Arms and the Dudes: How Three Stoners From Miami Beach Became the Most Unlikely Gunrunners in History

by Guy Lawson

  Worse, the dudes were convinced some elements in the government weren’t happy that they’d won the contract. They knew that the arms-dealing establishment hadn’t been thrilled when AEY underbid them. It seemed as if officials allied with General Dynamics and the other bidders on the Afghan contract might be undermining AEY. They were worried that false rumors were being spread about them—a fear that proved prescient.

  Diveroli finally decided to call a purchasing officer named Kim Jones, at Rock Island, to gently inquire about the chance of a do-over.

  “As a hypothetical question,” Diveroli said, “suppose fuel prices suddenly went up. Is there a method for the government to adjust the price to reflect the situation?”

  “This is a fixed-price contract,” Ms. Jones explained. “Companies are expected to compensate for volatility in the market by purchasing fuel futures or signing a fixed-price contract with their transportation provider. Will you be having difficulty making the deliveries?”

  “Oh, no, oh, no!” Diveroli replied. “That was just a hypothetical question. We are prepared and capable of making all deliveries. AEY will exceed your expectations.”

  Giving up, Diveroli called Thomet again.

  “Prices are going to go even higher,” Thomet said impatiently. “This is the way it is. Fuel is crazy. Many airlines are hedging with oil futures. Perhaps you should hedge.”

  Thomet hung up. Diveroli was downcast. If they paid the full airfreight, AEY wouldn’t make any money on the deal. The dudes might actually lose money, at least on the AK-47 ammo in Albania. But hedging fuel would require AEY to invest in complex financial instruments. The company could buy a fixed or capped hedge, using a commodity swap or options or derivative side bets. Even the most sophisticated investors had to be wary when buying futures, especially in a market as volatile as oil was at that time. Diveroli’s ninth-grade education had reached its outer limits.

  “Are you going to hedge?” Packouz asked.

  “Are you fucking kidding me?” Diveroli said defiantly. “I didn’t get where I am by hedging my bets.”

  Airfreight was too expensive, but perhaps the ammo could be loaded on trains and sent to Kabul through the mountains of Central Asia, Packouz suggested. Or perhaps the ammo could be shipped by sea to Karachi, Pakistan, then carried north by truck to Kabul.

  As the US government was learning daily, sending supplies to the mountains of Afghanistan was a logistical challenge of mindbending proportions. In the north of the country the main entry was through a narrow tunnel, built by the Soviets, in the Salang Pass. Trucks lined up to use the tunnel snaked for miles around the mountains. To the south, road transport in Pakistan was risky, with the real possibility that extremists would hijack the precious ammunition, causing yet another disaster.

  “I’ll try to look into Pakistan,” Packouz said. “But this is high-value cargo. There are a lot of people in between the Balkans and Afghanistan who’d like to get their hands on all this ammo.”

  “We can get Blackwater’s mercenaries to ride shotgun,” Diveroli said, only half joking. “Or we could get Thomet to hire a bunch of those Special Forces soldiers from Eastern Europe that he knows. Those guys are sitting around unemployed. We could get them dirt cheap.”

  Diveroli wrote to the Army to again plead for time. “I would like to formally apologize for the recent delays in the delivery schedule that is expected of us,” he wrote. He outlined the issues AEY had faced in the former Communist world. Obtaining overflight permission was still a problem, though it was being resolved. “Other solutions that we are exploring include mapping out alternate routes,” he wrote. “On a good note, we would like to confirm that as soon as we receive these permits, hopefully no later than next week, we are scheduled to begin two to four flights per week out of Albania, Bulgaria, and Hungary. We hope you understand our position and know that we are ready, willing, and able to fully execute these Task Orders and the many more we will receive under this contract over the next two years.”

  Then Packouz had an idea. A brilliant idea. Maybe. It was certainly ingenious. The problem was weight—arms were heavy, especially the AK-47 ammo in Albania; a single crate of AK-47 ammo weighed sixty pounds. Even if they successfully stalled the Army long enough to qualify for a wet lease and lower air freight rates, the weight would destroy their profit margin. But what if they repacked the ammo in Albania to reduce weight and increase profitability?

  Henri Thomet had told the dudes that the cache of 100 million rounds of AK-47 ammo in Albania dated back to the 1960s. The cartridges were stored in heavy wooden crates. The crates were mounted on heavy wooden pallets. Inside the crates, the ammo was stored in heavy, old tins called sardine cans because they were opened with a key, like Spam. The ammo had been manufactured at a time when weapons were shipped by sea, not air, so little attention had been paid to weight.

  The weight of the Albanian ammo was perhaps the only variable the dudes could control. Nothing could be done about the grenades in Bulgaria; they were new and already efficiently packed. But what if the old AK-47 ammo in Albania was taken out of the crates and placed in lighter cardboard boxes? What if the ammo was also taken out of the sardine cans and put in plastic bags? What if it was all loaded on much lighter, modern pallets?

  The savings could be significant, Packouz said excitedly, reaching for a calculator. Dozens of flights would be required to ship 100 million rounds to Kabul. Cramming as much ammo as humanly possible on every flight was vital to making the Albanian contract profitable.

  “We might be able to still make air transport work, even with the high oil prices,” Packouz said, punching the numbers. “Thomet says the wood from each crate weighs around one kilogram—so just over two pounds. If we got rid of that much weight, we’d save a lot on the transport. I figure it would be just enough to break even on the deal.”

  “I don’t work my fucking ass off to break even,” Diveroli said.

  “But I don’t think Thomet’s right about the amount of weight. I’ve seen crates that size. They weigh at least seven to ten pounds. With that much weight gone, we’d actually make money.”

  “How much?”

  Packouz hit TOTAL on the calculator. “About ten percent.”

  “Let’s do it.”

  Repacking was now the plan, which was obviously not going to be simple or straightforward. Albania was famously corrupt, for starters. Neither of them spoke a word of Albanian. They had no contacts there, other than through Thomet, and he was totally unreliable. How could two dudes in South Beach arrange to have ancient ammo in wooden crates hauled from the mountains of Albania, repackaged, loaded aboard cargo airplanes, and then shipped to Kabul?

  As Packouz tried to think, he received an e-mail from the Xinshidai Company in Beijing, a cruel reminder of the caprice so often involved in arms dealing. The Chinese company cheerfully said they would be more than happy to supply 100 million rounds of AK ammo, no problem. It was the ideal solution. The ammo would be new. The price was sure to be competitive. The quality would be at least as good as that of the old Albanian ammo. As next-door neighbors, the Chinese could fly directly to Kabul. All of the ridiculous logistical woes AEY faced would vanish.

  Packouz shook his head in despair. He’d sent the Chinese company the request for a quote on the AK ammo months earlier, before the Pentagon had changed the rules and banned Chinese-made munitions. Packouz could see that Xinshidai was definitely a “Chinese military company,” thus it had been disqualified. There was no sensible reason to stop a Chinese company from selling AK-47 ammo to the US Army, via a broker like AEY, certainly not when the urgency of the situation in Afghanistan was considered. But that was what the law said. Sighing, Packouz wrote to say AEY wasn’t able to do the deal with the Chinese.

  The reply from the Chinese only made him feel worse: “If the US lift the sanctions, we can provide the price and the products as soon as possible.”

  Diveroli had no time for irony. The Chinese and Russian bans were lite
rally crippling the United States in Afghanistan—and that meant AEY. A global shortage of small-arms ammo existed in large measure because of America’s spending spree in Iraq. The only real alternative left to the dudes remained 100 million rounds of ancient surplus ammo sitting in moldering wooden crates in Albania.

  “We’ve got to get a motherfucker on the ground in Albania right away,” Diveroli said. “We need a guy we can trust to check out how much these goddamn crates actually weigh. Then that guy can stay there and supervise the repacking job. I can’t go because I’ve got to run the office. I need you here to take care of the government and run logistics on the Afghan deal.”

  “What about Alex,” Packouz said, referring to their mutual friend Alex Podrizki. “He’s a smart guy. He’s multilingual. He’s got international experience. He trained with the French armed forces, for God’s sake. He’s perfect for the job.”

  “I already talked to Alex about coming to work for AEY,” Diveroli said. “He wasn’t interested.”

  “I’ll talk to him,” Packouz said. “He’s been looking for work.”

  “That’s not a bad idea. Looks like Albania’s going to be our problem child. We need someone to babysit that bitch.”

  * * *

  I. Not his real name.

  II. Not his real name.

  III. At least until Osama bin Laden and other jihadis who’d fought in Afghanistan turned on the United States and staged the attacks of September 11, 2001.

  IV. George Crile, Charlie Wilson’s War: The Extraordinary Story of How the Wildest Man in Congress and a Rogue CIA Agent Changed the History of Our Times (Grove Press, 2007), 268–69.

  Chapter Six

  CIRCUMVENTION

  What Alex Podrizki wanted from life was intangible—adventure, the chance to do good in the world, the courage to find his own path. For months Podrizki had listened with a mixture of amazement and alarm as his best friend, David Packouz, described his life as an arms dealer. Since Efraim Diveroli had started his business at the age of eighteen, Podrizki had quietly distanced himself as the young gunrunner’s obsession with war profiteering grew in intensity, even as he’d grown concerned about Packouz’s involvement. Like his two friends, Podrizki had rebelled against his Orthodox faith. But Podrizki wasn’t motivated by money or material possessions, or other superficial rewards.

  Politics was Podrizki’s main interest. As a teenager, he’d given speeches, usually over a joint, to his posse of friends exhorting them to take up radical leftist causes. Podrizki also enjoyed pranks, like turning off the lights in the synagogue during prayers on the Sabbath, a major problem for Orthodox Jews, as they couldn’t turn the lights back on and were forced to pray in the dark.

  By the spring of 2007, Podrizki had graduated from college with a degree in international relations and defense studies, but he was living at home with his mother. Slim, with curly brown hair and an intelligent face, Podrizki was twenty-four, unemployed, and increasingly frustrated by his inability to find a job. He was also discouraged by the turn American politics had taken with the invasion of Iraq and the reelection of George W. Bush—and appalled by Diveroli’s campaign to cash in on the war.

  “Efraim was viciously pro-war and ready to profit from it—but he didn’t have the balls to go there himself,” Podrizki recalled. “Like Dick Cheney with his five draft deferments in Vietnam, Efraim was happy to have others do the actual fighting and dying. To me, the invasion of Iraq was a naked, cynical grab for resources. It was obvious that Saddam Hussein had nothing to do with 9/11 and there were no weapons of mass destruction. I was only a kid and I could see that, so I was very disturbed by the overwhelming support the war was receiving. Before Iraq, I was planning on joining the Army, but the invasion changed everything for me. I went to a couple of antiwar protests in Miami, but it was frightening how small they were.”

  Like most of the dudes in their posse, Podrizki had been approached by Diveroli to come work for AEY. It was one of Diveroli’s many quirks, like his coarse manners and his drug consumption. Podrizki had said no to Diveroli with a laugh.

  But Podrizki was interested in traveling to a war zone, as a relief worker not a gunrunner. Fluent in French and Spanish, he’d spent a year as an English instructor for a paratrooper regiment in the south of France, which included basic military training. He’d tried to volunteer in Haiti, on a water-purification project, and he’d applied for an internship with the International Rescue Committee to work on its initiatives, like refugee resettlement, protecting children, and combating human trafficking. But his lack of foreign experience had held him back.

  Broke and adrift, subsisting on bad part-time jobs, Podrizki made pocket money dealing small amounts of pot to tourists in Miami Beach. When Diveroli and Packouz decided the company needed a new office, AEY paid Podrizki $500 to find the space. But in the end Diveroli had decided to stay in their tiny space, where he had the lone office, a room he’d decorated with a bong on a side table and a giant poster of Nicolas Cage from Lord of War on the wall behind his desk—a gift from Packouz.

  “I went to AEY’s office to pick up my check,” Podrizki recalled. “The vibe was awful. Diveroli was yelling at everyone, and everyone seemed really submissive. David was really stressed out. He was constantly telling me how miserable he was working with Efraim.”

  Despite the obvious dysfunction at AEY, when Packouz approached Podrizki with the idea of going overseas for the company, he didn’t dismiss the idea. He’d have nothing to do with Diveroli, Packouz said. The company needed someone to travel to Albania, Bulgaria, and Hungary to be AEY’s eyes and ears on the ground. Packouz said that he and Diveroli were having difficulty communicating with their suppliers and costs were running out of control, especially for a large amount of surplus ammunition AEY was buying in Albania that needed to be repacked. The ammo was packed in heavy wooden crates and aluminum cans and would have to be put into cardboard boxes and plastic bags to save money on airfreight. The idea was that Podrizki would fly to Albania and supervise the job.

  Podrizki was intrigued.

  “Mostly, I took the job because I didn’t have anything else going on,” Podrizki recalled. “I told David and Efraim that I wouldn’t have anything to do with any deals involving Iraq. I was strictly going to work on the Afghan contract. My job was to get the Albanians to actually deliver the ammo and to make sure the quality was good. It sounded like an adventure to me—a chance to be on my own in a third-world country with a difficult assignment.”

  Podrizki’s pay would be $1,100 per week, plus expenses. He was given the title Logistics Coordinator. Business cards were printed and a power of attorney was executed granting him the authority to conduct business in Albania on behalf of AEY.

  “Before I left, the three of us met at Efraim’s condo to talk the plan over,” Podrizki said. “Efraim was much calmer than he’d been in the office. He wasn’t so overbearing.”

  Diveroli fetched his pipe and packed a tight cone. The first shipment of $2 million worth of 7.62x39 mm ball and tracer rounds had already been paid for, Diveroli said—which wasn’t true, an ominous beginning to the relationship; in fact, Diveroli was holding out on payment until the rounds were actually delivered, a ploy that was partly responsible for the delays.

  Diveroli said Podrizki’s first priority should be to get the Albanians to finally start trucking ammo to the airport in Tirana. Podrizki was given a copy of AEY’s contract with Henri Thomet and Evdin. It showed AEY paying four cents each for the rounds. The Army was paying AEY eight cents a round.

  “Don’t show this contract to the Albanians,” Packouz told Podrizki. “We don’t want the Albanians to see our prices with Thomet.”

  According to the plan, Albania would be the first stop on Podrizki’s trip. When he was done there, he’d travel on to manage AEY’s deliveries from Bulgaria (grenades) and Hungary (more AK-47 ammo). He’d be gone two months in total, back in time to start graduate school in the fall, proudly burnishing his résumé wit
h overseas experience.

  Diveroli said that when Podrizki got to Tirana, he should inspect the ammo to make sure it was serviceable without qualification. Diveroli explained that the term meant it had to work—it had to go out of the barrel and go bang. Podrizki was experienced with weapons, so he was sure he could conduct a basic firing test.

  “Don’t tell anyone that you’re an arms dealer,” Diveroli advised Podrizki. “Tell them you import heavy equipment. When people hear about weapons, things get complicated.”

  The pipe was passed to the left, per decorum, followed by a shot of tequila.

  On April 17, 2007, a bleary-eyed Alex Podrizki arrived in Tirana. He immediately learned that nothing was going to be straightforward in Albania. Struggling through the jostling crowd at Mother Teresa International Airport, he caught a cab and directed the driver to the two-star hotel in the city he’d booked. The driver nodded and they set off. After a few minutes, the cab turned into what appeared to be a village. The car stopped. Podrizki looked around in confusion as the driver insisted this was his destination in downtown Tirana. Handing over the agreed fare, Podrizki got out of the car reluctantly, protesting that he was in the wrong place. The cabbie feigned incomprehension and sped away, full fare in hand. Thus was Podrizki left in a cloud of dust in the middle of nowhere, chickens roaming the dirt road, old ladies dressed in black watching him suspiciously.

  Finally catching another taxi to Tirana that afternoon, Podrizki arranged to meet Ylli Pinari, the Albanian official in charge of the ammo deal. Pinari was heavyset, short, with a five-o’clock shadow and dressed in a drab suit. MEICO was supposedly an autonomous commercial entity, but it was an instrument of the government and Pinari’s office was located in the Ministry of Defense. Greeting Podrizki, Pinari was surprisingly friendly, Podrizki thought, given the nature of what he did for a living. Pinari also spoke excellent English, not an unusual attribute among Albania’s ruling class; he possessed a green card from the years he’d lived in the United States, and like most every Albanian he was rabidly pro-American.