Cablegate: Blue Lantern Level 3 Post-Shipment End-Use Check On Questar

DE RUEHON #0108/01 1012010
P 102010Z APR 08 ZDK



STATE FOR PM/DTC - Blue Lantern Coordinator


E.O. 12958: N/A
SUBJECT: Blue Lantern Level 3 Post-Shipment End-Use Check on Questar

Ref: (A) State 20227 (notal) (B) 06 Ottawa 3660 (notal)

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Sensitive But Unclassified - Protect Accordingly.

1. (SBU) Summary: On April 2 ConOff and Pol/Econ Chief conducted a
Blue Lantern end-use check at Questar International (CA)'s office in
Barrie, Ontario. Questar maintains hand-written detailed end-use
records for each imported weapon. The end-use details we obtained
are being e-mailed to PM/DTC. The company appears to fill a
Canadian market niche, custom-building guns for target shooters,
collectors, and law enforcement officials across Canada. The
Questar facility in Barrie is located in Mark Herzog's home, but
appears to be extremely secure. Herzog has employed a former Barrie
policeman and reportedly has a close working relationship with
Canadian law enforcement officials. Questar expects to make some
significant sales to Canadian security and law enforcement officials
in the next year. We found no derogatory information on Herzog or
Questar. End Summary.

End-Use Information

2. (SBU) Per ref (A), on April 2 ConOff and Pol/Econ Chief met with
Mark Herzog for about three hours at the offices of Questar
International (CA) located in Herzog's home in a residential suburb
of Barrie, Ontario. Questar International (CA) does not currently
have an electronic filing system to record purchases and sales.
Herzog maintains records for the Ontario Chief Firearms Officer
(CFO) by handwriting pertinent weapon and transfer information into
books provided by the Canadian government. Herzog attempted to
provide the specific information requested in ref (A) by researching
the gun type in his CFO books. As we watched, he searched through
all five books and provided us with gun type, date of import and
sale, name of purchaser, province of purchaser, and transfer number
for the entries that relate to the licenses in question. We are
e-mailing this information directly to Kyle Ballard in an excel

3. (SBU) Herzog said he keeps separate paper files for each of his
clients, telling us he refuses to conduct business over the phone -
requiring a formal paper request for each order or subsequent change
order. He mentioned starting an Excel spreadsheet within the last
few weeks to maintain an inventory of guns at his warehouse, but
said he deletes the entries as soon as the weapons are transferred
to their end-user.

4. (SBU) On April 2 Herzog was unable to provide to us information
about the Rock River license. He told us he wanted to confer with
Sean Orr to obtain an exact number of guns, the dates of import, and
whether receivers, parts, or complete guns were imported before
searching for the individual guns through the CFO book (Note: the
book is organized by date of import. End Note). We received some
additional information about the Rock River license from Mark Herzog
on April 4. This e-mail is also being forwarded to Kyle Ballard.

5. (SBU) Herzog told us that he has imported many fewer weapons than
the numbers contained on ref (A) licenses. He indicated that Sean
Orr (his partner with Questar International USA) files for the
licenses, and then completes the form at the expiration of the
license to document how many were used and how many were unused.
Herzog claims to not maintain records of the actual U.S. licenses at
his Canadian location. In addition to the general licenses listed
in ref (A), Herzog said he would have requested many single-use
licenses for U.S.-export and sale to a specific Canadian client.

6. (SBU) Questar imports many receivers (rather than complete
weapons), and then builds the gun to the custom specifications of
his end-users, according to Herzog. He said he requires all
purchasers to have a valid firearms license for any sale and
accesses the Canadian system to search for the file by entering the
license number and other personal information provided by the buyer.
He told us he is well aware of U.S. munitions list requirements to
not retransfer weapons and claims to have never sold guns to anyone
outside of Canada. Herzog said he only once imported guns from a
country other than the U.S. -- importing 6 or 7 custom master shop
arms from Sigarms in Germany.

Site Security Information

7. (SBU) Herzog's home, which has no signage and looks like any of

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the other homes on the block from the outside, has multiple alarm
and security devices, as well as two German Shepherd dogs. The
alarm system includes video surveillance with at least six cameras,
key-panel codes for the exterior of the house, and a separate system
for the basement "warehouse" of weapons and related parts. The
weapons storage room is accessed via a door with a keypad lock. Gun
parts and accessories are stored in the outer part of this area. An
inner door to the "gun safe" room, where all of the assembled
weapons are stored, has a fingerprint recognition security system.
Herzog told us that all of the alarms are remotely monitored by
Chubb Security Systems.

8. (SBU) The onsite inventory varies, but Herzog said up to 50 guns
might be stored there at any given time. More than 20 Glocks in
their plastic cases were stacked on shelves in his inner gun safe
room; Herzog told us he had just been to Port Huron, Michigan to
pick up this shipment and could not ship them to their end-users
until he finished processing the sales with the Canadian Firearms
Centre (CFC).

9. (SBU) Herzog's basement has a well-equipped gun-smithing workshop
where he custom-builds the guns to client specifications. Herzog
showed us some "adjustable stocks" for target shooting which he said
he had obtained from Israel, but he said demand for these has been
low. He indicated that some of his customers obtain and install
their own stocks that are custom made to fit them. We saw no
evidence of telescoping stocks or threaded barrels during our visit.

Links to Barrie Police

10. (SBU) Herzog claims to have a close working relationship with
Barrie Police officials. He said he and his assistant (and former
Barrie Police Officer) Alex Wersonig (both certified armorers) have
upgraded the guns used by the Barrie Police Tactical Support Team
and continue to fix the guns as required. Wersonig, who began
working with Herzog about a year ago, told us they reconditioned
about 25 Bushmaster guns from December 2005 to January 2006. Herzog
said he is trying to obtain permission to develop a Tactical Support
Team training center in the Barrie area for Canadian law enforcement
personnel. Although this remains in preliminary planning stages, he
indicated that the proposal has been presented to Canadian
government authorities.

Additional Background on Questar

11. (SBU) Herzog told us the company has been in operations for
approximately two-and-a-half years. He said he started the company
after he retired as a way to incorporate his target-shooting hobby
into a business. Herzog displays his numerous Police Pistol
Competition trophies and plaques in the weapons safe.
Originally, he said he partnered the business with the "Hawk Shop,"
a gun shop in Port Huron, Michigan. He created a business
relationship with the owner's son, Sean Orr, who now runs Questar
International USA. Every 3-4 weeks, Herzog and/or Wersonig drive to
Port Huron to pick up the guns and transport them back to his

12. (SBU) Herzog mentioned to us in passing that he was cited for
unsafe storage of firearms by Canadian law enforcement in 1989 but
that he has been "pardoned" and the conviction expunged from his
record in Canada. He indicated that U.S. CBP officers recently
began sending him to secondary because of an exchange of criminal
conviction information between the U.S. and Canada.

Future Sales to Canadian Law Enforcement

13. (SBU) Herzog indicated Questar will be selling about 60 Rock
River guns to the guard force at the New Brunswick nuclear plant in
the near future. He said he hopes to make some additional sales to
Canadian police forces within the next year.

14. (SBU) Comment: During our three hour site visit, we saw no
evidence of unauthorized items such as threaded barrels or folding
stocks. Though Questar's record-keeping is not user-friendly, it
appeared to us to be very complete and, to provide the level of
detail that Canadian law enforcement officials would need to track

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down specific end-users of the imported weapons. Herzog was very
open with us and very willing to provide additional information if
requested. He indicated to us that his primary customers are target
shooters, collectors, or law enforcement officials. He said he is
serving a niche market by helping Canadian firearms collectors
obtain U.S. export licenses and physically import weapons that they
have identified for purchase into Canada. Though we can understand
that this could unsettle some Canadians, we found no derogatory
information on Herzog or Questar. End comment.

15. (U) Post requests PM/DTC include ConGen Toronto as an addressee
for all Blue Lantern cables regarding companies based in Ontario.


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