How Diamonds Buy Guns for Wars in Africa

Series: Frontline Global

Title: "Gunrunners" (Sierra Leone) Credits
Producer/Correspondent: Rick Young

Rick Young is an independent producer who has worked on more than a dozen FRONTLINE documentaries. He is based in Washington, D.C.

Co-Producer/Reporter: William Kistner

William Kistner is a producer and reporter based in Washington D.C., and he is an associate of the Center for Investigative Reporting.

Field Producers
Kim Woodard
Matthew Brunwasser

Editors
Cliff Hackel
Steve Audette

Camera
Peter Pearce

A co-production with the Center for Investigative Reporting, Inc The nonprofit Center for Investigative Reporting conducts media investigations of underreported issues in the public interest. CIR's most recent television investigation with KQED San Francisco, "GunShots," just received the Sigma Delta Chi Award for documentaries.

Additional funding for this story provided by

The John D. and Catherine T. MacArthur Foundation

Ploughshares Fund

United States Institute of Peace

Compton Foundation
http://www.pbs.org/frontlineworld/stories/sierraleone/context.html

Gunrunners

During the past decade, Ukraine has gained a reputation as one of the world's most active suppliers of illegal small arms. It is one of several Eastern European countries that has turned to arms dealing as a source of much-needed hard currency. Between 1997 and 2000, the Ukrainian arms industry grew tenfold and exported $1.5 billion worth of weapons. While Ukraine's legal arms industry has boomed, the international small arms black market may have proved far more lucrative. Ukrainian arms have been linked to some of the world's bloodiest conflicts and most notorious governments, including the Iraqi regime of Saddam Hussein, and, until recently, the Taliban in Afghanistan.

The arrest of suspected arms smuggler Leonid Minin, who is currently awaiting trial in Italy, has shed some light on the workings of the Ukrainian arms trade. But his case is just one piece of a puzzle involving illicit weapons, high-level corruption and organized crime centered in Ukraine.

Ukraine does not manufacture small arms, but it inherited huge stockpiles after it broke away from the crumbling Soviet Union in 1991. The Red Army stationed nearly one million troops in Ukraine while it was a front-line member of the Eastern Bloc. As the newly independent state moved toward a partnership with NATO and downsized its military, its Soviet weapons fell into disuse. Some were sold off legally, but many slipped through the cracks and into the black market. Poorly paid soldiers "lost" their weapons, and some commanders were caught selling off entire military installations.

A Ukrainian parliamentary inquiry concluded that between 1992 and 1998, Ukraine lost $32 billion in military assets, in part through theft, discount arms sales and lack of oversight. (In comparison, Ukraine's spending on legal arms for defense in 1999 is estimated to have been $500 million.) Many of the missing weapons found their way into the hands of willing buyers in hot spots around the globe, from Sierra Leone to Croatia. And as these arms proliferated, so did evidence of international criminal networks that sold arms from Ukraine in flagrant violation of international sanctions and embargoes.

Theft and corruption in the military facilitated the flow of illegal weapons from Ukraine. It was also facilitated by forged or falsified end-user certificates, the export documents that are supposed to record the final recipient of an arms shipment. The ease with which arms shipments moved through official channels has led many observers to conclude that prominent Ukrainian officials were involved in the deals. In a 1999 report on Eastern European arms dealing, Human Rights Watch concluded that export-control authorities in the region were accepting arms brokers' documentation without question, either through "complicity or incompetence." Other observers say responsibility goes straight to the top of the Ukrainian government. Writing in The Christian Science Monitor, Ukrainian political scientist Taras Kuzio said, "High-level Ukrainian officials, if not directly dealing arms, are reportedly either smoothing the path for sales or at least looking the other way."

Such allegations remain unproved, and no Ukrainian officials or politicians have been brought to trial in connection with arms dealing. However, the current political climate in Ukraine lends plausibility to the suspicion of official involvement and also explains why it has been so hard to verify. Ukraine is known for a high level of official corruption, as exemplified by the case of former Prime Minister Pavel Lazarenko, who reportedly skimmed as much as $700 million from government energy contracts during his political career. (In 1999, Lazarenko fled to the United States, where he was arrested and will be tried on fraud and money laundering charges later this year.)

The Ukrainian government has shown little interest in looking into corruption, organized crime, or arms dealing. Ukrainian politicians and journalists who have pursued the matter have found it difficult and potentially dangerous. There has been only one official inquiry into arms dealing, and it ended abruptly when the defense official heading it was court-martialed.

The panel's findings vanished and its members remained silent. A journalist who leaked some of the inquiry's findings was shot and wounded in an attack case that is still unsolved. Journalists who question the government routinely face censorship, harassment, and violence.

Leonid Kuchma, Ukraine's president since 1994, has been dogged by accusations of corruption and silencing his opponents. In November 2000, one of his former bodyguards released secret recordings that appeared to connect the president with the disappearance and beheading of an independent journalist looking into Kuchma's ties to the Lazarenko case. The tapes also reportedly depict Kuchma meeting with Oleksandr Zhukov, a Ukrainian underworld figure with ties to suspected arms dealer Leonid Minin. This March, the head of a parliamentary commission looking into the so-called "Kuchmagate" scandal claimed that the tapes revealed the president discussing a $100 million missile deal with Iraq, in violation of a U.N. embargo. The head of Ukraine's arms export agency, who was said to be on the tape with Kuchma, died in a mysterious car crash earlier this year. Kuchma and his allies claim the tapes are fake.

For their part, Ukrainian government officials vigorously deny any suggestion of high-level involvement in illegal arms dealing. As revelations of arms shipments to Sierra Leone and elsewhere have emerged, they have stressed that Ukraine is doing all it can to follow international agreements and prevent illicit arms sales. A common response, repeated recently by President Kuchma regarding Iraq arms allegations, is that other nations are trying to ruin Ukraine's reputation as a dealer of legitimate arms.

International pressure has led to some reforms in Ukraine's arms export sector. During the past few years, the government has put in place more stringent weapons inventory and export controls. A 1998 American study found the new system to be closely in line with Western standards. Some Ukrainian officials say it is unlikely that arms are still falling into the hands of smugglers or gangsters. "Ukraine's current export control system makes illegal arms transfers from or via Ukraine practically impossible," said Olga Ostroverkhova, first secretary of the Ukrainian Embassy in Washington, D.C. Cases like those of Minin and other Ukrainians arrested abroad, she said, are exceptions and do not indicate any larger arms dealing problem.

Critics say Ukraine has yet to prove its commitment to ending illegal arms dealing and changing the political culture that makes it possible. Recently, there have been accusations that Russian arms dealer Victor Bout, Israeli-Ukrainian businessman Vadim Rabinovich, and the former director of the Ukrainian secret service sold millions of dollars worth of weapons to the Taliban during the late 1990s. Such stories are potentially embarrassing for the Kuchma government, which is seeking stronger political and military ties with the West and has offered support for the U.S. war on terrorism.

Ukrainian defense officials now claim that as much as 50 percent of the army's current arsenal needs to be upgraded or disposed of. What happens to these stockpiles of second-hand arms will provide some evidence of Ukraine's connection to the illegal weapons trade. If they do not slip into the illegal weapons underground, they may still be sold legally, though at far less profit. Wherever they end up, the question facing Ukraine, its foreign supporters, and the international organizations that monitor the arms trade is of no small significance: Will Ukraine continue to receive the international support it craves without cleaning up its reputation?

Dave Gilson is a journalist based in Berkeley, California.


 

The Story

Few places in the world have seen such brutal carnage in recent years as Sierra Leone, where tens of thousands of civilians have been killed and mutilated in a decade-long civil war. The madness in Sierra Leone reached ghastly proportions in January 1999, during a three-week rebel siege of the capital city, Freetown. More than 4,000 people were slaughtered as rebel forces took control of the city. Women were randomly raped and thousands of children were conscripted.

Responding to the violence in Sierra Leone, the U.N. sent the largest peacekeeping force in the world to enforce peace. The U.N. also sent "expert panels" of investigators to report on how illegal weapons were continuing to flow into the region in spite of U.N. sanctions and arms embargoes. Although they don't carry badges or issue subpoenas, these U.N. "detectives" use their investigative skills to "name and shame" the violators.

U.N. arms expert Johan Peleman, a chain-smoking Belgian, was trying to turn up leads in Sierra Leone when he got a lucky break. Peleman learned of a cocaine bust in Milan, where Italian police discovered four prostitutes in a hotel room with a Ukrainian businessman named Leonid Minin. The police also discovered more than $35,000 in cash, a half-million dollars in diamonds, and more than 1,500 documents detailing a tangled web of business dealings in oil, diamonds, timber and gun shipments to Africa.

Among the documents were flight records of a plane that had once belonged to the Seattle Supersonics basketball team, and now belonged to Leonid Minin. The flight records helped Peleman crack the case of an illegal arms deal in 1999 that delivered missiles, grenade launchers and thousands of AK-47 assault rifles to Liberia. These same weapons ultimately made their way into the hands of the rebels in neighboring Sierra Leone.

It so happened that the U.S. State Department had spotted the same illegal arms shipment from the Ukraine, but decided to take no action beyond filing a demarche -- a written reprimand -- to the Ukrainian government. Washington, sources say, was more concerned with "loose nukes" in Ukraine and Russia than the export of small weapons to Africa.

Ukraine was once a vital part of the Soviet military machine, and it is now ranked 8th in the world for weapons sales to other countries. A Ukrainian arms export official tells FRONTLINE/World he has no knowledge of Ukrainian weapons being diverted to embargoed nations, "So how could we bear any responsibility for this?" But sources say that Minin told Italian investigators that Vadim Rabinovitch, one of Ukraine's wealthiest businessmen, was connected to the 1999 arms shipment to Liberia -- a charge Rabinovitch denies.

The U.N. Security Council has extended the arms embargo on Liberia, but has not acted to crackdown on Ukraine. Meanwhile, Leonid Minin sits in an Italian jail on charges of violating a U.N. arms embargo. Minin's prosecution -- the first of its kind -- is considered an international test case.

But State Department arms expert Tom Ofcansky warns that shutting down Minin won't eliminate the problem of global gun smuggling. "It's a systemic problem. The international climate ... allows this activity to go on. That has to change."

"Gunrunners" Credits

Producer/Correspondent: Rick Young

Rick Young is an independent producer who has worked on more than a dozen FRONTLINE documentaries. He is based in Washington, D.C.

Co-Producer/Reporter: William Kistner

William Kistner is a producer and reporter based in Washington D.C., and he is an associate of the Center for Investigative Reporting.

Field Producers
Kim Woodard
Matthew Brunwasser

Editors
Cliff Hackel
Steve Audette

Camera
Peter Pearce

A co-production with the Center for Investigative Reporting, Inc.

The nonprofit Center for Investigative Reporting conducts media investigations of underreported issues in the public interest. CIR's most recent television investigation with KQED San Francisco, "GunShots," just received the Sigma Delta Chi Award for documentaries.

Additional funding for this story provided by

The John D. and Catherine T. MacArthur Foundation

Ploughshares Fund

United States Institute of Peace

Compton Foundation

Additional Information:
Since the end of the Second World War, tens of millions of people have been killed by conventional weapons, mostly small arms such as rifles, machine guns and rocket-propelled grenade launchers. Sales of advanced weaponry -- fighter jets and high-tech electronics, sophisticated long-range artillery and warships, and "weapons of mass destruction" -- tend to receive the most press coverage. But these costly, sophisticated weapons have not proved as deadly as ordinary guns and grenades that are easy to buy, easy to ship and easy to use.

Low-tech, handheld weapons and explosives do the vast majority of the killing today. There are more than 550 million small arms currently in circulation, many of them fueling bloody civil strife in countries from Sri Lanka to Sierra Leone.

In most cases, the countries involved in these conflicts have been the subject of international embargoes imposed by the United Nations and other organizations. In some cases, major powers want to supply the side they favor in the conflict but do not want their "fingerprints" to be discovered on weapons of war.

Against this backdrop of embargoes and clandestine international politics, a specialized group of arms dealers emerged during the Cold War. Their role was to ensure that responsibility for the death and destruction could not be traced directly to the supplier. Usually they did their business in places amenable to the trade. These included countries, like Switzerland, where arms trafficking was traditionally considered "just another business." In countries like the United States, where arms trafficking is strictly controlled, these dealers had to maintain the approval of the government. The latter situation is detailed in an exclusive interview with Sarkis Soghanalian regarding his early years as an arms trafficker operating out of Miami International Airport in the United States.

The arms business gets murky when deals on the table are not sanctioned publicly by governments. Like any clandestine business, it means the first thing a dealer must do is establish the ability both to supply the goods and produce the money. But the dealer also has to provide the proper paperwork, especially the critical "end-user certificate." Only then can the buying and selling of lethal machines, along with the ammunition and spare parts they devour, become a real deal. Endless negotiations, fraud and violent crime are also characteristic of this and most other businesses that border on or are criminal.

The richest and longest-lived practitioners of this treacherous business simply "fronted" for a particular government or alliance or even "ruling family." In the 1950s and 60s, the late legendary Sam Cummings, a CIA veteran, supplied anyone who had U.S. government approval with weapons from stockpiles in the United States and the United Kingdom. And, of course, there were the "middlemen" who stood in for the oil rich, such as Adnan Kashoggi, who in the 1970s and 80s often fronted for the interests of the Saudi royal family. Both men would become so notorious, but invulnerable, they talked openly on television and in the press.

But it is not only individuals who operate in the international arms market. In some instances, countries that were subject to embargoes also got into the clandestine weapons business. Israel, apartheid-era South Africa and Taiwan are examples of countries compelled to develop their own arms industries and commerce as a result of international trade bans against them.

During the first 25 years of its existence, Israel was often denied weapons and ammunition by U.S. and European governments, as well as most nations in Asia and, of course, the Middle East. As a result, it built its own arsenal and related industries that are to this day active internationally. Israeli arms and trainers have turned up in China, Guatemala, Ecuador and Central Africa. Israel Defense Industries has a long history of both procurement and development of military technology and its sale overseas. The man once known as the richest Israeli, the late Shaul Eisenberg, is an example of the "legitimate" arms entrepreneur using the trade in weapons and weapons technology to create a multi-faceted business empire.

However, it is the role of the clandestine middleman that distinguishes the careers of the people profiled on this Web site. They are specialists. They know the laws and the rules of the game -- from the necessity of obtaining an end-user certificate to making sure that the weapons work and that the money is there. Often, they are the key players who provide the deniability that the government supplying the weapons seeks. They allow government spokespersons, such as the Ukrainian official interviewed by FRONTLINE/World, to say, when asked about a delivery of weapons, "We got certificates. ... What should we do else?"

Media exposure and prosecution can sometimes, it appears, "reform" these arms merchants. Monzer Al Kassar, for example, was once the target of Spanish prosecutors and the press. A high-profile but ultimately unsuccessful criminal case against him, combined with newspaper and television reports linking him to virtually every war or terrorist attack in the 1980s and 90s, he says, "made [me] give up the business."

Lowell Bergman is an award-winning investigative reporter and correspondent/producer for FRONTLINE and The New York Times, and for 14 years was a producer for CBS's "60 Minutes."

Reporting for this Web feature was in large part the work of current and past students of the Graduate School of Journalism at UC Berkeley and the "Breaking News" Seminar that Bergman conducts as adjunct professor.

This Web feature was reported and produced jointly with The Center for Investigative Reporting.

Click here for profiles of the most notorious arms dealers:

Jean Bernard Lasnaud- South Florida's Elusive Arms Dealer
Victor Anatoliyevich Bout- The Embargo Buster: Fueling Bloody Civil Wars
Leonid Efimovich Minin- From Ukraine, a New Kind of Arms Trafficker
Monzer Al Kassar- The Prince of Marbella: Arms to All Sides
Sarkis Soghanalian- The Cold War's Largest Arms Merchant

Click here for an interview with Johan Peleman, one of the world's most prominent arms-trade investigators.

Click here for an interview with Tom Ofcansky, an African affairs analyst with the State Department Bureau of Intelligence and Research.

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U.N. Report on Sierra Leone

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U.N. Report on Liberia

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