Hunting LeRoux

by Elaine Shannon

  To ship the Indonesian arms from Jakarta to the Philippines, Smith hired Bruce Jones, a fifty-something British sea captain who lived in Subic Bay and hung out in the expatriate bars there. Jones went to Istanbul and bought a tramp merchant ship called the Captain Ufuk for $800,000. He picked up a crew of thirteen Georgian sailors, sailed from Turkey to Jakarta, collected the arms on August 10, 2009, and arrived at Port of Mariveles on Bataan Peninsula on August 19. Smith sent three of his Echelon mercenaries—Hunter, Chris DeMeyere, and Adam Samia—to join Jones on the last leg of the trip to make sure the guns got where they were supposed to go.

  Once the Captain Ufuk arrived in Bataan, Smith took one of LeRoux’s yachts, the Mou Man Tai, to offload the Indonesian arms. (Here was yet another irony: In Chinese, Mou Man Tai means “No Problem” or “Relax.”) When about half the rifles had been moved from the Ufuk to the yacht, Smith and the offloading crew called it a day. Jones’s Filipino wife, who had made the journey with him, was pregnant and feeling ill. The couple climbed aboard the yacht with Smith and departed. The rifles were taken to Dave Smith’s beach house and then moved to the house of his friend Herbert Chu.

  The next day, before Smith could return for the rest of the rifles, the Philippine Coast Guard showed up. Guardsmen boarded the Ufuk, discovered the other fifty rifles, plus forty-five bayonets, and detained the crew for gun-running.

  It wasn’t a large seizure, by international standards, but it blew up into a scandal that made news across Asia. Jones and Smith were arrested. LeRoux bailed them out. He spent at least $1.2 million in bribes to make the Philippine government investigation go away and keep his name out of the press.

  American diplomats posted to the U.S. embassy in Jakarta gave the Indonesian government a stern lecture about not selling arms to strangers who might turn out to be extremists. Indonesian authorities needed little convincing. Since the late 1980s, they had been fighting their indigenous Islamist terror group Jemaah Islamiyah, which had staged a series of attacks in Indonesia, notably the bombings of two Bali nightclubs in October 2002 that killed 202 and injured another 209, and most recently, on July 17, 2009, an attack on two U.S.-owned luxury hotels in Jakarta, the Ritz-Carlton and JW Marriott, which killed nine and wounded at least fifty. In the wake of the Captain Ufuk scandal, the Indonesian Parliament and Defense Ministry enacted tighter arms export controls.

  LeRoux scratched Indonesia off his list of potential suppliers. There were other prospects, especially since the opportunities for an upstart gun-runner had suddenly proliferated. Since Viktor Bout had been arrested in March 2008, there was room at the top for a new arms mega-merchant. In his Manila lair, LeRoux read about Bout’s arrest and learned from the older man’s mistakes. “The guy should have known better and been more protective for his person,” LeRoux scoffed to Jack. The Russian, LeRoux said, was past his prime—vain, sloppy, and a publicity hound besides. The Americans had even gotten their hands on home movies Bout had made of himself, cavorting naked in the snow, dancing in a karaoke bar, hanging out with butchers and tyrants. (In 2012, Bout would be sentenced to twenty-five years in federal prison for his conviction on four felony counts, including conspiring to kill Americans and conspiring to provide material support to terrorists.)

  LeRoux shared Bout’s hunger for extreme wealth and the power that went with it. He planned to exercise his influence behind the scenes, without the flamboyance that Bout displayed, and without depending on a nation-state. Bout had had the backing of the Kremlin, but it could disappear in a blink of Vladimir Putin’s eye. LeRoux preferred to go it alone, shielding himself with his own strict rules for operational security: never show up to do a deal in person, communicate virtually, never use your real name on any transaction, and deal strictly in cash or gold exchanged by surrogates.

  LeRoux told Jack he wanted to stir up more small wars. “It’s good if countries get trouble and civil wars,” he told Jack. “It’s good for business.”

  Sitting in the restaurant, hungry and dehydrated, Jack labored to grasp the awful implications of LeRoux’s vision.

  “On the coast we would build almost a small city that was completely independent of anything and anyone,” Jack said, “with warehouses, housing for staff, a high security camp to keep us safe and to stock all arms and ammunition, a mosque, water wells to use locally, an airstrip, livestock and so on.” There would be an impregnable fortress in the center, and around it, simple huts for workers and guards. The place would function as a fulfillment center for arms shipments to combatants engaged in small wars and secular conflicts anywhere. As more personnel were needed, the complex would expand.

  LeRoux’s new city would be almost invisible. He had chosen the coast of Galmudug as the building site because it was without strategic value. There were no radical Islamists and no commerce except for goat herding and subsistence farming. It was of little interest to international intelligence and law enforcement. If the Big Powers didn’t care what went on there, his presence—his control—wouldn’t show up on their radar.

  In the first phase of the project, LeRoux said, they were going to take control of the major arms bazaars in Somalia. They would attract customers from many places, across not only Africa but also South Asia, Southeast Asia, East Asia, and the Pacific Islands. The demand from warlord factions and Islamist groups was virtually inexhaustible. “Once you have warehouses full of arms in Somalia, you can easily take over the trade on the continent,” Jack said.

  For the next phase, LeRoux had already engaged a Manila architect to draw up blueprints for a large, self-contained arms receiving and shipping facility with modules so that it was expandable as volume demanded. It was labeled “Forward Base Site Development Plan.” There were spaces for offices, bunkrooms, shower rooms, kitchens, and arsenals.

  Connected to the Somali base would be a private port, outfitted with landing craft to load and unload arms and other goods and supplies from merchant ships and bring them ashore, unseen by airport and waterfront snitches on whom intelligence services traditionally relied.

  Near the port, LeRoux wanted an airstrip that was at least 6,500 feet long, to accommodate big cargo planes coming in from Europe, the Middle East, North Africa, and Asia. LeRoux had already bought an Antonov AN-12 medium-range military transport, which he parked on the tarmac at the Galkayo airport. It was not in good working order, but it could be fixed, probably. LeRoux’s plan emulated Viktor Bout’s MO of using old clunkers to deliver arms to militia bands in the countryside. If a plane crashed due to mechanical difficulties or attack, or if it were seized by the authorities, the enterprise would not suffer a ruinous loss. Aircrews were expendable. LeRoux intended to buy a whole fleet of old Russian and Ukrainian Antonov cargo planes. These, he said, would deliver arms from Eastern Europe and building equipment from the United Arab Emirates.

  Though the coastal site was going to be the moneymaker, LeRoux intended to retain Jack’s original compound in Galkayo, to use as a base for sending orders and receiving supplies, either by truck from the port of Bosaso or by plane at the Galkayo airport. The airport wasn’t much to brag about. LeRoux had recently negotiated a deal with some Ukrainian arms smugglers, but when the ring’s pilots found out their destination was Galkayo, they refused the mission. But LeRoux was sure it could be improved to serve his needs.

  One major drawback in both Galkayo and the nameless coastal site was the lack of water.

  LeRoux explained to Jack that he had figured out how to solve that problem. He had purchased desalination equipment. He wanted Jack to erect a desalination facility and run 300 kilometers, or 186 miles, of pipe from the coastal site to Galkayo in the interior. Because al-Shabaab was likely to try to sabotage the water pipeline, Jack would have to devise a way to oversee and protect nearly two hundred miles of pipeline. “It would blow everybody’s mind in Somalia that we actually were willing to do that,” Jack said. “It was LeRoux’s way to please the locals. In fact he didn’t give a shit about them, but he needed them. It wa
s actually madness.”

  Jack was too worn-out to protest. He stared at LeRoux dully, trying to jog himself awake by scribbling notes on the back of his airplane ticket. Eighty minutes into the meeting, Jack could see the cooks in full prep for lunch service. He poured himself some water from a carafe on the table. It was free.

  A waiter came over to take their lunch order. Jack was desperate for a steak. The cuisine in Galmudug was goat, goat, goat, and flatbread. He was sick of goat.

  “We don’t want to eat here,” LeRoux said, waving the waiter away. “We’re finished meeting anyway.”

  Jack’s spirits sagged. He was embarrassed to be drinking the free water and not ordering anything. He felt lightheaded with hunger.

  “What time is your return flight?” LeRoux said. It wasn’t a question. “I need you to get back and start working on the new plan.”

  Jack was stunned and confused. “You cheap Charlie prick,” he muttered to himself in his old navy slang. “How can you expect me to fly all the way back the same day? Not even a shower?”

  But he answered that his flight back to Somalia was in a few hours. He flagged down a cab and dragged himself back to the airport.

  Up to now, LeRoux had been pretty good to him. Why this harsh treatment? Why now? Maybe it was just the way powerful men acted. After enduring his father’s alcoholic rages for twenty-four years, he could put up with a lot, and he’d been proud of himself for doing it. But now anger pumped enough adrenaline into his system to give him an idea. He strode up to the Cathay Pacific desk. “When is the next flight to Addis? Or Nairobi?” he asked.

  “The Nairobi flight leaves in four hours, sir,” the reservationist said.

  “That prick,” Jack said to himself. “Fuck it.”

  He turned to the reservationist.

  “I’d like to upgrade to business class.” He handed over a credit card LeRoux had given him. Business class cost $3,000 extra. LeRoux could have saved $2,800 by shelling out for a $200 room at a two-star hotel in Hong Kong. But it never seemed to occur to him that other humans had needs, or if he noticed, he didn’t care.

  Jack found the Cathay Pacific business-class lounge and took a long steamy shower in a private bath suite. The food in the lounge didn’t look that great, so he went out, found a restaurant, and ordered the biggest steak on the menu. Back in the lounge, he enjoyed a nice glass of wine and dessert. Upon boarding, he discovered to his delight that he was the only passenger in business class. He pulled off his boots, reclined his seat, stretched out his lanky frame to full length, and slept sweetly for hours. He landed in Nairobi to find there were no flights going to Somalia for several days. He took his R&R break there. He would rather have done it in Hong Kong, but he didn’t have the nerve. He was relieved when LeRoux paid his expense report without complaint.

  But once he had caught up on his sleep, Jack had to face a terrible reality. LeRoux was plotting to become the most powerful black-market drugs and arms dealer alive, and he had made Jack his co-conspirator. LeRoux wanted superstardom in the dark world.

  Up until that point, Jack had been on the legal side of LeRoux’s empire, but now LeRoux was setting him up to run the criminal enterprises, too. He was going to front for LeRoux’s narcotics and arms ventures, and worse. How could he get away? Could he get away?

  Jack didn’t get much time or space to think. LeRoux’s orders were pounding down like shells from a Maxim gun. He was having brainstorms that he fired at Jack with manic zeal.

  He wanted to take over the khat trade, unknown in the West but worth millions of dollars in East Africa. The khat mafia, composed mainly of Somalis, ran the trade out of Kenya, flying small planes loaded with product out of the Nairobi airport. LeRoux had sent a couple of his mercenaries to take a proposition to the khat mafia, offering to become their partner and expand the reach of their network, in exchange for a piece of the action.

  The khat mafia leaders turned LeRoux’s men down. “You can’t just walk up to these people and expect them to hand over a three-million-dollar-a-month trade to some strangers,” Jack said.

  The next idea was even more ambitious: mount a coup in the Seychelles Islands—some 115 islands located in the Indian Ocean, ranging between three hundred and a thousand miles from the East African mainland. LeRoux said that Dave Smith introduced him to a man who claimed to be a relative of President James Alix Michel of the Seychelles. The man offered him $300 million and a diplomatic passport from the Seychelles if he and his Echelon mercenaries deposed Michel and installed the man in Michel’s place. LeRoux gave the idea of mounting a coup serious consideration. The money was attractive, and he had been looking around for diplomatic status in Africa, in case things got too hot for him in the Philippines. He told Smith to send Hunter to the Seychelles to survey the situation.

  Hunter returned with an optimistic assessment. “Hunter reported that approximately thirty mercenaries would be required, thirty Echelon mercenaries . . . to take over the government, basically to defeat any resistance in the Seychelles,” LeRoux said later.

  He reluctantly demurred. “I responded to Smith that I believed that the project was not viable,” he said, “because, although the Echelon mercenaries being trained killers and well-trained and capable of initially overrunning the country and taking over the government, it would not be sustainable in the long-term, because the country had allies in the region . . . the neighboring countries such as Tanzania would intervene.”

  LeRoux focused on other money-making projects that he could carry out inside his safe haven in Somalia. He had greenhouses and agricultural equipment shipped to the Galkayo camp so that he and Jack could explore the idea of cultivating opium, coca, and marijuana. The water from the planned desalination plant could be used to irrigate the illicit crops. He dispatched a horticulturalist from the Philippines. The poor guy stayed with Jack for several months, trembling behind concrete block walls. So did the Filipino accountant LeRoux sent to run the numbers. Jack noticed that the frightened bean counter went to bed every night clutching a teddy bear.

  The horticulturalist did a study of the agricultural conditions and advised LeRoux that growing contraband crops wasn’t likely to make money anytime soon. Even with an assured supply of fresh water, planting, cultivating and harvesting were labor-intensive and subject to the vagaries of weather. Marijuana was a grass that grew easily. But opium and coca couldn’t be grown in the Somalian desert.

  LeRoux pivoted to methamphetamine manufacture. It was entirely synthetic and needed only a couple of lab workers and some barrels of chemicals from China or India. He told Jack they would set up a large methamphetamine production facility at the camp near the airport, using chemicals acquired for fertilizer as feedstock for crystal meth. They could make a finished product to rival the North Koreans.

  Jack countered, acutely unhappy now, with a proposal for a legitimate business, oil production. A local tribal leader had led Jack to an abandoned oil-drilling site in Galmudug, cemented over years earlier by an American oil exploration mission. Jack urged LeRoux to approach a major international oil company and offer to broker a deal with the local strongmen so the company could drill in peace.

  LeRoux listened, briefly, but then turned off the discussion. He didn’t want to play junior partner to an American oil company. Too visible, and it didn’t fit his image of himself as a lonely genius, like Elon Musk or Steve Jobs. His reality distortion field was getting stronger. He told Jack he wanted to do everything himself. He ordered drilling equipment from China and drilled down 600 to 800 feet. He found nothing. It turned out that the well needed to be 2,000 feet deep.

  Jack estimated that LeRoux would need to spend $10 million in capital costs to drill the well to 2,000 feet. He thought LeRoux could easily afford it. He figured LeRoux had many times that amount in cash in Hong Kong. LeRoux lost interest. The oil-drilling project would require a couple of years of investment in infrastructure before it would turn a profit. Jack was crestfallen.

  “
With the oil and tuna, he could be a very wealthy man, but he wanted it fast,” Jack said. “It had to be fast and it had to be dirty. He wanted to go one hundred percent rogue. That was more exciting for him. His problem was impatience. If he waited and gave us the time to build that airstrip at the coast and develop the fishing factory, which would be a great cover for the arms to fly in from Eastern Europe, he would be a seriously powerful man and even more dangerous than he already was. He wanted all to be built in a day, figuratively speaking, and that was impossible.”

  LeRoux’s kaleidoscope of proposed ventures baffled Jack, whose ideas about business were very traditional and linear. Start small, get bigger, and bigger. Build up or build out, but connect all the parts logically, like building a house. The twenty-first century way of doing business advocated exactly what LeRoux was doing—hopscotching from venture to venture in seemingly unrelated fields until something started to catch fire. LeRoux had a toe in projects all over the world so he could sample markets and assess the likelihood of government intervention. For example, around the same time he was brainstorming plots in Somalia, he was also experimenting with an online gambling start-up in Costa Rica, which he called the Betting Machine.

  Professor Howard Stevenson, who founded the discipline of entrepreneurship studies at the Harvard Business School in the 1980s, famously defined the concept as “pursuit of opportunity beyond resources controlled.” He meant that entrepreneurs were individuals or small groups with more vision, guts, and drive than money and without the patience for the traditional corporate-style product development umbrella, without all the checks, balances, imposed conformity, and timidity of groupthink.

  It was no accident, Stevenson said, that many famous entrepreneurs were penniless when they set out. “They see an opportunity and don’t feel constrained from pursuing it because they lack resources,” Stevenson explained to Inc. magazine in 2012. “They’re used to making do without resources.” What they had was obsessive focus, a need for speed, a try-anything-once attitude, inexplicable self-confidence, a high tolerance for risk, a hide like a rhino, and an all-consuming urge to rip the systems apart. As Mark Zuckerberg, the cofounder of Facebook, told his developers, “Move fast and break things. Unless you are breaking stuff, you are not moving fast enough.”