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An Iraqi Arms Bust

Russian weapons, organized crime, and the Iraqi government.

10:50 AM, Aug 21, 2007 • By RUEBEN F. JOHNSON
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LAAD 2007-017.JPGBulgarian-produced weapons of Russian design, like this one
manufactured at the Arsenal plant, made up most of the deal.

THE HIDDEN WORLD OF arms trafficking was in the spotlight last weekend with an Associated Press http://www.foxnews.com/story/0,2933,293028,00.html target=_blank>report uncovering a $40 million weapons deal that would have sent more than 100,000 automatic weapons of Russian design to Iraq. But, before the contract could be completed and shipments put into motion, the Italian and Middle Eastern middlemen in the deal were swept up by Operation Parabellum, an on-going investigation that was begun two years ago by Dario Razzi, an anti-Mafia prosecutor.

This operation targeted against organized crime first began in 2005 when investigators inquired into drug trafficking by Mafia kingpins. The scope of their activity soon widened as the team under Razzi began tracking mafia-linked arms deals first with Libya, and then with Iraq.

The AP obtained Italian court documents showing that the proverbial smoking gun (no pun intended) was unearthed early last year when police in Rome, in the course of a drug trafficking investigation, covertly opened the luggage of a suspect they'd been monitoring after he had checked in for a flight to Libya. They were expecting to find a load of narcotics. Instead, the suitcase contained helmets, body armor, and a weapons catalog.

The purchase of Russian-designed weaponry for Iraqi security forces is not unusual. Russian and other Soviet bloc/Warsaw Pact arms was what the Iraqi forces already had in stock, and it is the type of equipment that the troops now fighting alongside U.S. forces are most familiar with.

Concern about past problems with having the U.S. military make the buys may be one of the reasons that there were Iraqi government officials controlling the purchase. Those same officials also did not inform the U.S. government that the procurement had been initiated, nor did they provide any details of which entities they were dealing with as intermediaries in the deal. Both of these actions are not the norm for these transactions, which have usually been closely controlled by the U.S. military.

In the past, problems with the procurement and subsequent inventory control of Russian-design equipment has cast doubt on the ability of the U.S. military to properly manage these acquisitions. Iraqi security forces have had to wait months longer than promised to receive rather basic equipment, such as armored vehicles. Some of the equipment that they had received was so substandard when compared with U.S. kit that Iraqi officers had quietly taken to telling Coalition and foreign liaison intelligence officers that the rank-and-file Iraqi troops felt at best like "second class citizens."

Whether or not the arms were actually intended for the Iraqi Security Forces is still unclear, but it is almost certain that officials in Baghdad involved in the deal will use the spotty past performance by the U.S. military on such contracts as justification for their decision to go and freelance this latest purchase on their own.

The mystery deepens with the revelation that intercepted emails and other communications that had been monitored by the Italians state that the Iraqi officials involved claimed the contract for these weapons had official American approval, an assertion that was denied by a U.S. spokesman in Baghdad.

"Iraqi officials did not make MNSTC-I aware that they were making purchases," said Lt. Col. Daniel Williams. MNSTC-I is the Multi-National Security Transition Command-Iraq - the organization that oversees the arming and training of the Iraqi Army and National Police.

The details of the chain of companies involved are--as they say in Washington--malodorous, and suggest that the Iraqis were misleading the Italian middlemen in stating that the entire affair had been blessed by U.S. authorities.

The first of these is that the intercepts of communications and other information led the investigators to a group of Italian businessmen who were unrelated to any of the narcotics probes. However, these same businessmen were utilizing front companies that had been set up in both Malta and Cyprus. These two nations have relatively loose controls on arms trading, and both are notorious for hosting shell corporations and other corporate entities that act as the legal pass-throughs for trafficking in arms.

The second is that the Italian businessmen are charged with operating in violation of national laws that make trading in arms without a government-issued license illegal. One of the chief figures in the deal was one Massimo Bettinotti, a 39-year-old arms broker operating a Maltese firm called MIR, Ltd.

The third is that the company in the middle between the Italians and the buyers within the government in Baghdad was the Iraqi-owned Al-Handal General Trading Company, which is based in Dubai. Dubai is another location that is known for being the official front for contracts aimed skirting international embargoes.

From 1996-2003, Al-Handal was utilized as a broker in the now well-known Oil for Food Program. The company was accused of aiding and abetting the whole scheme by which kickbacks were paid to officials of the Saddam regime, as well as covertly aiding the movement of goods and equipment (presumably military hardware and other embargoed technologies) into Iraq in violation of the UN sanctions enacted against the Hussein government. Other Dubai-based trading companies are sometimes used to procure embargoed arms and other materiel for the Iranian armed forces.

Fourth, the need by the Iraqis for this quantity of arms is hard to justify. To date 701,000 weapons have been purchased for the Iraqi army and police forces using $237 million in U.S. government funds. Another 100,000 automatic weapons and small arms seems like overkill.

And lastly, one of the five Italian businessmen that has been charged, Vittorio Dordi, 42, is still at large and was reported to be in the Democratic Republic of Congo. Dordi is said to have be involved in the diamond trade, which in this part of the world is often linked to illicit trades of arms for what are commonly called "conflict diamonds."

Perhaps one of the keys to the Italian authorities deciding to close in on these would-be arms traders is that in addition to the circumstantial indicators that something was amiss, there were messages intercepted from Waleed Noori al-Handal, the general manager of Al-Handal. He emailed the Italians "you mustn't worry if it's a problem to import these goods directly into Iraq. We can bring the product to another country and then transfer it to Iraq." In other words, there would be falsification of the end user certificates for this purchase and the official and actual destinations might end up being two different countries.

This arms bust comes on the heels of announcements in July that some 110,000 Kalashnikov AK-47s and 80,000 other small arms originally purchased by the U.S. military to arm the new Iraqi Security Forces and police units are unaccounted for.

Analysts in Washington with knowledge of the situation in Iraq point out that the U.S. regularly blames both Syria and Iran for permitting a flow of materiel across the border into Iraq, but that Coalition forces are ignoring the growing black-market trade of arms and loss of government inventory inside Iraq. Quoted in the Washington Post, Rachel Stohl from the Center for Defense Information states that U.S. forces on the ground are ignoring this dimension of the problem at their own peril. "It likely means that the United States is unintentionally providing weapons to bad actors."

Add to the equation that the long-term plan of the U.S. Army is to replace the AK-47s now being used by coalition-trained Iraqi units with the famous U.S.-made M-16 and the specter of a country awash in black-market weapons seems ever more likely. Stohl and others have warned that to let this situation continue is to repeat the same type of mistakes made when Coalition forces initially invaded Iraq in 2003 and left large caches of arms and ammunition in their wake--arms that have been used by the insurgents ever since.

Reuben F. Johnson is a contributor to THE WORLDWIDE STANDARD.