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

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Arms and the Dudes: How Three Stoners From Miami Beach Became the Most Unlikely Gunrunners in History Page 27

by Guy Lawson

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

 

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