“As Dick Clarke assumed control over counterterror at the NSC, he was in position to plan and oversee terrorism ops,” recalled Winer, who allied with Clarke’s broad view of transnational threats. “Justice made strong objections. They simply didn’t want to cede authority.” And the FBI, under Louis Freeh, asserted its traditional watchdog role on any international organized-crime matters. “Freeh’s attitude,” Winer recalled, “was you can’t get involved in that, don’t do it, we have things under control.” Clarke’s backers chalked off much of the animosity to the hidebound reactions of territorial bureaucrats. But Justice officials and other internal critics also had raised cogent questions about whether Clarke and other NSC officials risked muddying national security priorities by lumping terrorism, organized crime, arms trafficking, and other international ills into one bulging portfolio. Was arms trafficking as ominous a peril as al Qaeda’s Islamic terrorism? If not, did the NSC deserve the lead role in targeting such a wide range of transnational threats? Were traditional law enforcement and intelligence agencies being cut out of the decision loop as the NSC assumed dominance over transnational issues? These were essential questions of policy and government structure that could only be resolved from the White House.21
“Operationally, PDD-42 was supposed to be run by the FBI on the law enforcement side and the ‘drugs and thugs’ part of the CIA,” acknowledged one of Clarke’s supporters. “But at some point people either tow the line or you work around them. Some of both happened. We had an analysis capability at the NSC and a broader policy capability that they lacked. The question was whether they wanted to be involved in this effort. They had done the limits of what they could do in terms of looking at organized crime internationally. But they didn’t have people from NSC and State going off to foreign countries and working the issues hard like Clarke did.”22
It finally took Clinton’s involvement and the intrusion of Congress to sort out the jockeying. In 1996 the National Security Act was amended by Congress to include formation of the Committee on Transnational Threats. The new entity was mandated to “coordinate and direct the activities of the United States Government relating to combating transnational threats.”23 Clinton objected to Congress’s intervention, insisting he had already begun to institute the changes. But its creation jump-started his old objective of a unified approach to transnational threats.
In a final NSC realignment in the summer of 1998, Clinton expanded Clarke’s authority as counterterror gatekeeper, appointing him to the new post of national coordinator for infrastructure protection and counterterrorism. At the same time, he created the new Office for Transnational Threats—under Clarke’s authority. Its purview was broad and finally unambiguous: “Policies and programs on unconventional threats to the United States and Americans abroad; attacks on our infrastructures, cyber systems and government operations; terrorism; and attacks with weapons of mass destruction. This office also coordinates efforts to address other transnational threats such as international crime and narcotics trafficking.”24
Clarke assembled a circle of hard-charging, accomplished young deputies to work as his transnational threats directors. Obsessed with cutting-edge foreign policy and mostly liberal Democrat by inclination, they shared Clarke’s concern about al Qaeda and his urgency to root out similar global threats. The group grew to include Steven Simon, Daniel Benjamin, Roger Cressey, Michael Fenzel, Lee Wolosky, and William Wechsler—all key players in the secret chess moves against terrorism in the final years of Clinton’s second-term.
After the 1998 embassy bombings raised Africa’s profile as a key battleground against al Qaeda, Gayle Smith, the head of the NSC’s Africa desk, also was drawn into Clarke’s circle. Tall and animated, with a shock of spiky white hair, Smith would be one of the first senior officials to push for concerted action against Bout. A veteran of years of field work in Africa, she had seen firsthand the consequences of the continent’s wars and its death spiral of small arms. “Viktor Bout almost leaped off the map,” she said. “Meetings of principals and deputies on Sierra Leone always dealt with Liberia. Sierra Leone was spilling into Guinea. Things were not looking optimistic.” At the end of one meeting, “one official asked: ‘What about Viktor Bout? He shows up in all this stuff.’ ” Smith decided to approach Clarke to see if anyone on his staff could focus on Bout.
There was. It was Wolosky, a Russia specialist who had been steered into the transnational threats office by sheer accident. He would spearhead the American effort to bring Bout to justice.
Despite the absence of strong American interest in Bout’s activities in Africa until late in the decade, it was only a matter of time before his nonstop cargo flights and massive arms shipments came under scrutiny from other quarters. All through the 1990s, the UN Security Council repeatedly imposed arms embargoes on African war zones, trying in vain to cordon them off from weapons flowing in from foreign sources. Liberia and Somalia were quarantined in 1992, Angola’s UNITA rebels in 1993, Rwanda in 1994, and Sierra Leone in 1997. Rifles and ammunition were shipped in by the ton, and as Bout and other suppliers grew bolder, the killing power and sophistication of their weapons deliveries increased. East European helicopter gunships became a familiar sight in African skies. Land mines and mortars became standard issue. Armored vehicles and truck-mounted artillery and antiaircraft guns appeared in rebel arsenals.
As UN officials pressed their own experts to explain why the embargoes were so porous, they also began to rely on outside experts from the NGO community who had done much of the initial work on Bout. Chief among them were Johan Peleman and Kathi Austin.
Peleman’s early investigation into Bout’s activities had coincided with mounting concern about the massive worldwide supply of small arms, particularly in the Third World. By 1998 both the United Nations and other global security groups were calling for international summits to find ways to interrupt the weapons traffic. At a small-arms conference in Oslo that October attended by delegates from ninety nations, Peleman spoke about the issue of weapons flights from the Balkans in a speech, and in private conversations, cited Bout’s prominence. He was surprised by the lack of interest. “Nobody heard of Bout or seemed much interested in him,” Peleman recalled.
Despite its still-faint interest in Bout’s growing operation, the Clinton administration had decided to push for more oversight. At the 1998 conference, U.S. diplomats lobbied European delegates to adopt versions of the tough new American law on arms brokering. They met with nearly total resistance. “This was a first-order issue of trying to get governments to own up to their responsibility,” said one of the U.S. diplomats who pressed the issue. “But it’s a real obstacle when governments don’t want to do the right thing.” Among the most hostile were Belgium, Portugal, Spain, and the East European bloc, led by Russia. Peleman was not surprised.
“The Europeans didn’t see it as important and they each had private arms industries to protect,” he recalled. “The French were not eager. The Belgians were already big arms producers. The British had introduced their own brokering law and weren’t keen on changing it. Even if all the delegates agreed with the American position, they would have needed to persuade their national legislatures, and that was not going to happen. Their arms industries were too powerful.”25
Despite the stony reactions, Peleman’s work on Bout’s network impressed UN officials desperate to learn more about how their embargoes were being circumvented. In 1996, when the UN Security Council set up an internal panel to learn how weapons continued to flow into Rwanda, Security Council officials had approached Peleman for help. When the panel’s term was extended, he turned over “everything I had.” Three years later, UN officials again came knocking. This time, officials investigating arms embargo violations in Angola pressed for Peleman’s latest records. He gave them a proof copy of The Arms Fixers, a book he was coauthoring on the weapons trade. He figured they would be back for more, and when they were, Peleman insisted he would only work under contract. The
United Nations hired him to work for the Angola panel, and later, for another panel looking into Liberian arms violations. Austin was also hired onto the Liberia panel, and then worked in the DRC, spending several years on the ground, tracking weapons shipments.
Soon Peleman was flying to Luanda and Monrovia, retrieving yellowing end-user files and flight records, but this time under UN authority. In Sharjah, he and a team of UN investigators badgered reluctant emirati aviation officials to let them tour the airport and inspect Bout’s planes. And as he shuttled between his monk’s nook and the foreign capitals, Peleman found himself caught up in a bizarre “cat-and-mouse game” with the Bout brothers and their assistants.
The Belgian tried to set up interviews with the elusive Bouts, only to see the arrangements endlessly dashed. “Sometimes I give [Sergei Bout] a call inviting him to an interview. Then we agree to meet in Dubai. Subsequently, he does not show up and seems to have changed his mobile number once again. Sometimes I am talking to his associates, and in the middle of the conversation, Viktor calls. His brother asks whether he would to talk to ‘our friend Johan,’ and then he invariably answers: ‘No.’”26
As the cat-and-mouse game kept on through the late 1990s, even the most dogged investigators had no idea how high the stakes had become.
Lee Wolosky was a latecomer to the Clinton administration. He had spent most of the 1990s immersed in Russia’s turbulent economic and political transformation, first as an adviser and then as a New York attorney specializing in international law. Unlike Clinton loyalists who viewed Russia’s democratic transformation as an essential American commitment, Wolosky was troubled by what he saw as the dark side of the process.
In the immediate years after the Soviet empire fell, Wolosky had a front seat on the shaping of the Eastern bloc’s democratic future. Compact and cerebral, a Bronx-born intellectual with a pronounced skeptical streak, Wolosky graduated from Harvard in 1990 and jumped at the chance to work as a research assistant in Soviet political and economic reform with the university’s John F. Kennedy School of Government. He had detoured from following his father’s path into corporate law by painting and rehabbing houses. But the following year, he joined a group of young internationalists and headed for Moscow to help Russia’s new leaders on their shaky trek toward the free-market system.
Between 1990 and 1992 Wolosky shuttled between Cambridge and Moscow, working with the Moscow City Council on political reforms. He met occasionally with former Communist general secretary Mikhail Gorbachev, then in his final months as the first president of Russia, and Grigory Yavlinsky, a liberal economist who was overseeing the rush to market reform. Yavlinsky and other Russian economists were still struggling to fulfill the ideals of perestroika, Gorbachev’s effort to restructure the hidebound Communist economy, and some of The United States’ top government and economic experts had joined them. Wolosky found himself working side by side with Graham Allison, the former dean of the Kennedy School who was advising Gorbachev, and Jeffrey Sachs, a Harvard economist who had made a career of advising emerging nations, from to Bolivia to Poland.
It was Allison who had hired Wolosky for the Kennedy School program, impressed by his “intelligence, diligence, and determination.” Working with Yavlinsky on the “Grand Bargain,” an ambitious Marshall Plan-scale proposal to pump Western aid into the Russian economy in return for radical market reform, Allison needed a supporting cast of promising young policy specialists to make it work. They worked around the clock for two months in mid-1991 to hammer out the details, but the ambitious plan was rejected by Gorbachev and President George H. W. Bush. Wolosky stayed on through 1992, working on other policy initiatives.27
It was a heady time for a young idealist. Moscow was overrun with Americans eager to teach democratic ideals to a new generation of Russians they no longer feared or hated. But Wolosky was also dubious about the grand talk of a rapid Russian transition to a free-market democracy, alert to signs of trouble behind the rosy scenarios. During one meeting with Gorbachev, Wolosky pressed for the former Communist leader’s views of the “Grand Bargain.” Instead, he noticed, Gorbachev kept grumbling about his inability to build a train to Siberia.
When he ventured away from the crowded meeting rooms where Americans and Russians talked confidently about the future, Wolosky noticed the detritus left behind by the Soviet state. Moscow was becoming a playground for a rising generation of economic hustlers. Their limousines prowled streets clotted with trash. On a road trip deep into former Soviet satellite states, he poked around to see what the big-name advisers missed. In Turkmenistan, close to the Iranian border, Wolosky drove out to an air base that had been a Soviet outpost for decades. Old MiG fighter jets sat rusting on the runways, exposed and unattended. They had once been the fearsome vanguard of Soviet military might; now they were silent markers of its decay. The image stayed with him. “I had the sense that this had been our enemy, but also that they were not as well put together as a society as the West was. It was the Second World. They had First World resources, certainly the intellectual resources and education of the First World, but Third World living conditions, especially outside of Moscow. Everywhere you went, there was deterioration. It didn’t bode too well for instant democracy.”
Wolosky returned to Harvard for two years of law school, then took up with a New York corporate law firm, handling mergers, acquisitions, and boardroom fights. He kept getting tugged back into Russian affairs, retained by big-money Western investors who had been burned in their dealings with Russia’s new generation of corporate plutocrats. In one case he represented American industrialist Kenneth Dart in a lawsuit against Mikhail Khodorkovsky, the billionaire Russian banker who had taken over Yukos, the country’s largest oil company.
Dart had complained that Khodorkovsky, the wealthiest man in Russia, had weakened his investments in Yukos subsidiaries by reorganizing the firm. A legal investigation discovered that Yukos shares controlled by Khodorkovsky had been scattered to distant offshore accounts, from Cyprus to the South Pacific island of Niue. Khodorkovsky and his henchmen were “bullies,” Wolosky told reporters after Dart reluctantly sold his Yukos holdings.28 The more he turned up evidence of financial scams and corruption for his private clients, the less sanguine Wolosky felt about Russia’s chances for real reform. “It seemed like everything was for sale,” he recalled. “Government assets, military assets, private assets, it was all being sold. The idea of minority rights, whether they were investors or Russian voters, were pretty much being trampled.”
By the late 1990s, Wolosky had become an outspoken critic of the Russian political scene, worried that the plutocrats were hijacking the nation’s struggling economy and co-opting its political leaders. He took a fellowship at the Council of Foreign Relations and began drafting an article for Foreign Affairs, the council’s influential journal. Researching through early 1999, Wolosky aimed directly at Russia’s new president. In “Putin’s Plutocrat Problem,” Wolosky predicted bleakly that Putin would do little to fight the culture of corruption long tolerated by his predecessor Boris Yeltsin. “In the face of such venality,” Wolosky urged, the United States needed to withhold financial investment, treat Russia’s oil oligarchs “like pariahs,” and “vigorously prosecute” international cases of Russian organized crime and corruption. “In the battle against the oligarchs,” he wrote, “Moscow and the West must rely on every weapon available. If they do not, the oligarchs will.”29
Wolosky’s cautionary warning did not sit well with the Clinton administration’s top Russia experts. Clinton had bonded with Yeltsin and long talked approvingly of Russia’s transformation. Clinton openly viewed the United States’ role in promoting Russian democracy as one of his main historic legacies. Clinton’s close friend and deputy secretary of state Strobe Talbott had accented the positive aspects of privatization, convinced that the culture of corruption stretched back through Soviet history and could only be overcome by democracy’s deepening roots.30
But Wolo
sky’s broadside struck a chord at the NSC. Unlike Talbott and other specialists on Russia at the State Department, Clarke viewed Russian corruption as a strategic threat to U.S. interests. In the summer of 1999, Clarke and Wechsler sounded out Wolosky about joining the NSC as a deputy in the Russian affairs section. But by the time he passed his government security check in the late fall, Wolosky had been steered over to the transnational threats office, where he was assigned as a director replacing Wechsler, who was moving over to the Treasury Department to oversee money laundering control strategy.
Wolosky plunged into preparations for a planned Clinton trip to Moscow in June 2000 to meet with Putin. Clarke wanted to make Russian corruption part of the agenda, and Wolosky began putting together the background for Clinton to bring up the issue with Putin. But by spring 2000 Wolosky had been diverted to a new project that dovetailed with his interest in Russian crime and corruption. He was given the Viktor Bout file.
Wolosky was intrigued from the start. Bout was the apotheosis of Russia’s new wave of freebooting plutocrats, a personification of everything Wolosky had warned about in his Foreign Affairs essay. But while their corrosive influence was mostly confined to the chaotic Russian economic and political spheres, Bout appeared to be wreaking havoc on an international scale. “He wasn’t just a flower trader,” Wolosky said.
No longer a lone voice outside the government, Wolosky now had the authority to urge action about his concerns about Russian corruption—personified by Bout—at the highest levels of the Clinton administration. Bolstered by the bureaucratic clout of the National Security Council and newfound access to senior advisers at the White House, Wolosky turned his full attention to putting Viktor Bout out of business.
Merchant of Death: Money, Guns, Planes, and the Man Who Makes War Possible Page 14