Merchant of Death: Money, Guns, Planes, and the Man Who Makes War Possible

by Douglas Farah

  Ownership of the squat, old Antonovs, Ilyushins, Tupelovs, and Yakovlevs that clustered on civil airfields across the Soviet interior had always been in the hands of the government. The planes carried dual civilian and armed forces identifications, each attesting to the separate missions long forecast by Soviet planners—carrying commercial cargo in peacetime and matériel and troops in the event of war. “The [Soviets] built an aircraft for every route,” Pickering said. “It was a state-subsidized thing and their reserve air force. So they just built aircraft.”

  Most of the planes were the property of the old Soviet commercial fleet, Aeroflot. But with the disappearance of Communist overseers, Aeroflot was left paralyzed, “too big to know what it had and where,” said Mark Galleoti, a British historian who specializes in the modern Russian military and organized crime. “In some cases, local administrations or military authorities took them. There were spats between the local airports and central authorities over some of the planes. And at some airports, they sat, completely abandoned. In that state, planes just disappeared.”

  Despite their age and often dilapidated condition, the heavy-duty freighters were perfect vessels for the lift and range requirements that Bout needed for long-distance transport of weapons and ammunition. The older Tupelovs and Yakovlevs and the newer-generation Antonovs and Ilyushins were particularly well suited for handling the blasted terrain of Third World landing strips and making fast exits under fire. They were ear-splittingly noisy, with dirty, inefficient engines. But their sturdy undercarriages could take rough landings and were equipped with extra wheels and reinforced pneumatic systems. Designed simply, the engines, hulls, and instruments were not hard to maintain, and their parts were easily replaced. The durable hulks turned up at remote landing strips across Africa and Central Asia, whining loudly, bullet-pocked, wingtips gouged, hulls laced with gaffer tape. “The planes were literally built to last until they frayed away,” Galleoti said. Experienced Antonov and Ilyushin pilots were often trained, Galleoti added, to operate on short runways and without the benefit of air traffic controllers—both critical advantages for arms flights into remote, rugged territory and quick getaways.

  Moving speedily to establish himself as a player in the nation’s struggling new capitalist society, Bout acquired several cargo planes destined for the scrap heap. By his own account, Bout, then twenty-five, bought his first trio of old Antonovs for $120,000, hiring crews to fly cargo on a maiden flight to Denmark, then on longer-distance routes to the Third World. But he told intimates a markedly different version. “The GRU gave him three airplanes to start the business,” one associate said. “The planes, countless numbers of them, were sitting there doing nothing. They decided, let’s make this commercial. They gave Viktor the aircraft and in exchange collected a part of the charter money. It was a setup from the beginning.”

  Bout began renting his tiny fleet to customers either in “wet leasing” arrangements—aviation parlance for providing plane and crew—or “dry”—just the plane. Years later, Bout insisted he was the sole investor and that he had no difficulty raising the initial cash.12

  In reality, according to Bout associates and Western intelligence officials, Bout’s senior GRU contacts were critical for his start-up, and his initial flights were sanctioned weapons runs to approved Third World clients. Most likely Bout paid little or no money down on the planes, but had an extended lease agreement that provided some seed money in return for administering the initial arms shipments. Through the years, Bout’s GRU benefactors remained as his “rabbis,” said one associate, and presumably still benefited from his burgeoning operation. 13

  “What he was doing, he was doing with a wink and a nod from the GRU,” said Pickering. “He was an international entrepreneur. He really did not care who he was mixed up with or how.”

  In the Russian underworld they called it krisha, a roof, a favored tie to an official or powerful criminal benefactor who offered protection and hidden advantages. Over time, said longtime Bout watchers, he cultivated ties with the critical people he needed to find new planes and keep the arms shipments flowing: military and intelligence officials, most importantly, but also friendly faces in the Russian foreign and interior ministries, plane and weapons plant managers, civil aviation and airport officials, and banking and finance officers.14 Sergei Mankhayev, a former partner who became general manager of Republic Air in Sharjah, concluded early on that Bout had “very powerful backing and protection back in Moscow. At first, he just implemented the orders of bigger men in Moscow, telling him where to go and what to take. Later, he started his own business, but I believe the strings attached to Bout in those years have never really been cut.” 15

  Bout grew adept at acquiring the old cargo planes for his own operation by whatever means necessary. “His eyes sparkle when he sees an aircraft,” said Chichakli. 16 Valery Spurnov, a Soviet civil aviation official in Chelyabinsk who later became general director of the SpAir aviation firm in Yekaterinburg, openly suspected that Bout played a central role in the disappearance of several civil aircraft from the southern Urals region in the early 1990s. Spurnov said his private investigation discovered that “a company in Russia which owned planes wrote some of them off, then sold them to another Russian company, which in fact was a front company, for Bout’s operations. At that time Bout was very actively doing business in Angola.”

  Spurnov and other Russian air industry hands said aviation and airport officials often wrote off old planes as scrap—then sold the aircraft to Bout’s network for pittances. Bout’s avionics crews would retrofit the junkers with enough spare parts to make them airworthy. In one deft 1992 operation, Spurnov said, “Bout acquired four old and written-off [Antonov] An-8s, which were nothing more than a pile of scrap metal. According to my information, Bout paid $20,000 to $30,000 for each of them.” The purchase of the decrepit planes quickly paid off. “In Angola at the time, every An-8 [cargo flight] brought him about $30,000 a week.” 17

  Buying written-off aircraft provided another benefit. Once the planes were recorded as unworthy to fly and taken off the international aircraft registries, it was much harder to track them or determine their origins. The aircraft would often just appear on a Bout company’s fleet as if they had flown in from the ether.

  A veteran Russian air executive who competed against Bout’s air firms said at least three hulking Ilyushin Il-76s were spirited out, along with eighteen Il-76 engines. “The engines were written off as having exhausted their service-time limits,” he recalled. “But Bout had these engines put on those planes and the planes, which had no right to fly, worked for years for Bout.” His hard-boiled philosophy, the executive said, was “to profit at every stage of business.”18 An official at the Kyrgyzstan Air Star Company (KAS), a Gilbraltarregistered firm that did frequent business with Bout’s companies, recalled that the Bout firms he dealt with in the late 1990s stored “all sorts of papers, permissions, licenses, and certificates, fake or real, that made it possible for him to deliver anything, at any time and without necessary noise and publicity.”19

  Bout’s most audacious acquisition was his appropriation of a jumbo Il-76 freighter that had been consigned to stand as a monument in front of the Smolensk Rocket and Artillery School. The old aircraft was never delivered to its pedestal. Instead the plane was written off as scrap with the aid of compliant officials and smuggled out of the country into Bout’s fleet. “Anything for money, anything for risk,” said the Russian air executive. “The more risk the better.”20

  The same political and economic chaos that left scores of cargo planes available for the taking in Russia in the early 1990s also swung open the gates at arms factories and massive storehouses of weaponry.

  Across Russia’s interior and in its far-flung satellite states, arms factories that had churned out AK-47 assault rifles, millions of rounds of ammunition, land mines, surface-to-air missiles, tanks, sniper rifles, and night-vision equipment were suddenly idled, assembly lines shuttered becaus
e of a lack of money for matériel and salaries. Security at the sites also was fraying: plant managers and base commanders suddenly found themselves in charge of vast storerooms of matériel as the local Communist Party hierarchy withered. Military conscripts who worked as guards faced layoffs and uncertain pay schedules, and some responded by cutting deals that allowed outsiders to pilfer weapons stocks.

  The newly privatized Russian arms factories and the military’s stockrooms were filled to capacity with massive inventories of older rifles, ammunition, and matériel that would not sell easily to Russia’s blue-chip clients. Often these less-desired weapons were written off as destroyed, then shipped off to unwitting Third World clients disguised as top-grade arms. According to Western intelligence reports, nearly a third of the vast stock of Kalashnikovs disappeared in this fashion from the factories at Tula, the main source of the ubiquitous Russian-built rifle.21

  The most loyal customers were former Third World clients of the Soviet Union—rebel movements, anti-American warlords, dictators spurned by the West. They needed reliable sources of arms to replenish the massive stockpiles that fueled the regional outbursts and civil wars that had replaced the Cold War feints of the past. In the new world order, there were few impediments to cranking up the levers of Russia’s old war machinery. “It was like a Pavlovian reaction by people after the wall fell,” said one Bout associate. “They had been trained with Soviet weapons, the Soviet Union had always given them weapons, and so they wanted to keep going with Soviet weapons. They didn’t want to have American weapons. So they kept coming.”22

  As the old Soviet arms pipelines began to flow again, the West paid little attention. In the euphoria of the Eastern bloc’s liberation, the stealth movement of excess weapons to African and Central Asian backwaters did not register as an ominous trend to U.S. and European officials preoccupied with smoothing Russia’s path toward democracy and free market principles. With the Cold War buried, U.S. intelligence agents were recalled from remote African capitals just as the new arms routes began to hum. In a world seemingly devoid of enemies, what possible harm could come from making a tidy profit from a glut of guns and ammunition? In the early 1990s, this was the atmosphere of obliviousness that allowed Bout to painstakingly lay the groundwork for the expansion of his budding empire of planes, guns, and money. An admiring U.S. defense official would later compare Bout’s appearance at the birth of the world’s transformed arms trade to the emergence of two seminal American business figures. “Viktor Bout is like the Donald Trump or Bill Gates of arms trafficking,” the official said. “He’s the biggest kid on the block.”23

  The surge in available weaponry had its greatest immediate impact in Africa, where automatic weapons had previously been expensive and hard to obtain. The influx of the new, high-powered weapons soon wreaked havoc, dramatically beefing up the killing power of the continent’s guerrilla movements. But few cared, at least in the beginning.

  “A few planeloads of arms going to an African country just didn’t make the cut, in terms of an issue governments would want to pay attention to,” said Tom Ofcansky, a State Department African affairs analyst. “But the impact of a few planeloads of arms, as we’ve seen repeatedly in Africa, had a devastating impact on fragile African societies.”24

  It did not take long for Russia’s new generation of oligarchs to see the potential for profit. Military and intelligence service leaders quickly cashed in on the privatization of the Russian economy, well aware that the nation’s arms stockpiles had “tremendous value to warring countries in Africa and anywhere you need guns,” said Jonathan Winer, a former deputy assistant secretary of state for international law enforcement in the Clinton administration. “It’s capitalism, comrade.”25

  Base commanders could be persuaded to part with crates of weapons straight from their warehouses for a fraction of market value, allowing for high profits when the matériel was resold. Bribes worked wonders. Even before the end came, Soviet military officials saw the signs of rampant sell-offs from weapons stocks at their military bases. In 1989, official Soviet statistics indicated that weapons thefts had spiked 50 percent over the previous year. One arms merchant who dealt with Bout described the ease with which even the most dangerous weapons were accessed. He said he has an old photograph of himself, happily drunk, driving a tractor pulling a fully operational Russian nuclear warhead. “They let me ride it for the hell of it,” he said. “They all laughed and said they hoped it didn’t go boom.”

  In a 1995 report for the U.S. Army’s Foreign Military Studies Office, the former DIA official Turbiville found “poorly paid, badly housed, and demoralized Russian military forces at home and abroad are deeply immersed in criminal activities conducted for personal and group profit. Smuggling crimes of all types (particularly drug and arms trafficking), the massive diversion of equipment and materials, illegal business ventures, and coercion and criminal violence, all fall under the umbrella of military organized crime.”26 There was an underground trade in heavy matériel, from armored vehicles to MiG aircraft. Mark Galleoti noticed on a research trip through Russia in 1991 that even low-ranking former soldiers were hustling for their piece of the action. “You’d see them in hotel lobbies, tough guys out of uniform, now all wearing track suits. There was money to be made.”

  As graft and organized crime enterprises grew rampant, Bout could hardly have been expected to steer clear of their influence. Western intelligence documents reported that at least two men who rose to prominent roles inside the Bout network had solid ties to Russian organized crime groups. One was a director of a Russian weapons manufacturing firm; the other was a top pilot who later left Bout’s employ and became an aviation executive.27 Bout also worked with a far-flung network of weapons providers. In Moscow, according to Western intelligence officials, his main arms contact was Alexander Islamov, an associate who was named in a 2001 UN report examining arms embargo violations in Liberia and who was charged in that same year by Slovakia with illegal arms sales. In Bulgaria, according to U.S. officials, Bout dealt with Petar Mirchev, an arms broker who operated out of Burgas, a free trade zone where several arms factories were based for easy air access.28

  Experienced former Soviet pilots and flight crews, grounded by the lack of aircraft flying, were available for work at rock-bottom wages. The Soviet Air Force had fourteen thousand pilots and five thousand aircraft when the Berlin Wall fell, and thousands faced unemployment as the service shrank.29 A base salary of $900 per month and the chance to avoid Russia’s harsh winters lured many former Russian aviators to fly in dangerous and remote regions. The task of moving weapons was made even easier because many of the far-flung weapons factories and arsenals had landing strips built on the premises, designed to make loading the cargo fast, efficient, and cheap. All the ingredients were available for a master chef to work wonders. Bout, with his African connections, language ability, and entrepreneurial daring, quickly took possession of the kitchen.

  “On the surface, it might seem easy to get those weapons out [of Europe], but in fact it was not an easy thing to do,” said a U.S. intelligence official who monitored Bout. “There were only a few individuals capable of moving large amounts of weapons to African countries. This was the expertise Bout developed. If you had an Antonov and wanted to get into the arms business, you needed strong contacts and excellent language skills. He had all of these.”

  From early on, Bout and his associates grew practiced in the manipulation of shell companies, plane registries, and offshore jurisdictions. Financial barriers were breaking down as the world transformed in the post-Cold War era. Soviet intelligence agencies also were experienced in setting up front operations and disguising money movements. Indeed, as the Soviet bureaucracy imploded in the last years of the USSR, the KGB, the GRU, and other state intelligence agencies moved vast amounts of cash into foreign banking accounts and facade firms to prepare for the post-Communist era. “They salted money into Swiss bank accounts and front companies in the Soviet Unio
n and elsewhere in the world,” said the British intelligence analyst. “There was a well-designed program for setting up foreign bank accounts and companies.”30

  Bout’s firms were often set up in jurisdictions where lax corporate reporting laws veiled ownership. Bout-linked firms sprouted in Belgium, the UAE, Switzerland, in several African nations, and even in Delaware and Texas. Similarly, his aircraft could take advantage of spotty international aviation regulations, often registered in countries far from where they were actually based—moves that made it difficult for the host countries to take any action against them. “His structure is a lot what we see in drug cartels,” said a U.S. Treasury official. “He uses lots of interlocking corporate structures, capital-intensive assets, shifting names and associates. Everything with Viktor is one big ball of wax that can be molded any way he wants. It’s really just one big company, really, and he uses different names and structures when it suits him.”31

  Bout’s own identity was just as elastic. When he traveled, he had at least five varying Russian passports he could show prying border officials. Adopting the modus operandi of spies and criminals, he sometimes altered his name on documents and in personal encounters, allowing him to adopt and shed aliases at will. In South Africa he used Vitali Sergitov. Elsewhere he was Victor Buyte, or Butte, Byte, Bont, or Boutov. In the UAE he signed as Victor Butt, the name that bemused U.S. government pursuers wryly preferred to use in the late 1990s as they tried to scuttle his operation. Elsewhere, Bout was “often referred to in law enforcement circles as Viktor B because he uses at least five aliases and different versions of his last name,” a UN panel of experts related in a 2000 report on arms embargo violations in Sierra Leone.