Global Policy Forum

By John C K Daly

With international arms dealer Victor Bout behind bars in Bangkok, many world leaders are squirming over revelations of his client list. The arrest on 6 March of 41-year-old Viktor Anatol'evich Bout in Bangkok continues to shine a most unwelcome (for some) spotlight on the shadowy world of the international arms trade, and will doubtless leave many governments, including the US, scrambling for cover as they attempt to limit the fallout from his arrest. Bout was taken into custody in a conference room on the 27th floor of Bangkok's five-star Sofitel hotel after reportedly attempting to sell armaments to Colombia's FARC guerrillas. His arrest involved not only the Royal Thai Police and the US Drug Enforcement Agency, but the Romanian Border Police, the Romanian Prosecutor's Office Attached to the High Court of Cassation and Justice, the Korps Politie Curacao of the Netherlands Antilles and the Danish National Police Security Services.

The following day, Michael Garcia, the US Attorney for the Southern District of New York, and Michele Leonhart, the Acting Administrator of the DEA, announced the unsealing of charges against Bout (aka "Boris," Victor But," "Viktor Budd," "Viktor Butt," "Viktor Bulakin," "Vadim Markovich Aminov . and so on. On 10 March at 9 am in Manhattan district court federal agents arraigned Bout's associate, Andrei (Andrew) Smulian, who, according to the DEA, was arrested along with Bout in Thailand. Smulian, apparently spirited out of Thailand, was charged with conspiring to provide material support to a designated foreign terrorist organization, according to the Economist magazine. Smulian was detained without bail. Prosecutors did not say where or when he had been arrested, Agence France Presse reported.

One of Bout's three lawyers, Yan Dasgupta, claimed that, "Some [US] governmental officials at the moment of his detention tried to actually send him to United States without following proper extradition procedure prescribed by the law. He was doing everything in his power including physical resistance not to fly to the US," according to Profile magazine. Dasgupta confirmed that Smulian had been in Bangkok at the time of Bout's arrest, telling journalists, "We don't really understand what happened to Mr Smulian. It is quite interesting and surprising and strengthens my argument on (Bout) being forcibly sent to the United States," AFP quoted him as saying.

On 8 March after a brief hearing, Bout was fingerprinted before the media and transferred to Bangkok's Klong Prem Special Prison. The Russian embassy immediately hired Thai lawyer Lak Nitiwatvichan, who told reporters, "He was a military man. He has done nothing wrong. Thailand is a sovereign country, so since he was arrested in Thailand, he is willing to be prosecuted under Thai law," according to the Bangkok Post. On 11 March, Lak posted 500,000 baht (US$15,835) in cash for bail, but the Criminal Court issued a statement noting that "The suspect is accused of being involved in international terrorism. This is a serious case and he may leave the country, so the court is not allowing the bail for the suspect," the daily reported. On 23 April, the US Department of Justice issued its Overview of the Law Enforcement Strategy to Combat International Organized Crime, which revealed the sting operation, noting: "Unbeknownst to Bout, the people he believed to be FARC members were actually confidential sources working with the Department of Justice."

Equal opportunity supplier

During his career Bout has been an equal opportunity merchant of death, reportedly supplying former Eastern bloc weaponry to 17 African countries, al-Qaida, Afghanistan's Northern Alliance, the Taliban, Hizbollah, Muammar el-Qaddafi and the Philippines' Abu Sayyaf militant group, among others. Demonstrating a real flair for business, Bout's numerous, shadowy firms and their suspected accomplices comprise a very impressive list, including nearly 40 aviation companies and their numerous branches around the world, with the Air Cess entity being the flagship.

Nearly everything about Bout's past is murky. While his USSR passport states that he was born in Dushanbe, Tajikistan, Bout said during a February 2002 interview that he was in fact born in Ashgabat, Turkmenistan, according to Russia's Ekho Moskvy radio. The Guardian lists Bout's birthplace as Tashkent, Uzbekistan. As late as 2004, the Chairman of Britain's House of Commons Select Committee on Foreign Affairs identified Bout as a Ukrainian. Further muddying the portrait are such relatively simple questions as the number of passports that he carries (five or more), which include two Russian (internal and foreign) and one Ukrainian. The January 2005 UN Security Council Committee on Liberia Assets Freeze List gave four differing passport numbers. The Ukrainian SBU, successor to the Soviet-era KGB, states that Bout is a citizen of the United Arab Emirates.

Bout graduated as an interpreter in the late 1980s from the prestigious Military Foreign Languages Institute in Moscow, where in addition to his Russian and Uzbek, he reportedly learned English, Farsi, French, Spanish and Portuguese, later picking up the African languages Xhosa and Zulu during his travels, Alain Astaud writes in "Portrait du trafiquant d'armes 'Victor B' A Bout portent." Bout subsequently served in the 339th military-transport aerial regiment of the Soviet Air Force in Vitebsk, Belarus, and was in 1987 subsequently posted to Angola with UN peacekeeping forces, where he worked as a translator and developed political and military ties, according to Russia's Kommersant newspaper. Bout also served in Mozambique, furthering sharpening his abilities in Portuguese, Izvestia reported.

Opportunity knocks

The 1991 implosion of the USSR was a catastrophe for the Soviet military-industrial complex. The USSR's former first deputy defense minister Pavel Grachev subsequently observed that of the Soviet Air Force's three military transport aviation divisions only two regiments remained operational, while the breakup of the USSR left units in Vitebsk and Ukraine's Dzhankoe, Zaporozh'e and Krivoi Rog beyond Russian control. Among the newly unemployed in Vitebsk was Senior Lieutenant Bout. An executive decision opened the door for wide-scale looting of Soviet-era military equipment deemed surplus, not only in Russia but throughout the newly created Commonwealth of Independent States (CIS). Immediately after the collapse of the USSR, when the last Soviet defense minister Evgenii Shaposhnikov became commander-in-chief of the new CIS armed forces, the right to dispose of "surplus property" was granted down to the level of battalion commander, according to an article in the Sovershenno Sekretno magazine.

In 1992, Bout left the military and was discharged into the reserves as a Senior Lieutenant, according to Russia's Novosti newspaper. Bout found the shambolic post-Soviet aviation environment a perfect setting for his unique skills. It was in this chaotic setting that Bout ostensibly made his first "purchase" of three Antonov AN-12 aircraft for US$120,000. Bout then started Transavia Export Cargo Co, based in Ostend, together with the Belgian pilot Ronald Desmet. Bout's planes, registered in Monrovia in 1993, covertly supplied Belgian soldiers in Somalia. Several reports in the Russian media claim that, in return for a cut of the profits, Bout was proffered the Antonovs by the General Staff's Main Intelligence Directorate, while many speculate that he might have been a member of the directorate himself, given that it (the GRU) ran the Military Foreign Languages Institute. Bout's possible KGB links included possible marriage ties. A December 2000 UN report on his activities noted that his wife Alla's father, Zuiguin, "at one point held a high position in the KGB, perhaps even as high as a deputy chairman."

In 1995, Bout also started the Air Cess air cargo company, the only firm in Bout's network that ever officially listed him as its head, which he registered in Liberia. Like Transavia Export Cargo Co., Air Cess operated out of Ostend, which Bout used until 1997. Interestingly, Ostend had been a transit point for weapons in the Iran-contra operation 11 years earlier. The scale of Bout's various enterprises was startling; one Russian media source reports that, in the aftermath of the post-Soviet economic chaos in the Ukraine, Bout and his associates purloined one-third of Ukraine's Soviet-era arsenal and sold it on the global market, netting US$49 million. In 1997, under pressure from the Belgian authorities amid media allegations that he had sold 40 tonnes of weapons to the Northern Alliance in Afghanistan, Bout moved his operations to Sharjah in the UAE. Shortly thereafter, he was running the biggest of the Emirate's 160 air-cargo companies, employing 1,000 air and ground crewmembers.

Africa, the diamond years

It was in Africa that Bout built his aviation empire. By 2000, in eight short years, his aerial armada had grown from three to nearly 60 aircraft operated by a dizzying array of shell companies. UN experts in 1996 claimed that Bout was shipping arms from Bulgaria and Romania to Hutu forces in the Democratic Republic of Congo (DRC) who were fighting the government in Rwanda, but no action was taken because Bout's activities were extra-territorial. Rwanda still allegedly owes Bout US$21 million for the weapons.

Between 1997 and 1998, Air Cess shipped US$14 million of weapons from Bulgaria via Togo to Angolan rebel group UNITA (National Union for the Total Independence of Angola) and the Liberian-backed Revolutionary United Front of Sierra Leone, violating the UN embargo. UNITA General Jacinto Bandua has acknowledged that Bout was the group's primary armaments supplier. Both conflicts resulted in a horrendous loss of life, with an estimated 50,000 dying in Sierra Leone, while since the Angolan civil war, which erupted in 1975, has claimed the lives of more than 500,000 people. Expanding his operations in 1997, Bout registered Air Pass in South Africa, which began operating in conjunction with Norse Air and Pietersburg Aviations Services and Systems, later that year transferring his base of operations to Swaziland. Bout's African client list would eventually expand beyond Angola to include Cameroon, the Central African Republic, the DRC, Equatorial Guinea, Kenya, Liberia, Libya, Congo-Brazzaville, Rwanda, Sierra Leone, South Africa, Sudan, Swaziland and Uganda. Bout's pilots knew how to evade radars, used false identification markings and observed radio silence, flying with their aircraft navigation lights turned off. African clients would set up temporary airstrips, deceiving American satellites by only cutting down underbrush to slightly below wing level rather than clear-cutting an identifiable runway for the rugged former Soviet aircraft. Bout's pilots specialized in precise parachute cargo drops onto prearranged coordinates. For such services the money in the early 1990s for Russians was extraordinary. In Angola, leasing Bout's aircraft cost US$1,200 per hour and pilots made US$5,000-10,000 per month.

In 1998, as South African authorities moved to indict Bout with 146 breaches of civil aviation regulations, he moved his operations to Swaziland. When authorities there subsequently grounded 43 of his aircraft because of inadequate documentation, the aircraft magically reappeared in Bangui in the Central African Republic. In 2000 and 2001, Bout shuffled dozens of flights through South Africa using front companies. After the December 2000 publication of two UN reports on African gun-running, many European diplomats expressed outrage during UN meetings that Bout was working so openly in Africa's war zones, causing him yet again to relocate his Air Cess and Air Pass offices to Sharjah.

The following year, Bout's company headquarters reappeared in the neighboring emirate of Adjman, even though Bout continued living in Sharjah. Meanwhile, in Central Africa, Bout's villa in the Kimihurura section of Kigali, Rwanda, was so overrun with Bout's CIS personnel, from pilots to mechanics, that the locals dubbed it "The Kremlin." As interesting as Bout's lethal arms deliveries were the materials he took in payment. Beside the better known "blood diamonds" and gold, one of Bout's major mineral exports from the Congo was coltan, or columbo-tantalite, which is processed into tantalum and used in the production of mobile phones, computers, jet engines, fiber optics and capacitors.

By late 2000, the suddenly rising global demand for tantalum capacitors for mobile phones, laptop computers, video cameras, consumer and automotive electronics caused coltan prices to soar that year from US$30-40 per pound to over US$300 per pound by December. As coltan prices skyrocketed, Bout's planes transported coltan from the DRC to Uganda, Tanzania and Kenya, according to Spain's El Pais magazine. During Africa's "second Congo war" (2000-2002), Bout supplied weapons to more than 20 armed groups from eight states participating in the slaughter. By then Bout was the biggest operator in the African arms market; his front companies employing an estimated 300 people operating 40 to 60 aircraft, including the world's largest private fleet of Antonov cargo planes, according to Russia's RIA-Novosti.

Determining Afghanistan

Bout said during a 2002 interview, "Before the Taliban came in we had a very large volume of shipments there. In 1997, we were the second-biggest operator in Afghanistan after Lufthansa. We cooperated with the legal government of Rabbani, which was recognized by the world community," Komsomolskaia Pravda quoted him as saying. Bout would eventually supply more than Afghanistan's Northern Alliance forces. In 1995, an Aerostan Iliushin-76 plane leased by Bout's company Transavia was forced to land in Kandahar by a Taliban MiG-21 jet fighter and Taliban officials impounded "30-odd tons of AK-47 small arms ammunition" meant for Rabbani's forces.

While the Taliban by then had captured 10 provincial capitals, it had not yet taken Kabul. On 16 August, 1996 the crew reportedly "overpowered" their Taliban guards and returned the plane to Sharjah. Western intelligence believed that Bout subsequently used the incident to establish relations with the Taliban, with some US and UN officials asserting that Bout made his first deal with the Taliban in 1996 in the UAE, one of only three nations to recognize the regime.

On 15 April 2002, the British publication Air Cargo News published an article alleging that in 1995 Bout had supplied an aircraft to Osama bin Laden. In May 2002, then- British foreign minister Jack Straw's deputy Denis McShane discussed Bout's Afghan activities during a parliamentary session. In commenting on one of Bout's cargo planes, McShane said, "Prior to September 11th, this aircraft had reportedly been frequently overflying Iran from Saudi Arabia to Kabul and Kandahar in Afghanistan. It is now reportedly parked at Jiddah in Saudi Arabia." Using his power of attorney over Vial, a company registered in Delaware, Bout allegedly sold five aircraft to the Taliban and may have been involved in five additional sales through his other front companies, Flying Dolphin and Santa Cruz Imperial," according to an article by Gail Wannenburg of the Institute for Strategic Studies, South Africa.

Bout with the law

Belgium was the first nation to seek legal sanctions against Bout, where in the mid-1990s the Service Général du Renseignement et de la Sécurité (Belgian Military Intelligence Service, or SGR) began "Operation Boomerang" against Bout on suspicion that he was supplying weapons in return for diamonds to African countries under UN sanction. On 18 February 2002, Belgium transmitted a secret warrant to Interpol for Bout's arrest on a charge of money laundering and weapons smuggling worth US$32.5 million through Belgium. The warrant was based on Sanjivan Rupriah's secret FBI testimony of the previous month. Russia's Interior Ministry (MVD) also began to investigate Bout for possibly shipping weapons to al-Qaida. The MVD Information and Regional Communications Division ordered then-deputy interior minister Nikolai Boborovskii to investigate the case when it was learned that Bout's Air Cess had chartered planes owned by the Aerostan air transport firm registered in Kazan in central Russia, Interfax reported.

Global embarrassment

While Washington was congratulating itself on Bout's detention in Bangkok, there were many clues about his activities scattered across the US, too. The 2002 Interpol warrant described Bout's power of attorney over Delaware's Vial company bank accounts, reporting that he used them to launder weapons trafficking proceeds. Vial, established by Bout for African operations in the early 1990s, was an acronym from the first two letters of the founders' names, Viktor Bout and Aleksandr Kibkalo, who founded the company after working for a firm in Angola following Bout's discharge from the military, according to Izvestia.

Equally prominent were the activities of the man described by the UNSC Committee on Liberia Assets as Viktor Bout's "chief financial officer," Richard Chichakli. From a suite of offices in Richardson, Texas, Chichakli was president and director of the Trans Aviation Global Group, Inc. The UN identified Chichakli as the Chief Financial Officer for San Air General Trading in the UAE and president of Orient Star Aviation. Other subsidiaries that Chichakli operates from Richardson include Central Africa Development Fund, DHH Enterprises Inc., IB of America Holdings, Inc, Richard A. Chichakli, PC, Chichakli & Associates PLLC, Daytona Pools, Inc and Continue Professional Education, Inc. While admitting knowing Bout, Chichakli has denied all the federal charges against him. Following the March 2003 US invasion of Iraq, Bout's British Gulf aerial armada was a godsend for US forces, as the logistical supply aircraft using Baghdad International Airport were under constant threat, and any downing of US military aircraft there would be a public relations disaster. The commander of the US Transportation Command, Air Force General John Handy, noted that insurgents fired on US military aircraft using Baghdad International on almost a daily basis; "As we fly around, we are repeatedly shot at, with manpads [man-portable air defense systems], small arms, and triple-A [anti-aircraft artillery]," Stars and Stripes magazine reported. In a January 2005 letter to Congress, then-assistant defense secretary Paul Wolfowitz admitted the Defense Department "did conduct business with companies that, in turn, subcontracted work to second-tier providers who leased aircraft owned by companies associated with Mr Bout," ABC news reported.

In the strongest signal of Bout's usefulness to the Pentagon in Iraq, in March 2004 the UN Security Council began drafting a resolution to freeze the assets of mercenaries and weapons dealers who backed ousted Liberian dictator Charles Ghankay Taylor, including Bout, but French diplomats and UN sources say the US worked to keep Bout off the list because of Bout's British Gulf flights to Iraq, IPS reported. Washington's pressure resulted in Bout's name disappearing from the British list submitted in April, even though it headed the list in January's version. While Bout's name remained on the French list, according to British sources it was "rejected," even while "the affair is still being discussed in New York."

Bout's resupply activities broke in the western media in May 2004, when western diplomats were quoted as saying that Bout's freight companies might be involved in delivering goods to US forces in Iraq, and that the Pentagon was "recycling" his cargo network, according to the Financial Times. Perhaps to deflect international criticism of the move, as well as the fact that Bout had no substantial US-based assets, in July 2004 the US Treasury Department sanctioned Bout because of his association with Taylor.

As Bout's usefulness in Iraq diminished Washington slowly applied more pressure. On 26 April 2005, the Treasury Department expanded its sanctions against Bout by identifying 30 companies and four individuals linked to Bout, whom it labeled "an international arms dealer and war profiteer," and submitted the 30 companies and four individuals to the UN Sanctions Committee to add to the consolidated list of individuals and entities tied to Taylor. The sanctions prohibited transactions between US citizens and the designated entities and also froze the assets of designated persons within US jurisdiction. By late 2004, Bout's activities had also become a liability for the Pentagon. During a 15 December 2004 Special Defense Department Briefing on Iraq Reconstruction Update press conference (PDF), a journalist asked Charlie Hess, director of the Project and Contracting Office in Iraq, about Bout. To a question about whether the DoD had ever used Bout's services Hess replied, "I have not heard anything about that. But if you had some details, we can certainly check into it."

On 31 October 2006, President George W Bush issued an executive order freezing Bout's US assets. Andrei Smulian estimated the value of Bout's fiscal assets affected by Bush's executive order at US$6 billion, Kommersant reported. After apparently severing ties with the Pentagon, Bout continued his activities in Iraq, reportedly in 2006 selling 200,000 Kalashnikovs from Bosnia-Herzegovina to Iraq, Zagreb Vecernji List reported. Nor was Iraq the only Middle East market that Bout operated in. In July 2006, prior to the outbreak of hostilities between Hizbollah and Israel, western intelligence agencies spotted Bout at a Hizbollah facility in Lebanon. Shortly before Bout's arrival in Beirut, Chichakli, after leaving Texas when the federal government froze his assets, moved to Damascus, where he currently lives. Fuelling Israeli suspicions of possible Bout shipments, Israeli intelligence concluded that Hizbollah had used Russian-made anti-tank weaponry in Lebanon, according to chechennews.com. A delegation under Deputy General Director of the Israeli Foreign Affairs Ministry Mark Sofer arrived in Moscow on 18 August and complained that Hizbollah guerrillas had used Russian-made anti-tank missiles in their 34-day conflict with Israeli forces in Lebanon. The following month Russian Foreign Affairs Minister Sergei Lavrov arrived in Israel on a visit to more complaints about Hizbollah's use of the RPG-29 Vampir and 9K129 Kornet anti-tank weaponry, Kommersant reported.

For most Americans, however, the most disquieting item in Bout's record of carnage is that according to Britain's MI6, Bout was still supplying arms to Osama Bin Laden's terror network until just before the 9/11 attacks, according to De Standaard. The potential for embarrassment resulting from Bout's prosecution is global. In 2001, the Romanian media reported that the Flying Dolphin air transport company, the parent company of Flying Dolphin Romania, while registered in Liberia had its work offices in Dubai, UAE, where Bout lived at the time. Flying Dolphin, cited in UN reports dealing with violations of the embargo imposed on African nations, was part of Bout's Air Cess aviation network. Sheikh Abdullah Zayed Saqr al Nayhan was the sole shareholder of both Flying Dolphin and Flying Dolphin Romania, and is described in the UN reports as close to Bout. Al Nayhan is a member of the ruling family in Abu Dhabi and former UAE ambassador to the US. Bout had UK connections dating back to at least 1999, when British gunrunner Christopher Barrett-Jolley leased Bout's aircraft to run armaments to Sudan, the DRC and other African hotspots. In 2000, Peter Hain, Minister for Africa at the Foreign and Commonwealth Office, used MI6 reports and his parliamentary immunity publicly to name Bout as one of Angola's sanction busters.

In March 2005, according to official Civil Aviation Authority records, in one instance Britain's Ministry of Defense hired Bout's Trans Avia and Jet Line International to transport armored vehicles and a small number of British troops from RAF Brize Norton in Oxfordshire and RAF Lyneham to Kosovo, according to the Evening Standard. The British were also discomfited by the revelation that Bout actually ran many of his activities from British territory, including Gibraltar's Westbound, Ltd, owned by Ronald De Smet, who had a lengthy history of acting on behalf of Bout. Westbound is also a major shareholder in Centrafrican Airlines. Other Centrafrican Airlines major shareholders based in Gibraltar were Southbound Ltd. and ATC Ltd.

Little ado about much

Since the mid-1990's, not one UN arms embargo has resulted in the conviction of an arms trafficker, as the UN has no detention powers, while Interpol depends on the cooperation of local authorities. Astonishingly, despite having the toughest arms-trafficking laws in the world, the US has not prosecuted a single case of arms trafficking. After his arrest Bangkok police chief Lieutenant General Adisorn Nonsi said that Bout may face up to 10 years in prison or may be fined from 4,000 to 200,000 baht (US$130-6,400), according to the Bangkok Post. Given his activities in the rest of the world, Bout would doubtless prefer to remain in Southeast Asia. His lawyers fear that Smulian, already in US custody, may strike a deal, further implicating his former business partner, Poliarnaia Zvezda reported. The timing and operatives behind Bout's arrest remain a mystery, but it is possible that, as he flew directly from Moscow to Bangkok, Russia's security forces might have been involved, especially given Bout's previous relations to the Pentagon. Russian arms exports are now only second to oil exports in value to the Russian government, and are surging toward US$8 billion annually. Given that many Russian weapons exporters are now either security officers on active duty or in reserve, they may have been tempted to betray Bout because of suspicions that he was a possible US collaborator.

Further incentive to clean house may have come from the fact that Russia's defense minister and former presidential hopeful Sergei Ivanov was passed over for promotion while President Dmitrii Medvedev, former first deputy prime minister, succeeded Vladimir Putin, further reducing their potential krisha, or patronage, protection.The reality is, that even after Bout's arrest, Russia's transport aviation earns income from foreign wars and will continue to do so. Bolstering perceptions that Bout's transport activities may have been superseded by Russian governmental activity, on 8 June Deputy Prime Minister Sergei Ivanov told participants at the 12th St Petersburg International Economic Forum, "Our business participates in the transportation support of wars led by other nations. We earn income from wars, however cynical that may sound," RIA-Novosti reported.

Bout's brother Sergei sees darker forces at work behind Bout's arrest, with Washington seeking Bout as part of a decade-long campaign to exclude Russian aviation from the lucrative global transport market. During a recent interview he said that his brother was a victim of a "specific battle for the international aviation transportation market. For the last 10 years the US has attempted to exclude [Russia] from this market in order not to allow Russian aviation to survive. Attempts to resuscitate it were made. We showed the entire world that our aircraft can fly, that our aircraft can transport. This was not at all profitable to Americans, they lost markets, but our aviation, considerably more effective in this plan, worked."

Bout's organizational skills have impressed many western observers. Misha Glenny, author of McMafia, a study of global criminal networks, told ISN Security Watch when asked about Bout, "He's a spectacular success - my own personal opinion. [.] "You generally find behind spectacular success of criminals shady government support. "That Bout has been arrested is a very positive sign. [.] The influence of gangsters in Russia is diminishing," Glenny concluded. Bout's trials promises to be a unique and disturbing peak into the shadowy world of illicit arms trafficking, and the US must be nervously contemplating what he might say in court about his transports flights into Baghdad and Afghanistan as a Pentagon contractor. Perhaps however, Viktor Bout is merely misunderstood; as his wife Alla recently observed in her first interview with a western newspaper: "He's a poet, not the lord of war," she told the UK Sunday Times. Those interested in following Bout's legal difficulties can now visit his "official" website, which promises to "provide you with information, details, and all the facts the world's governments wanted to suppress about the Victor Bout story, and the man behind the story that grew into a legend." As for Bout himself, in his first and so far only prison interview with a western journalist since his arrest, the "merchant of death" stated simply: "Today I despise Americans," the Sydney Morning Herald reported.