Globalization and the Illicit Traffic in Arms

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Introduction

The research presented in this critical essay explores the transnational market in illicit firearms with an emphasis on the implicit or complicit role of the United States in the illicit transnational arms market. The nature of the arms market will be addressed, as well the ultimate uses for illicit firearms. The importance of recognizing the salience of state crime to the arms market will also be explored.

The analysis of the relationship between illicit arms trafficking and state crime presented here relies on the frameworks developed by Rothe, Collins and Ross (Rothe and Collins, 2010; Rothe and Ross, 2011). The illicit arms market is dependent upon a variety of criminal networks organized along a continuum extending from small “mom and pop” rogue arms merchants to highly complex transnational crime networks (Rothe and Collins, 2010). The concept of a crime network implies a wide variety of actors, all of which play key roles in facilitating illicit transactions, including: retail and wholesale brokers; suppliers of financial capital; logistical and transport suppliers; and state actors. The context of the illicit arms market also is complex, and extends from white, to gray, to black market transactions (Rothe and Collins, 2010).

Illicit arms sales, as noted above, occur in a complex web of criminal networks. But, equally true is that many governments, or at the very least state institutions, such as intelligence and defense agencies, also play a significant role in gray and black market arms sales. As Rothe and Ross (2011) suggest, state involvement in illicit arms trafficking takes many forms occurring along a continuum from implicit to complicit involvement. It is these complexities which this paper will address in relation to the involvement of the United States in the facilitation of the illicit market in arms.

Globalization, Destabilization and the Illicit Arms Market

The rapid globalization of international economies and the concomitant spread of neo-liberal ideologies in the 1980s and 1990s had a distinctly destabilizing effect on much of the world. Conflicts that had been held in check by superpower politics, and a clear distinction between “industrialized” and “third-world” nations, broke out around the world. Wars in the former Yugoslavia, Africa (Rwanda, Somalia, Democratic Republic of the Congo, Sierra Leone, and Liberia), Colombia, and Asia (Afghanistan, Chechnya, Myanmar, Sri Lanka, East Timor) raged in the 1990s.

Economies and political systems, which had previously been “regulated” and controlled by the United States, Europe, China and Russia, became fractured, economies became weaker, and governmental institutions eroded.  “Weak” states began to proliferate, and in some cases those governments became “failed states” (where governments had virtually no control over what happened in their territory), or “captured states” (which became sanctuaries for arms trafficking, drug trafficking, money laundering, human trafficking and the panoply of organized crime activities).

Weak states became havens for organized crime activities and focal points for regional military conflicts, or “new wars” (Kaldor, 1999).  The inability of these states to provide sufficient funding through taxation to support effective law enforcement or a competent military, along with the organizational weakness of the state itself, encouraged the growth of regional warlords, guerrilla armies, terrorist groups, or private armies serving corporations and large landowners.  The result, as has been seen in Colombia, the Balkans, Africa and parts of Asia, has been armed conflict.

Weak states and new wars have two vital implications for organized criminality. First, they are havens for all manner of illicit activities.  Drug trafficking in particular thrives in many of these areas like Myanmar (opium), Colombia (opium and cocaine), and Afghanistan (opium).  Second, they are all markets for arms traffickers.  In those states where drugs and armed conflict coincide, drug and arms have become “currencies” of exchange creating a new and robust international arms-for-drugs trade.

Crime Networks, Illicit Arms and the State

One of the newest and most profitable transnational criminal enterprises is arms trafficking.  Organized crime has always, to a limited degree, dealt in weapons, mostly weapons for personal use or for organizational requirements. While syndicates of the past may have supplied a few “clean” handguns, today’s illicit entrepreneurs provide spare parts for large weapons systems; small arms, including assault rifles, and portable antitank and antiaircraft weapons; and ammunition for both small arms and larger artillery and armor systems.  In some cases transnational organized crime groups have also gained access to larger military systems, which have been placed on the black market for resale.

A basic and fundamental aspect of the arms trade is that organized crime networks are no longer serving the needs of individual patrons.  Their customers, their clients, and to a large degree their sponsors are nation-states, the entities that are supposed to control organized crime. For example, in the late 20th century, millions of dollars worth of illegal weaponry was sold to clients in Afghanistan and the countries of the former Yugoslavia, including helicopters and fighter aircraft.  Organized crime networks brokering arms acquired weaponry in many ways and many locations, but much of it is military equipment and “small arms” from the United States. It is clear that the crime networks those clients were serving were not participants in your local drug, gambling, and prostitution rackets.  The clients were governments, or factions within those governments.  It is equally clear that such large-scale arms trafficking could not occur without at least tacit approval by governments of source nations, like the United States.

The largest market for illegal contraband from the United States is the international market for firearms, munitions, and defense related technologies.  Illegal trafficking in U.S. manufactured firearms creates enormous problems for other countries, and is often regarded as the most serious organized crime in many parts of the world.  Firearms from U.S. gun manufacturers are used to supply narcotics traffickers, organized crime groups, insurgent and terrorists worldwide. Organized criminals operating in the arms trade, simply put, do so with explicit state sanction at both ends of the trade.

In addition, arms trafficking requires a new and different modality of supply and smuggling. There is a clear and discernible difference between smuggling a suitcase full of cocaine, and smuggling tanks, aircraft and helicopters. In order to accomplish this task, organized crime syndicates have to redefine themselves either as “employees” of legitimate corporations or as those corporations themselves.  Almost all illicit arms transfers are accomplished through “gray market” transactions.  The gray market in arms is dominated and controlled by large companies who provide both the cover and the means to make the transfers. Gray market arms trafficking involves the use of the legitimate export licensing process, which requires a “legitimate” arms brokering company. A transfer of arms in the gray market simply involves one of four techniques: (1) fraudulent documents, issued by the company, may be used to disguise the actual customer; (2) fraudulent documents may disguise the military nature of the goods; (3) false declarations by the company may hide the actual identity of the supplier; and, (4) the arms transfer may be disguised as “humanitarian aid..” All of these techniques require the participation of “legitimate” businesses involved in the weapons trade because they are all part of the normal exporting process.  Furthermore, a legitimate company must be involved because the arms trade depends on both normal and legal modalities of payment and transportation. These multi-million dollar transactions are a normal part of international commerce.

In addition to the enormous profits involved, the arms trade is important to organized crime because it fundamentally changes the nature of organized crime. Instead of initiating criminal enterprise, organized criminals now become functionaries or “professionals” available for hire by international corporations, or are those corporations themselves.  In addition, instead of being in an adversarial position with governments, organized crime is operating at the behest of those governments and frequently as temporary “employees” of those governments (Mouzos, 1999; .Ruggiero, 1996).

Guns for Drugs

Examples of the trade of arms for drugs are legion, but a few examples are illustrative.  In Brazil, Luiz Fernando Da Costa operated a lucrative arms-for-cocaine business through the 1990s. Da Costa purchased large weapons caches in Paraguay. His syndicate traded guns to FARC rebels in Colombia in exchange for cocaine. Russian organized crime groups have also opened a lucrative trade in guns for both drugs and trafficked women in Brazil. The women are transported to Europe and Israel to work in Russian organized crime owned brothels, while the cocaine is transported for sale in Europe.  The women and drugs are paid for with AK-47 and AR-15 semiautomatic rifles shipped into Brazil from Russia (Library of Congress, 2003:187-188).

Another good example of this trade involves Albanian organized crime groups and the Kosovo Liberation Army in the Balkans. Heroin, primarily obtained from Turkish traffickers, is traded for guns and women.  The arms were used to fuel the “new wars” in the Balkans, while the heroin and women were traded to organized crime groups in Western Europe. Organized crime revenues, particular heroin and human trafficking, with the tacit support of the United States and its allies in Europe funded the Kosovo Liberation Army (KLA). The multibillion-dollar narcotics trade in the Balkans played the major role in financing the war in Kosovo in the late 1990s (Kominek, 1002; Boyes and Wright, 1999; Smucker and Butcher, 1999).

In Afghanistan the war against Russia waged by the mujahedeen was in large part financed by the heroin trade with drugs moving out of Afghanistan through Pakistan, and arms moving back in through the same routes, all with the tacit approval of the CIA and the U.S. government.  To a large degree the same heroin-for-arms trade helped to finance the activities of Al Qaeda and the Taliban in Afghanistan. And, of course, the notorious cocaine-for-guns operation, which funded Ronald Reagan’s “secret” war against Nicaragua in the 1980s, has been the subject of numerous Congressional investigations and journalistic exposes.

The Source of Illicit Arms

In the United States, we know very little about the source of weapons trafficked in the illicit market, because we are forbidden by statute from knowing. In the United States the Tiahrt Amendment (named for Kansas Representative Todd Tiahrt) bans the public release of comprehensive information about guns traced to crime scenes contained in ATF’s firearms tracing system database.  The net result is that Congressman Tiahrt and his colleagues shield terrorists, warlords, organized criminals, and common murderers from exposure.

However, a review of ATF initiated federal prosecutions provides enough data to identify the most common sources of illicitly trafficked weapons emanating in the United States:

Table 1: Source of Weapons in Illicit Arms Trafficking Prosecutions
Type of Trafficking                                                 Percent of Weapons
Trafficking by a licensed dealer                             31%
Trafficking through gun shows                               21%
Trafficking thought straw purchasers                     20%
Trafficking by unlicensed sellers                            18%
Trafficking stolen firearms                                      10%

It is clear, just from this review of federal prosecutions that the majority of weapons illegally sold on the gray and black markets come from “legal” and protected U.S. arms sellers and brokers.  That assertion is confirmed by joint reports from the ATF and Mexican law enforcement on weapons sold to Mexican drug cartels. In addition, the weapons of choice which are marketed reveal the military intent of their use.

Table 2: Types of Weapons Trafficked to Mexican Drug Cartels
Type of Weapon                                                        Percent of All Weapons Sold to Mexican Cartels
Assault weapons                                                        42%
Semi-automatic pistols                                               30%
Armor piercing handguns                                          18%
50 caliber sniper rifles                                                2%
Other                                                                          8%

According to the ATF, 90% of the weapons obtained by the Mexican cartels emanate in the U.S.  There are 6,700 gun dealers along the border with Mexico. It is clear that the U.S. state, through its laws protecting the distribution of weapons provides implicit support for arms trafficking to Mexico. The American “gun culture” and American law is a substantial part of the foundation of the illicit weapons market.

But the question remains, is the U.S. government also directly complicit in the illegal arms trade?

The Death Merchants and the U.S. Government

Facilitation of arms trafficking by the United States is usually cloaked under the catchall term “national security.”  But a close examination of the three largest arms traffickers in the world provides some important clues to what is actually hidden by the term “national security.”

Sarkis Soghanalian (1929 or 1930-2011) was a Lebanese citizen born in Armenia. For much of his life as a professional arms trafficker, Soghanalian lived in Los Angeles. His client list was a “Who’s Who” of dictators around the world including: Sadam Hussein (Iraq), Anastasio Somoza and the Contras (Nicaragua), the Christian Fallange Militias (Lebanon), General Leopoldo Galiteri (Argentina), Ferdinand Marcos (Philippines), Mobuto Sese Seko (Congo) and Muammar Qaddafi (Libya). Furthermore, Soghanalian had a series of collaborations with the CIA, the FBI and DEA and enjoyed particularly close associations with Jack Brennan (Nixon’s chief-of-staff) and John Mitchell (Attorney General) (Gillard, 2011; Rees, 2011; Shane, 2011).

His most significant known arms deals involved the sale of 103 combat helicopters and two rocket launchers to Iraq, and 10,000 Kalashnikov rifles to FARC (Colombia) (Gillard, 2011; Rees, 2011; Shane, 2011).  Soghanalian was convicted on six counts of exporting arms without the required federal license and sentenced to 6 years in prison, but his sentence was set aside at the request of the U.S. Justice Department. He also was convicted of wire fraud and sentenced to 10 months. That sentence was set aside at the request of the U.S. Attorney’s office because of “substantial assistance to law enforcement” in an unspecified investigation. Finally, his prosecution for the FARC air-drop was suspended at the request of the CIA.

Jean-Bernard Lasnaud is a French citizen born in 1942, who until recently lived in Fort Lauderdale, Florida. He is best known for the sale of 6,500 tons of weapons to Croatia and Ecuador. Florida law enforcement officials believed Lasnaud was a protected asset of the CIA. The U.S. Department of Justice refused to arrest Lasnaud on an Interpol arrest warrant. Later, he was convicted in Belgium for illegal arms trafficking, and once again the U.S. refused to extradite him (Bergman, 2002; Forestier, 2011).

Monzar Al Kasar was born in Syria in 1945 and currently resides in Marbella, Spain. His client list includes an impressive list of nations:
•         Argentina
•         Austria
•         Bosnia
•         Brazil
•         Bulgaria
•         Chad
•         Croatia
•         Guatemala
•         Iran
•         Lebanon
•         Nicaragua
•         Panama
•         Poland
•         South Africa
•         Sri Lanka
•         Syria
•         United States
•         Yemen

Monzar Al Kasar’s most significant arms transactions involve the sale of anti-ship cruise missile technology to Iran, and the sale of $1.11 billion in submarines to Argentina. He was a major player in the Iran-Contra scandal, working directly with Oliver North and General Richard Secord. He was also the in-house arms broker for the International Bank for Credit and Commerce (BCCI) (Roston, 2006; Weiser, 2009).  However, his fortunes seemed to have changed recently as the Spanish government extradited him to the United States, and he was convicted of arms trafficking and sentenced to thirty years in prison (Weiser, 2009).

Conclusion

All of this leaves us with more questions than answers:

1) Why did the U.S. government prevent the arrest and prosecution of the three largest arms traffickers in the world?

2) Why does the U.S. government find it useful to cover-up the illegal traffic in arms, which are destined for ostensible enemies like Iraq, Iran, Libya and FARC?

3) How extensive is U.S. government collaboration in illegal arms sales to putative allies like the Flange militia, the Contras, and Mobuto?

4) How has U.S. covert activity changed under Obama? Are we still using the heavy hand or are we using microsurgery and what does that mean in relation to arms trafficking?

Unfortunately, the lack of scholarly research and curiosity in the world of arms traffickers makes it difficult to draw definitive conclusions.

Gary W. Potter, PhD, Professor
Maria Bordt, Graduate Student
School of Justice Studies
Eastern Kentucky University

Sources:

Bergman, L. (2002). Argentina says U.S. refused to detain a wanted arms dealer. The New York Times, June 9.

Boyes, R. & Wright, E. (1999). Drug money linked to the Kosovo rebels. Times of London, March 24.

Forestier, P. (2011). Le business des armes: Intermédiaires & corruption. Paris Match, March 7.

Gillard, M. (2011). Sarkis Soghanalian obituary: World’s largest private arms dealer for more than two decades. The Guardian, November 14.

Kaldor, M. (1999). New and old wars: Organized violence in a global era. Cambridge, UK: Polity Press.

Kominek, J. (2002). Albanian organized crime finds a home in the Czech Republic. Jame’s Intelligence Review 14, October 10: 34-35.

Library of Congress. (2003). Nations hospitable to organized crime and terrorism. Washington, D.C: Federal Research Division, Library of Congress.

Mouzos, J. (1999). International traffic in small arms: An Australian perspective. Canberra: Australian Institute of Criminology.

Rees, T. (2011). Sarkis G. Soghanalian, arms dealer dubbed ‘merchant of death,’ dies at 82. Washington Post, October 5.

Roston, A. (2006). Meet the ‘Prince of Marbella’ – is he really supporting Iraq’s insurgency? The Observer, October 1.

Rothe, D. & Collins, V. (2011). An exploration of applying system criminality to arms trafficking. International Criminal Justice Review, 21(1): 22-38.

Rothe, D. & Ross, J. (2011). How states facilitate small arms trafficking in Africa:  A theoretical and juristic interpretation. African Journal of Criminology and Justice Studies, 5(1&2): 1-18.

Ruggiero, V. (1996). War markets: Corporate and organized criminals in Europe. Social and Legal Studies, 5: 5-20.

Shane, S. (2011). Sarkis G. Sognahanalian, an arms dealer who aided U.S. intelligence, dies at 82. The New York Times, October 5.

Smuckler, P. & Butcher, T. (1999). Shifting stance over KLA has betrayed Albanians. Daily Telegraph, April 6.

Weiser, B. (2009). An arms dealer is sentenced to 30 Years in a scheme to sell weapons to terrorists. The New York Times, February 24.

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