11.20.10

Did U.S. Help 'Merchant of Death'?

They call him the "merchant of death," but the most dangerous thing about Russian Victor Bout isn't the weapons he trades. It's the U.S. officials he might take down with him.

The “Merchant of Death” may bring down a few U.S. government officials with him.

Federal law enforcement agents tell The Daily Beast that the extradition to the U.S. of Victor Bout, the former Russian military officer long considered one of the world’s most dangerous and prolific arms dealers, should alarm officials at the Pentagon, CIA and elsewhere who approved contracts during the Iraq war that indirectly paid out millions of dollars to Bout’s far-flung business empire.

If Bout agreed to cooperate with the Justice Department in a plea agreement sparing him life in prison, “we’ll certainly want to know more from him about the circumstances of those Iraq contracts,” said a law-enforcement official with detailed knowledge of the criminal case against Bout. The official was referring to large U.S. military contracts in 2003 and 2004 in which Bout’s cargo companies were used as subcontractors to deliver military supplies to U.S. forces in Iraq. “We’d want to understand if our officials knew exactly who they were dealing with. If U.S. officials knew they were dealing with Bout, that’s uncomfortable news.” Could U.S. officials face prosecution? “The conspiracy laws are broad,” the official said without elaboration.

Federal prosecutors are celebrating their chance to try Bout, who was whisked in cloak-and-dagger fashion to New York this week aboard a small jet from Thailand, where he was arrested in 2008 in a sting orchestrated by the U.S. Drug Enforcement Administration.

Even as prosecutors cheer, however, there is concern about the implications of the case at the White House and the State Department, where officials fear the prosecution of Bout, who has deep ties to the Kremlin and to Russian intelligence services, could do damage to U.S.-Russian relations at an especially sensitive time. The relationship is already under special strain because of moves in the Senate this week to block a new nuclear-arms reduction treaty that the Obama administration has held out as a centerpiece of its efforts to “reset” long-strained U.S. ties with Moscow.

“If U.S. officials knew they were dealing with Bout, that’s uncomfortable news,” one law-enforcement official said. Could U.S. officials face prosecution? “The conspiracy laws are broad.”

During two years of captivity in Thailand, where he was the subject of a fierce diplomatic struggle between the U.S. and Russia to win his custody, Bout insisted he was an honest, globetrotting businessman whose air-cargo operations were not much different from those of UPS or Federal Express—though he prefers to operate in more exotic and dangerous settings than his American counterparts. When he appeared before a federal judge in Manhattan this week, the multilingual 43-year-old Russian, sporting his trademark bushy mustache, pleaded not guilty to charges that include conspiracy to kill American nationals abroad.

Although prosecutors believe that Bout is hiding a fortune in foreign banks, he is, for now, accepting the services of a court appointed lawyer in New York. Reached by phone Friday, the lawyer, Sabrina Shroff, said she would not comment on details of the case.

After his arrest in Thailand, Bout (pronounced “boot”) and his family mounted an aggressive, and seemingly expensive, public relations campaign to block his extradition to the U.S., including creation of a multimedia English-language website, www.victorbout.com, that includes a video of his modest childhood home in the city of Dushanbe, the capital of what is now Tajikistan, and childhood photos of a cherubic young Bout.

His website says Bout is “a Russian businessman who became one of the world’s most famous on the basis of fictitious tales and stories.” Bout may deny wrongdoing, but cannot deny mammoth self-esteem--also describing himself on the website as a “dynamic, charismatic, spontaneous, well-dressed, well-spoken and highly energetic person” who has an “eternal drive to succeed.” His life as an arms trader was the basis for the 2005 film “ Lord of War” starring Nicholas Cage.

Bout came to the attention of the United States in the 1990’s, when his Russian-built cargo planes started appearing on tarmacs in airports in war-torn, god-forsaken parts of Africa, where it became clear to intelligence agencies that Bout was arming governments armies and anti-government insurgents alike in some of the most savage civil wars that continent had ever experienced. He later turned up in Afghanistan, where he was accused by the United States of working with the Taliban. He was arrested in Thailand two years ago in a sting in which U.S. agents pretended to act as representatives of Colombia’s FARC guerrillas in seeking to buy weapons and other equipment from Bout.

“We initially sought to put this organization out of business because of his activities supply arms to African conflict zones,” said Lee Wolosky, director of transnational threats at the National Security Council under both Presidents Clinton and Bush, whose colleagues said he was one of the first government officials to detect clearly what Bout was up to. “Then we found out that he was providing aviation logistics support to the Taliban. Then we saw other activity. He became a global player. He’s been delivering bad things to bad people around the world for years now.”

Wolosky said he was startled to learn, after leaving the government, about reports that the United States paid out millions of dollars to Bout’s air-cargo operations in Iraq as a government subcontractor beginning in 2003, long after the N.S.C. and other agencies of the government had detected his illegal arms trafficking around the world. “It is not clear to me whether the U.S. government knew that Bout was the subcontractor,” he said.

Michael A. Braun, chief of operations at the D.E.A. during the time the agency organized the 2008 sting that led to Bout’s arrest in Thailand, said he believed that U.S. government officials did not understand who they were dealing with when Bout’s companies were hired for the Iraq contracts.

“He was a master of standing up companies and quickly shutting them down, and our government was strained at that point,” said Braun, now a private security consultant. “There wasn’t a whole lot of time for the government to do extraordinary due diligence.”

Still, Braun acknowledged it was disquieting to think of the United States government in business with one of the world’s most notorious arms traffickers. “He is a profiteer without conscience,” Braun said of Bout, noting estimates that tens of thousands of Africans died because of relatively sophisticated weapons that Bout’s operations trafficked into Africa in the 1990’s. Soldiers and insurgents who once would have fought with machetes were suddenly able to fight with AK-47s. Across Africa, Braun said, “what Bout did is turn murderous men into maniacal killing machines.”

Philip Shenon is an investigative reporter and bestselling author, based in Washington D.C. Almost all of his career was spent at The New York Times, where he was a reporter from 1981 until 2008. He left the paper in May 2008, a few weeks after his first book, The Commission: The Uncensored History of the 9/11 Investigation, hit the bestsellers lists of both The New York Times and The Washington Post. He has reported from several warzones and was one of two reporters from The Times embedded with American ground troops during the invasion of Iraq in the 1991 Gulf War.