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Cablegate: Results of Blue Lantern Level 3 Pre-License Check

VZCZCXYZ0010
PP RUEHWEB

DE RUEHTV #1244/01 1641232
ZNR UUUUU ZZH
P 121232Z JUN 08
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 7078
INFO RUEAIIA/CIA WASHDC
RUCPDOC/USDOC WASHDC
RUEKJCS/SECDEF WASHDC
RUCNFB/FBI WASHDC
RHMFIUU/HQ BICE INTEL WASHINGTON DC

UNCLAS TEL AVIV 001244

SIPDIS
SENSITIVE

STATE FOR PM/DTCC - BLUE LANTERN COORDINATOR (STITZEL)
STATE NEA/IPA (PECCIA)

E.O. 12958: N/A
TAGS: ETTC KOMC IS
SUBJECT: RESULTS OF BLUE LANTERN LEVEL 3 PRE-LICENSE CHECK
ON APPLICATION 050093749

REF: STATE 36935

1. (SBU) Per reftel instructions, emboffs visited Bental in
the Golan on May 22 and met with CEO Shmuel Mandel, Projects
Manager Benny Heimann, and Marketing and Sales Manager Moshe
Poolat. Israeli MOD Security Directorate (DSDE/MALMAB)
representative Kobi Fogler also attended the meeting.
Mandel, Heimann and Poolat provided emboffs the following
information in response to their questions:

A) Bona Fides: Bental was established in 1983 and is
controlled in part by TAT Technologies (an Israeli public
company traded on the NASDAQ), and in part by Kibbutz Merom,
where it is located. Bental employs 100-150 workers and
manufactures and repairs motors for use in airplanes and
vehicles, as well as in larger machines, such as CT scanners
and industrial printers. CEO Shmuel Mandel explained that
Bental supplies both private corporations as well as Israel's
aviation and defense industries (e.g., Elbit, IAI, Rafael).
Mandel listed the Israel Ministry of Defense, IAI, and
Kinetics (involved in the Mine Resistant Armored Truck
(MRAT)) program as some of their larger customers.

B) Technology Applications: Mandel said most of their
products are not/not derived from sensitive technologies. He
indicated that the brush DC motor with tachometer (the
subject of the proposed, licensed transaction) is used
"exclusively" in replacing and updating broken tachometers on
the turret control motors of Israeli Merkava tanks. These
motor/tachometer units are considered to be owned by the
Israel MOD and are stored separately from other motor parts.
According to Mandel, the requested 47 motor/tachometer units
should be sufficient to complete repairs as requested by the
MOD over the course of 12-18 months, depending on demand.
Bental stores the motors with the integrated tachometers.
When the holdings get down to around 10 pieces, Bental will
submit a new order for tachometers.

C) Company's On-Site Security and Understanding of USML
Restrictions: Mandel indicated that those employees who
handle USML controlled technologies, such as the
motor/tachometer units, have all received security clearances
to the confidential level. The office is equipped with safes
and secure areas for storage of information about the
technologies, and the units themselves are stickered to
indicate that they are USML-controlled. Mandel showed
emboffs a storage room with a locked door and separate
storage for USML items. Mandel explained that old and broken
tachometers are securely disposed of per USG requirements.
He confirmed that he and his staff are familiar with USML
requirements and regulations, and indicated that his company
shares U.S. interests in protecting secure technologies.

D) Role of Danaher Motion/Servotronix: Mandel explained that
Servotronix is the Israeli subsidiary of Danaher Corporation
in the U.S. It is Servotronix, Mandel explained, which
completes all of the clearance forms and other paperwork for
the purchase of USML items, which are then collected directly
by Bental from the airport upon arrival.

E) Documentation: Mandel showed emboffs the following
documents: an end-user certificate from Kollmorgen to Bental
dated May 30, 2007; and an end-used statement from the
Israeli Ministry of Defense, signed by Amos Gilad and dated
December 27, 2007. Mandel also showed emboff a purchase
order from Bental to signed by Yerach Sapojnikov and dated
January 2, 2008. All documents collected by emboff have been
sent by FAX to PM/DDTC at 202-261-8198.

2. (SBU) On June 11, emboffs visited Danaher Motion's
officers in Petach Tikva and met with Executive Vice
President Aviran Weisler, Application and Sales Engineer Gadi
Hon, and Alon, a sale administrator responsible for sales to
Bental. MALMAB/DSDE did not have a representative present.
Weisler indicated that he had spoken with Bental CEO Shmuel
Mandel prior to the meeting. Weisler, Hon and Alon provided
emboffs the following information in response to their
questions:

A) Bona Fides: Weisler said that Danaher Corporation in the
U.S. has two subsidiaries in Israel: Danaher Motion (also
known as Servotech, Ltd.) and Kollmorgen Servotronix Ltd.
(aka Servotronix, Ltd.). Danaher Corporation in the U.S. is
a USD 13 billion dollar company listed on the U.S. stock

market. Established in 1987 initially as an engineering
company, Danaher Motion is a small part of Danaher's
aerospace and military division, and is valued at USD 80
million. (Danaher's other division is the Pacific division,
which includes Kollmorgen, and is valued at USD 600 million.)
Danaher Motion's principals are Dr. Ilan Cohen (manager),
Eyal Silka and Aviram Weisler (executive vice presidents),
Norit Palev, and Roi Ziv (operations). Danaher Motion does
not produce weapons systems. Instead, it produces motors and
drives -- some of which have dual uses. Danaher Motion's
suppliers in the U.S. include Inland Motors in Radford,
Virginia and Thompson. (Weisler noted that Kollmorgan
Corporation -- which is listed as a subsidiary of Danaher
Corporation, the supplier per reftel, is also known as Inland
Motors.) Danaher Motion is selling directly to Bental.
Customers include companies like Applied Materials, Strong
ADT, Advanced Dicing Technologies, HP Indigo and HP Cytex.
Danaher's aerospace and military division (of which Danaher
Motion is a part) does business with Israeli defense
contractors Rafael, Elbit and IMI, and is starting to work
with Elta. In June 2000, Danaher acquired Kollmorgen. In
response to emboff's question as to why Servotronix Ltd. is
listed as the intermediate consignee when the company is
really Danaher Motion, Weisler replied that the person filing
the application may have been confused as Kollmorgen
Servotronix, Ltd. -- Danaher Motion's sister company -- is
located in the same building as Danaher Motion. Weisler
stressed that Kollmorgen Servotronix Ltd. is not/not involved
in the transaction. Danaher Motion is located entirely in
Israel. It has no overseas customers, and it does not serve
as a broker.

B) Technology Applications: In response to emboff's
questions, Hon said that the tachometers will be used to
provide analog feedback. They will be integrated into a
motor that Bental is already making. They will then provide
feedback with respect to yaw and pitch. Bental's motors with
the tachometers integrated into them will be set aside solely
for the Israeli MOD's use. According to Hon, it is likely
that they will be kept in Bental's warehouse as spare parts
for future use.

C) Company's On-Site Security and Understanding of USML
Restrictions: Weisler said that each employee in Danaher
Motion undergoes training on the ITAR and their obligations
towards controlled items, including dual-use items. He said
that the training is coordinated by a person (Caroline; no
further information) at Inland Motors, who is also available
to answer any questions Danaher Motion employees have on the
subject. Weisler said that Caroline provides Alon guidance,
as needed, and advised Danaher Motion to establish a
separate, secure location for the storage of controlled
items, should storage be required. Weisler said that the
Israeli MOD's Security Directorate (MALMAB/DSDE) had recently
checked Danaher Motion's security policies and procedures and
given them "high marks." Regarding the transaction in
question, Weisler said that only two people from Danaher
Motion will handle the tachometers: Alon and the warehouse
manager. Weisler said that Danaher Motion has a secure
lock-box for controlled items, and that all items Danaher
Motion receives, uses and sends out are tracked in a computer
system.

D) Roles of Bental and Servotronix: In response to emboff's
question about the role of Danaher Motion in the transaction,
Weisler answered by describing a process whereby Danaher
Motion has inserted itself into the transaction process that
was previously between Bental and its U.S. suppliers.
Weisler explained that Danaher Motion is growing and seeking
to acquire Bental. Regarding the transaction in question,
Weisler said that Danaher Motion received the purchase order
from Bental at the start. (He added that all purchase orders
received by Danaher Motion need to note the end-use of the
item in question, even if the item is not sensitive.)
Weisler continued: Danaher Motion will receive the
controlled items, and then turn them over immediately to
Bental. (He noted that Danaher Motion has a secure warehouse
where controlled items can be kept, but stressed that Bental
urgently desires the tachometers, and so will take them from
Danaher Motion immediately.)

E) Documentation: When asked about the documentation package
listed as one of the controlled items in reftel, Alon replied
that this is a standard package that is shipped with items

like the tachometers, and includes the invoice and export
license. At emboff's request, Hon supplied emboff with a
copy of the March 10, 2008 cover letter from Danaher Motion
explaining the proposed transaction. Alon showed emboff the
purchase order DS800052 signed by Efrat Yefet -- also an
administrative assistant -- and introduced emboff to Yefet.
Alon also showed emboff the end-user statement signed by
Aviran Weisler and Eyal Silka. When asked why there is a
discrepancy between the license value (per reftel) of USD
44,240 and the values listed in the other documents (e.g.,
USD 43,240 and USD 57,669), Weisler explained that this is
because Danaher Motion requires a transaction fee. All
documents collected by emboff have been sent by FAX to
PM/DDTC at 202-261-8198.

3. (SBU) Based on the above information, emboffs believe that
the proposed transaction in question is legitimate and that
Bental and Danaher Motion are legitimate companies fully
aware of their obligations towards USML items.

********************************************* ********************
Visit Embassy Tel Aviv's Classified Website:
http://www.state.sgov.gov/p/nea/telaviv

You can also access this site through the State Department's
Classified SIPRNET website.
********************************************* ********************
JONES

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