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

by Douglas Farah

  Belgium, the Netherlands, and other European countries, all with small intelligence services and dedicating most of their limited resources to tracking terrorist threats and supporting the U.S. occupation of Afghanistan, had little ability to run down the continuing reports of Bout’s activities. But the Belgian Foreign Ministry doggedly continued to press Russia for a formal response to the Interpol arrest warrant. In December 2002, almost a year after the arrest warrant was issued, the Belgians were stunned by the Russian response. The Russian Foreign Ministry formally stated that Viktor Bout was not a Russian citizen, despite the fact that he had applied successfully for Russian nationality as an ex-member of the armed forces of the Soviet Union.20 Despite the preposterous Russian claim, the Belgian government could get no further explanation or clarification.

  In Washington, official interest in Bout’s network was little more than dormant. Frustrated by the Bush administration’s inattention, Lee Wolosky had returned to the life of a corporate lawyer in New York. Richard Clarke had been sidelined to the position of national cyber security adviser, his broad authority over transnational threats diminished. The Bout portfolio was shifted to Joseph M. “Jody” Meyers, a Clinton holdover who had worked on terror finance at Treasury before taking over international threats at the NSC.

  In the weeks after the Belgian government and Interpol circulated the red notice for Bout’s arrest in February 2002, there was a brief uptick of attention at the NSC. Meyers found himself at the center of a flurry of “papers and phone calls” and proposed letters of démarche to the Russians requesting their cooperation in handing Bout over to the Belgians. But with the lack of interest from Rice and other senior NSC officials, the unsent démarches were filed away. “After 9/11, things changed with Russia,” Meyers said. “Suddenly, they were our best friends. Anything having to do with Russian organized crime was swept under the rug.”21

  A small working group of State and NSC officials was thrown together to mull over new directions against the Bout empire. During several inconclusive meetings, officials recited the latest collated intelligence on the Russian’s network. But by mid-2002, the meetings petered out.

  In July, Wolosky and Will Wechsler wrote a stinging op-ed essay that ran in the Los Angeles Times and the Moscow Times, faulting the Bush administration’s silence and inactivity on Bout. “To date, Putin has not touched him. And why should he? Neither President Bush nor any senior administration official has asked him to.” Bout’s “continuing impunity,” Wolosky and Weschler wrote, “sends the wrong message” from international partners who “need to address post-Cold War threats together. A good way to start would be to take down Victor Bout.”22

  There was no reply from either nation. But one enterprising U.S. official had grown intrigued by the Bout empire’s global reach, fascinated enough to start gathering his own private files with the hope that he might prod government action.

  Andreas Morgner read all the press stories he could on Viktor Bout, adding them to a growing collection he had started in the weeks before September 11. Middle-aged, sandy-haired, and slightly paunchy, Morgner had spent ten years in the CIA as a counternarcotics specialist before moving over to the Treasury Department’s Office of Foreign Assets Control (OFAC) in the spring of 2001. The OFAC, created in 1950 to block all Chinese and North Korean assets during the Korean War, originally had the job of enforcing economic embargoes on sanctioned countries such as Cuba and Iraq. But as the war on drugs snowballed in the late 1980s, the small office had become increasingly important because it could designate an individual or a business as dangerous to the United States and freeze their assets. The threshold for taking such action was high and had to pass through numerous interagency and judicial reviews. But it had proved to be an effective method of freezing the assets of Latin American drug barons inside the United States and was much quicker than building a criminal case.

  Morgner started out as part of the OFAC team looking to seize drug money. Both at the CIA and the OFAC he had specialized in Latin American drug trafficking and the money movements of the criminal syndicates. He well understood the importance of aircraft in illicit enterprises and had become something of an aviation buff on the side.

  In August 2001, while reading an aviation magazine, he came across a photo spread of dozens of Russian planes on the runways of Sharjah, including some belonging to Bout. The story noted that “these aircraft are destined to fly again in Africa irrespective of their certificate of airworthiness status.”23 The story planted the germ of an idea—why not target the assets of Viktor Bout for seizure by the OFAC? He tore out the pages and kept them for future reference.

  When Morgner mentioned it to his superiors, they expressed no opposition. It was a low priority, but Morgner was free to pursue the idea as long as he took care of his other business.

  Morgner was not aware, however, that the NSC, the State Department, and the CIA already had a long-standing program under way. He knew nothing of Ruprah’s contacts with the FBI agent “Brad.” Morgner did not even have access to an unclassified report on Bout that the Treasury Department’s own Bureau of Alcohol, Tobacco, and Firearms had written in December 2000 and circulated to UN investigators and European intelligence services. Because of the incompatibility of databases and the lack of shared information among government agencies, much of the classified information gathered on Bout’s operation by the task force headed by Wolosky and Schneidman had been stovepiped into hidden bureaucratic compartments that Morgner, even with his high-level clearances, could not find.

  In the aftermath of September 11, the OFAC’s role suddenly changed. Terrorist charities, banks, and money-changing hawalas—informal money remittance services—had suddenly become key targets in the war on terror, and the OFAC was thrust into the forefront of investigative efforts to unravel their structures and freeze their assets. Morgner’s nascent interest in Bout remained a back-burner item. Morgner’s primary job was to pitch in on various OFAC investigations into Islamic charities alleged to be supporting al Qaeda and other terrorist groups

  But as Morgner read the growing barrage of media stories on Bout in the spring and summer of 2002, he realized that he was not the only one with an interest in the shadowy arms merchant. He was summoned to join the working group that met several times after Bout surfaced in Moscow. But without direction from above, the group treaded water. The meetings stopped. “Basically, everybody was trying to figure out what everyone else knew. There was no sense of urgency,” Morgner recalled.

  Only as the crush of terrorism cases eased was Morgner able to devote his attention to Bout, who had by then become linked publicly to the Taliban. Morgner felt that the OFAC might be able to designate the Bout network as a terrorist-related target, based on the media reports of its airplane sales and logistics support to the Taliban and its gold shipments for Islamic militants. Using the OFAC was a new approach and would prove to be one of the effective government weapons against Bout’s freewheeling operation.

  Morgner began reaching out to old friends in the intelligence community and the State Department, then to Johan Peleman and other UN investigators. But even as the informal network fed him updated information, Morgner realized he was only gathering string. The Bout issue was no longer a high enough priority anywhere in the government to command serious interagency cooperation, and there were no policymakers asking for information. Morgner tried couching his official requests for information under the rubric of “counterterrorism,” but his efforts went unanswered. No one waved him off the Bout case, but it was not a pressing interest higher up in the OFAC or at the main Treasury Department.

  After September 11, a senior Treasury official explained, the Russian’s network was only “one in a fertile field of targets. Yeah, he was a bad guy, but there are a whole lot of other bad guys out there.”24 Given the OFAC’s limited resources and the labor-intensive nature of each designation, the official said, Bout’s indirect ties to al Qaeda did not immediately make him a top-
tier terrorism target.

  Still, the more Morgner learned, the more passionate he grew in his pursuit of Bout. He felt that Bout was something more than a typical criminal. “Viktor Bout supports people who absolutely slaughter people,” Morgner concluded. “No one else has the ability to pour that kind of stuff into wars. He is a vulture, basically profiting on other people’s misery. And what is galling is the sheer volume of it.” But few in the government shared his outrage. And those few were not in a position to make policy.

  While Morgner was quietly building his case file on Bout, the Bush administration had greater and seemingly unrelated concerns: preparing to invade Iraq and topple Saddam Hussein. Morgner had no realization how much the Iraq war would alter his work and the fortunes of the Bout empire.

  With a new, major Middle East conflict about to take place, Bout’s reputation as the master of chaos was about to be put to the ultimate test. He was either just about to lose his market, or expand it beyond imagination.

  CHAPTER 13

  Welcome to Baghdad

  On his rounds at Baghdad International Airport, U.S. Air National Guard major Christopher Walker had a close-range view of the organized frenzy of the U.S. airlift into Iraq. Landing on the hour in a din of droning propellers and whining jet engines, an armada of civilian cargo planes roared into Baghdad from around the world on a daily mission to replenish America’s postwar military supply lines and Iraq’s reconstruction.

  As many as sixty civilian flights and seventy military aircraft arrived each day from Persian Gulf and Central Asian airports, loaded with deliveries for coalition depots and private contractors’ warehouses. At the airport’s cargo field, not far from his office inside a dilapidated terminal building, Walker watched as forklifts scuttled by like motorized beetles, skirting into and out of storage bays with pallets and containers loaded with every conceivable cargo: televisions and tents, American-built armored Humvees and Russian-made Kalashnikovs, disassembled oil rigs and massive generators, surgery equipment, electric power poles, frozen food, uniforms, baggage, bulletproof vests, and a ceaseless issue of mail sacks and courier packages. Impatient men hurried everywhere. Teams of American and Iraqi aviation specialists paced into and out of the hangars, bickering over the airport’s future. Air force refueling crews struggled with heavy aviation fuel hoses. Armed Gurkhas and American mercenaries patrolled the perimeter fence for insurgents. Anxious pilots readied their planes while their cargo holds were emptied, racing to finish and fly out of Baghdad before a mandatory night curfew left them stranded until dawn.

  Walker, a trim, unflappable thirty-seven-year-old Air National Guard veteran from western Maryland, was the point man for the largest U.S. government air cargo operation since the Berlin Airlift of the late 1940s. He had arrived in Baghdad on August 15, 2003, assigned as senior flight clearance officer for the Coalition Provisional Authority (CPA), the American occupation administration. Walker was the final authority on deciding whether each nonmilitary cargo plane could land and depart. He was an air force navigator by trade, and had flown supply missions on C-130 freighters into Afghanistan during the 2002 U.S. invasion. He returned to his wartime mission in spring 2003, guiding the huge cargo carriers on transport sorties into Baghdad, constantly on alert for shoulder-fired missiles. On one night flight, electronic alarms aboard Walker’s C-130 suddenly wailed, warning that a manned surface-to-air missile had locked in on the plane’s heat trail. The pilot took evasive action, banking steeply, and the missile never neared. As a young Brooklyn high school student enamored of flight, Walker later enrolled in the Air Force Academy to get in on just that kind of action. But when he mentioned to his commander that he wanted to do something more substantial for the postwar effort, Walker was steered to his new job as “airspace guru” on the staff of CPA administrator L. Paul Bremer. Hired in June 2003, Walker arrived in August, shuttling in a beat-up Toyota pickup truck between his window-seat office at Terminal B at the airport and the CPA’s complex in the Presidential Palace in downtown Baghdad.

  Security at BIAP—aviation industry shorthand for the French-designed field once known as Saddam International Airport—had barely improved by the time Walker took charge. The distant staccato of sniper fire was a reminder of the peril at hand. Several times a week, insurgents outside the five-kilometer perimeter fence lobbed mortar rounds toward the airport. They had the aim of the blind. The shells usually exploded harmlessly wide of the airfield, marked by faint thuds. But the volleys were still close enough to paralyze the airport for several hours. The military side of the divided airport ran like clockwork. Equipped with sophisticated radar, guidance, and evasion systems, the air force’s C-130s and other supply planes were well suited to deal with perils from the ground. But on the civilian side, where Walker held sway, few commercial cargo planes had those systems. The constant threat of ground-fired SA-7 and other MANPAD missiles kept delaying the planned return of commercial passenger flights. Skittish U.S. war logistics planners had already forbidden any American commercial air freight firms from participating in the airlift, worried that their sluggish, unprotected planes would be sitting ducks aloft.

  Military aircraft such as Walker’s C-130 were plentiful, and sufficient to handle the bulk of tactical in-theater supply and transport needs for immediate war operations. But the Department of Defense still required a flotilla of civilian carriers for its strategic long-haul deliveries of everything else—from heavyweight shipments of helicopter gunships to minor everyday items such as boots and blankets. With the American civilian air transport fleet unavailable, Defense contracting officials and major reconstruction firms both moved quickly in spring 2003 to find alternate options. They turned to private air companies that were based in neighboring Middle East airfields and fielded crews experienced at flying into danger zones; more often than not, they hired Russians. Senior logistics officials had already relied on Russian and Ukrainian air firms based in the Persian Gulf and Central Asia to back up American cargo planes after the invasion of Afghanistan. Giant Antonov An-124s had airlifted heavy supplies into Bagram Air Base near Kabul. In July 2002, even as senior military officials were secretly making preparations for the Iraq invasion, air force general John W. Handy, commander in chief of the U.S. Transportation Command, publicly acknowledged that “shortfalls both in airlift and refueling” were forcing planners to rely increasingly on East European aviation firms. The bulk of the capacity was still handled by C-130s. But “the world has changed,” Handy told National Defense magazine. “The Soviet Union is dead and now we even have contacts with businesses in former Soviet republics.”1

  The first few civilian cargo planes arrived in Baghdad in late April 2003, just weeks after the airport was seized by American troops. Once the crown jewel of Saddam Hussein’s grandiose dreams of transforming Baghdad into an international travel and commerce destination, the airport now lay in ruins. Its thirteen-thousand-foot runway was pocked with craters. Looters had stripped furniture and radar equipment from the tower and stolen the facility’s fuel trucks. The bullet-riddled main terminal was littered with trash, its gaudy wall tributes to Saddam stripped down. U.S. troops bivouacked in every available building. The earliest flights brought shipments of food, dry milk, medical supplies, and other humanitarian cargoes, and were soon joined by freighters flying for U.S. military contractors. Many of the planes arriving from Dubai, Sharjah, Amman, and other Persian Gulf hubs were familiar staples of Third World aviation—durable, old Ilyushins and Antonovs, their sturdy undercarriages and extra wheels equipped to take the punishment from BIAP’s scarred runways.

  To oversee the flights, military officials first tapped Army Reserve Sergeant Steve Goldblatt, an Illinois civil affairs expert who had experience in airline industry marketing, to handle flight clearance—the job later taken on by Walker. Goldblatt was never told how the first cargo flights into Baghdad had been chosen or contracted. All he knew was that the flights had been approved at RAMCC (Regional Air Movement Control Cent
er), the U.S. military’s centralized air command operation in Qatar. As Goldblatt poked around the devastated airport, he was stunned to find a DHL office already set up and staffed in a bombed-out corner of a vacant building. The DHL agent shrugged when Goldblatt asked how the firm had won permission to operate there. “He told me they got in right after the Third Infantry seized the airport,” Goldblatt recalled. Soon afterward, the National Guard sergeant saw arriving DHL flights staffed by Russian crews and planes.

  By May, Goldblatt was joined by Captain Mason Sellers, a reserve Civil Affairs officer from Maryland. Sellers toughened clearance procedures at Baghdad, demanding to see copies of Defense contracts and cargo manifests before he would permit new air cargo firms to land. But the first wave of air firms operating in Baghdad were simply grandfathered in—they already had military approval, and as long as their records remained clean, they were not second-guessed. “Planes were just showing up without any proper papers, but you couldn’t turn them away because they were carrying critical stuff,” Sellers recalled. Besides, Goldblatt concluded, the former Soviet military pilots seemed capable and “pretty fearless.” They easily negotiated the difficult corkscrew turns required of aircraft flying into and out of Baghdad to elude missiles and RPG attacks. During long delays, they strung hammocks under their wings and left vodka bottles strewn on the tarmac. “They couldn’t care less” about perils of missile attacks or crumbled runways, Goldblatt marveled. “As long as they were being paid, they’d fly.”2