Arms and the Dudes: How Three Stoners From Miami Beach Became the Most Unlikely Gunrunners in History
Page 27
missing weapons in, 236
Operation Lastay Kulang in, 152
Operation Mountain Fury in, 80
Operation Mountain Thrust in, 56
private contractors and, xvii, 6, 7, 13, 49, 126, 164–65
Taliban resurgence in, 56–57, 80, 151
US failures in, xv, 4, 234
Afghan military, xiii–xiv, 56, 236
AEY-supplied ammo as satisfactory to, 227
Albanian proposal to donate ammo to, 207–8
ammo shortages of, 4, 57, 66, 69, 97, 120, 151, 163, 190, 202–4, 206, 207, 227, 228
cost of training and deploying, 17
Soviet Bloc weapons used by, xiv, 1, 57
US Army denial of ammo shortages for, 220, 225
US stand-up of, 3, 4, 57–60, 133, 163, 164
see also AK-47 ammunition
AK-47 ammunition, 31, 69, 111
Albanian-made, 120, 129
brass vs. steel casings of, 120, 138, 140, 214
demilitarization of, 120, 214
global shortage of, 104, 206
price of, 70, 120
AK-47 ammunition, Army Task Order 002 for:
AEY’s application for progress payments in, 83–85
AEY as unprepared to deal with complexities of fulfillment of, 6
AEY’s bid for, xiii, xiv–xv, xvi, 1, 6, 72–75
Albania as primary source for, 2, 98, 99, 167, 172, 182; see also AK-47 ammunition, Chinese-made
“all-or-none” specification in, 62
Bulgaria as source for, 69, 71, 120
Certificates of Conformance in, 172
concerns about substandard ammo in, 6
“cure notice” in, 204
Diveroli’s inattention to, 96, 152
Diveroli’s reneging on profit deal with Packouz in, 153–57
Diveroli’s renegotiation of prices in, 150, 167
fake documents in, 137, 138, 182
flyover permissions for, 1, 3, 99–100, 102, 133, 134
formerly Communist countries as only source for, xiv
Hungary as source for, 1–5, 69, 71, 120, 144
and Kyrgyz KGB’s seizure of plane, 3–5, 144–48, 168
Merrill and, 83, 84, 85, 98, 118, 167–68, 169–70, 185
“operational necessity” and, 190, 191, 202–3, 205
Packouz as responsible for fulfillment of, 63–66, 69–70, 81, 96, 97, 99–100, 115, 120–22, 125, 137, 144–48, 152
as “pseudo case,” 97
RFP for, 61–62
Russian companies banned from competing for, 4, 59–60, 68, 92–93, 100, 104, 147
Russian interference with, 100, 146–47
“serviceable without qualification” specification in, 61, 109, 119, 150–51, 226–27, 233, 238
shipping-deficiency reports in, 217–18
successful shipments in, 151–52, 188–89
Sustainment Command’s concerns about, 147–48
Thomet and, 61, 69, 70–72, 86, 96–99, 101, 103, 115, 135–37, 139, 141, 160, 164–65, 167
time pressure in, 98–99
transportation costs in, 71–72, 96–99, 101, 103, 134
25/75 profit split between Packouz and Diveroli in, 62–63, 153
value of, 62
see also grenades, Army Task Order 001 for
AK-47 ammunition, Army Task Order 005 for, 206–7
AEY’s shipping of defective cartridges in, 207, 219
AK-47 ammunition, Chinese-made, xv, 66, 98, 99, 188, 205–6, 237
AEY’s failure to inform Army about, 117, 123–24
Black and, 188
Diveroli and, 2, 115, 118, 119–20, 124–27, 129, 130, 150, 155–57, 220, 226–27
and Diveroli’s meeting with Newsome, 141–42
and Diveroli’s meeting with Pinari and Delijorgji, 139–40, 141, 142, 163
domestic US sales of, 91
donated to Kurds in Iraq, 235–36
HP White Laboratory’s test-firing of, 226–27
Mentavlos’s obtaining of samples of, 193, 194, 202
Packouz and, 114–15, 118, 125–27, 155–57, 179–80
Podrizki and, 2, 111–15, 118–23, 126–27, 128–33, 138–41, 144–46, 149–51, 155–56, 161, 170, 180, 214
repacking of, 2, 102–5, 108, 118, 121–22, 125, 128–33, 149–50, 158, 163, 170–71, 183, 188, 197–98, 220
revised price for, 150, 167
as “serviceable without qualification,” 119, 150–51, 206, 207, 226–27, 233, 238
Thomet and, 136
Trebicka and, see Trebicka, Kosta
US ban on, 2, 67–69, 90, 91–92, 104, 112–13, 163, 170–71, 174, 208, 222, 237–38
vague legal status of, 113, 116–18, 125
AK-47s, 31, 53
as both cheap and reliable, 17, 224
Chivers as expert on, 162–63, 224
Iraqi military armed with, 17
Russian-made, 58
Al-Askari Mosque, 53
Albania, xvi, 105, 108
arms caches in, 24, 57, 66, 71, 110–11, 120, 165
Bush’s visit to, 149–50
China’s history with, 113
Chinese AK-47 ammo in, see AK-47 ammunition, Chinese-made
corruption in, 71, 103–4, 151, 165, 188, 195, 237
Kurds given AK-47 rounds and other surplus ammo by, 235–36
mafia in, 2, 5, 140, 159, 197
MEICO in, see MEICO
Ministry of Defense of, 137, 138
pending NATO membership of, 57, 71, 123, 142, 149, 197, 215
in proposal to donate AK-47 ammo to Afghan War effort, 207–8
pro-US sentiment in, 149
in split with Soviet Union, 113
see also AK-47 ammunition, Army Task Order 002 for; Tirana
Alb-Demil, 150, 217
Alcohol, Tobacco, Firearms, and Explosives Bureau, 241–42
Alibaba.com, 28, 33–34
Al Qaeda, 151, 164, 196
American Gun Range, 95
Ammoworks, 240–42
Arcus, 86–87
arms dealing, arms dealers, xvi–xvii
bidding for contracts in, xiv, 1, 7–9
“circumvention” in, 126
corruption and illegal activities in, xiv, xvii, 2, 6, 22, 25, 71, 173–74
Defense Department involvement in, xvii, 164–65, 223, 233–34
Diveroli’s uncle and, 9–10
greed as endemic to, 214
“gunboard” websites in, 10
Merrill and, 18–19
risks in, 25, 31, 52
secrecy of, xv, 2
trade shows of, 38–39, 46–48, 75–76, 88–93, 157, 211
see also AEY; defense industry; specific dealers
Army, US:
AEY investigation of, 217, 227
AEY used as proxy in deals with gunrunners, 50–51, 71, 164–65, 224, 225
DDTC watch list bypassed by, 48–51, 82
Logistics Civil Augmentation Programs of, 15
political campaign of, 226
procurement officers of, 25, 54
procurement-process reform announced by, 218
shortage of ammo in Afghanistan denied by, 220, 225
Special Operations Command of, 8
Sustainment Command of, see Sustainment Command (US Army)
Task Order 001 of, see grenades, Army Task Order 001 for
Task Order 002 of, see AK-47 ammunition, Army Task Order 002 for
Task Order 005 of, see AK-47 ammunition, Army Task Order 005 for
see also Defense Department, US; military, US
Associated Press, 218
Astra Cub pistol, 201
Atlantic, 67
Avivi, Sammy, 72
Azerbaijan, 133
Ba’ath Party, 14
Baghdad:
Green Zone in, 15–16, 21, 22, 25
insurgency in, 53
procurement officers in, 43, 54
Baghdad International Airport, 22
Bakiyev, Ku
rmanbek, 147n
Balkans:
arms caches in, xiv, xvii, 21, 24, 44, 48, 99
corruption in, 22
Benya, Chris, 81
Berisha, Sali, 139, 159, 198, 208
Berisha, Shkëlzen, 139, 140, 141, 142, 150, 159, 163, 196, 197, 231
Bernatik, Petr, 194–95
“best value” rule, in defense contracts, 35, 209
Bishkek, Kyrgyzstan, 1
AEY’s plane seized at, 3–5, 144–48, 168
as strategic staging point for Afghanistan War, 4, 147
US Embassy in, 146
Black, David, and repacking of Chinese ammo, 188
Blackwater, xiv
Blane, Milton, 175–76
AEY accused of fraud by, 176, 179, 194
DCIS interview of, 176–77
Blane International Group, 24, 175, 176
blood feud (gjakmarrja), 159
Boeing, 124, 177
Bosnia, arms caches in, 21–22, 24, 53
Botach, 9–10
Bout, Viktor, 49, 53–54
Bremer, Paul, 14, 16
Bulgaria, 57, 108, 134
arms caches in, 65
as source of AK-47 ammo, 69, 71, 120, 206, 219, 221
as source of grenades, 96–97, 109, 133, 182
Bush, George W., xiv, 4, 13, 31, 67, 107
Albanian visit of, 149–50
Bush administration, xiii
AEY scandal and, 225
Afghanistan War and, 56–57, 58, 59, 80
Iraq War and, 14–15, 31
neoconservatives in, 14, 67
rules for defense contract bidding changed by, 9
use of private contractors encouraged by, 13, 14
“buying in,” 74
Cayman Islands, 15
Central Command, 205
Certificates of Conformance, 172
Chad, 164
Charlie Wilson’s War (Crile), 90, 91n
Cheney, Dick, 15, 107
China:
AK-47 ammo from, see AK-47 ammunition, Chinese-made
Albania’s history with, 113
Tiananmen Square crackdown in, 67
US ban on arms from, 67–69, 90, 91–92, 104, 163, 170–71, 174, 208, 222, 237–38
US relations with, 112
Chivers, C. J.:
AEY investigation of, 163–65, 175, 194–99, 208–9, 218–20
AEY story of, see New York Times, AEY story in
as expert on AK-47s, 162–63, 224
Kokolari’s contacting of, 162–63
Sustainment Command questioned by, 164, 209, 218–19
Thomet interviewed by, 195
Trebicka interviewed by, 164, 175, 193, 195
in trip to Afghanistan, 208–9
Chora, Afghanistan, 152
“circumvention,” in arms deals, 126
Clausewitz, Carl von, 123
Coalition Provisional Authority, 14
Cold War, 58, 126
Collins, Debra, 204
Columbian army, 43
Combined Security Transition Command, 163
combined synopsis solicitation, 8
Congo, 196
Congress, US:
defense procurement for Iraq and Afghanistan exempted from US laws by, 49
lack of arms dealing oversight by, xvii, 97
Regulatory Flexibility Act and, 118
Costco, 34
Craigslist, 2, 28, 42, 85, 95, 96, 238
Crile, George, 91n
Croatia, arms caches in, 20, 21, 24
Crocker, Ryan, 208
“cure notice,” 204
Custer Battles, 15–16
Cyprus, 2, 47, 71, 164
Czech Republic, 194, 206
Dadullah, Mullah, 152
Damnjanovic, Tomislav, 195–96
Davis, Howard, 227
Defense Acquisition University, 6
Defense Contract Management Agency, 171–72
defense contracts:
ban on Chinese arms in, 2, 67–69, 90, 91–92, 104, 112–13, 163, 170–71, 174, 208, 222, 237–38
“best value” rule in, 35, 209
Bush administration changes to rules for, 9
“buying in” in, 74
cancellation of, 38
combined synopsis solicitation in, 8
“equitable adjustments” in, 100
ID/IQ (Indefinite Delivery, Indefinite Quantity), 23–25
Iraq War and, 17–21, 23–25, 35–39, 42, 47–54, 58, 62, 80
lack of accountability in, 14–16, 171–72, 218–19, 222–23
“mini-competes,” 24, 25, 80
no-bid, xiv, 15, 16
“notwithstanding any other provision of law” loophole in, 49, 235
online bidding for, see FedBizOpps
performance record in, 9, 20–21, 38
profitability of, 20
Russian arms companies banned from bidding on, 4, 59–60, 68, 92–93, 100, 147
“serviceable without qualification” specification in, 21, 61, 109, 119, 150–51, 206, 207, 226–27, 233, 238
single source, 8, 35
subcontractor loophole in, 49–51
“termination for default” in, 118–19
Defense Criminal Investigative Service (DCIS):
AEY as easy target for, 178
AEY investigation of, 175, 176–79, 182–87, 189–94, 201–7
Blane interviewed by, 176–77
Diveroli as special target of, 189, 192, 193, 201–2
as failing to stop fraud in Afghanistan and Iraq, 174, 177–78
misleading AEY press release of, 233
as trumped by operational necessity, 191
see also Mentavlos, Michael
Defense Department, US, xiii
as arms-dealing organization, xvii, 133–34, 164–65, 223
bureaucracy of, 124
China as viewed by, 67–68
fraud and waste ignored by, xvii, 15–16, 25, 53–54, 83, 173–75, 188
private contractors used by, see defense contracts; private contractors
Procurement Fraud division of, 202
weapons-procurement procedures of, 83, 171–72, 174, 218–19, 225, 233–34, 235; see also defense contracts
see also Army, US; military, US
Defense Federal Acquisition Regulation Supplement (DFARS), 50, 116, 174
defense industry:
lobbying by, 124–25
see also arms dealing, arms dealers
Delijorgji, Mihail, 139–40, 141, 142, 150, 163, 217, 231
demilitarization:
of AK-47 ammo, 120, 214
of large-caliber ammo, 214–17
Democrats, AEY scandal and, 225
Directorate of Defense Trade Controls (DDTC) watch list:
AEY on, 81–82
Army’s bypassing of, 48–51, 82, 223
Diveroli on, 52, 177
Thomet on, 48, 50, 51, 194, 195
Diveroli, Efraim, xiii, 225
AK-47 contracts and, see AK-47 ammunition, Army Task Order 002 for; AK-47 ammunition, Army Task Order 005 for
Ammoworks and, 240–42
amorality of, 43–44
appearance of, 8
arms dealing as obsession of, 7–8, 23, 25, 26, 27, 30, 106, 153, 166, 240–42
arrest of, for valet parking fight, 76–78, 221–22
arrogance of, 25, 32, 51–52, 125, 167, 175, 189
ATF reverse sting and, 241–42
author’s interviews with, xxi
bait-and-switch tactics of, 43, 82, 182
Bernatik’s e-mail to, 194–95
and DCIS raid on AEY offices, 180
DCIS’s focus on, 189, 192, 193, 201–2, 228–29, 231
on DDTC watch list, 52, 81–82
deal-making talent of, 32, 36–37, 38, 39, 43, 86–87
delinquent behavior of, 9, 27–28
drug use by, 6, 7, 9, 10–11, 13, 20, 23, 26–27, 29, 36, 38, 40, 43, 77–78, 79, 80, 166, 179
/> enemies made by, 158, 175, 211
FedBizOpps bidding process mastered by, 6, 7–9, 20, 35–36
financial war chest built by, 13–14
guilty plea of, 236
HP White Laboratory hired by, 226–27
indictment of, 233
IRS audit feared by, 82, 85, 155, 156
as lacking understanding of arms business, 25
larger-than-life quality of, 32
lying as habitual for, 38–39, 99, 109, 118, 141, 145, 155, 159, 168, 169–70, 180, 185
money as obsession of, 27, 29, 30, 80–81, 106, 153–55, 166, 187, 214
mug shot of, xvi, 221–22, 227
Myspace profile of, 166–67
nightclubbing and partying by, 7, 20, 30–31, 40–41
NY Times story’s focus on, 223, 227
Orthodox Jewish background of, 6–7, 27, 35
Packouz recruited to AEY by, 30–33
Packouz’s commission agreement with, 33, 53
Packouz’s post-raid meeting with, 185–86
Packouz’s search for incriminating e-mails of, 184–85
Packouz’s threatening of, 155–57
political help disdained by, 123, 125, 145, 225
profit margin formula of, 11, 62, 83
as reneging on profit deal with Packouz, 153–57
risks ignored by, 25, 31, 52
romantic relationships of, 26–27
sayings of, 39–40
Schmitt’s call to, 195
sentence of, xv, 240
in Sustaining Command meeting, 205
Suzie and, 41, 166
tightfisted lifestyle of, 20
in Tirana, 2, 5, 137–42, 144–46, 163
trade shows attended by, 38–39, 46–48, 75–76
Trebicka’s recorded phone call with, 159–61, 195
.223 ammo contract won by, 8–9, 11–12
Ukraine trip of, 169
and uncle’s arms business, 9–11, 18
in violent altercations, 40
wealth of, 29, 32–33
work ethic of, 36
see also AEY
DLS, 24
Dörner, Dietrich, 234
Doudnik, Danny, 125–26, 168–69, 180
Dowd, General, 204
Dynacore Industries, 187
Nigerian deal of, 157–58, 183–84
NSV ammo contract and, 210–13
Packouz’s creation of, 157
Wells Fargo factoring deal with, 213
Eastern Europe, NATO expansion into, 4
eBay, 34
Educating Hands School of Massage, 2
“equitable adjustments,” 100
Eurosatory, 46–48
Evdin, 71, 141, 163, 164, 194, 195
Fallon, William, 205
Fallujah, Iraq, 20
FARC, 43
FedBizOpps (Federal Business Opportunities website), xiv, 1, 7–9, 10–11, 13, 33, 51, 96, 118, 152, 166, 175
AK-47 ammo contract on, see AK-47 ammunition, Army Task Order 002 for
Diveroli’s mastery of bidding process on, 6, 7–9, 20, 35–36