$40 Million Iraq Arms Deal Uncovered
PERUGIA, Italy (Aug. 12) – In a hidden corner of Rome’s busy Fiumicino Airport, police dug quietly through a traveler’s checked baggage, looking for smuggled drugs. What they found instead was a catalog of weapons, a clue to something bigger.
Their discovery led anti-Mafia investigators down a monthslong trail of telephone and e-mail intercepts, into the midst of a huge black-market transaction, as Iraqi and Italian partners haggled over shipping more than 100,000 Russian-made automatic weapons into the bloodbath of Iraq .
Ghassan al-Yassiri, AP
An Iraqi man carries a Russian-made machine gun at a funeral in Karbala, Iraq, last month. The secret multi-million-dollar purchase would have been the most spectacular example of how Iraq has become a magnet for arms traffickers.
As the secretive, $40 million deal neared completion, Italian authorities moved in, making arrests and breaking it up. But key questions remain unanswered. For one thing, The Associated Press has learned that Iraqi government officials were involved in the deal, apparently without the knowledge of the U.S. Baghdad command – a departure from the usual pattern of U.S.-overseen arms purchases.
Why these officials resorted to “black” channels and where the weapons were headed is unclear. Some guns the U.S. bought for Iraq’s police and army are unaccounted for, possibly fallen into the hands of insurgents or sectarian militias. Meanwhile, the planned replacement of the army’s AK-47s with U.S.-made M-16s may throw more assault rifles onto the black market.
And the weapons free-for-all apparently is spilling over borders: Turkey and Iran complain U.S.-supplied guns are flowing from Iraq to anti-government militants on their soil.
Iraqi middlemen in the Italian deal, in intercepted e-mails, claimed the arrangement had official American approval. A U.S. spokesman in Baghdad denied that. “Iraqi officials did not make MNSTC-I aware that they were making purchases,” Lt. Col. Daniel Williams of the Multi-National Security Transition Command-Iraq (MNSTC-I), which oversees arming and training of the Iraqi police and army, told the AP.
Operation Parabellum, the investigation led by Dario Razzi, anti-Mafia prosecutor in this central Italian city, began in 2005 as a routine investigation into drug trafficking by organized-crime figures, branched out into an inquiry into arms dealing with Libya, and then widened to Iraq.
Court documents obtained by the AP show that Razzi’s break came early last year when police monitoring one of the drug suspects covertly opened his luggage as he left on a flight to Libya. Instead of the expected drugs, they found helmets, bulletproof vests and the weapons catalog.
Tapping telephones, monitoring e-mails, Razzi’s investigators followed the trail to a group of Italian businessmen, otherwise unrelated to the drug probe, who were working to sell arms to Libya and, by late 2006, to Iraq as well, through offshore companies they set up in Malta and Cyprus.
In the documents, Razzi describes it as “strange” that the U.S.-supported Iraqi government would seek such weapons via the black market.
Investigators say the prospect of an Iraq deal was raised last November, when an Iraqi-owned trading firm e-mailed Massimo Bettinotti, 39, owner of the Malta-based MIR Ltd., about whether MIR could supply 100,000 AK-47 assault rifles and 10,000 machine guns “to the Iraqi Interior Ministry,” adding that “this deal is approved by America and Iraq.”
…By December, the Italians, having found a Bulgarian broker, were offering Russian-made goods: 50,000 AKM rifles, an improved version of the AK-47; 50,000 AKMS rifles, the same gun with folding stock; and 5,000 PKM machine guns.
The Iraqis quibbled over the asking price, $39.7 million, but seemed satisfied. The Italians were set for a $6.6 million profit, the court documents show, and were already discussing air transport for the weapons. At this point prosecutor Razzi acted, seeking an arrest warrant from a Perugia court.
“The negotiation with Iraq is developing very quickly,” he wrote the judge. On Feb. 12, in seven locations across Italy, police arrested the 17 men, including the four alleged arms traffickers:
Al-Handal’s operations have caught investigators’ notice before. In 1996-2003, the company was involved as a broker in the kickback scandal known as Oil for Food, the CIA says.
In that program, Iraq under U.N. economic sanctions bought food and other necessities with U.N.-supervised oil revenues. Foreign companies, often through intermediaries, surreptitiously kicked back payments to officials of Saddam Hussein ‘s Iraqi government in exchange for such supply contracts.
Those Iraqi middlemen also engaged in “misrepresenting the origin or final destination of goods,” said the 2004 report of the CIA’s Iraq Survey Group, which investigated both Iraq’s defunct advanced weapons programs and Oil for Food.
That report also alleged that during this period Al-Handal General Trading, from its bases in Dubai and Jordan, secretly moved unspecified “equipment” into Iraq that was forbidden by the U.N. sanctions.
Reached at his office in Amman, Jordan, Waleed Noori al-Handal denied the family firm had done anything wrong in the Italian arms case. “We don’t have anything to hide,” he told the AP.
Citing the names of “friends” in top U.S. military ranks in Iraq, al-Handal said his company has fulfilled scores of supply and service contracts for the U.S. occupation. Asked why he claimed U.S. approval for the abortive Italian weapons purchase, he said he had a document from the U.S. Army “that says, ‘We allow al-Thuraya Group to do all kinds of business.”‘
In Baghdad, the Interior Ministry wouldn’t discuss the AK-47 transaction on the record. But a senior ministry official, speaking on condition of anonymity because of the matter’s sensitivity, acknowledged it had sought the weapons through al-Handal.
Asked about the irregular channels used, he said the ministry “doesn’t ask the supplier how these weapons are obtained.”
Although this official refused to discuss details, he said “most” of the 105,000 weapons were meant for police in Iraq’s western province of Anbar. That statement raised questions, however, since Pentagon reports list only 161,000 trained police across all 18 of Iraq’s provinces, and say the ministry has been issued 169,280 AK-47s, 167,789 pistols and 16,398 machine guns for them and 28,000 border police.
A July 26 Pentagon report said 20,847 other AK-47s purchased for the Interior Ministry have not yet been delivered. Iraqi officials complain that the U.S. supply of equipment, from bullets to uniforms, has been slow.
Shiite Muslim militias in Iraq’s civil war have long been known to find cover and weapons within the Interior Ministry. In fact, in a further sign of poor controls on the flow of arms into Iraq, a July 31 audit report by the U.S. Government Accountability Office said the U.S. command’s books don’t contain records on 190,000 AK-47s and other weapons, more than half those issued in 2004-2005 to Iraqi forces. This makes it difficult to trace weapons that may be passed on to militias or insurgents.
Here in Italy, Razzi expressed puzzlement at the Iraqi officials’ circumvention of U.S. supply routes.
“It seems strange that a pro-Western government, supported by the U.S. Army and other NATO countries on its own territory, would seek Russian or Chinese weapons through questionable channels,” the anti-Mafia prosecutor wrote in seeking the arrest warrant that short-circuited the complex deal.