VZCZCXRO7552
RR RUEHRG
DE RUEHSO #0088 0411638
ZNR UUUUU ZZH
R 101638Z FEB 09
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC 8940
INFO RUEHBR/AMEMBASSY BRASILIA 0096
RUEHRG/AMCONSUL RECIFE 4294
RUEHRI/AMCONSUL RIO DE JANEIRO 9017
RUEHBU/AMEMBASSY BUENOS AIRES 3414
RUEHAC/AMEMBASSY ASUNCION 3661
RUEHMN/AMEMBASSY MONTEVIDEO 2848
RUEHSG/AMEMBASSY SANTIAGO 2661
RUEHLP/AMEMBASSY LA PAZ 4057
RUCPDOC/USDOC WASHDC 3248
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC

UNCLAS SAO PAULO 000088 
 
SIPDIS 
SENSITIVE 
 
FOR PM/DTCC - BLUE LANTERN COORDINATOR 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC BR
SUBJECT: BLUE LANTERN REQUEST 050139731 - DIGEX 
 
REF: 09 STATE 003638 
 
SENSITIVE BUT UNCLASSIFIED--PLEASE PROTECT ACCORDINGLY 
 
¶1.   (SBU) SUMMARY:  On February 9, econoff conducted a site visit 
to the Digex facility in Sao Jose dos Campos per reftel 
instructions.  The company is bona fide and its security appears 
adequate to handle to handle U.S. Munitions List (USML) items.  END 
SUMMARY. 
 
¶2.  (SBU) Digex will not purchase any equipment from Defense 
Technology Equipment, Inc., as stated in reftel.  They had requested 
an initial quote from this company, but chose another U.S. supplier, 
a company called Derco, instead.  Post continued with the Blue 
Lantern request as though Derco were the seller in reftel. 
 
¶3.  (SBU) Digex is located in an airport hangar just outside of the 
Sao Jose dos Campos airport.  Digex is a relatively small company, 
consisting of two hangar facilities, 100 employees on site, and with 
2008 gross revenue of approximately US$8 million.   While the 
company normally services commercial aircraft, last year was the 
first year it began servicing Brazilian Air Force (BAF) cargo jets. 
Digex has three clients, all based in Brazil:  The BAF, Varig Log, 
and Webjet (a local internet-based charter air service and not the 
Canadian company of the same name).  Renato Cianfone and Jorge 
Josende founded the company in 1997.  Seguranca, a Brazilian hedge 
fund, also owns a substantial stake.  Digex is the end user for all 
parts and is not a broker. 
 
¶4.  (SBU) The products in reftel arrive in Brazil at the Guarulhos 
airport (GRU), where a company representative receives them and 
processes them through customs.  The goods are then loaded onto a 
truck operated by one of two shipping companies, Take Off Services 
or Master Freight Transport.  The Digex representative seals the 
containers, to protect against tampering while in transit to their 
site.  Upon arrival to the Digex facility, company workers inspect 
the products on site.  Workers put goods without the proper 
paperwork into the "quarantine" area until they can obtain the 
proper documentation placing the rest in the stockroom.  Digex 
representatives could not recall an incident when any parts had been 
stolen or misplaced in transit from GRU to their facility. 
 
¶5.   (SBU) Mechanics who need parts for servicing a plane must first 
go to their supervisor for a work order request.  After approval, 
they take the service request to the stockroom window.  A stockroom 
employee reviews the request and supplies the requested part.  Digex 
employs a full-time manager in the stockroom to control items.  This 
employee selects twenty items at random each day for an inventory 
reconciliation, and twice a year, they conduct a full inventory 
reconciliation.  The stock room itself is locked with a padlock and 
only authorized personnel are allowed inside.  After the mechanic 
receives a requested part, he or she installs it into the plane. 
Upon completion of servicing the C-130, the Brazilian Air Force 
takes back control of the aircraft on site and flies it to their 
facility at the Galeao airport in Rio de Janeiro (GIG). 
 
¶6.   (SBU) Digex representatives told econoff that they understand 
the restrictions on United States Munitions List (USML) items, as 
well as the prohibition against the unauthorized stockpiling of such 
items.  As a good business practice, Digex avoids stockpiling parts 
it does not need and the sparse looking stockroom appeared to 
support this assertion.  The company keeps parts for the C-130s in a 
separate air-conditioned area of the stockroom and they are building 
a separate fence around them.  Digex representatives showed econoff 
a copy of the purchase order for the C-130 parts.   All of the parts 
will go to the Brazilian Air Force, which keeps an office on site to 
inspect their planes.  Digex maintains 24-hour security at its 
facility. 
 
¶7.  (U) This cable was coordinated/cleared by Embassy Brasilia. 
 
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