VZCZCXYZ0368
PP RUEHWEB

DE RUEHMD #1195/01 3520705
ZNR UUUUU ZZH
P 180705Z DEC 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC PRIORITY 1573
INFO RUEHRL/AMEMBASSY BERLIN PRIORITY 0672
RUEHSM/AMEMBASSY STOCKHOLM PRIORITY 3099
RUEHTV/AMEMBASSY TEL AVIV PRIORITY 2451

UNCLAS MADRID 001195 
 
SIPDIS 
 
PM/DTCC - BLUE LANTERN COORDINATOR FOR MEREDITH SUNDLOF 
STACIE ZERDECKI, EUR/WE 
STOCKHOLM FOR MARC KOEHLER 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC SP SW MARR
SUBJECT: BLUE LANTERN CHECK ON LICENSE GC 0411-09 
 
REF: A. STATE 109436 
     ¶B. MURRAY-SUNDLOF TELCON 12/07/09 
     ¶C. SUNDLOF-MURRAY E-MAIL 12/09/09 
     ¶D. 2008 STOCKHOLM 772 AND PREVIOUS 
 
¶1.  (SBU) SUMMARY:  Pol-Mil officer and Air Force Attache 
made site visit requested in reftel A in order to confirm the 
delivery in March 2009 of three Bell 212 helicopters 
transferred to Spain from Sweden and to confirm that the end 
user continues to "evaluate the mechanical status of the 
helicopters in order to decide what further commercial 
actions are available given the condition of the craft," as 
stated in the DSP-83 signed February 6.  Venture capitalists 
Ivan Bedia and Pedro Torres Gallego provided a tour of their 
facilities, including the hangar where all three helos are 
currently being stored, and were forthcoming both about how 
they acquired the helicopters and how much they wish they had 
not done so.  Presenting themselves as investors trying to 
salvage what they could of a bad, bad business deal, Bedia 
and Torres were frank about the non-viability of commercial 
options and sought Department assistance in recouping as much 
of their investment as possible while adhering to 
International Traffic in Arms Regulations (ITAR).  Pol-Mil 
officer has advised Bedia and Torres of the need to submit 
General Correspondence to change end use(s) once they have 
identified prospective buyers.  END SUMMARY. 
 
¶2.  (SBU) Ivan Bedia is the General Manager of Guadaira 
Componentes.  The Guadaira GROUP financed the original 
operation and now has possession (about one hour outside 
Madrid) of the helos.  Within the "group," Bedia told Emboffs 
that European Helicopter Service (EHS) belongs to INACA 
(Inversiones de America y Cadiz), which was represented 
November 6 by Pedro Torres Gallego.  Torres is an investor 
based in southern Spain, who has no English ability.  They 
claimed to be very eager to see visitors from the U.S. 
Embassy because they wanted our help in figuring out what to 
do next, and they await our instructions. 
 
¶3.  (SBU) C.I. Guadaira is located in a brand new facility 
that opened in July 2009 about an hours' drive from Madrid. 
The company has ten employees and is certified in Spain to 
work on transmissions and motors and to refurbish "dynamic 
parts," not including helicopter blades.  In addition to 
green-designed office spaces, Bedia escorted Emboffs through 
a "clean room" for metallurgy.  By contrast the relatively 
unfinished hangar lacked temperature controls and was very 
dusty.  Two helos we observed were still wrapped in plastic 
sheeting coated in dust.  A third helo, Serial No. 32231 and 
Tail No. 014, that had been partially disassembled for 
display purposes to potential buyers, was also covered with 
dust.  Bedia advised the blades were corroded beyond likely 
repair and indicated the other removed parts on shelves in 
the secure warehouse hangar. 
 
¶4.  (SBU) Bedia and Torres recounted the whole story from 
their perspective of purchasing 16 such helicopters from the 
Israeli Defense Ministry, of which they took delivery of the 
first four on a trial basis, before their German partner 
(European Petrol Station, or EPS) dropped out of the 
transaction.  (Bedia and Torres described meetings that took 
place in Israel in 2005  and 2006 and included EPS.  The 
Guadaira Group is now pursuing a claim of USD $1.2 million 
for its down payment from the Israeli MOD and is reportedly 
close to an agreement with Israeli lawyers.)  These 16 helos 
were half of an original group of 32 such aircraft.  Bedia 
cited the example of INAER, which had acquired six or eight 
such helos for firefighting under a restricted Spanish 
Certificate of Airworthiness (COA).  When Grupo Guadaira 
agreed to acquire additional helos in lots of four, Bedia 
held their intention was always to fly the helos in Europe. 
They exported them to Sweden in hopes of acquiring a COA more 
easily than Spain, and they claim they spent an estimated USD 
$400,000 more to certify the helicopters.  Sometime after the 
purchase and transfer, however, EU regulations changed, 
preventing the certification of these particular models for 
firefighting and other civilian uses.  (NOTE:  Even 
previously cited INAER is no longer permitted to fly its 
helos.  End note.)  They do not have and may never have the 
accountability and service records for these aircraft (the 
mechanical logbooks are in Israel), however.  Bedia frankly 
acknowledged that even if they could or wanted to get the 
aircraft in working order, there is no way these helos would 
be allowed to fly in the EU (or in the United States). 
 
¶5.  (SBU) Consequently, the investors told us they have had 
to look elsewhere for potential markets for the aircraft. 
They have had some interest (buyers from the Dominican 
Republic, Mexico, Costa Rica, Dubai, Israel, Canada, 
Colombia) but no lookers have pursued the deal.  They have 
also been visited by officers of the Spanish National 
Intelligence Center (CNI).  They have contemplated lowering 
the asking price.  (NOTE:  License GC 0411-09 lists a 
combined value of USD $600,000 for all three helos, but Bedia 
valued each helo at USD $500,000.  End note.)  In the face of 
our inquiry and the CNI questioning, and to get their 
investors off their backs, however, Bedia and Torres told us 
they were leaning toward decommissioning and removing the 
military character of the helicopters in order to scrap them 
and sell as many parts as are viable.  They held their goal 
was to get rid of the helos, in parts, and recoup some of 
their investment.  They requested our assistance in 
determining what parts the United States would allow them to 
sell and they offered assurances that if permission were 
denied, they would destroy the helos and report same to 
State. 
 
¶6.  (SBU) Bedia and Torres suspected that the CNI officers 
had been sent to Guadaira based on information from U.S. 
Embassy officers here and in Sweden.  The told AIRA and 
Pol-Mil officer that a U.S.-Swedish dual national contract 
employee named Arnold B. Sundquist, who had lost his job and 
hangar fees with the transfer of the helos from Sweden to 
Spain, had told "strange stories" to Embassy Stockholm about 
the Group's attempts to sell the helos to Hezbollah, forcing 
them to explain themselves to both the GOS and the USG. 
Bedia and Torres laughed to dismiss the allegations.  With 
the characterization of Sundquist as a disgruntled employee, 
Emboffs inquired about Helena Pariza Lopez, one-time General 
Manager of European Helicopter Service (ref D).  According to 
Bedia and Torres, Pariza Lopez no longer works for EHS and 
had not since May or June 2009. 
 
¶7.  (SBU) COMMENT:  Presuming no malice aforethought, knowing 
that CNI has already expressed interest in the company and 
these specific helicopters, and upon consultation with 
PM/DTCC, Post has provided the Spanish owners of the three 
helos with required steps to follow should they identify 
buyers for specific parts (ref C).  Now that they seem 
committed to selling the helos for parts, the first hurdle 
will be to disassemble each and determine which parts are 
marketable.  Next, they must identify potential buyers.  Post 
has stressed that before proceeding with any transactions, 
Guadaira must submit General Correspondence to PM/DTCC 
requesting a change in end use for each specific part.  As of 
the date of this report, neither Torres nor Bedia had 
communicated with Post regarding their intentions.  Pol-Mil 
officer will reach out to the helo owners again after the 
Christmas holidays to see where things stand and to 
facilitate any requests to change end use.  END COMMENT. 
CHACON