In Washington, frustrated Treasury officials were bewildered by the military’s inability to curb them. “With all of our efforts,” a senior Treasury official said acidly, “it would be real helpful to get cooperation from other countries, let alone from other departments of government.”22
The Europeans monitoring Bout were also at the end of their rope. Irked by Bout’s continued sanctions-busting in Africa and his high-level Russian protection, a small group of intelligence officers was given approval for another try at nabbing him. This operation was to be carried out in March 2004, when the officials knew Bout planned to visit a daughter in Madrid for her birthday party.
But on March 11, an al Qaeda-affiliated terror group set off coordinated bomb attacks on the train system in Madrid, killing 191 people and wounding thousands of others. Bout canceled the trip.
“It was a very good plan, we would have had him,” said one operative involved in the planning. “We can’t be sure he didn’t get wind of it before he came, but we were pretty convinced it was the bombings that scared him off, because of the increased scrutiny at the borders at the time.”
Morgner and his Treasury team pressed on. As weeks dragged into months, the effort bogged down with interagency jockeying with State officials and with legal concerns about how many suspected Bout companies could be targeted. Treasury officials resisted State’s proposal to tie the DoD’s hands by listing Bout and some of his companies in the Federal Register. There were fears, a State official admitted, that “we might somehow tip off these parties that OFAC is considering sanctions.”23 Even pinpointing Bout’s associates was proving difficult. Treasury officials were considering imposing sanctions on Viktor Lebedev, Air Bas general manager in Sharjah. But Treasury’s database disgorged seventeen different Lebedevs, with birth dates ranging from 1934 to 1974, each with a different Russian passport number. “Listing him simply as a Russian residing in a particular city will virtually guarantee a flood of false hits that will endlessly tie up OFAC resources,” a Treasury official said.24
While Treasury fretted over how to target him, Lebedev was laying plans in Sharjah to bid for a new contract through another UAE firm to deliver general U.S. government cargo into Iraq and Afghanistan. “We expect to provide service from Dubai to Baghdad and Kabul,” Lebedev cheerily confided in a telephone interview from Air Bas offices in Novermber 2004. He confirmed Irbis’s earlier flights for Federal Express and wondered aloud why “the U.S. government threw us back. They did not give us a reason.” He explained that Irbis planes began flying as a U.S. subcontractor “from time to time in 2003. The first flights were difficult because we had to obtain much information and recommendation from civil authorities in Dubai and Sharjah. The situation is better for us now. Now we have obtained some offers and good communications with RAMCC in Baghdad.” He boasted of the firm’s “good relations” with KBR and told of a run of flights in October 2004 for the firm into Balad. “This was general cargo, which is usually mail, sometimes electric equipment, or military equipment.” When asked about his employer, Viktor Bout, Lebedev abruptly turned the receiver over to his sales manager, Oleg Vakushin. “Viktor Bout? I never heard this name,” Vakushin snorted before hanging up.25
KBR officials acknowledged that they had hired Irbis through Falcon Express Cargo as part of their Restore Iraqi Oil (RIO) contract with the U.S. Army Corps of Engineers starting in 2003. “The service was used to transport RIO personnel into and out of Iraq,” said Wendy Hall, a KBR spokeswoman. KBR, Hall emphasized, “manages thousands of first-tier subcontractors in Kuwait and Iraq, and each contractor, in turn, may have additional layers of subcontracts in place to support the mission.” But despite overseeing its vast army of suppliers, KBR was also wedded to government contract stipulations that “its subcontractors must operate according to applicable laws.” Hall directed further questions to Falcon Express, which never replied. Hall said that “KBR had no knowledge of a relationship between Falcon and Air Bas, and if we had known, we would have terminated the contract.” She added that Falcon Express had been terminated in July 2004. Yet Irbis continued flying for KBR as late as October 2004, according to Lebedev and American military officials in Baghdad.26
The procession of Irbis flights from Sharjah into Iraq was also followed avidly by journalists and by an obsessed international community of plane spotters. By fall 2004, the Bout network’s flights into Iraq had became the repeated targets of newspaper and magazine exposés. The Los Angeles Times, Newsweek, and Mother Jones all weighed in on the American government’s failures, while in the United Kingdom, the Guardian and the Evening Standard joined the Financial Times and the Times of London in highlighting the British government’s use of the Bout network. But the flights shuttled on, astonishing veteran plane spotters who spent long hours tracking the movements of the elusive Antonovs and could not fathom how intelligence officials with more sophisticated capacities did not stop them.
The most prolific of the spotters was Alexander Harrowell, an activist aviation enthusiast who blogged on the Web from Britain as the Yorkshire Ranter. Harrowell made it his mission to expose the tangled corporate structure of the Bout network and its hidden ties to the American and British war efforts in Iraq. Several times a month, Harrowell dashed off mocking screeds about suspected Bout planes that turned up in Baghdad and elsewhere across the globe. When the devastating tsunami ravaged Indonesia, Sri Lanka and Thailand in December 2004, killing more than a hundred thousand, Harrowell was quick to report that Bout cargo planes had been spotted days later in Phuket and Colombo, carrying humanitarian supplies for the Russian government and unwitting charity organizations.
Even after the United States and the United Nations moved against Bout with assets freezes, Harrowell remained dissatisfied with the pace of their efforts. In a Web lobbying effort he called “Operation Firedump,” Harrowell rallied his fellow plane spotters to move against the Bout empire. “It’s time to find these aircraft and demand their seizure. All bloggers are invited to mirror this and help land [Bout planes] on the fire dump, which is where most of these planes will end up given their age and general condition,” he wrote.27
While Irbis and sister Bout-network airlines were busy shuttling into and out of Baghdad, other suspected Bout-orbit aircraft were still plying old routes in Africa. Through the fall of 2004, Johan Peleman tracked weapons flows into the eastern region of the DRC, compiling evidence for a British parliamentary investigative panel. As part of the panel’s report, released that December, Peleman traced the May 2004 crash of a Russian-built Mi-8 helicopter owned by the Great Lakes Business Company, a firm headed by Dimitri Popov, a businessman linked to Bout’s network. The crashed helicopter had previously been registered in Equatorial Guinea by CET Aviation, a firm that Treasury officials were about to include on their banned list of Bout-network companies. The report also cited a July 2004 arms flight into Kongolo Airport of a plane owned by Compagnie Aérienne des Grands Lacs, another link to Bout that the panel concluded “is pertinent and requires further investigation.”28
Kathi Austin, the American investigator, had been tracking Bout for close to a decade when she accepted a new assignment in 2004 as a weapons expert for a UN panel examining arms embargo violations in the DRC. She had seen enough of Bout’s activities over the years to recognize his planes and modus operandi. She found both in the ramshackle Congolese town of Goma, the commercial hub of the DRC’s vast northeastern region. Unregistered Russian aircraft lumbered into and out of Goma’s airfield all night under the noses of slumbering South African peacekeepers. At night the planes parked on the grass beside a runway pocked with volcanic ash. The Russian crews were driven by minibuses to cheap hotels, where they congregated in bars popular with local hookers.
Austin decided on an audacious tack to find out if the planes were Bout’s. She planned a spot inspection with no prior warning. Alerting no other officials in the town, she and her team drove to the airfield just after dawn on November 26, 2004. They r
oused the dozing UN peacekeepers, while another UN team simultaneously moved in on cargo planes at an airstrip in the Congolese town of Bukavu. When the bleary-eyed Russian crewmen returned to their planes, they were confronted by Austin and her UN team and ordered to produce seven categories of paperwork required by international law. The pilots glared at the UN team in silence. Several warned that they would search out the families of some of Austin’s team. As the day grew hotter, more Russians arrived. In Bukavu, a local military commander terminated the sting. In Goma, several planes took off in the confusion on the tarmac. But Austin and her crew managed to keep most of the aircraft on the ground.29
The raids enabled Austin’s team to identify several new Bout associates and companies ferrying illicit arms into the region. Almost all of the plane registrations were false, expired, or incomplete. And many were traced back to Bout’s organization. Of the twenty-six aircraft inspected by the two UN groups, only three had valid certificates of registration. Several of the planes carried false documents, including some traced back to the old, outdated registries of Liberia and Equatorial Guinea. Twelve planes did not even have insurance policies.30
The UN panel concluded that the aircraft “operated by two companies were linked to the internationally renowned arms broker Viktor Bout through one of his front men, Dimitri Popov.” The two firms were the same companies Peleman had turned up, the Great Lakes Business Company and its twin, the Compagnie Aérienne des Grands Lacs. “Both companies,” the UN panel wrote, “operate aircraft that had previously been deregistered because of suspicion of involvement in violating the Liberian arms embargo.”31 The panel warned that the DRC’s key airports in Goma and Bakuvu “are becoming ‘airports of convenience’ as well as hubs from which destabilizing operations can be launched.”32
While the United Nations continued its “name and shame” campaign, the United States finally took concrete action against the Bout empire. After more than eight months of painstaking spadework, the Treasury team was finally ready to file its long-awaited broadside against the Viktor Bout organization. The looming Treasury designation had been bolstered by a secret grand jury investigation of Bout’s longtime associate Richard Chichakli. FBI agents and federal prosecutors from the U.S. attorney’s counterterrorism unit in Dallas had already spent months probing Chichakli’s background and connection to Bout.
On the morning of April 26, Treasury and FBI agents burst into Chichakli’s house and accounting and business offices in Richardson, Texas. Chichakli watched, enraged, while the agents seized his computer and documents and took possession of more than $1 million in assets, including diamonds locked in an office safe. While the federal agents trooped through his office, Chichakli took long-distance calls from both Viktor Bout and his brother Sergei. Days later, using frequent-flier miles to purchase his ticket because his bank accounts were frozen, Chichakli quietly left the United States, turning up in Cairo and then in Moscow. He turned his accounting company Web page into a graphics-intensive jeremiad against Treasury and FBI “Nazis,” Johan Peleman, and assorted journalists and bloggers, demanding the return of his frozen assets. “I hereby place an open invitation to the United States government to meet with Victor Bout in Moscow anytime they want, just call my attorney or drop me an e-mail,” he wrote. “Victor is ready, so how about you?”33
In addition to Chichakli, the OFAC designation targeted Sergei Bout and two associates along with thirty companies; most were dormant, although Irbis, Air Bas, and Transavia Travel were still active. Days after the new sanctions were announced, nearly $3 million in Bout-controlled bank transfers were seized.34 “I think we finally hurt him psychologically,” one Treasury official said. “He couldn’t cry that he was an aggrieved businessman any longer. The sanctions raised his profile and took away his shield of legitimacy.” The most mysterious of Treasury’s targets was Vial, the Delaware holding company that had a role in the cargo plane sales to the Taliban and was cited in the Interpol arrest warrant.
In announcing the OFAC assets seizure, Juan Zarate, assistant secretary of the treasury for terrorist financing and financial crimes, finally acknowledged publicly what U.S. officials had been saying in private since the late 1990s: Bout’s network had played a vital role in supplying the Talibs, and indirectly through them, to al Qaeda. Zarate openly cited the Belgian intelligence claim that Bout had provided $50 million in cargo shipments to the Taliban.
In a separate interview with the Los Angeles Times, Zarate said Bout had supplied “air services to provide matériel to the Taliban, which was problematic at the time, given their sponsorship of al Qaeda.” Well aware of the Pentagon’s continuing use of Irbis and other Bout-network air firms, Zarate said the frontal assault on the Russian’s business empire would “put the private sector and the DoD and others doing business with these entities on notice that they have to do due diligence to undo any relationships they might have.” Zarate said Treasury officials had begun working with the Pentagon to identify Bout firms targeted by the sanctions. “With a business network the size Bout has created there are bound to be these interlocking entities that have to be unwound,” Zarate said. But he insisted that Treasury’s “dramatic step” would “start to untangle these contracts.”35
It was like untwining a tight ball of yarn. The strands ran everywhere. In the immediate days after Treasury’s move, the OFAC quietly issued a temporary waiver to the U.S. military’s Central Command. Centcom had asked for a temporary reprieve to allow Bout’s aircraft to continue flying for the military for a final week. Centcom’s waiver allowed Bout’s freighters to deliver a last flurry of shipments of ammunition and other materials that had been deemed vital to the U.S. war effort—and it ensured that private contractors continued paying Bout’s network despite the fact that any other American firm doing the same would have been subject to prosecution.36
Even after the waiver period ended, Bout’s planes continued to fly into Iraq and Afghanistan on missions for American contractors. On June 24, 2005, two Irbis flights made the rounds into Baghdad. Two days later, they were at Bagram.
Andreas Morgner kept adding to his files as Bout’s companies juggled names, locations, registries, and planes. He knew that Bout’s network was nimble enough to remain several steps ahead of the small circle of investigators, intelligence officials, activists, and journalists who tried to keep up. He was getting little help. After the media splash about the Bout designations, the OFAC sparred in a protracted debate with State officials over a proposal to extend the Bout network freeze to the United Nations, making the sanctions global rather than affecting only U.S. assets and financial institutions. The delay held off the UN move until December.
One telling vignette spoke volumes about the turf battles that hindered the Bout effort despite pledges of closer cooperation in the wake of September 11. Anxious to expand the rolls of Bout-associated companies on the U.S. and UN designation lists, Morgner had been trying, through normal government channels, to get an internal copy of the FBI interview with Sanjivan Ruprah. Morgner wanted the transcript because it named many of the Russian’s companies and described his financial dealings. But the FBI flatly refused to turn the transcript over, even though it was unclassified. Numerous OFAC entreaties for the document were ignored and rebuffed.
But there was another copy of the transcript, in the possession of an Italian court that was overseeing a criminal conspiracy case against Ruprah. The transcript copy had been downloaded by Belgian police from the hard drive of Ruprah’s computer. When Ruprah fled Italy and escaped back to Africa in 2002, the Italian court turned over a copy of his interview to the United Nations-backed Special Court for Sierra Leone. The court was putting together charges of crimes against humanity against Liberia’s Charles Taylor and others involved in the West African conflict. The court had requested information from around the world that might be of use, and the Italians felt that the Ruprah interview provided potent evidence.
The court offered to let Morgner go t
hrough the files for Bout-related information. In June 2005 Morgner finally had to fly to Freetown, Sierra Leone—a round-trip of almost seven thousand miles and costing several thousand dollars—to retrieve a document that was sitting, unclassified, a few blocks from his office. Morgner also had to gather other documents in Freetown that were unavailable in the United States, including the December 2000 unclassified report issued by the Bureau of Alcohol, Tobacco, and Firearms—a Treasury agency.
Court officials were left shaking their heads at the absurdity of Morgner’s trip. “It was a long way to come for stuff that is sitting in the U.S. government files,” said one court source. “We enjoyed having Andreas here, but we were wondering why he had to come here instead of taking a taxicab in Washington to get what he needed.”
Taking on the quicksilver nature of Bout’s corporate structure was much like taking on the narcotics cartels Morgner monitored when he worked at the CIA. It required staying current; keeping in touch with worldwide contacts; watching for new areas of likely exploitation; and most of all, not giving up. “They keep trying new things and you have to adapt,” he said.
Merchant of Death: Money, Guns, Planes, and the Man Who Makes War Possible Page 30
