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Cablegate: Brazil: Response to Request for Due

VZCZCXRO9081
PP RUEHRG
DE RUEHBR #1555 2251927
ZNR UUUUU ZZH
P 131927Z AUG 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 9732
INFO RUEHSO/AMCONSUL SAO PAULO 0606
RUEHRI/AMCONSUL RIO DE JANEIRO 4932
RUEHRG/AMCONSUL RECIFE 7040
RUCPDOC/USDOC WASHDC

UNCLAS BRASILIA 001555

SIPDIS

SENSITIVE

SIPDIS

DEPT FOR EB/EPPD NANCY SMITH-NISSLEY

E.O. 12958: N/A
TAGS: AMGT BEXP ECON ELAB ETRD KSEP SENV BR
SUBJECT: BRAZIL: RESPONSE TO REQUEST FOR DUE
DILIGENCE FOR THE SECRETARY OF STATE'S 2007 AWARD
CORPORATE EXCELLENCE

REF: A. STATE 47222
B. STATE 71180
C. STATE 109403

1. (SBU) The below answers are in response to the request for
information in ref C:

A) Could there possibly be any downside or embarrassment caused by
the selection of your post's nominee?

--Post has no knowledge of any downside or embarrassment that would
result from the selection of its nominee.

B) Do you have any information concerning job creation in the United
States resulting from the operations of the company you nominated?

--Ruralfone employees six direct hire employees in the U.S. and has
created 50 full-time jobs within four rural communities in Brazil.
Within the next six months the company anticipates hiring 100
additional full-time employees (also in rural areas) with the
anticipated receipt of World Bank funding. Because Ruralfone
sources some telecom equipment and services from the U.S., the
company indirectly creates an unknown number of U.S. jobs.

C) What is your assessment of the company's trade and investment
activities with regard to helping stimulate economic growth in the
U.S. and increasing American exports (what is the U.S. content of
its products)?

--The company sources part of its equipment from the U.S. and sells
American brand mobile phones.

D) What is the state of labor conditions in the company's facilities
and are workers unionized?

--Ruralfone has been exemplary regarding labor conditions. The
company has greatly invested in capacity building, provided jobs for
youth, and shown a gender conscious approach (70% of their staff are
women); their employees receive health insurance coverage, and the
company is in full compliance with Brazilian Labor Legislation
requirements. The company's employees are not unionized.

E) Are you aware of any litigation pending in local courts involving
the company?

--Post is not aware of any pending litigation against Ruralfone.
The company, however, is currently suing a Brazilian trader.

F) Please confirm that the Chief of Mission and others involved in
the nominating process do not hold shares of stock or have other
financial interests in the company.

--Chief of Mission and others involved in the nominating process do
not hold shares of stock nor have other financial interests in the
company.

2. (SBU) As the result of an internet search, EmbOffs found
reference to a July 30 Verizon announcement of the purchase of an
unaffiliated company called "Rural Cellular," which may have been
confused with Ruralfone in an earlier unconfirmed report. In an
August 8, 2007 telephone conversation, the CEO of Ruralfone's
Brazilian subsidiary told EmbOffs that he was unaware of any such
acquisition, and believed that Verizon is acquiring an entirely
different company as stated above.

Sobel

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