by Guy Lawson
“Are there Chinese markings on the lids of the cans?” Diveroli asked.
“Yes,” Trebicka replied.
“Are there Chinese markings on the paper wrappers?”
“Yes.”
Diveroli said that the operation had to continue as instructed, even if it was going to cost more. A new price was agreed, granting the Albanian an extra $40,000 for his trouble. Trebicka was surprised by Diveroli’s response—and suspicious. That evening, Trebicka and Podrizki went to a local restaurant for dinner. Both ordered fish soup, a traditional Albanian delicacy.
“This is a very strange thing to do,” Trebicka said to Podrizki. “Why do you want to spend all this money for repacking the same ammunition?”
“Weight,” Alex replied. “Everything is done to avoid wasting money on airfreight.”
“But what is such a strong reason to hide the Chinese writings on the top of the cans?” Trebicka asked. “And the Chinese letters on the paper, too—why do this?”
“Don’t worry, Kosta. The simple reason is that the ammo passes over different countries during transportation. If the authorities in another country stop the flight and see that part of the ammunition is from Albania and part is from China they will start an investigation. The difference will have to be explained. That will delay the shipments. We’ll lose the contract if we don’t deliver on time.”
Trebicka didn’t seem satisfied. Podrizki was a man of few words—the less said the better, he believed. But he realized he needed to be direct with Trebicka, or at least give him an explanation that was believable.
Leaning forward, Podrizki confided that the truth was that Chinese ammo wasn’t allowed under the contract. He explained the situation as it had been explained to him—the ban and the fact that the ammo had been manufactured in China was a contractual issue between the Army and AEY. He said AEY was searching for alternative sources for the ammo, but it’d default on the whole contract if they didn’t ship on time. AEY had no choice—it had to repack. Nothing about the repacking changed the quality of the rounds, or the urgency of the need in Kabul.
“I had my own personal reservations, but I kept moving forward, hoping things would work themselves out somehow,” Podrizki recalled. “I wasn’t ready to quit and go home. It was a problem to do with the terms of the contract—not the quality of the ammunition.”
Trebicka listened silently, a serious expression on his face. He was quiet for maybe ten seconds.
“I imagined in those moments he drew the same conclusion that I had,” Podrizki said. “He was going to keep going. He could understand the reasoning. It wasn’t such a big deal. The ammo was good quality, even if it was old, so what was the difference if the Chinese markings were removed? It wasn’t like we were hiding flaws in the ammunition to trick the American military. Every round was inspected for quality.”
But privately Trebicka wasn’t pleased by Podrizki’s reassurance. Concerned that AEY might be breaking the law, Trebicka decided to reach out to a contact he had in the US Embassy, a diplomat he’d known for years. Robert Newsome was a State Department official who worked as an economic representative in Albania. Trebicka met Newsome at the Chocolate Café next to the US Embassy. Trebicka described AEY’s arms contract and how the company had hired him to repack the AK-47 rounds. The ammunition was Chinese, Trebicka said. He explained how his workers were breaking down every wooden crate, putting the rounds into plastic bags, then putting the bags into the cardboard boxes.
“Why are they doing that?” Newsome asked.
Trebicka repeated what Podrizki had told him about weight and freight and the possibility that the flight would be grounded in a third country en route to Afghanistan—leaving out the possibility that Chinese ammo was forbidden under AEY’s contract. Newsome asked for Alex’s mobile phone number.
“Everything is okay,” Newsome assured Trebicka. “The contract is a great help for the United States. We’ve been looking for funding to demolish most of the ammunition in Albania.”
The next day Trebicka told Podrizki about his encounter with the State Department official.
“What did Newsome say when you told him the ammo was Chinese?” Podrizki asked.
“He said it was okay,” Trebicka said. “He said it was a great idea to send the ammunition from Albania to Afghanistan so it doesn’t have to be destroyed here.”
This was great news: a senior American official apparently didn’t care that “Chinese” ammunition was being transported to Kabul. Surely the diplomat knew about the ban and didn’t think it mattered, or applied. Newsome called Podrizki later that day. The State Department attaché told Podrizki that he had firsthand knowledge of the situation in America’s two war zones—how dire and desperate the need for ammunition really was. In wartime, bureaucratic niceties had to give way to the realities on the ground—and the reality was that standing up armies in Iraq and Afghanistan was a top strategic priority for the US government.
“I understand you’re repacking and delivering Russian, Albanian, and Chinese ammunition to send to Afghanistan,” Newsome said.
“No,” Podrizki said. “We’re only delivering Albanian and Chinese.”
“I’m familiar with the ongoing war effort. I know what’s going on.”
Podrizki took this to be unspoken approval, the proverbial nudge and a wink. Finally talking to a friendly person, Podrizki described the troubles he faced. There were still delays in getting more of the ammo to the airport. Onerous fees had to be paid at the airport because the authorities were treating the flights as commercial instead of governmental. Could Newsome help get the fees waived?
“I can help,” Newsome said. “I’ll stay in touch with Trebicka and let you know how things progress.”
/ / / / /
On May 16, 2007, AEY’s first shipment of ammunition under the Afghanistan contract touched down in Kabul. But it wasn’t the ammo from Albania—the repacking for the first planeload still wasn’t complete, and the dudes hadn’t been able to obtain the proper overflight permissions. Nor had they been able to find a reasonable price for the airfreight from Tirana to Kabul.
AEY’s first shipment consisted of hand grenades—110,000 grenades from Bulgaria. An Azerbaijan airline called Silkway made the delivery, charging $130,000 for the flight. AEY could afford to pay the high price to Silkway for the shipment of grenades because the load was worth $3 million. With the AK-47 ammo, each load was worth only $300,000, so the exorbitant airfreight cost meant AEY would make no money on the deal.
“The first delivery was a huge relief for us,” David Packouz recalled. “We were finally performing, even if the cost of airfreight was insane. But there were still lots of problems getting overflight permissions. It was the hardest thing I’d ever tried to do.”
To coordinate the flights from Albania, AEY hired a string of logistics companies that specialized in that business. The companies assured Packouz they could arrange the required permissions, but they’d call back a few days later saying they couldn’t complete the contract. It was a mystery—as if invisible forces were interfering with AEY.
Taking up the job himself, Packouz called the American embassies in the countries where AEY was having a hard time—Macedonia, Bulgaria, Turkey, Georgia, Azerbaijan, and Turkmenistan. After weeks of cajoling, the military attachés were finally able to help Packouz get overflight permission for every country except Turkmenistan. For some reason, they couldn’t get that one, so Packouz had the idea of using Turkmenistan’s airline, and it worked—no lubricant was better than money for a gunrunner greasing the wheels of commerce.
In late May, an ancient Ilyushin 76 from Turkmenistan landed in Tirana and taxied to the military section of the airport, where the repacking was taking place. The giant cargo plane was in terrible condition, and US military officials stationed at the airport joked about its being unable to take off.
The pallets were finally ready to be loaded. But as preparations were made, Kosta Trebicka’s ambitions appea
red to be changing. He now had fifty workers busily taking AK-47 ammo from cans and putting it into plastic bags, placing the bags in cardboard boxes, then arranging the boxes on pallets. It was hard work and he was making a pittance, at least compared with Ylli Pinari of MEICO. Or so Trebicka surmised. Pinari was doing nothing but arranging for delivery of the ammo from stockpiles around the country. While Trebicka and his workers slaved away in the open-air hangar, all Pinari did was make a few phone calls and military trucks loaded with AK-47 ammo turned up at the airport. How much was Pinari personally making from the deal? Trebicka wondered—because in Albania he was certain that an unctuous official, like the head of MEICO, would be taking a cut.
As Trebicka drove Podrizki to the sea one day, on a sightseeing trip, he bad-mouthed the Albanian officials in MEICO, most especially Pinari—“little people,” he called them. Trebicka claimed that he could “protect” AEY from Pinari.
Walking along the beach, Trebicka said that he’d done clandestine work for the CIA during the eighties and early nineties. He claimed he’d been instrumental in overthrowing the old Communist regime. He said he remained deeply connected to the American intelligence apparatus in Albania, an invisible network that had great influence in the country.
Podrizki didn’t know what to make of Trebicka’s new attitude, or his tales of intrigue. It sounded like empty boasting. Podrizki duly reported the offer to “protect” AEY to Diveroli, more as a joke than a serious matter.
Diveroli was intrigued by Trebicka’s claims. If the Albanian businessman was so well connected, Diveroli said, perhaps he could find out what the Swiss arms dealer Henri Thomet was really paying MEICO for the ammo. Diveroli had long wondered what Thomet’s true profit margin was.
Trying to squeeze every last dollar from the deal, Diveroli called Trebicka directly. The Albanian businessman was eager to ingratiate himself with the young gunrunner. Trebicka readily agreed to use his connections to find out the price Thomet was paying; Trebicka had a contact inside the Ministry of Defense who could do some sleuthing for him. A few days later, Trebicka called and told Diveroli that he’d discovered that MEICO was selling the ammo for $22 for every thousand rounds. That translated to 2.2 cents a round. Diveroli was stunned speechless, at least for a moment, as he did a quick calculation. AEY was paying $40 per thousand, or four cents a round. That meant Diveroli was paying nearly double what Thomet was paying. Thomet was making millions of dollars for doing literally nothing, while AEY was repacking the ammo and arranging for all the logistics of delivery—and taking all the risk on the China matter. Diveroli’s profit margin was tiny, Thomet’s huge.
“Fuck Thomet,” Diveroli screamed. “He’s a fucking thief.”
“This is your business,” Trebicka said. “Only you know what to do about it.”
“You have lots of contacts in Albania,” Diveroli said. “Can you have somebody go talk to the minister of defense to kick Thomet out and let us buy directly from MEICO?”
“I can do this. But I have to be paid properly for my unpacking and repacking the ammunition.”
“How much?”
A deal was quickly struck, nearly doubling Trebicka’s pay. A lengthy phone call with Ralph Merrill, in Utah, led the older businessman to write to Thomet (the Swiss broker had ceased replying to Diveroli’s messages). Merrill’s e-mail had to tread through a field littered with land mines of lies, half-truths, and subtle deceptions. “Circumvention concerns” was the title, alerting Thomet to the possibility that Diveroli might decide to cut him out of the deal entirely—this form of “circumvention” in the arms trade referring to going around a broker like Thomet to buy directly from the seller.
“Efraim is upset that you are making a lot of money and we are losing money,” Merrill wrote. “He has received offers from the Ukraine, the Czech Republic, and Hungary, where there is enough ammo to fill the order. There is also the risk element regarding the reason for repacking. It seems to be a double negative to lose money and assume considerable risk.”
Merrill turned to the question of the Chinese ammo, though without directly mentioning it in the e-mail. The matter was now simply referred to as “the problem.” Merrill wrote, “Efraim is upset because he’s checked all his e-mails from you and not found any mention of the problem. He thinks he’s been set up.”
Merrill proposed $27 per thousand as a fair price. “This would help with shipping, repacking, and the risks involved,” he wrote, without overtly explaining the “risks” he was referring to. “Obviously we are not interested in donating to the war cause in Afghanistan, and are looking for a way out of this pit as soon as possible. Efraim awaits your response to this offer to save the Albanian connection.”
But Thomet wouldn’t budge on price—not under any circumstances. Diveroli decided he had to travel to Albania. He was going to negotiate the deal directly with the Ministry of Defense. He was going to get rid of the duplicitous Thomet, and he was going to force MEICO to lower the price.
Diveroli called Packouz into the hallway to talk confidentially, away from the staff: “Listen to me very carefully. I got to get to Albania to meet with that fat fuck Pinari. This is a make-it-or-break-it situation. So this is what I want you to do. Call the Ukrainians, the Hungarians, the Kazakhs, and get quotes from them. Then change the prices to make it look like we’ve got better options so I can beat that greedy fucker down. The documents have got to look good. But I know you’re an artist, baby. When I land in Tirana, I need you to have sent me something beautiful.”
Late that night, as Diveroli flew over the Atlantic, Packouz sat down to create another set of fake documents—and perhaps commit another fraud, he feared. By now Packouz knew that this kind of duplicity was all too common in arms dealing.
“I was very nervous,” Packouz recalled. “I knew I was in really shady territory—possibly illegal, with a real paper trail. But I also felt excited that it might work—that we’d save the deal. And was it really so bad? We were lying to a sleazy Albanian tough guy to get a better price so we could deliver what the government needed. This was why the government needed us—they didn’t want to have to do these kinds of things. In reality, they couldn’t do these kinds of things because of the risks and complications, but they needed them done. So they sent us. It was how things worked—it was the nature of the business. In a way, the Pentagon was paying us for this exact service.”
The next day, Alex Podrizki waited in the arrivals section of the airport in Tirana to greet Diveroli. Striding through the terminal, Diveroli was loud and brash, smirking at the bustle of the backward country. Driving into the city, Diveroli ridiculed the condition of the roads, the peasants walking donkeys next to the highway, the run-down houses and tiny, white pillboxes scattered all over the landscape.
“This place is like a jungle,” Diveroli said. “Give me twenty men with guns and I could take this country.”
The pair went to the Sheraton. They downed shots of raki, the colorless, high-alcohol Albanian eau-de-vie, sending shivers down their spines. Diveroli checked his e-mails and found the documents Packouz had doctored, showing false prices for AK-47 ammo. Packouz had done an excellent job changing the numbers, doctoring quotes from other suppliers to show the Hungarians and the Bulgarians could beat MEICO’s price by a significant amount. Diveroli and Podrizki were ready.
The first stop was Ylli Pinari’s office in the Ministry of Defense. More raki was poured and cigarettes were passed around. Diveroli placed a stack of documents on the table. He said they were quotes from other Eastern European countries for the same ammunition he was buying from MEICO.
“These are the standard prices,” Diveroli said. “Any more than this, I will walk away.”
Pinari inspected the sheet. He’d been in the business for decades. He knew the real prices of surplus nonstandard munitions. He looked up and shook his head with contempt. “These are fake.”
Diveroli had been busted. Stumbling for what to say next, he forged on, “Your ammo is old.
Some of it is nearly fifty years old. It doesn’t warrant the price.”
Pinari was unmoved.
“It’s steel-cased, not brass,” Diveroli said. “It’s not as good.”
Pinari said nothing.
“The only place you can sell your ammo is in Africa. The Africans can’t afford to pay as much as the government of the United States.”
The conversation was going nowhere, it seemed: Diveroli demanded a reduction, and Pinari insisted on the agreed terms. All the extra costs AEY had incurred, for the repacking, the higher airfreight prices, the unexpected licenses and fees at Tirana’s airport—those were issues for Diveroli to take up with Henri Thomet, not MEICO, Pinari said.
Diveroli asked to see the Albanian minister of defense.
“If you want to change the price, you have to meet someone else,” Pinari said finally.
Apparently, someone was more powerful than the minister—a strange assertion. Ylli Pinari escorted Diveroli and Podrizki to his Mercedes sedan. The pair were driven around the streets of Tirana in a seemingly deliberately confusing route, so the Americans wouldn’t be able to re-create where they’d gone. Finally, they turned into an abandoned construction site for a partially completed office building. Pinari led the pair up a set of stairs and along a corridor until they reached a door. Stepping inside, they found a sleek, stylish office, like the suite of a corporate law firm in a skyscraper in Miami. The incongruity was disorienting. So was the sight of the man rising from his seat behind the desk. Instead of the kind of global businessman who might be expected to occupy such an office, there was a hard-looking man—a real thug, Podrizki thought, fear rising. Gegh was the Albanian word for such a man: muscular, dark-skinned, with what appeared to be prison tattoos on his forearms, a native of the tribal mountains.
