VZCZCXYZ0019
RR RUEHWEB

DE RUEHGT #0069/01 0261447
ZNY CCCCC ZZH
R 261447Z JAN 09
FM AMEMBASSY GUATEMALA
TO SECSTATE WASHDC 6838

C O N F I D E N T I A L GUATEMALA 000069 
 
SIPDIS 
 
DEPT FOR PM/DTCC- BLUE LANTERN COORDINATOR 
 
E.O. 12958: DECL: 01/26/2019 
TAGS: ETTC KMOC GT
SUBJECT: GUATEMALA: BLUE LANTERN PRE-LICENSE CHECK, 
050137099 
 
REF: A. STATE 133173 
     ¶B. 03 GUATEMALA 67 
     ¶C. 08 GUATEMALA 1148 
     ¶D. 08 USDOC 04860 
 
Classified By: Political Officer Lance Hegerle for reasons 1.4(b,d) 
 
¶1.  (SBU) Summary:  In response to ref a, PolMil Officer 
researched the bona fides of the arms import company Munar 
S.A.  The research included an on-site inspection of the 
facility, an interview with the company's owner, and records 
checks of both the company and the owner with Guatemala's 
Arms and Munitions Control Department (DECAM).  As a result 
of the investigation, Post recommends approval of license 
¶050137099.  End Summary. 
 
¶2. (SBU) On January 23, PolMil Officer conducted an on-site 
inspection of Munar S.A./Mundos de las Armas, located at 10a 
Calle 0-68, Zone 10 and interviewed the company's owner, 
Oscar Grazioso.  Grazioso was fully cooperative during the 
interview, offered complete access to his records, and a tour 
of the facility.  Munar S.A. is located on a busy street 
three blocks from the U.S. Embassy and includes a large 
showroom, several offices, and a large walk-in weapons 
storage area.  In September 2008, PolMil Officer conducted a 
Blue Lantern inspection of Munar S.A. for the U.S. Commerce 
Department (ref c) and as a result Post recommended Munar as 
a reliable recipient of U.S. origin Commodities Commerce. 
The purpose of the January 23 inspection was to explore the 
question of Tito Antonio Bassi Leoni's involvement in Munar 
S.A. raised in ref a. 
 
¶3. (SBU)  According to Grazioso he started Munar S.A. as a 
private company in 1992.  In July of 1993 he incorporated the 
company into an Anonymous Society with partner Hector Sales 
Salverria.  He stated that he provided the start up capital 
and Sales, a retired army officer, provided the contacts with 
the military and foreign arms vendors.  In June 1994 he 
purchased Sales' shares in Munar S.A. and was the sole owner 
until March 1995, when he went into business with Bassi.  He 
stated that the business deal with Bassi was predicated on 
both parties providing $17,000 USD in operating capital. 
Under their deal Grazioso would run the company and receive a 
salary, with Bassi providing contacts with several U.S. and 
European arms vendors.  Grazioso stated that while he and 
Bassi executed the Anonymous Society declaration in 1995, 
they agreed that Bassi would not receive the actual shares 
corresponding to his 49 percent ownership until he paid the 
$17,000 USD.  Grazioso stated that soon after they started 
working together Bassi began asking for loans to support his 
other business interests, using a hotel in the Department of 
Izabal as collateral. 
 
¶4. (SBU) Grazioso stated that in 1997, since Bassi still had 
not come up with the money, he issued the shares in his own 
name, giving himself 100 percent ownership of the company. 
He added that he still hoped to receive the money from Bassi, 
and if he did he planned to sign over the shares.  Grazioso 
stated that by 1999 Bassi owed him over $139,337 USD and 
could not pay.  At this point Bassi legally ceded his claims 
under the 1995 Anonymous Society decree for a payment of 
$1,500 USD that was credited against his outstanding debt to 
Grazioso.  Grazioso claims that from April 1999 his only 
relationship with Bassi was his well-documented efforts to 
recoup the principle and interest on the loans that by 2005 
totaled over $350,000.  In 1999, Grazioso executed a third 
Anonymous Society declaration naming himself the owner of 99 
percent of Munar S.A. and his long time accountant/secretary 
Carla Jeannette Muralles Estrada as a one percent owner.  He 
stated that he named her as a one percent owner to satisfy 
Qstated that he named her as a one percent owner to satisfy 
Guatemalan law, but never transferred any of the company's 
shares to her. 
 
¶5. (SBU) In 2005, Grazioso's lawyers uncovered that Bassi had 
secretly sold the hotel used to secure the original loans and 
that multiple other creditors had already attached judgments 
against Bassi's few visible assets.  Grazioso stated that 
since 2005 he has made no effort to collect from Bassi, but 
continues to hope that some day he may recover some of his 
losses.  During the interview PolMil Officer examined the 
original copies of the 1993, 1995, and 1999 Anonymous Society 
declarations, the original documents signed by Sales and 
Bassi acknowledging that they relinquished all ownership of 
Munar S.A., and all of Munar S.A.'s shares dated from 1997 
and 1999 indicating that Grazioso has controlled all shares 
in Munar S.A. from 1995 until the present time.  Grazioso 
also demonstrated a wealth of original documents outlining 
his failed efforts to collect from Bassi from 1998 untill 
¶2005.  It appears that Tito Antonio Bassi Leoni has had no 
involvement with Munar S.A. since April, 1999.  (Note: The 
above account of Bassi's involvement in Munar S.A. differs 
 
from the ref b account in both the date Bassi became involved 
in the company and in the report's assertion that Bassi was 
still involved in the company when the report was written. 
PolMil Officer was unable to determine the cause of the 
discrepancies, but Grazioso's account is supported by 
original documentation that firmly establishes the timeline 
of events.  End Note.) 
 
¶6. (C) PolMil Officer also discussed the nature of Bassi's 
NADDIS hit with members of Post's law enforcement community. 
According to Post's DEA Office, the nature of the 1995 NADDIS 
report indicated possible involvement in narcotics 
trafficking, but offered no conclusive information.  Since 
the original report there have been no further reports of 
Bassi's possible involvement in criminal activity, and Bassi 
is not a person of interest to either U.S. or Guatemalan law 
enforcement.  It is also of interest that during the January 
21 meeting, Grazioso proudly presented original documentation 
of the 1996 contract with the U.S. Embassy that he and Bassi 
had to provide training and equipment to the now defunct 
Guatemalan Anti-Narcotics Unit, DOAN.  The documentation 
included the original letter signed by the former NAS 
Director awarding the contract and canceled checks dating 
from 1996 and 1997. 
 
¶5. (SBU) According to DECAM records Munar S.A. has had no 
infractions since 2000 and has passed all routine inspections 
without major incident.  According to DECAM's Director, 
Colonel David Barrientos, Munar S.A. is a large-scale weapons 
store that has always operated within local laws and 
regulations.  Barrientos added that Grazioso is a 
well-respected leader in the local Arms Industry and had 
provided valuable input on needed changes to Guatemala's 
current Arms and Ammunition Bill. 
 
¶6. (C) COMMENT:  PolMil Officer has inspected Munar S.A. on 
two occasions and has found the company to meet or exceed all 
local standards.  Post's DEA Office indicates that the NADDIS 
hit on Bassi would be irrelevant even if he were still 
involved in Munar S.A., and all information available at Post 
indicates that he no longer has any involvement with the 
company.  Based upon the current inspection and the 
inspection conducted in September 2008, Post recommends Munar 
S.A. as a reliable recipient of U.S Origin Commodities and 
recommends the approval of license 050137099. 
 
McFarland