The Business of War
from the 11-part series
Making a Killing
The Business of War
The Center for Public Integrity
In February 2002, Belgian authorities
issuedan international arrest warrant for Russian arms dealer
Victor Bout on charges ofmoney laundering and conspiracy. Dayslater,
Bout who allegedly also suppliedweapons to the Taliban in
Afghanistan sauntered into the studios of a Moscow radio
station a few blocks from the Kremlin to protest his innocence.
"What should I be afraid of?"
he asked, live on air, as Russian police claimed they could not
Bout believed he was untouchable, and
with reason. In order to operate one of the largest arms-trafficking
networks in the world, he had cultivated influential friends
from African heads of state to senior figures in Russia's post-Soviet
Bout's swagger is not altogether unique.
He epitomizes a new breed of opportunists that has come to dominate
the global landscape of conflicts since the end of the Cold War.
Gone is the superpower ideological divide that once gave a strange
sort of order to the world's wars. In its place are entrepreneurs,
selling arms or military expertise and support, and companies,
whose drilling and mining in some of the hottest spots often prolong
conflict and instability. Additionally, the military downsizing
that followed the end of the Cold War and the collapse of the
Soviet Union flooded the market with surplus arms and trained
soldiers looking for a job.
As Pete Singer, an Olin Fellow in the
Foreign Policy Studies Program at the Brookings Institution, said:
"This incredible dump of goods and services has made it much
easier for non-state actors to fight a war."
A nearly two-year investigation by the
Center for Public Integrity's International Consortium of Investigative
Journalists into the business of war has found that these non-state
actors despite their appearance of being freelancers
have copious connections to intelligence services, multinational
corporations, political figures and criminal syndicates in the
United States, Western and Eastern Europe, Russia, Africa and
the Middle East. Often, they work as proxies for national or corporate
interests whose involvement is buried under layers of secrecy.
"Western chancelleries have not renounced
their self-proclaimed right to influence the course of events,"
the French political scientist Jean-Francois Bayart wrote in the
journal African Affairs in April 2000. "But they now prefer
to act through private operators, including both commercial companies
and non-governmental organizations, and even in the field of defense."
Private military companies, or PMCs as
the new world order's mercenaries have come to be known, allow
governments to pursue policies in tough corners of the world with
the distance and comfort of plausible deniability. The ICIJ investigation
uncovered the existence of at least 90 private military companies
that have operated in 110 countries worldwide. These corporate
armies, often providing services normally carried out by a national
military force, offer specialized skills in high-tech warfare,
including communications and signals intelligence and aerial surveillance,
as well as pilots, logistical support, battlefield planning and
training. They have been hired both
by governments and multinational corporations to further their
policies or protect their interests.
These companies do not represent the dark
underbelly of war commerce and, indeed, their supporters argue
that PMCs save lives and bolster security, all while being more
cost-efficient than national militaries or international peacekeeping
operations. But many operate in the same black hole of information
that allows war profiteers like Bout to work with impunity.
War or criminality?
Much of what has been called war during
the past decade especially in places like Sierra Leone and
Angola is merely anextreme form of criminality. Some of
thearms dealers andentrepreneurs tracked inthe ICIJ investigationcrossed
regularlybetween the secretiveworlds of war commerce, organized
crime and terrorism.
One measure of theirinfluence is the deadly
trade in arms. Compared to the legal trade in arms, the number
of weapons shipped illegally is small about 10 percent of
total world sales. But small arms have been the weapons of choice
in 90 percent of the conflicts since 1990 and were responsible
for almost 100 percent of the killing.
Arms dealers such as Bout, Leonid Minin
and Jacques Monsieur have been at the forefront of the most extensive
yard sale in history a massive unregulated sell off of low
price surplus armaments into the most fragile, conflict-ridden
corners of the Earth.
The weapons, mostly from state-owned Eastern
European factories, have found their way to Angola, Sudan, Ethiopia,
Colombia, Congo-Brazzaville, Sri Lanka, Burundi and Afghanistan
conflicts in which up to an estimated 10 million people
have died during the past decade.
It is hard to imagine that a few individuals
could have such influence, but as Tom Ofcansky, a specialist at
the U.S. State Department's Bureau of Intelligence and Research,
pointed out: "The impact of a few planeloads of arms, as
we've seen repeatedly in Africa, had a devastating impact on fragile
African societies." Two helicopter gunships piloted by South
African mercenaries, for example, altered the balance of war in
Sierra Leone in 1999 in favor of the government.
Arms shipments were bolstered by highly
trained soldiers and pilots war veterans from apartheid
South Africa, the Ukraine, the Israeli Defense Force, U.S. Special
Forces and the British Special Air Services who came onto
the market, selling their services.
The entrepreneurs and their sponsors did
not invent this world. Large parts of Africa and parts of South
Asia and Latin America have experienced state collapse, where
leaders are no longer able to impose law and order. However, developed
nations have aided or, at a minimum, turned a blind eye to the
activities of their nationals which are fueling wars.
"You have situations, where states
are collapsing or completely out of control," said Johan
Peleman, a Belgian arms investigator. "They invite the sort
of investors that thrive on this lack of oversight, on this lack
of control, on this lack of interest in the background of the
Some African governments are little more
than criminal syndicates warlords such as Charles Taylor,
the president of Liberia, or more sophisticated elites, such as
the rulers of Angola. But to sell diamonds and timber and oil
onto the world market requires foreign partners.
The people doing the extracting, the bribing,
the arms dealing, and the deal-making are South African, Belgian,
American, Israeli, French, Ukrainian, Lebanese, Canadian, British,
Russian, Malaysian, and Syrian. They are a class of entrepreneur
that operates beyond borders, often unaccountable to shareholders
and unfettered by the regulation they would encounter in their
own countries. They have become influential political players
in the countries in which they operate.
"You have presidents that then attract
investors that are just out to make a quick few million, mostly
at the expense of the local population or the long-term situation
of that country," says Peleman. "At the same time, real
Mafia organizations and organized crime are attracted to this
kind of situation."
The end of the Cold War led to a profound
disengagement of the United States and its allies from formal
involvement in the wars of the developing world. The West's reluctance
to intervene in small wars was driven by the 1993 debacle in Somalia,
when 19 U.S. soldiers and 1,000 Somalis died in a disastrous attempt
at ridding the country of the warlord and food profiteer, Mohammed
Even the notable exception to this trend,
the Balkans, was left to fester for years before American and
NATO power was brought to bear on the thuggish regime of Slobodan
Milosevic, despite the fact that the former Yugoslavia was on
Europe's doorstep and its implosion threatened the integrity of
the Atlantic alliance.
In most instances, the big powers withdrew
their direct sponsorship of rebel movements and regimes, which
in turn had to become self-financing businesses to pay for the
weapons, training and mercenaries they needed to overthrow governments
or protect their tenuous hold on power.
When Jonas Savimbi, the leader of Angola's
rebel UNITA forces, refused to accept his defeat in elections
in Angola 1992, he paid for his arms by seizing thediamond fields
in thenortheast of the country. Hecreated an elaborate miningoperation
and buyingsystem and imported aworkforce from neighboringZaire
(now Congo). He alsorecruited a network of Belgian and South African
diamond dealers, a structure that was replicated in Sierra Leone.
Wars that had been shaped by U.S.-Soviet
competition were overtaken by wars in which governments, guerrilla
groups and criminal organizations-sometimes interchangeable-battled
it out for access to wealth, potential wealth or trafficking routes.
Often the conflicts reached a point of equilibrium at which both
sides could loot and profiteer.
David Keen of the London School of Economics
wrote in an International Committee of the Red Cross book on war,
money and survival that the perception of a civil war in which
the combatants actively seek to win the war is increasingly faulty.
"Civil wars spawn their own political economy, from which
all sides of the conflict might benefit. As a result, some parties
may become more anxious to prolong a war than to win it."
The Democratic Republic of the Congo went
back to war in 1998 over political differences between President
Laurent Kabila and his erstwhile mentors in Rwanda and Uganda.
Yet the original cause of the conflict was obscured and forgotten
as occupying armies on both sides looted the country's resources.
War brought no one closer to developing the Congo. It could only
support a plunder economy, the most basic of mining operations
digging for coltan or diamonds or stripping forests.
An orphan child
There have been notable attempts
in France, Switzerland and Italy to clamp down on criminal
networks that have profited from war. But these have been hampered
by a lack of intelligence and law enforcement coordination.
When Minin, a Ukrainian arms dealer, was
arrested with bags of cocaine and diamonds in his pockets and
prostitutes on his lap in a hotel room in Monza, Italy, it took
weeks for the authorities to find out that he already had been
convicted of fraud in Germany, banned from Switzerland and Monaco,
that there were bulging files on his criminal activities in Belgium
and France, and that he was, in fact, wanted by the Italian police
in connection with alleged Mafia activities and drugs and arms
"The African arms trafficking issue
was an orphan child in the greater scheme of things," Ofcansky,
the U.S. State Department arms specialist, said.
The United States, despite having the
best anti-arms trafficking legislation in the world, lost interest
in the global trade outside its borders just as that trade was
mushrooming, according to a senior U.S. Customs official who spent
decades investigating the black market in weapons. Up until 1995,
Customs agents tracked international weapons trafficking through
intelligence and undercover operations, he said. During the Clinton
administration, there was a change in emphasis one that
extended to the Bush administration. "The change of attitude
by the administration severely restricted us in our work,"
the agent told ICIJ. "People were basically saying, why are
we sticking our noses in these matters? Okay, there's a guy from
Russia selling weapons to Ethiopia. Why should we care?"
Monitoring arms trafficking to Africa,
one law enforcement official said, was a part-time job at Interpol.
International arms embargoes, meanwhile,
were ineffective and seldom enforced. Although the United Nations
resorted to publicly outing culprits like Bout, no one was prosecuted
for violating U.N. arms embargoes. And Western intelligence agencies
adopted a tolerant attitude when it suited them.
In September 2000, Monsieur, a Belgian
arms dealer, told a French judge of having been contacted in Brussels
by the CIA and, with the blessing of the French civilian intelligence
agency, of having sent tens of millions of dollars in weapons
to Croatia. From 1991 to 1995, he found his best markets in Croatia
and Bosnia, even though the two countries were under a U.N. arms
embargo to which the United States paid public lip service. Monsieur
also dealt arms in Iran, Qatar, Zaire, Burundi and Congo-Brazzaville.
Indeed, the failure of intelligence agencies
to share information hindered law enforcement. "Despite the
fact that it is a secret world, we were at least able to find
out some very interesting inner workings of the arms trafficking
trade," said Ofcansky. "But, again, what does one do
with that information? Much of it is highly classified and cannot
be shared. I think this is another challenge facing the West in
this proliferation of secret worlds. And there's going to have
to be a rethink, a more generous declassification process eventually,
to help come to terms with some of these problems."
The arms dealers cannot be viewed in isolation,
however. The diamond industry took little action to police itself
as gemstones became one of the prime currencies in Africa's wars
and, it was later revealed, for terrorists. With so-called conflict
diamonds being laundered through the exchanges of Antwerp and
Tel Aviv, the industry responded only after it was challenged
by nongovernmental organizations such as Global Witness, whose
campaign against blood diamonds created so much bad publicity
that the industry was forced to devise measures to clamp down
on stones from conflict zones.
Blue chip corporations were squeamish
about investing in lawless societies, but large oil companies,
which followed the natural deposits, had no choice but to engage.
Most turned a blind eye to how their involvement helped fund various
despots or conflicts. But, according to numerous court cases,
statements by former officials and press exposés in France,
the now-defunct French state oil company, Elf Aquitaine, went
beyond indifference, financing the purchase of weapons and hedging
its bets in Congo-Brazzaville and Angola by supporting and helping
arm both sides.
The failed states within whose boundaries
the wars were conducted helped launch new and dangerous movements,
which thrived in a world of lax banking rules, secretive arms
networks, and surreptitious financing methods.
Michael Westphal, the deputy assistant
U.S. defense secretary for African affairs, warned in April 2002
that 40 out of 48 African states were too weak to prevent members
of al Qaeda or other terrorist organizations from transiting,
stationing themselves, or raising funds and planning operations
from their territories.
"I think the September 11 tragedy
underscored the fact that the West could no longer afford to ignore
or give a very low priority to failed states," Ofcansky said.
"These are breeding grounds not only of arms traffickers,
organized crime, but also of terrorists."
The aftermath of the Sept. 11, 2001, terrorist
attacks on the United States showed what could be achieved with
greater political will. Bout, the Russian arms trafficker, operated
with impunity for years in Africa's conflict zones.
Even when the United Nations cited him
frequently in its reports on individuals and companies involved
in the shady world of arms and diamonds dealing in Africa in 2000,
Bout continued to ply his trade.
If he felt uncomfortable or under scrutiny,
he would simply move his planes to a new base from Belgium
to South Africa to Swaziland to Equatorial Guinea. For years,
his head office was in the United Arab Emirates because the free
trade zone allowed him to come and go at will with very little
U.S. authorities in 1999 became aware
that Bout was also supplying weapons to the Taliban and sought
the assistance of Belgium and South Africa in investigating him.
But after the Sept. 11 attacks, Bout was more than a bad guy,
he was an enemy in the war on terrorism. He fled back to Moscow
where, although he remains at large, his operation appears to
be largely crippled.
Bush administration officials initially
opposed international moves to impose strict controls on the purchase
and sale of diamonds, but softened their stance after reports
that Osama bin Laden made good use of the diamond trade in West
Africa, employing the dealers and networks that had helped to
fund rebel forces in Angola and Sierra Leone. U.S Rep. Tony Hall,
an Ohio Democrat who sponsored legislation to place trade sanctions
on countries that sell diamonds to finance war or terrorism, said
after the legislation was approved that reports on Bin Laden's
role in the trade "put us over the edge."
But the ability to launder conflict diamonds
through the official system remains. A U.S. government report
in February 2002 found that the new process the industry has devised
to police itself is inherently flawed.
And the evidence seems to suggest there
will be less, not more, effort devoted to policing criminal networks
trafficking in the war zones of the world.
While the wars in Angola and Sierra Leone
ended in 2002, fresh conflict erupted in Liberia, Congo-Brazzaville,
the Central African Republic, and fighting continues in Sudan
and the Congo. Afghanistan continues to threaten a return to warlordism,
and the United Nations, fearing a resumption of hostilities in
Sierra Leone, has extended its peacekeeping mandate there.Ofcansky,
the U.S. State Department official, said there is a crying need
for international law enforcement aimed at curbing global criminals.
"What are needed are U.N. inspection
teams in ports and airports, with the authority to detain aircraft
or ships, or arrest people that requires a significant change
in the international system. But that's not going to happen anytime
a Killing page