VZCZCXYZ0011
RR RUEHWEB

DE RUEHGT #0482/01 1081924
ZNR UUUUU ZZH
R 171924Z APR 08
FM AMEMBASSY GUATEMALA
TO SECSTATE WASHDC 5169

UNCLAS GUATEMALA 000482 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR PM/DTCC J. STITZIEL AND K. BALLARD 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC GT
SUBJECT: GUATEMALAN RESPONSE ON POTENTIAL SALE OF 
MAP-ORIGIN FIREARMS 
 
REF: A. STATE 32825 
     ¶B. GAUTEMALA 2042 
 
¶1.  SUMMARY:  On April 10, PM/DDTC representatives Judd 
Stitziel and Kyle Ballard, and Embassy officers conducted 
meetings requested Ref A to explore the sale of MAP-origin 
firearms by the Guatemalan Ministry of Defense (MOD) to U.S. 
firearms dealer Century Arms via Guatemalan company GIR SA in 
¶2007.  Prior to the meetings post delivered the specific 
questions provided Reftel to the MOD, and on April 11 
provided written follow-up questions to the MOD that arose 
from the April 10 meetings.  MOD representatives acknowledge 
that mistakes had been made by the prior military leadership 
and promised full cooperation and disclosure regarding the 
MOD's business relationship with Century Arms and GIR SA. 
Stitziel, Ballard, and Embassy officers also met with the 
owner of GIR SA, Ori Zoller, who discussed his company's role 
in the Century Arms deal.  His version of events, including 
the role played by GIR SA and the actual chain of custody of 
the weapons, do not totally correspond with other versions 
received by Embassy Officers.  The visit of Stitziel and 
Ballard afforded post an opportunity to reinforce to MOD 
officials the importance that the USG places on weapons 
accountability, re-transfer, and end-use monitoring issues. 
END SUMMARY 
 
¶2.  On April 9 and 10, PM/DDTC representatives Judd Stitziel 
and Kyle Ballard accompanied Embassy officers to meetings 
with Government officials and the owner of GIR SA (Ori 
Zoller, see para. 7) to discuss the sale of MAP-origin 
firearms by the MOD to U.S. company Century Arms in 2007. 
Prior to the meetings post delivered to MOD officials Reftel 
questions regarding the MOD's commercial relationship with 
Guatemalan intermediary GIR SA and Century Arms, and had 
raised the issue with the current Minister of Defense on 
several occasions.  Embassy officials who have followed the 
Century Arms deal provided background information to Stitziel 
and Ballard prior to the external meetings, and detailed the 
positive role members of the Guatemalan military played in 
bringing the Century Arms weapons transaction to Embassy 
attention. 
 
¶3.  On April 10, Stitziel, Ballard, Polmil officer, and the 
MILGRP Commander met with the chief of the MOD's Judicial 
Office, Colonel Jorge Contreras, and the Commanders of the 
MOD's Logistics Office and Military Armaments Office. 
Guatemalan military officers present have been in their 
current positions less than three months and apologized for 
not having firsthand knowledge of the Century Arms case. 
They also promised to provide answers to all Reftel questions 
following searches of their respective records and interviews 
of officers who had been working in their offices at the time 
of the sale.  Contreras requested that post submit another 
request for written responses outlining the additional 
questions raised during the meeting and asked for an 
additional two weeks to prepare the MOD response.  Stitziel 
agreed to the extension and suggested that it would be 
helpful if the MOD could provide information on how the MOD 
has changed or will change its inventory control and 
re-transfer procedures to ensure that all future arms sales 
comply with Guatemala's bilateral agreements with the U.S. 
(Comment: The MOD representatives appeared genuinely 
committed to providing full disclosure relating to the sale 
of arms to Century Arms.  The officers currently occupying 
the positions involved in inventory control and arms 
import/export issues have little firsthand knowledge of the 
sale, but are under orders of the Minister of Defense to 
fully cooperate with the USG on this issue.  The officers 
Qfully cooperate with the USG on this issue.  The officers 
noted that many of the most important questions listed in 
Reftel could be answered only by representatives of the 
MOD,s Finance Office, who did not to attend the meeting. 
End Comment.) 
 
¶4.  On April 10, Stitziel, Ballard, and Embassy officers met 
with GIR SA owner Ori Zoller regarding his company's 
involvement in the Reftel arms sale (Ref B).  Zoller provided 
copies of documentation and his recollection of the events. 
According to Zoller, the MOD owed money to the Israeli arms 
company IMI for the refurbishment of Galil assault rifles and 
parts.  GIR SA is IMI,s representative in Guatemala.  Zoller 
stated that when the MOD was unable to pay, the then-MOD 
leadership offered to sell weapons from its existing stock to 
cancel the debt.  Zoller stated that he agreed to arrange 
such a transaction, but only if the weapons were exported to 
the U.S.  He stated that by shipping the weapons to the U.S., 
he hoped to avoid any possibility that the weapons could be 
diverted to an inappropriate end-user.  He asserted that he 
approached Century Arms with the idea, and that Century Arms 
sent representatives to select what weapons they wished to 
purchase.  He added that he took no steps to formalize the 
deal until Century Arms and the MOD had agreed on the list of 
 
weapons, and Century Arms had obtained the necessary 
permission from U.S. officials to import the weapons into the 
U.S.  He stressed that after receiving approval from both the 
GOG and the USG he took ownership of the weapons only "on 
paper," and that Century Arms sent representatives to 
Guatemala to handle the actual shipment.  Zoller was very 
clear that he at no time took physical possession of the 
weapons, and that Century Arms representatives physically 
traveled to a military warehouse in Guatemala with a shipping 
container rented by Century Arms and proceeded to inventory 
and pack the weapons.  Zoller added that Century Arms had 
sole custody of the weapons from the time that they left the 
military warehouse until they were shipped out of the 
country, and that he was not present at these events. 
 
 
¶5.  Even though the MOD representatives were not ready to 
respond to Ref A questions during the April 10 interview, 
they did offer interesting insights into events that differ 
from Zoller's account.  The major area of disparity arose 
when the officers were questioned about the physical chain of 
custody of the weapons.  Although none of the officers 
present was involved in the transaction, the current 
commander of the MOD's Logistics Office was working for the 
Guatemalan Military Inspector General's office at the time 
and recalls the event.  He stated that he and fellow officers 
went to the military warehouse to observe the transfer, but 
upon arrival found the weapons already loaded into a sealed 
GIR SA truck.  He suggested that there was little oversight 
and accountability procedures involved in loading the GIR SA 
truck, which was performed by just a few men.  He added that 
he did not have the authority to order the trucks opened and 
that the trucks left the military warehouse in the sole 
custody of GIR SA, which took them to a GIR SA facility for 
packing and loading into a shipping container.  These 
statements, confirmed by a junior officer also present in the 
meeting, are in direct contradiction to Zoller's statements, 
and suggest that GIR SA may have played a lrger role in the 
transaction than Zoller admitte. 
 
¶6.  Comment:  The visit of Stitziel and Ballard enabled post 
to emphasize to MOD officials the importance that the USG 
places on weapons accountability, re-transfer, and end-use 
monitoring issues.  Given the extra time agreed upon, we 
expect the MOD to make a good faith effort to fully and 
transparently answer all questions posed regarding the 
Century Arms deal.  Given the lack of any representation by 
the MOD,s Finance Office at the meeting, it is unclear how 
willing and able this important office will be to provide 
some of the most important requested information.  The MOD is 
also working closely with post's MILGRP Commander to improve 
both its end-use monitoring and inventory control systems to 
ensure that all future arms sales comply with Guatemala's 
bilateral obligations with the U.S.  Post will continue to 
stay engaged on this issue and will forward the MOD's written 
response when it becomes available.  End Comment. 
 
 
¶7.  GIR SA's verbal responses to Reftel questions during the 
April 10 meeting are as follows:  (Note:  GIR SA's answers 
have not been corroborated or verified by post.  End Note) 
 
--  Question:  What is the nature of GIR SA's business and 
who are your clients?  GIR SA response:  GIR SA is an arms 
sales company founded in 1996 to represent the Israeli arms 
company IMI in Guatemala and other Central American 
countries.  Although GIR SA handles arms purchases between 
the governments of several Central American countries and 
Qthe governments of several Central American countries and 
IMI, the bulk of its business is the commercial importation 
of handguns from IMI.  GIR SA owner Ori Zoller stated that 
GIR SA has one retail store, but also sells wholesale to 120 
other gun stores.  He put annual sales at between 8,000 and 
10,000 IMI handguns a year. 
 
--  Question:  What is GIR's relationship to the Guatemalan 
MOD?  GIR SA response:  As a result of a prohibition on U.S. 
and European arms sales to Guatemala, Guatemala adopted the 
Israeli-made Galil assault rifle as its primary combat 
weapon.  As IMI's representative in Guatemala, GIR SA has 
maintained a close working relationship with the Guatemalan 
MOD since 1996. 
 
-- Question: In what capacity was GIR SA involved in the 
firearms re-export transaction?  GIR SA response: GIR SA was 
technically the owner of the weapons, having taken "paper" 
ownership of them to cancel a debt owed by the MOD to Israeli 
arms company IMI.  However, at no point in time did GIR SA 
have physical custody of the weapons. 
 
-- Question:  What is your company's relationship with US 
company Century Arms?  GIR SA response:  GIR SA has done 
 
successful business with Century Arms since approximately 
¶1997.  While Century Arms recently approached GIR SA about 
new business deals, GIR SA will not do business with them 
again until the issues relating to Ref A arms sale are 
resolved. 
 
--  Question: What entity or individual first approached GIR 
SA regarding this transaction?  GIR SA response:  The 
Guatemalan MOD approached GIR SA in hopes of exchanging old 
equipment to pay an outstanding debt.  GIR SA then asked 
Century Arms if it would be interested in buying the weapons. 
 
--  Question:  What firearms were obtained from the GOG 
through GIR SA?  GIR SA response:  (Zoller provided Stitziel 
with lists of weapons reportedly transferred to Century Arms 
as part of the sale.) 
 
--  Question:  What fee was levied by GIR SA for its role in 
the transaction?  GIR SA response:  Zoller stated that he 
made money on the transaction, but did not provide a specific 
dollar amount regarding how much he earned on the sale.  He 
stressed that GIR SA,s transaction with the MOD was a 
"barter deal"; there was no exchange of money between GIR SA 
and the MOD.  GIR SA, however, did receive cash from Century 
Arms for the weapons.  Zoller claimed that the MOD is not 
allowed to receive cash payments on its own behalf.  Zoller 
explained that the money GIR SA received from Century Arms 
was used for several purposes:  for resolution of the GOG,s 
debt to IMI for the refurbished Galil rifles, for GIR SA,s 
profits, and for several "projects" performed by GIR SA for 
the MOD.  These "projects" included supplying equipment and 
performing services related to a military hotel.  (Comment: 
Stitziel asked Zoller for documents that detail the financial 
arrangement and title transfer between GIR SA and the MOD. 
Zoller produced GOG documents that referred to the arms 
transfer but said he could not locate any documents that 
outlined the deal in detail.  Instead, he provided the record 
locator number of a MOD Military Armaments document which he 
claimed contained the requested information.  Post has asked 
the MOD to provide a copy of this document.  End comment.) 
 
--  Question:  Did GIR SA have formal custody of the firearms 
listed in GC-0321-07?  GIR SA response:  Zoller was very 
clear that while GIR SA was the owner of the weapons listed 
in GC-0321-07 "on paper," his company "never had physical 
possession of the weapons." 
 
--  Was the company aware of the complete content of the 
final shipment to Century Arms in the United States?  GIR SA 
response:  Zoller provided packing lists of the complete 
shipments, but stressed that Century Arms, not his company, 
packed and shipped the weapons to the United States. 
 
--  Would GIR SA produce appropriate packing and shipping 
documentation to indicate the content of the final shipment? 
GIR SA response:  Zoller provided a packet of documents 
relating to the sale in question during the meeting, and also 
provided Polmil officer with additional documents 24 hours 
after the meeting.  Stitziel took all documents to Washington 
for evaluation, but a first reading indicated that not all 
requested documents were in fact provided. 
 
¶8.  This message was cleared by PM/DTCC J. Stitziel prior to 
transmission. 
 
Derham