This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 LIMA 004070 
 
SIPDIS 
 
DEPT FOR WHA/AND, EB/TRA/AN 
TREASURY FOR OFAC 
FAA MIAMI FOR JAY RODRIGUEZ 
YAOUNDE FOR MALABO OFFICE 
 
E.O. 12958: DECL: 09/19/2015 
TAGS: EAIR SNAR PGOV EINV PE
SUBJECT: DGAC EXPLAINS ZEVALLOS' FLIGHT PERMISSIONS 
 
REF: A. LIMA 3974 
     ¶B. LIMA 3366 
     ¶C. LIMA 2769 
     ¶D. LIMA 2053 
 
Classified By: Economic Officer Samantha Carl-Yoder for reasons 1.4 (b) 
 and (d). 
 
¶1. (C) Summary.  Despite pledges by the DGAC to ensure that 
OFAC-listed Narcotics Kingpin Fernando Zevallos paid off 
previous debts of his former companies, AeroContinente and 
NuevoContinente, Zevallos received flight permissions for his 
new company, AeroContinente EIRL in June.  The Director 
General of Civil Aviation Roberto Rodriguez explained that 
the Ministry of Transport determined that Zevallos 
technically did not own NuevoContinente and thus should not 
be held responsible for the company's debts.  Zevallos, who 
sold AeroContinente to his former employees last year, 
maintained ownership of the fleet of planes and continues to 
rent them to Air Guinea Cargo, based in Equatorial Guinea. 
Zevallos continues to push the DGAC, unsuccessfully, for 
airworthiness certificates for his new company, 
AeroContinente EIRL.  End Summary. 
 
Zevallos Not Responsible for Debts 
---------------------------------- 
 
¶2. (C) Econoff met with Acting Director General of Civil 
Aviation Roberto Rodriguez and DGAC Director of Security Juan 
Crovetto on September 14 to discuss the efforts of 
OFAC-designated Narcotics Kingpin Fernando Zevallos to resume 
AeroContinente operations.  Rodriguez noted that while the 
DGAC granted flight permissions to the company in mid-June, 
none of Zevallos' planes have received airworthiness 
certificates (Ref B).  Although Zevallos was listed on the 
OFAC Kingpin list and is currently on trial for 
narcotrafficking, Rodriguez explained, there is no legal 
impediment in Peru that prevents Zevallos from resuming 
operations. 
 
¶3. (C) Econoff noted that in a previous conversation, 
Rodriguez emphasized that Zevallos would have to pay off 
AeroContiente/NuevoContinente's previous debts, including 
salaries for former employees and NuevoContinente's fuel bill 
(ref C).  According to DGAC records and information from 
former NuevoContinente employees, these debts are still 
outstanding.  Rodriguez, acknowledging his prior comments, 
noted that the Ministry of Transport decided, without DGAC 
consent, that it could not hold Zevallos responsible for 
debts incurred by NuevoContinente because Zevallos was not 
technically the owner of the company.  (Note:  Zevallos sold 
NuevoContinente to his employees in September 2004.  End 
Note.)  The former owners of NuevoContinente, according to 
the Ministry of Transport, should be held responsible for 
these debts.   Rodriguez commented that if it were up to the 
DGAC, Zevallos would be held responsible and not granted 
flight permissions.  He further lamented that the Ministry of 
Transport felt otherwise, resulting in the resumption of 
AeroContinente operations. 
 
But Zevallos Still Owns the Planes? 
----------------------------------- 
 
¶4.  (C) Econoff pointed out, that using the Ministry of 
Transport's logic, Zevallos technically sold his planes to 
the new owners of NuevoContinente and should not have been 
able to rent them to Air Guinea Cargo (Refs A and B). 
Rodriguez agreed initially, but then speculated that Zevallos 
may have maintained ownership of the planes and rented them 
to Nuevo Continente.  Econoff then inquired about the 
airworthiness of the planes that Zevallos rented to Air 
Guinea, as Zevallos was unable to purchase spare parts for 
the Boeing planes under the Kingpin Act.  Rodriguez noted 
that before the planes left, Air Guinea representatives 
registered the planes in Air Guinea's name and petitioned to 
fly the plane as a "fair flight."  Air Guinea pledged to 
repair the planes once they arrived in Equatorial Guinea. 
 
 
Comment 
------- 
 
¶5.  (C) Although the DGAC provided Zevallos with flight 
permissions for his "new" company, AeroContinente EIRL, 
Rodriguez continues to emphasize that unless Zevallos 
purchases or rents new planes, the company's current plane (a 
Fokker F28) will not receive its airworthiness certificate. 
We suspect, however, that Zevallos will use his connections 
within the Peruvian Government to try to manipulate permits 
from the DGAC.  Rodriguez very candidly informed us that 
several Congressmen, including President of the 
Transportation Committee (and alleged contact of Zevallos) 
Victor Valdez, has put pressure on the DGAC to improve 
competition in the Peruvian aviation industry by authorizing 
new local airlines.  We will continue to monitor the 
situation and report any new developments. 
 
 
POWERS