R 121450Z DEC 86
FM AMEMBASSY BRASILIA
TO SECSTATE WASHDC 1591
INFO AMCONSUL RIO DE JANEIRO
AMCONSUL SAO PAULO
AMCONSUL PORTO ALEGRE POUCH
AMCONSUL RECIFE POUCH
AMCONSUL SALVADOR DA BAHIA POUCH
BELO HORIZONTE POUCH
AMEMBASSY COLOMBO
AMEMBASSY TEGUCIGALPA
AMEMBASSY MANAGUA

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