Russia investigates businessman's reported links with Al-Qa'idah

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ARMS FOR AFRICA: Russian weapons are supplied to virtually all sides to conflicts in Africa Dmitry Polikanov Moscow News; INVESTIGATION; No. 4 January 24, 2001

There would have been nothing wrong with arms supplies to Angola had the deal not been made in circumvention of procedure established by Paris and had it not involved an international shadow dealer on the run, currently hiding from justice in Israel. Russia does not look at all bad against the backdrop of supplies from other countries, especially from former Soviet republics: Of the CIS states, Russia has the most diversified export control system while state military supplies proceed in compliance with rules of international law. So the main problem with Russian arms export is not its perceived "illegitimacy" but violation of just one norm of ethics: refraining from supplying arms to zones of combat action.

A case in point is former KGB Major Viktor Butt, who had offices in Europe and used Soviet-made aircraft registered in Liberia, Swaziland, and the Republic of South Africa.

Unfortunately, most of the time Russia proceeds from considerations of commercial expediency and the need to maintain the viability of its military industrial complex, not long-term political interests, as evidenced by its sale of Su-27 and MiG-29 fighter jets to Ethiopia and Eritrea in late 1998, at the height of a border war between the two countries. The main recipient of Russian military equipment is Angola. One major landmark in the evolution of the military-technological cooperation with Angola was the visit by RF Defense Minister Igor Sergeyev to Luanda, in August 1998, when the sides agreed on an arms maintenance and modernization program for the Angolan army, including the creation of joint ventures for the purpose. Those maintenance centers were also supposed to service Soviet-made weapons in other African countries, thus becoming outposts for Russian arms producers in Africa. In fact, Russia is the main arms supplier for the government of Eduardo dos Santos. In 1997, Luanda purchased modern combat helicopters and ordered 20 Su-24 fighter-bombers from Russia. In November 1998, multipurpose MiG-23 fighter jets began to arrive in Angola with modernization work on Angola's fleet of MiG-21s and MiG-23s getting under way. In April 1999, a new deal with Russia was reported - estimated at nearly $ 1 billion, including combat aircraft and T-72 tanks. Russian arms supplies enabled the Angolan government to rout UNITA by 2000, establishing control over diamond producing areas - the key source of funds for the rebels. Another area of intense conflict is the Great Lakes, where the war in the Democratic Republic of Congo (former Zaire) has been going on, with a short break, for more than four years now. At present more than 10 states supporting different sides in the Congolese conflict are involved in this African "World War I." In 1998, Zimbabwe bought more than $ 54 million worth of arms from Russia. In April 1999, the government reportedly intended to buy yet another large shipment of arms and ammunition, including 10 Mi-24 helicopters. The justice minister on a visit to Moscow held preliminary negotiations on a deal valued at approximately $ 26 million.

The agreement would not have made much of a stir perhaps were it not for the fact that the Congolese government was to partially fund the deal while the weapons were to be used in fighting the insurgents. Suspicions also arose over the fact that the Zimbabwe government sought to conduct negotiations by circumventing existing mechanisms, while the country's defense minister strongly denied there had been a deal in the first place. Presumably, the shroud of secrecy surrounding the deal had to do with the intention to soft-pedal the issue about massive defense expenditures in a famine-stricken country.

Paradoxically, another coalition of states involved in the war in the Democratic Republic of Congo, on the insurgent side, includes Uganda, Rwanda, and Burundi, which also buy weapons from Russia. Thus, in late 1998-early 1999, three shipments of arms were delivered to Uganda via Tanzania - presumably, from Russia or Ukraine - in all, more than 90 tanks, 10,000 antitank and antiaircraft missiles, plus several thousand automatic rifles, grenade launchers, mortars, and ammunition. The third shipment was designed for Rwanda.

Incidentally, according to some reports, Russian arms were also used in the spring and summer of 2000 in the course of unrest in Zimbabwe. Zimbabwe military distributed 21,000 AK-47 automatic rifles, which arrived at an Air Force base in Manyama aboard a Soviet-made transport plane, among former veterans of the independence war. As is known, on the eve of election day, with permission from President Robert Mugabe, the war veterans started seizing land owned by white settlers, which was accompanied by a wave of violence.

Unfortunately, in addition to official and semi-official contacts, there is a diversified network of illegal arms suppliers from countries of Eastern Europe and the former Soviet Union. It is noteworthy that oftentimes purportedly Russian weapons figuring in these deals in fact come from other CIS countries. Such inaccuracies partly arise from the tendency to view Russian-speakers as Russian nationals although not all of them are. In particular, Arkady Gaidamak involved in the Paris scandal, holds French, Canadian, and Israeli passports and has long become a citizen of the world.

Not infrequently Russian aircraft, ships, and crews are used to carry weapons and even troops or mercenaries. There are diversified networks of agencies specializing in such shipments. A case in point is former KGB Major Viktor Butt, who had offices in Europe and used Soviet-made aircraft registered in Liberia, Swaziland, and the Republic of South Africa. The arrest by Spanish police of Russian fishing vessels illegally carrying various types of weapons via the Canary Islands - presumably to Angola, Sierra Leone, and Congo - provoked a bitter row. In December 1999, Congolese insurgents detained an An-26B airplane with a Russian crew on board, which had been charted by a Belgian company to airlift weapons from Kinshasa to eastern provinces for a pro-government army. The weapons were packed in boxes marked "Typewriter Parts." Considering the pragmatic orientation of the current foreign policy course, military-technological cooperation with African countries should be expected to expand although Russia would be well advised to set a little more store by its international image and play a more active part in the international effort to control arms trade on the African Continent.

'toon's backers were all bad money, but Loutchansky took it to the next level. Hmm.....Iran's part of the "axis of evil".

ASIAN PERSPECTIVE, Vol. 21, No. 3, Winter 1997, pp. 7-39

In testimony to a U.S. Senate intelligence oversight committee in 1996, U.S. government agencies added the following comments:

Iran has had a biological-warfare program since the early 1980s. Currently, the program is mostly in the research and development stages, but we believe Iran holds some stocks of BW agents and weapons....Iran has maintained an offensive BW program since the mid-1980s, with the intent of developing BW weapons… Like other BW proliferants in the region and elsewhere, Iran has been successful in acquiring necessary dual-use equipment for biological agent R&D and production. Efforts are underway to conceal the location(s), pace and direction of the offensive program.

One report has identified the city of Damghan as the location of a possible “chemical and biological production facility.”

Other locations have been suggested as well, however, and as indicated, major Iranian academic institutions may be involved. Finally, there is a report that a Russian export company sold “a BW delivery system to Iran” some time in 1995. The company was subsequently identified as Nordex.

The political implications of the above information, that Iran’s BW program seems to have reached the production stage, is magnified many fold by the nature of Iran’s diplomatic behavior in the arms control negotiations in Geneva to achieve a Verification Protocol to the BTWC. In that negotiating forum, Iran has done everything it could to block progress toward achieving a positive outcome to seven years of negotiating.

How well was that $300,000 to klintoon washed?

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The U.S. Connection in Caucasus Intelligence Newsletter; THREAT ASSESSMENT; DIPLOMACY; N. 401 March 8, 2001

Ex-president Bill Clinton's pardons-for-cash scandal is only the tip of an iceberg that reveals close connections between the Washington establishment and an international network of Russian mobsters.

At the origin of the saga was the revelation by the National Enquirer that Hillary Clinton's brother Hugh Rodham received some $ 400,000 for arranging last minute presidential pardons for two ex-convicts. From that starting point one can see the extent of common interests of the previous and new U.S. administrations concerning oil reserves in the Caucasus. Two years ago Hugh and his brother Tony traveled to the small autonomous Georgian republic of Ajaria where they hoped to make a quick profit. There, they did business with Aslan Abashidze, head of the republic, who convinced them to invest in a hazelnut cartel. U.S. intelligence officials later managed to persuade Clinton to warn his brothers-in-law away from the deal.

A fierce opponent of Georgian president Eduard Shevarnadze, Abashidze made much of his fortune from high-level crime. He is a close friend of Grigori Loutchansky, a Georgian-born Israeli citizen who is considered by the National Security Council as a main cog in Russian crime. He owns the Austria-based firm Nordex and was also a key player in Motorola's $ 5 billion Iridium satellite project.

In the early 1990s Loutchansky teamed up with Marc Rich, the fugitive trader who was given a pardon by Clinton. The two made billions in selling Russian oil and aluminum from faltering Soviet-era and mafia-controlled state enterprises to the west.

Loutchansky is on an official watch list maintained by the U.S. State Department but that didn't stop him from entering the U.S. in 1993 to attend a White House dinner with Clinton. Loutchansky has a friend, Roger Tamraz, who had donated a large sum of money to the Democrats.

A Lebanese-American, Tamraz worked to get Clinton's support for the construction of an oil pipeline from Baku in Azerbaijan to Ceyhan in Turkey. This presented the advantage to the U.S. of providing access to Central Asian oil without passing by way of Russia.

Construction of the pipeline also involved a wealthy Chechen businessman named Khozhakhmed Nukhayev, rumored to be one of the most influential Chechen mafia bosses but who became president of the U.S.-Caucasus Chamber of Commerce headquartered in Washington. Nukhayev spent some time in Houston persuading big oil companies to bankroll the oil pipeline.

In the consortium formed to build the pipeline figure BP Amoco, Bechtel, Exxon Mobil and Halliburton, the company previously run by vice president Dick Cheney. Other officials of the new Bush administration are linked to the affair. One is Richard Armitage, who is now Colin Powell's number two man at the State Department, who chaired the U.S.-Azerbaidjan Chamber of Commerce. At the time the chamber's lawyer was the son of former secretary of state James Baker. Also, Cheney's chief of staff, Lewis Libby, was recently said by former president Clinton to have once been a lawyer for Marc Rich.

REP. LEACH: One second, Mr. Ermarth. One of our concerns, obviously, as a committee is that when you look at a problem of corruption abroad, how do you present shields to your own country, and have those shields worked? And Mr. Ermarth has asserted that he believes that there may have been monies that have seeped into the American political process. And I'd like to ask you, Mr. Ermarth, if you could elaborate on that assertion.

MR. ERMARTH: The Loutchansky case is one of the more prominent that I know about in the public domain. It's just been referred to in the press. In fact, most of the Loutchansky story is in the public domain because of press coverage in Europe and in the United Stats over the years. He was one of those operations that was set up in business by the KGB in the late '80s that semi-privatized himself after the collapse of the Soviet order.

The political contribution alleged arose in 1993 when he attended a fund-raiser in New York with an American friend, and the allegation is he just wouldn't have been there if he hadn't made a contribution. Another case is Goldenata (sp)[Golden Ada], a company in San Francisco, since dissolved and defunct, set up in the early '90s to cut, polish and market Russian diamonds and other precious metals and stones, receiving hundreds of millions of dollars of diamond, gold, platinum, which they just pocketed the proceeds. And they are known to have made political contributions in the San Francisco area.

I would rest more -- I simply cite those as attention-getting public cases. I would rest more on the direct assertions, admittedly in private settings, by colleagues in the FBI who say, yes, it's happening at the federal -- or at the state and local and probably at the federal level as well, at least in the states where there's a substaussian business influence from offshore. And there's no attempt here to impugn the honesty or patriotism of Russian-Americans who now live in this country in fairly substantial numbers, but it's money coming from offshore. FRITZ W. ERMARTH, FORMER CIA CHIEF RUSSIAN ANALYST
CAPITOL HILL HEARING WITH DEFENSE DEPARTMENT PERSONNEL
PANELS II AND III OF A HEARING OF THE HOUSE BANKING AND FINANCIAL SERVICES COMMITTEE SUBJECT: RUSSIAN CORRUPTION AND MONEY LAUNDERING OPERATIONS CHAIRED BY: REPRESENTATIVE JIM LEACH (R-IOWA)
SEPTEMBER 21, 1999, TUESDAY

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Jovial airman is armourer of terror Hunting the merchants of destruction Sunday Times (London) February 17, 2002, Sunday

There was nothing very remarkable about the corpulent businessman who arrived at Ostend airport in 1995 with a request to the Belgian authorities to set up an air freight company. He introduced himself as Victor Anatolevic Bout, a former Soviet air force officer operating a legitimate air cargo business in Africa.

Now an even more sinister link has emerged. Investigators have established that as well as supplying some of the most vicious armies in Africa in return for diamonds, Bout was the chief supplier of arms and equipment to the Taliban and Osama Bin Laden's Al-Qaeda network in Afghanistan.

Within a year of his arrival in Belgium, Bout had settled in well. He bought a comfortable Pounds 275,000 home near Ostend and made his offices at the airport the European headquarters of his flagship company, Air Cess. But the professional life of the suave and jovial airman - who spoke several languages and is married with a violin-playing daughter - was anything but straightforward; nor did it go unnoticed for long. Investigators who have spent the past five years examining Bout's murky business activities soon found that behind the seemingly legitimate facade and the charming exterior was a "merchant of death".
Using his Soviet military and intelligence connections to obtain weapons from bankrupt eastern bloc arms factories, Bout rapidly turned Ostend airport into one pivot of a worldwide arms-trafficking business that fuelled the bloodiest wars in Africa.
Now an even more sinister link has emerged. Investigators have established that as well as supplying some of the most vicious armies in Africa in return for diamonds, Bout was the chief supplier of arms and equipment to the Taliban and Osama Bin Laden's Al-Qaeda network in Afghanistan.
Managing a fleet of planes from Ostend and later the United Arab Emirates, Bout is thought to have shipped weaponry to the Taliban from contacts in Ukraine, Russia and Bulgaria. According to one United Nations source, Bout's cargo planes were also used to help smuggle opium out of Afghanistan on their return.
Some of the most damning evidence of Bout's connections to the Taliban and Al Qaeda has been collected by MI6, which has run a campaign to monitor and disrupt his activities.
Days after September 11, MI6 officers informed the government that they had clearly established Bout's role in arming Al-Qaeda, according to a senior official. Even after the tightening of UN sanctions on Taliban-controlled Afghanistan at the beginning of last year, western sources believe secret flights by Bout-associated companies continued into the country.
Equipping the Taliban is estimated to have made Bout a personal profit of more than Pounds 30m.
After mounting local and international pressure, Bout moved out of Belgium in 1997 but his operations continued. He established a new base in the Gulf emirate of Sharjah. Last year, he moved on to the neighbouring emirates of Ras al Khaimah and Ajman.
He is also believed to own a number of properties in Kigali, the capital of Rwanda, and in neighbouring Uganda, but some informed sources say he may be lying low in Moscow.
Last week, though, the net began to tighten: Belgian authorities struck what they hope will be a death blow to Bout's arms deals by rounding up a number of his key associates in a major criminal investigation into counterfeit currency.
They have followed this by issuing an international arrest warrant for Bout, which will certainly restrict his movements.
Whether it will lead to his ultimate arrest is harder to figure. Seldom photographed and with multiple aliases, he is an elusive figure, with powerful contacts in unstable regimes across the world who would be eager to protect their armourer.
Details of his background are sketchy. Believed to have been born either in Smolensk or Dushanbe, the capital of Tajikistan, on January 10, 1967, Bout initially trained as a navigator.
Some reports claim he went on to become a KGB officer. Others believe that it was through his wife Alla that the lowly airman rose to prominence. According to reports from South Africa, her father "Zuigin" is said to have held high rank in the Soviet security forces, possibly even acting as deputy chairman of the KGB.
Either way, following the collapse of the Soviet Union, Bout was one of several former military personnel to have spotted an opportunity to market stockpiles of redundant armaments to rebel factions across Africa.
Initially, it was a small-scale affair. When Bout first arrived in Ostend he owned one Ilyushin cargo plane. Today he controls some 60 aircraft, including he largest private fleet of Antonov cargo planes in the world, and is thought to employ some 250 people.
Bout has often disguised his arms trafficking empire behind other, more legitimate activities: Air Cess once carried UN peacekeepers from Pakistan to East Timor. But his gun-running in Africa and Afghanistan have been terribly destructive.
In breach of embargoes imposed by the UN, his fleet of big-bellied Soviet-era cargo planes supplied weapons to rebels in Sierra Leone, the unsavoury Unita forces in Angola, and the extremist Hutu militia responsible for the Rwandan genocide.
Bout's involvement in Afghanistan began with supplying weapons to the Taliban's opponents, the Northern Alliance. But after one of his aircraft was held hostage by the Taliban, he agreed to switch sides and by 1996 his aircraft and Ariana, the Afghan carrier, were operating up to four flights a day into Taliban-held territory.
As well as conventional arms, shipments are thought to have included cyanide and other toxic chemicals bought in Germany, the Czech Republic and Ukraine, according to Dr Ravan Farhadi, the Afghan permanent representative to the UN.
Al-Qaeda was purchasing the chemicals directly for use in experiments, he said.
But Bout himself pours scorn on his reputation as a merchant of death. Last year, in a chance encounter with a Belgian journalist, he claimed he was simply misunderstood. "I was suspected of trafficking arms every day, to all corners of the world," he lamented. "But that would have been impossible."
It will take a somewhat more convincing defence to satisfy western governments as the hunt for Al-Qaeda's armourer intensifies.
Insight: Stephen Grey, Jon Swain, Jon Ungoed-Thomas, Gareth Walsh in London; Nick Fielding in Kabul

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