Italy probe unearths huge Iraq arms deal
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WORLD / Middle East
Italy probe unearths huge Iraq arms deal
(Agencies)
Updated: 2007-08-13 09:33
In a hidden corner of Rome's busy Fiumicino Airport, police dug quietly
through a traveler's checked baggage, looking for smuggled drugs. What
they found instead was a catalog of weapons, a clue to something bigger.
Iraqi policemen stand guard with their AK-47 assault rifles, July 26,
2007, in Karbala, Iraq.[AP]
Their discovery led anti-Mafia investigators down a monthslong trail of
telephone and e-mail intercepts, into the midst of a huge black-market
transaction, as Iraqi and Italian partners haggled over shipping more
than 100,000 Russian-made automatic weapons into the bloodbath of Iraq.
As the secretive, $40 million deal neared completion, Italian authorities
moved in, making arrests and breaking it up. But key questions remain
unanswered.
For one thing, The Associated Press has learned that Iraqi government
officials were involved in the deal, apparently without the knowledge of
the US Baghdad command?-- a departure from the usual pattern of
US-overseen arms purchases.
Why these officials resorted to "black" channels and where the weapons
were headed is unclear.
The purchase would merely have been the most spectacular example of how
Iraq has become a magnet for arms traffickers and a place of vanishing
weapons stockpiles and uncontrolled gun markets since the 2003 US
invasion and the onset of civil war.
Some guns the US bought for Iraq's police and army are unaccounted for,
possibly fallen into the hands of insurgents or sectarian militias.
Meanwhile, the planned replacement of the army's AK-47s with US-made
M-16s may throw more assault rifles onto the black market. And the
weapons free-for-all apparently is spilling over borders: Turkey and Iran
complain US-supplied guns are flowing from Iraq to anti-government
militants on their soil.
Iraqi middlemen in the Italian deal, in intercepted e-mails, claimed the
arrangement had official American approval. A US spokesman in Baghdad
denied that.
"Iraqi officials did not make MNSTC-I aware that they were making
purchases," Lt. Col. Daniel Williams of the Multi-National Security
Transition Command-Iraq (MNSTC-I), which oversees arming and training of
the Iraqi police and army, told the AP.
Operation Parabellum, the investigation led by Dario Razzi, anti-Mafia
prosecutor in this central Italian city, began in 2005 as a routine
investigation into drug trafficking by organized-crime figures, branched
out into an inquiry into arms dealing with Libya, and then widened to
Iraq.
Court documents show that Razzi's break came early last year when police
monitoring one of the drug suspects covertly opened his luggage as he
left on a flight to Libya. Instead of the expected drugs, they found
helmets, bulletproof vests and the weapons catalog.
Tapping telephones, monitoring e-mails, Razzi's investigators followed
the trail to a group of Italian businessmen, otherwise unrelated to the
drug probe, who were working to sell arms to Libya and, by late 2006, to
Iraq as well, through offshore companies they set up in Malta and Cyprus.
Four Italians have been arrested and are awaiting court indictment for
allegedly creating a criminal association and alleged arms trafficking?--
trading in weapons without a government license. A fifth Italian is being
sought in Africa. In addition, 13 other Italians were arrested on drug
charges.
In the documents, Razzi describes it as "strange" that the US-supported
Iraqi government would seek such weapons via the black market.
Investigators say the prospect of an Iraq deal was raised last November,
when an Iraqi-owned trading firm e-mailed Massimo Bettinotti, 39, owner
of the Malta-based MIR Ltd., about whether MIR could supply 100,000 AK-47
assault rifles and 10,000 machine guns "to the Iraqi Interior Ministry,"
adding that "this deal is approved by America and Iraq."
The go-between?-- the Al-Handal General Trading Co. in Dubai?--
apparently had communicated with Bettinotti earlier about buying night
visors and had been told MIR could also procure weapons.
Al-Handal has figured in questionable dealings before, having been
identified by US investigators three years ago as a "front company" in
Iraq's Oil-for-Food scandal.
The Interior Ministry's need at that point for such a massive weapons
shipment is unclear. The US training command had already reported it
would arm all Interior Ministry police by the end of 2006 through its own
three-year-old program, which as of July 26 has bought 701,000 weapons
for the Iraqi army and police with $237 million in US government funds.
Negotiations on the deal progressed quickly in e-mail exchanges between
the Italians and Iraqi middlemen of the al-Handal company and its parent
al-Thuraya Group. But at times the discussion turned murky and nervous.
The Iraqis alternately indicated the Interior Ministry or "security
ministries" would be the end users. At one point, a worried Bettinotti
e-mailed, "We prefer to speak about this deal face to face and not by
e-mail."
"We are in a hurry with this deal," an impatient Waleed Noori al-Handal,
Jordan-based general manager of the Iraqi firm, wrote the Italians on
Nov. 13 in one of the e-mails seen by AP.
He added, in apparent allusion to the shipment's clandestine nature, "You
mustn't worry if it's a problem to import these goods directly into Iraq.
We can bring the product to another country and then transfer it to Iraq."
By December, the Italians, having found a Bulgarian broker, were offering
Russian-made goods: 50,000 AKM rifles, an improved version of the AK-47;
50,000 AKMS rifles, the same gun with folding stock; and 5,000 PKM
machine guns.
The Iraqis quibbled over the asking price, $39.7 million, but seemed
satisfied. The Italians were set for a $6.6 million profit, the court
documents show, and were already discussing air transport for the
weapons. At this point prosecutor Razzi acted, seeking an arrest warrant
from a Perugia court.
"The negotiation with Iraq is developing very quickly," he wrote the
judge.
On Feb. 12, in seven locations across Italy, police arrested the 17 men,
including the four alleged arms traffickers: Bettinotti; Gianluca
Squarzolo, 39, the man whose luggage had yielded the original clue;
Ermete Moretti, 55, and Serafino Rossi, 64. If convicted, they could be
sentenced to up to 12 years in prison.
The at-large fifth man, Vittorio Dordi, 42, was believed to be in the
Democratic Republic of Congo, where he apparently is involved in the
diamond trade. Italian authorities were seeking information on him from
the African country.
In the parallel Libya case, the Italians allegedly paid two Libyan
Defense Ministry officials about $500,000 in kickbacks to speed that
transaction for assault rifles. It isn't known whether such bribes were a
factor in the Iraq deal. No Libyans or Iraqis are known to have been
detained in connection with the cases.
Al-Handal's operations have caught investigators' notice before. In
1996-2003, the company was involved as a broker in the kickback scandal
known as Oil for Food, the CIA says.
In that program, Iraq under UN economic sanctions bought food and other
necessities with UN-supervised oil revenues. Foreign companies, often
through intermediaries, surreptitiously kicked back payments to officials
of Saddam Hussein's Iraqi government in exchange for such supply
contracts.
Those Iraqi middlemen also engaged in "misrepresenting the origin or
final destination of goods," said the 2004 report of the CIA's Iraq
Survey Group, which investigated both Iraq's defunct advanced weapons
programs and Oil for Food.
That report also alleged that during this period Al-Handal General
Trading, from its bases in Dubai and Jordan, secretly moved unspecified
"equipment" into Iraq that was forbidden by the UN sanctions.
Reached at his office in Amman, Jordan, Waleed Noori al-Handal denied the
family firm had done anything wrong in the Italian arms case.
"We don't have anything to hide," he said.
Citing the names of "friends" in top US military ranks in Iraq, al-Handal
said his company has fulfilled scores of supply and service contracts for
the US occupation. Asked why he claimed US approval for the abortive
Italian weapons purchase, he said he had a document from the US Army
"that says, 'We allow al-Thuraya Group to do all kinds of business.'"
In Baghdad, the Interior Ministry wouldn't discuss the AK-47 transaction
on the record. But a senior ministry official, speaking on condition of
anonymity because of the matter's sensitivity, acknowledged it had sought
the weapons through al-Handal.
Asked about the irregular channels used, he said the ministry "doesn't
ask the supplier how these weapons are obtained."
Although this official refused to discuss details, he said "most" of the
105,000 weapons were meant for police in Iraq's western province of
Anbar. That statement raised questions, however, since Pentagon reports
list only 161,000 trained police across all 18 of Iraq's provinces, and
say the ministry has been issued 169,280 AK-47s, 167,789 pistols and
16,398 machine guns for them and 28,000 border police.
A July 26 Pentagon report said 20,847 other AK-47s purchased for the
Interior Ministry have not yet been delivered. Iraqi officials complain
that the US supply of equipment, from bullets to uniforms, has been slow.
A Pentagon report in June may have touched on another possible
destination for weapons obtained via secretive channels, noting that
"militia infiltration of local police remains a significant problem."
Shiite Muslim militias in Iraq's civil war have long been known to find
cover and weapons within the Interior Ministry.
In fact, in a further sign of poor controls on the flow of arms into
Iraq, a July 31 audit report by the US Government Accountability Office
said the US command's books don't contain records on 190,000 AK-47s and
other weapons, more than half those issued in 2004-2005 to Iraqi forces.
This makes it difficult to trace weapons that may be passed on to
militias or insurgents.
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