Q/A: Inside the murky world of arms dealing

Andrew Feinstein’s new book “The Shadow World” uncovers the inner workings of the global arms trade. Written with an insider’s tone, the book describes backroom weapons deals, including an arms deal between the British and Saudi governments and the guns-for-diamonds deals in Africa.

Feinstein was a member of the African National Congress from 1997 to 2001, resigning when the ANC declined to investigate corruption claims regarding a major South African arms deal. Feinstein is an Open Society fellow and the founder of Corruption Watch in London.  Feinstein e-mailed with CNN.com about how the arms trade has mushroomed since World War II, its role in the Arab Spring uprisings, and what he thinks can be done about all those unchecked weapons in Libya.

CNN.com: What is the global arms trade?

Feinstein: It is the trade in conventional arms, so not (weapons of mass destruction), but everything from small and light weapons to aircraft carriers and jet fighters. It accounts for sales of about $60 billion a year on average, and is responsible for around 40 percent of all corruption in all world trade.

CNN.com: Why is it important to understand the distinction you make in your book between government to government trading and illicit weapons dealing? What is the “grey market?”
Feinstein: Governments and defense contractors argue that the government-to-government trade is “clean,” whereas in fact it is riven with corruption, and also supports the illegal or black market trade. The grey market is where governments attempt to influence foreign policy covertly through the use of illegal dealers to undertake arms transactions on their behalf. A well-known example would be the Iran-Contra deal, perhaps the most cynical arms deal of all time.

CNN.com: Your book isn’t an academic history, though you do explain how and why the military industrial complex grew after World War II. Your book is mostly packed with thriller-type stories about arms dealers and corrupt government officials, backroom wheeling and dealing. Much of that is based on top secret information you obtained. How did you manage to get that information?
Feinstein: The book is intended as an accessible, narrative account of the trade that is hopefully entertaining to read. But it is also backed by extensive research – there are between 2,500 and 3,000 endnotes in the book for anyone who wants to check where any piece of information was sourced. This information came from a wide variety of sources: interviews with arms dealers who have never been reported on or interviewed before, massive investigation archives that have not been in the public domain, whistle-blowers and publicly available sources.

CNN.com: You joined the African National Congress during Nelson Mandela’sadministration when you were a student and you resigned in 2001 when the ANC wouldn’t investigate a major arms dealer. Was this your first up-close introduction to the world of arms dealing? What was that experience like?
Feinstein: That’s correct. I was committed to the ANC from the mid-1980s when it was still a banned organization in South Africa. After working as a facilitator in the negotiations that led to our first democratic elections in 1994, I became a Member of Parliament for the party in those elections. It was an extraordinary experience to serve under Mandela but it was disappointing how quickly his successor adopted the tawdry norms of global politics. The point at which the ANC lost its moral compass was when they decided to spend $10 billion on weapons the country didn’t need, and barely use today, with $300 million in bribes being paid to senior politicians, officials and the ANC itself. My financial oversight committee was stopped by President Thabo Mbeki from investigating this corruption, which led to my resignation, and the writing of a book on the deal and its devastating impact on South Africa’s young democracy. It was a sad time for me personally and politically, as I saw at first hand how an extraordinary liberation movement was prepared to undermine the democracy it had created to protect its leaders from the consequences of their corrupt behavior. It was also the first of myriad grand corruption scandals in the country and the demise of the early years of hope.

CNN.com: The book covers the guns-for-diamonds deal in Africa. Just how rampant is the arms trade there?
Feinstein: The trade, especially the illicit trade, thrives wherever there is conflict because weapons then command a premium price. Given the number and nature of conflicts in Africa it is unsurprising that the arms trade is ubiquitous. In some places there are literally open air arms bazaars. The trade is often linked to natural resource extraction, which is how the weapons are paid for. So-called blood diamonds were a case in point. I cover the story of a number of the dealers involved, including a Ukrainian-Israeli against whom there was mountains of evidence, but the case against him was dropped as an Italian court claimed it had no jurisdiction over him, in spite of the fact that he was a permanent resident in the country, was arrested there with blood diamonds in his possession and had documented his deals with (former Liberian president) Charles Taylor and others.

CNN.com: The character of the global arms dealer has been mythologized time and again. We saw this most recently with Viktor Bout, immortalized as aglobetrotting outlaw by Nic Cage in the film “Merchant of Death.” How many other dealers like Bout operate today, where and how?
Feinstein: There are many Viktor Bouts although it is difficult to put an exact figure on it. I estimate certainly in the high hundreds if not low thousands. They are to be found everywhere but favorite locations for arms dealers include Lebanon, Dubai, Israel, Switzerland and parts of Eastern Europe such as Montenegro.

CNN.com: Bout was portrayed as someone who would sell to anyone in any country for any conflict if they were willing to pay, a man with no morals or national loyalties. What is the true mentality of an arms dealer? Is it truly just money they motivates them?
Feinstein: The template for the modern arms dealer was established by one Basil Zaharoff, who would sell to anyone who could pay, including all sides in a conflict, bribe whoever he needed to and justify it by claiming he was providing intelligence to whichever government questioned his practices. The primary motivation for dealers is profit. Bout himself provided services to America’s enemies and allies, and to the U.S. Department of Defense itself at the time that there was an Interpol warrant out for his arrest.

CNN.com: Your book points out that it’s not terribly difficult to become an international arms dealer. Case in point: Efraim Diveroli, a 21-year-old who was obtaining multi-million contracts from the U.S. Defense Department to provide weapons for fighting in Afghanistan. How did someone like Diveroli pull this off? What does that say about the modern arms trade?
Feinstein: It reflects the lack of regulation and the inadequacy of procurement procedures. At the time that Diveroli was given a $300 million contract he was on a State Department arms trading watch list. The person who undertook due diligence on Diveroli for the Defense Department had a financial stake in Diveroli’s company. The consequence of this deal was not only that Diveroli supplied useless 40-year-old Chinese ammunition but also the death of 26 innocent people when the inadequate factory that was cleaning this ammo exploded.

CNN.com: You recently wrote in the Guardian newspaper that Libya is a ticking time bomb because it has so many unchecked weapons? How did Libya obtain all these weapons and what can be done to round them up?
Feinstein: The weapons were sold to Libya by the former Soviet Union and Russia, and since 2003 in vast quantities by Western countries, especially the EU nations. They actually sold him more weaponry than he had the personnel to use. This meant that when NATO forces began their bombing operations, they had to try and destroy weapons that their member countries had sold to Moammar Gaddafi. Some of this equipment, including surface-to-air missiles capable of bringing down a commercial jet airliner, has already appeared on the black market. It is extremely difficult to retrieve this weaponry. However, securing stockpiles in the country will ensure additional equipment does not find its way onto the illicit market.

CNN.com: Are there other countries in the Arab Spring region that might have a similar unchecked weapons issue?
Feinstein: Possibly. Egypt’s weaponry is more secure because the military remains in control. This could change. The volatile situation in Yemen could see additional weaponry finding its way onto the black market.

CNN.com: How and why has China become an emerging force in the weapons trade?
Feinstein: China has historically focused on addressing its own military needs, but in recent decades has expanded the reach of its industry. Besides arming a number of pariah states such as North Korea, Myanmar and Zimbabwe, China has been selling, or giving, weapons to a wide range of countries in Africa, South Asia and Latin America. This is part of a concerted foreign policy push into these regions.

CNN.com: Latin America, you write, is overwhelmed by arms deal corruption. How is this playing into the drug war in Mexico which has, according to the DEA, taken 43,000 lives since 2006?
Feinstein: Drugs and arms are often symbiotically linked. Many organised crime cartels operate in both trades. This is certainly the case in Mexico where drug cartels not only have access to huge supplies of weapons, but in some instances also trade them in the wider region. This symbiosis is also common to organised crime networks in other parts of the world including Africa, Eastern Europe and the Balkans. The consequence is, unsurprisingly, far greater violence in and around the drug trade.

CNN.com: Who are the good guys, the prosecutors and investigators, going after arms dealers? What kind of fight do they have on their hands?
Feinstein: It is incredibly difficult for investigators, journalists and prosecutors to expose and clamp down on the illicit trade in weapons because many of the black market dealers are used by the large defense contractors, defense departments and intelligence agencies and are, therefore, frequently protected by their own governments, or those to whom they are useful. The whole trade seems to operate in its own parallel legal universe. Often those intrepid people who do pursue arms companies and dealers end up being professionally marginalised.

CNN.com: Your book frequently returns to two central points – A huge amount of public money is spent on the global arms trade and there’s immeasurable loss socially as arms trading weakens democracies and takes and destroys lives. But arms trading will never end, so how can it be better regulated, or should it be?
Feinstein: We strongly regulate those industries that are deemed harmful to our health, such as tobacco, alcohol, drugs, etc. Yet the trade in weapons is very lightly regulated and what regulation there is, is often weakly enforced. Given the impact that the trade has on human life, on the nature of our democracies and on corruption, it is essential that it is much more vigorously regulated. As the rubric of national security enables all aspects of arms deals to play out behind a veil of secrecy, including criminal conduct such as bribery, a few simple measures could make a huge difference. For instance, forcing transparency in the use of middlemen or agents, who are often the conduits for bribes, would have huge impact in reducing corruption in the trade.

CNN.com: In your book, you describe arms trade as “legalized bribery.”
Feinstein: Specifically in the United States there is a circle of patronage between the defense contractors, the Pentagon and lawmakers that sometimes results in inordinately expensive weapons projects that are not relevant to the conflicts that the country is engaged in, don’t always do what is promised, and are often delivered late. This has been going on at least since WWII. The F-35 is the obvious example of this.

CNN.com: What is the F-35?
Feinstein: The F-35 is the jet fighter currently being produced by the Unites States at a cost over $380 billion. While it might have been useful during the Cold War, it is not suited to the sorts of conflicts the US is currently engaged in, and is likely to be involved in for generations to come. A former Pentagon aerospace engineer I interviewed described it as “a piece of crap” and suggested those who will be in most danger from the F-35 will be the test pilots. Already testing has been halted on a few occasions. But it feeds the circle of patronage that is the US defense procurement system.

CNN.com: Next summer the United Nations could finalize its Arms Trade Treaty. Will this affect the global arms trade?
Feinstein: It could do if it is a strong treaty, including forbidding sales where they might negatively impact human rights or socio-economic development. It might increase the likelihood of conflict. (It could lead to) greater transparency, especially in relation to the use of middlemen and agents, as well as vigorous anti-corruption measures which are actively enforced requiring internationalised law enforcement. It could lead to harsher penalties, including debarment and the prosecution of senior corporate individuals. If the treaty is weak it will simply endorse the current arms trading status quo which leads to a poorer, more corrupt, less democratic and more dangerous world.

Source: http://security.blogs.cnn.com/2011/12/12/qa-inside-the-murky-world-of-arms-dealing/

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