Grinda’s superiors. Grinda is known to Post’s Legat Office as a skilled and rigorous professional with deep subject matter expertise. He is forward-leaning in his cooperation with the USG and grateful for USG assistance. His work places him under considerable stress, which make him suspicious of penetration attempts by intelligence services and causes him to have heightened sensitivities regarding his physical security. Grinda also will be the prosecutor in the trial for those arrested in Operation Troika (See Refs B and C).

//Nomenclature//

3. (C) Grinda’s was the first presentation at the January 13 meeting and his candor set the tone for an open exchange of ideas and information. He began by urging those present to speak frankly with each other in this closed door session. He said that what we are confronting is the “Russian mafia” even if the term “Eurasian mafia” is more socially acceptable and what the Russians certainly prefer. He acknowledged that the term Russian mafia can be a misnomer since these criminal groups sometimes involve Ukrainians, Georgians, Belarusians or Chechens. He nevertheless questioned the stigma surrounding the phrase “Russian mafia” and noted it is acceptable to say “Sicilian mafia”.

4. (C//NF) Grinda stated that he considers Belarus, Chechnya and Russia to be virtual “mafia states” and said that Ukraine is going to be one. For each of those countries, he alleged, one cannot differentiate between the activities of the government and OC groups.

//Identifying The Scope of The Threat the Russian Mafia Poses//

5. (C) Grinda suggested that there are two reasons to worry about the Russian mafia. First, it exercises “tremendous control” over certain strategic sectors of the global economy, such as aluminum. He made a passing remark that the USG has a strategic problem in that the Russian mafia is suspected of having a sizable investment in XXXXXXXXXXXX

6. (S//NF) The second reason is the unanswered question regarding the extent to which Russian PM Putin is implicated in the Russian mafia and whether he controls the mafia’s actions. Grinda cited a “thesis” by Alexander Litvinenko, the former Russian intelligence official who worked on OC issues before he died in late 2006 in London from poisoning under mysterious circumstances, that the Russian intelligence and security services – Grinda cited the Federal Security Service (FSB), the Foreign Intelligence Service (SVR), and military intelligence (GRU) – control OC in Russia. Grinda stated that he believes this thesis is accurate.

(COMMENT: See Ref B on a reported meeting between Litvinenko and the Spanish security services shortly before his death.) Grinda said that he believes the FSB is “absorbing” the Russian mafia but they can also “eliminate” them in two ways: by killing OC leaders who do not do what the security services want them to do or by putting them behind bars to eliminate them as a competitor for influence. The crimelords can also be put in jail for their own protection.

7. (S//NF) Grinda said that according to information he has received from intelligence services, witnesses and phone taps, certain political parties in Russia operate “hand in hand” with OC. For example, he argued that the Liberal Democratic Party (LDP) was created by the KGB and its successor, the SVR, and is home to many serious criminals. Grinda further alleged that there are proven ties between the Russian political parties, organized crime and arms trafficking. Without elaborating, he cited the strange case of the “Arctic Sea” ship in mid-2009 as “a clear example” of arms trafficking.

8. (S//NF) Grinda said what he has read from 10-12 years’s worth of investigations on OC has led him to believe that whereas terrorists aim to substitute the essence of the state itself, OC seeks to be a complement to state structures. He summarized his views by asserting that the GOR’s strategy is to use OC groups to do whatever the GOR cannot acceptably do as a government. As an example, he cited Kalashov, whom he said worked for Russian military intelligence to sell weapons to the Kurds to destabilize Turkey. Grinda claimed that the GOR takes the relationship with OC leaders even further by granting them the privileges of politics, in order to grant them immunity from racketeering charges.

//The Spanish Strategy to Combat the Russian Mafia: Follow the Money//

9. (C) Grinda traced the history of the Russian mafia in Spain to the mid-1990s, when several vory v zakone began to enter Spain. He said that since 2004 Spanish prosecutors have created a formal strategy to “behead” the Russian mafia in Spain. He explained that this has been a top-down strategy done through extensive investigations of criminal actions by these vory v zakone living in Spain. These individuals have no known jobs and unknown sources of income, yet they live in large mansions. Spanish prosecutors have concluded that money-laundering is likely involved and the challenge has been how to prove this. Grinda says that Spain’s longtime experience in fighting drug traffickers’ use of money laundering has proven valuable in this regard.

10. (C) Grinda says the money-laundering investigations have a two-fold objective: to prevent the targets from profiting from the original crime and to prevent the targets from gaining enough clout to enjoy economic influence, which Grinda suggested sooner or later always reaches political power. This is why Spain’s Attorney General has grouped together the prosecutors’ office for anti-corruption and organized crime. As part of this strategy to prevent mafiosos from enjoying economic influence, Spain’s strategy includes the seizure of businesses, companies, furniture and other assets.

11. (C) Grinda also addressed the challenges of combating OC when it enjoys political, economic, social and – especially – legal protection. Grinda applauded a document provided by the U.S. delegation which addressed the important role the media can play in warning the public of OC’s activities and the threat that OC poses. The media can create an environment in which politicians would be reluctant to be friends with and do favors for mafia leaders, whom Grinda argued need to be seen as shady figures to be feared. Regarding legal protection, Grinda stated that a key factor in a government’s ability to combat OC depends on the extent to which the country’s best attorneys and law firms represent the mafia. In this regard, he asked rhetorically, “Why is Cuatrecases constantly defending Russian mafia members?” (COMMENT: Cuatrecases is one of Spain’s leading law firms. Its website, available in English, is www.cuatrecasas.com.)

12. (C) Grinda stated that OC begins to accumulate both economic and political power when it begins to bid for contract tenders on civil works and infrastructure projects.
He noted, however, that the vory v zakone do not engage in racketeering and murder, preferring to distance themselves from this activity and focus on crimes that are further up in the hierarchy, such as corruption of high-level ministers. The level of power that vory v zakone operate at is indicated by their level of interaction with these public servants, because cabinet-level officials do not spend time with unimportant people and cannot be tempted by those who do not have something important to offer. Grinda commented that Gennadios Petrov, the chief target of Spain’s Operation Troika (See Refs B and C), was engaged in a “dangerously close” level of contact with senior Russian officials. COMMENT: In a surprise move, Spanish judges granted bail to Petrov, who is out on house arrest as of January 31, 2010. END COMMENT.

//Thoughts on International Collaboration//

13. (S//NF) Grinda addressed the collaboration Spain receives from other countries regarding the Russian mafia. Early in his remarks, he thanked the U.S. delegation for Washington’s assistance to his office on corruption and OC issues. He said that it is important to have the DOJ, FBI, and Post’s Legat office as collaborating partners and assessed that he and his U.S. interlocutors collaborate in “a very efficient manner”. He added that the close level of US-GOS cooperation on OC issues is known in some circles and has led some to say that he and Spain are “the executing hand of the USG regarding the Russian mafia”. He said that description is fine by him.

14. (S//NF) Grinda said that the Spanish National Police (SNP), the Civil Guard (GC), Spain’s financial intelligence unit (SEPBLAC), and the surveillance division of the Customs Police together have compiled a solid portfolio of information on the Russian mafia in Spain. He added that Germany, SWITZERLAND, Austria, Belgium and the USG have been valuable partners in supplementing this information to further flesh out Grinda’s office’s understanding of the Russian mafia’s activities. He added that Spain is beginning to collaborate with France on these issues, but singled out the United Kingdom for its lack of cooperation. XXXXXXXXXXXX

15. (S//NF) Grinda described OC as “very powerful” in Georgia and claimed that the intertwined ties there between the government and OC began under former President Shevardnadze, when he alleges a paramilitary group served as a de facto shadow presidency. Although Grinda acknowledged improvements under current President Saakashvili, he said that there are still “limitations” in Georgia’s efforts to combat OC. Citing his personal experience in trying to secure Georgian assistance in the prosecution of Kalashov’s OC network in Spain (See upcoming septel on the Kalashov trial), Grinda said that he feels “completely abandoned” and “betrayed” by Georgia and the explanations that he has received from Georgia regarding its lack of cooperation are “more pathetic than the betrayal itself”.

16. (S//NF) To illustrate his thoughts on the level of cooperation Spain receives from Russia, Grinda reviewed Spain’s efforts to arrest Tariel Oniani as part of Operation Avispa. (See Refs B, C and D.) In June 2005, Georgian-born Oniani fled to Russia hours before he was to be arrested in Spain and Russia gave him citizenship in April 2006, despite the fact that he had fled Spanish justice. Grinda alleged that the granting of citizenship was neither “innocent” nor “something done for free”, and was an example of Russia putting crimelords to work on behalf of its interests. Grinda alleged that the Russian Ministry of Interior and the FSB are closely protecting Oniani in Russia (even in prison). Following Oniani’s arrest in Moscow in June 2009, Spain requested his extradition for charges stemming from Operation Avispa, to which Russia replied that Oniani’s Russian citizenship prevented him from being extradited. Grinda said that Russia “always tells Spain that it will take away Oniani’s citizenship, but it never does”. Grinda said that, from his experience, “A virture of the Russian government is that it will always say and do the same thing: nothing”.

17. (U) The U.S. delegation to US-Spain Counter-Terrorism and Organized Crime Experts Working Group cleared this cable.

SOLOMONT

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