VZCZCXRO9684
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV
DE RUEHSF #1686/01 3540756
ZNY SSSSS ZZH
O 200756Z DEC 06
FM AMEMBASSY SOFIA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2980
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHEG/AMEMBASSY CAIRO PRIORITY 0038
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY

S E C R E T SECTION 01 OF 02 SOFIA 001686 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
DEPT. FOR PM, EUR/NCE 
 
E.O. 12958: DECL: 12/19/2016 
TAGS: ETTC PARM PTER EG BU
SUBJECT: BULGARIA: ARMS DEALER WARNS THAT EGYPT IS HUNTING 
FOR MANPADS 
 
REF: A. SOFIA 1119 
     ¶B. SOFIA 1204 
     ¶C. STATE 146913 
 
Classified By: CDA Alex Karagiannis, for reasons 1.4 (b) and (d). 
 
¶1. (S) SUMMARY: In a December 18 meeting with an Embassy 
Political Officer, a well-connected Bulgarian arms broker 
told us that he had recently rebuffed an Egyptian MoD order 
for Bulgarian MANPADS, which he viewed as a proliferation 
risk.  He warned that the Egyptians seemed to view the order 
as very time-sensitive and that they were likely to seek 
MANPADS elsewhere in the Balkans after being turned down in 
Bulgaria.  Post has reason to suspect the source's motive for 
sharing this information with us; we have no way of verifying 
its veracity.  END SUMMARY. 
 
¶2. (S) On December 18, Nikolai Gigov called a lunch meeting 
with Poloff at the offices of his company -- the arms trading 
firm Delta Group (commonly known as "Delta G").  The purpose 
was to inform us that he had recently received a large order 
from the Egyptian Ministry of Defense.  He had accepted part 
of the order -- for T-72 tank rounds and parts; however, he 
claimed to have declined the Ministry's order for 150 Strela 
MANPADS systems.  Gigov appeared unaware of the 
U.S.-Bulgarian MANPADS agreement, which is classified in both 
countries at the Secret level.  He claimed to have rebuffed 
the Egyptians of his own initiative, because of his doubts 
about the type of missiles ordered and the urgency with which 
the MoD seemed to require them. 
 
¶3. (S) Gigov reported being confused as to why Egypt would 
place an order for outdated Strela missiles (he did not 
specify the specific model).  "If you're a state," he asked 
rhetorically, "why not buy something better -- an Igla or 
Mistral system, or a Stinger?"  Military planes have 
effective countermeasures for MANPADS such as the Strela, 
Gigov said -- "The only thing they're good for is shooting 
down a civilian aircraft."  Gigov speculated openly that the 
weapons may have been intended to be diverted elsewhere. 
When asked specifically if the order had come from Arab 
International Optronics, an Egyptian MoD-owned firm that has 
bought MANPADS parts from Bulgaria in the past (reftels), 
Gigov hedged, before restating that the order came "from the 
MoD." 
 
¶4. (S) Gigov said that such deals typically were slow-moving 
affairs, but he emphasized the sense of urgency that he 
perceived from the Egyptian side on this particular deal. 
The Egyptians did not specifically describe the deal as 
time-sensitive, he said; however, the frequent phone calls 
and follow-up messages he had received from their side 
indicated to him that this was the case.  After declining the 
MANPADS portion of the order, he reported being contacted by 
the Egyptian defense attache with a request for an 
explanation. 
 
Background: 
 
¶5. (S/NF) Nikolai Gigov is an extremely well-connected 
businessman, whose legitimate business interests besides 
Delta G include insurance and private security ventures as 
well as ownership of Sofia's Lokomotiv soccer club.  He is 
widely alleged to have brokered arms deals with the former 
Yugoslavia in violation of UN embargoes, and may have an 
ongoing role in illegal traffic in methamphetamines.  He has 
family ties to Serbia, and displays a vocal antipathy toward 
Muslims.  Through a combination of personal ties and liberal 
political donations, Gigov counts many of Bulgaria's most 
powerful figures as "close personal friends," including 
President Parvanov, Interior Minister Petkov, and Sofia Mayor 
Borisov.  He recently put these ties to use as the local 
agent for EADS, helping the European consortium win the MoD's 
competition to supply the Bulgarian military with Eurocopter 
helicopters.  He has also worked with General Dynamics to 
supply Bulgarian-origin weapons and munitions to the Afghan 
National Army, and has indicated to us that he is interested 
in representing either Boeing or Lockheed in the MoD's 
anticipated tender for fighter aircraft. 
 
Comment: 
 
¶6. (S) We believe that Gigov was attempting to curry favor 
with us by calling this meeting, but have no way of verifying 
the facts of his story.  He badly wants a relationship with 
 
SOFIA 00001686  002 OF 002 
 
 
the U.S. Embassy -- possibly for commercial reasons and 
possibly in an attempt to clean up his reputation.  It is 
possible that he is merely shopping rumors in an attempt to 
convince us of his bona fides; however it is impossible to 
dismiss his allegations.  As reftels indicate, Egypt has been 
a traditional customer for Bulgarian MANPADS, and the detail 
with which Gigov recounts the purported order would make for 
a very ambitious fabrication. 
 
¶7. (U) XXXXXXXXXXXX
 
KARAGIANNIS