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S E C R E T GUATEMALA 001013 VISAS SIPDIS NOFORN E.O. 12958: DECL: 2019/12/02 TAGS: CVIS, PARM, PGOV, PTER, MASS, IS, GT SUBJECT: VISAS DONKEY: - ISRL (ZOLLER, ORI) REF: A) 08 STATE 32825; B) 08 STATE 61434 AND PREVIOUS C) 08 GUATEMALA 0482; D) 07 GUATEMALA 2042; E) 04 GUATEMALA 00307 F) 03 GUATEMALA 112059Z; G) 02 GUATEMALA 01097 DERIVED FROM: DSCG 05-1 C, D, E 1. (U) This is an action cable. Please see paragraphs 8, 14 and 15. 2. (U) Name: Ori Zoller DOB: 11 March 1965 POB: Petah Tikva, Israel Address: Club de Golf San Isidro Zona 16 Casa E26 Guatemala City Employer's Address: Grupo Daled, GIR SA. Area Comercial Hotel Vista Real, Prolongacion Blvd. Los Proceres KM 9, Zona 15 - Guatemala City, 01015. Purpose of Travel: Pleasure Proposed U.S. Address: Hotel JW Marriott, 1109 Brickell Ave. Miami, FL 33131. Previous Visa Issued: 04 June 1998 Previous Visa Refusal: 05 June 2003 Current Visa Application: 29 January 2009 Current Hits In System: P3F entered on 23 April 2002. 3. (S) Summary: Israeli arms dealer Ori Zoller currently has a P3F entered in CLASS for his involvement in the illegal diversion of Nicaraguan arms to the United Defense Forces of Colombia (AUC). Although an OAS report cleared Zoller and his company GIR of any explicit wrongdoing, it also raised questions about his lack of due diligence and potentially 'willful blindness' in the deal. Zoller was also involved in Guatemala's recent Century Arms deal, in which MAP-origin weapons were illegally sold to American collectors. Despite these past difficulties, Zoller has cooperated fully with the DEA and MILGRP in subsequent investigations and is a valuable source for DAO on GOG military matters. Zoller's involvement in the arms diversion can be interpreted in three possible ways: he knowingly associated with a foreign terrorist organization, he arguably should have discovered the arms' true destination but was deliberately negligent in his research, or he was completely unaware of the illicit nature of the deal. Independent of Zoller's potential association with terrorists, Post does believe he has knowingly sold weapons illicitly obtained from Guatemalan army stocks. Post requests Department guidance on whether Zoller is ineligible under 3F. If he is found ineligible, Post does not recommend a waiver. End Summary. Something Rotten in the State of Panama 4. (SBU) The P3F hit was initially entered due to Zoller's involvement in the diversion of Nicaraguan arms to the United Defense Forces of Colombia (AUC), designated as a foreign terrorist organization by the Department of State in 2001. A 2003 report from OAS states that in 1999, several individuals approached Zoller claiming to represent the Panamanian National Police (PNP), which they said was interested in purchasing weapons that Zoller had recently acquired from the Nicaraguan army. One purported representative, Simon Yelenik, presented Zoller with a PNP purchase order for the weapons and Zoller agreed to proceed with the deal. The weapons, which included 3000 AK-47s, were placed on board the M/V Otterloo bound for Panama. However, the ship diverted to Colombia shortly after departure. A second weapons deal based on the same purchase order, involving an additional 5000 AK-47s, was begun but not completed after the story of the first shipment's diversion broke in the international news. 5. (S) Zoller and his colleagues at GIR were the subject of a 2003 OAS Investigation into the arms diversion, which concluded that they were "at the very least guilty of serious neglect" for failure to verify the legitimacy of the purchase with the Panamanian government. The quantity and kind of weapons sold was unrealistic given the size and needs of Panama's police force, which had recently recognized that AK-47s were inappropriate for police work. As an experienced arms dealer in the region, Zoller would have been aware that additional customs and importation documents from the Panamanian government were needed for the shipment to enter Panama, but he did not request them. Although he claimed the purchase order included language specifying the end user as the PNP, thus fulfilling the requirement for a certificate of end-use, Zoller himself admitted the deal was a "huge mistake" and told an ORA source that he should have used better judgment and not relied solely on the purchase order. The OAS report goes further, arguing that "to rely on this one purchase order, unsupported by any other documentation throughout this complex transaction, and to utilize this one document as determinative of the identity of the end-user, is unprofessional and not credible." 6. (S) In November 2001, shortly after the first shipment of weapons and several months before their diversion to Colombia came to light, Zoller used the same purchase order to request an additional 5000 AK-47s for the PNP from the Nicaraguan army. The Nicaraguan army agreed, but instead of sending the invoice to the Panamanian police, they forwarded it to Zoller himself. Zoller acknowledged sending the request, but stated he had written the note in January and backdated it at the request of the Nicaraguan army. The OAS investigative team found this reason to suspect that Zoller and the Nicaraguan army were aware as early as November that the purchase order was fake and the arms they were discussing would not in fact be destined for (or purchased by) the Panamanian police. Zoller later claimed that both the direct receipt of the invoice and backdating a note at a client's request were routine procedures for GIR. He also stated that he was only giving "lip service" to Yelenik and had no intention of completing this second transaction, since over the course of the discussions he became aware that something was amiss. 7. (S/NF) In fact, unknown to OAS, Zoller was cooperating with a DEA-led sting operation and continued the deal at their request, even after Yelenik told him openly around February 2002 that the weapons were destined for Colombia. A now-retired DEA agent, who worked with Zoller in the sting operation, stated that "Zoller cooperated with us in everything." When asked if he thought Zoller knew the true destination of the first weapons shipment, the retired agent refused to speculate, saying "whether he knew about it or not, as soon as we contacted him, he jumped fully on board with us." In his testimony against Yelenik during subsequent investigations and Colombian court hearings, Zoller consistently claimed that he had been the unwitting victim of a fraudulent purchase order and profited very little from this transaction compared to others he had undertaken. ORA analysts conceded that he was very helpful in the subsequent inquiry but added that "there was no doubt that Zoller was aware that the Otterloo shipment was odd and possibly illicit, however, it appeared he decided that since he had the cover of the PNP purchase order the profit was worth the risk." Zoller vehemently disagreed with this analysis, arguing that the costs to GIR's reputation in the international arena were far greater than any profit it could have made: "[Yelenik] did a lot of harm to us - damage was huge." 8. (S) Since Post does not have access to all the details regarding these weapons shipments to Colombia and Zoller's cooperation with U.S. officials, Post requests that U.S. Embassy Bogota provide any further information that may be useful for the Department's determination of Zoller's potential INA 212(a)(3)(F) ineligibility. 9. (S) The Panamanian transaction was not Zoller's only dealing with Yelinek and the Nicaraguan army. In January 2001, he had also attempted to fill a purchase request from Yelenik which was later linked by the OAS team to Samih Osailly, a Lebanese arms broker under investigation by several nations for ties to al-Qaeda. The weapons, intended for the Revolutionary United Front in Sierra Leone, were never acquired - due to the Nicaraguan army's inability to supply the kind of arms required. (Note: ORA information places this exchange in January 2002, with the intended arms recipient being Liberia. OAS and Zoller both state it occurred in January 2001. Osailly was convicted in Belgian courts in 2003 for illicit diamond smuggling and is also suspected of funneling $20 million of al-Qaeda money into West African diamonds. The retired agent states Zoller contacted him about a suspicious arms deal related to Africa in early 2002, but is unable to recall more details. End note.) When questioned about this deal, Zoller stated that he only found out years later where the weapons were destined, since the deal never proceeded far enough for Yelenik to provide him with the end-user information. The Trade's the Thing: Century Arms and the sale of MAP-origin weapons 10. (SBU) While the Otterloo arms diversion was Zoller's most publicized brush with the law, it was not his last. In 2007, he found himself embroiled in a new controversy after serving as the middleman in Guatemala's sale of U.S.-donated MAP weapons to private dealer Century Arms, a transaction that violated U.S. law (see reftels c and d). In this case, Zoller had in his possession a statement from then-Minister of Defense Ronaldo Leiva Rodriguez affirming that all weapons to be sold were acquired by commercial means. Based on this and other documentation, Zoller received an import certificate from the Department of Commerce and proceeded with the deal. Later it was discovered that Leiva's statement was false: a large quantity of the weapons were in fact MAP-origin and should not have been sold. Although once again Zoller was cleared of any deliberate wrongdoing, many of the same questions lingered: did he do due diligence in verifying the accuracy of the paperwork he received, or did he turn a blind eye to possible discrepancies? 11. (S/NF) Opinions on this last question vary. Then-acting USMILGP Commander stated Zoller provided the appropriate notifications to Embassy personnel through each step of the deal and he did not believe Zoller would have proceeded with the deal if Commerce had not approved it. When the presence of MAP-origin weapons was discovered in the transaction, Zoller was "very helpful and upfront" in providing the requested documentation. The Pol/Econ Counselor, however, said that he suspects Zoller is a "facilitator of military corruption," and that specifically in the MAP case Zoller may have helped army officers "make a big profit on stealing arms out of their own stores." Zoller's response to these accusations again hints at the "willful blindness" referenced in the OAS report: per reftel d, when asked whether he believed any Guatemalan Army officer personally benefited from the sale, Zoller responded "that is impossible." 12. (S) A recent CICIG investigation has revealed that Zoller has frequently been the broker for weapons improperly removed from the Guatemalan Army's stocks. In one reported instance from 2006, over 30,000 illegally removed firearms (including many MAP-origin weapons) were handed over to Zoller's company GIR, reportedly as payment for Israeli Military Industries' refurbishment of unspecified army weapons. As in the Century Arms incident, there is no conclusive evidence as to whether Zoller was aware these weapons had been illicitly obtained. 13. (S/NF) Although his intentions in past arms deals remain a mystery, it is certain that Zoller has served for the past several years as a valuable source for the USG in Guatemala. Assistant Army Attache describes Zoller as "extremely cooperative, providing unlimited access" and functioning as DAO's only external source on the weapons and arms dealings of the GOG. In the past, Zoller has provided DAO with intelligence about civilian and military security officials, as well as the status of arms being brought into Guatemala and possible sources of wiretapping and signals operations on the part of the GOG. He has also provided information about Israeli embassy officials, Russian ammunitions sales through GOG officials, and the origin of grenades used by Mexican narcotraffickers. DAO points out that Zoller has shown himself to be principled in the past, refusing at least twice to conduct weapons sales with members of GOG who were not authorized or might have had illicit purposes. In a similar vein, then-acting USMILGP Commander noted that Zoller makes enough money through legal avenues and "he understands that participating in illicit deals would hurt him more than help him." To 3 or not to 3? That is the question... 14. (S) Was Zoller misled by Yelenik into serving as the middleman for arms destined for a foreign terrorist organization, or was he complicit by choosing to look the other way and ignore shoddy paperwork, preferring a profit to a principled refusal? Zoller was fully cooperative with the OAS investigation into his activities. However, that same investigation raised serious questions about his apparent lack of due diligence in the midst of multiple indications that something was amiss. In the aftermath of the Century Arms incident, was Zoller simply taken advantage of twice or has a pattern started to emerge of convenient 'negligence' when profit stands to be made? Zoller claims that the OAS investigation clears him of any wrongdoing, and an ORA memo sent in June 2003 suggested Zoller's name be removed from CLASS as a possible supporter of terrorist activity. However, the P3F hit remains and was not removed even though previous SAOs requested this. Therefore, Post requests the Department's guidance on whether Ori Zoller is in fact ineligible under INA 212(a)(3)(F). 15. (S) If Zoller is found ineligible, Post does not request a waiver of the 3F ineligibility, despite his continuing value as a source on military and defense issues. Independent of his potential association with terrorist organizations, Post has reason to believe that Zoller has knowingly served as the broker on more than one occasion for weapons illicitly obtained from Guatemalan army stocks. MCFARLAND