book abstract 'arming Iraq'

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book abstract 'arming Iraq'

Postby blanc » Mon Jun 29, 2009 9:23 am

Mark Pythian Arming Iraq: How the US and Britain Secretly Built Saddam’s War Machine. Northeastern University Press: Boston 1997

Biography: Mark Pythian is a political science lecturer at Wolverhampton University in the UK and is an expert on the subject of overt and covert international arms sales.

Research question/hypothesis: Pythian analyzes the arms contracts held with Iraq by western arms manufacturers from the Iran-Iraq war to the outbreak of the 1st gulf war. He argues that the US and UK Governments were complicit in negotiating and filling these arms contracts, which were responsible for fueling 8 years of war between Iran and Iraq and helped to initiate the gulf war.

Data: Pythian’s data was drawn primarily from official investigations into companies that violated trade regulations with Iraq. The Scott Inquiry, a committee formed to investigate allegations of UK encouragement of illegal arms sales to Iraq and Iran, was the most notable of these. It was formed in the wake of the Matrix Churchill trial, a company prosecuted for trading with Iraq. Company documents, interviews, historical records, and court documents from companies prosecuted were also used.


The 3 most important issues of oil politics are access, reliability of flow, and price stability. (p.5)

Selling arms to Middle Eastern states is a way to preserve access to oil as well as recoup money lost through its purchase. These arms sales stabilize oil flow by tying Middle Eastern states to western military suppliers. (p.5)

In 1969 the Nixon Doctrine that called for supporting the military of allies in strategic areas as an alternative to dispatching US forces was implemented. The doctrine was applied to the Gulf States through the Twin Pillar Policy that armed Iran and Saudi Arabia in exchange they act on behalf of US/western interests. Iranian spending on US arms jumped from $500 million in 1972 to $4.3 billion in 1974. (p.9-10)

Iraq was the closest Middle Eastern state to the west until the 1958 coup that installed Gen. Abdul Karam Qassim who established relations with the Soviet Union. Iraq’s relations to the west worsened with the 1963 coup that brought the Ba’ ath party to power and the 1972 Iraq Friendship and Cooperation Treaty with the Soviet Union. In 1978 Carter placed Iraq on a list of states that supported terrorism. (p.11)

Former employees of Racal, an arms manufacturer, were tried for corruption as a result of US and Britain relations with Iran. (p.14)

The British Ministry of Defense (MOD) visited Tehran after the 1979 revolution and contracted a “memorandum of understanding” where the Iranians prepaid 7.5 million for ammunition. Trade relations were severed after the seizure of western hostages, however, the International Military Service (IMS) quietly kept in touch with military leaders through a local Iranian office and Ali Reza Nobari, former head of the Central Bank of Iran, reported that the British Ambassador stated that Britain was willing to sell military equipment to Iran despite the embargo. (p. 15)

There are reports that the US permitted weapons to reach Iran through Israel and allegations that elements of the Reagan-Bush administration arranged for the hostages in Iran to remain seized until after the 1980 election. Arms dealers Arit Durrani and Hushang Levi claim that NATO arms were sent to Iran through conduits. (p. 15)

In 1976 the Britain Royal Air Force trained Iraqi pilots in Britain. (p.15)

Iraq began to experiment with its long range missile capability through involvement with the Condor II Ballistic Missile program, an Argentinean program set up in the late 1970s with the help of the W. German company Messerschmitt-Bolkow-Bolhm (MBB). Egypt was also involved in the program that shared technical information with Iraq and cross-shipped materials from Cairo to Baghdad. (p.22)

Private arms dealers are oftentimes used by Governments to supply arms to areas they are constrained from selling to and provide a level of deniability if arms deals are discovered. (p.23)

The Stockholm International Peace Institute (SIPRI) estimates that 28 states supplied both Iran and Iraq during their 8-year war. They call the practice of arming both sides as the “application of the ultimate commercial logic in the arms sales environment”. (p.24)

3rd world leaders are highly paid from allowing their country to be used as a transshipment point or providing false end-user certificates for covert arms sales. (p.26)

France was Iraq’s 2nd largest supplier after the Soviet Union and leased Iraq Mirage and Mystere fighter aircraft, helicopters, armored vehicles, and tanks. France sold Iraq the Osirak reactor for Iraq’s nuclear research program. Iraq was in debt to France 25 billion francs. (p. 28)

1971-5 the Soviet Union was responsible for 97% of Iraq’s weapons imports but this dropped to 55% 1981-5. (p.29)

68 German companies were involved in Iraq’s militarization program between 1982-1990. The German Co., Water Engineering Trading, sold Iraq 58 tons of precursor chemicals necessary for the production of Tabun and in 1986 exported machines to Falluja for the production of poisonous gas. The German Co, Pilot Plant, was responsible for the construction of Sammarra, one of the centers of Iraq’s chemical weapons program, and 5 other chemical production facilities. (p.29-30)

Messechmitt-Bolkow-Bolhm (MBB), a leader in military technology hardware research and development, was involved in transferring technological material of NATO’s to Iraq. MBB was also involved in a conduit arrangement that transported material used in missile shells produced in Paraguay to S. Africa where the missiles were completed and transported to Iraq. (p.31)

Spain and Portugal were used as transshipment points for military material destined for Iraq and issued false end-user certificates. (p. 21)

The Swiss socialist party named 48 Swiss companies that participated in the militarization program of Iraq through producing and exporting military material under the banner of dual-use technology. The company Shmiedemeccanica sold Iraq 50 Roland armored personnel carriers and over 100 training aircraft and aided in Iraq’s non-conventional weapons program. (p. 31)

The Dutch company Eurometals manufactured 220,000 propellant charges and 30,000 155mm shells that were transported to Iraq through sale to the Belgium company Poudriries Reunies de Belgigue (PRB) who sold them to Jordan who then transferred them to Iraq. (p. 31)

There was a significant relationship between the Brazilian manufacturer Engesa and Iraq. (p. 32)

The Chilean company Cardeons Industries, owned by Carlos Cardeon, conducted 95% of its business in Iraq. (p. 32)

The Reagan Administration removed Iraq from the list of states that sponsor terrorism despite its overt support of groups such as the Abu Nidal Organization. The US began intelligence sharing operations with Iraq and supplying their military with arms and technological material. (p. 32)

In 1981 the US Government allowed Israel to supply Iran with “spare parts”. Billions of dollars worth of equipment entered Iran in the early 1980s. (p. 33)

The US Department of Agriculture runs a Commodity Credit Corporation (CCC) program that guarantees countries agricultural aid. Iraq was extended over $400 million in agricultural credits in 1983, $513 million in 1984, and by 1987 Iraq was extended $652.5 million in CCC credit. The credits allowed Iraq to divert funds normally reserved for food imports to weapon procurement. The super gun program was made possible by CCC credits. (p. 36-7)

The US sells civilian helicopters as a way to supply military equipment to a country despite congressional opposition. This tactic was used in El Salvador and Iraq. In 1983 the US sold Iraq 60 Hugh MD-500 defender helicopters and 10 Bell UH-1 helicopters, used to spray chemicals on the Kurdish opposition. (p.38)

Brigadier Azzawi was the Iraqi overseeing the supergun program. (p. 38)

In 1982 Iraq and the US entered into an intelligence sharing arrangement where satellite information collected by the US was given to Iraq. In 1984 Reagan signed an advanced directive that authorized sharing information collected on Iran’s troop positions and arms by a US run AWACS base in Saudi Arabia. The US was still sharing information with Iraq as of May 1990. (p. 39-40)

In March 1985 requests for licenses to export dual-use equipment to Iraq, previously denied, were systematically approved despite knowledge that the equipments end use was military in nature. Britain, W. Germany, Switzerland and other European countries requested in mass licenses to export dual use equipment to Iraq. Between 1985 and 1990 771 export licenses were approved for Iraq; the Bush Administration approved 239 of those licenses. (p.43)

9 Iraqi military institutions received funds from the Atlanta, GA branch of the Banco Nazionale del Lavaro (BNL): Nassr, Badr, Saddam, SAAD 16, Salah al Din, Al QaQA, Hutteen, Al Qadisiyah, and Al Yarmuk. In 1989 3 employees of Al QaQa attended a US sponsored conference on nuclear detonation in Portland, OR. (p. 43)

The Bush Administration approved many export licenses for the Gerald Bulls Space Research Corp. (SRC). The licenses were for high-tec computers and missile design software for use in Bull’s supergun program and more overt military programs such as Iraq’s SCUD modification program. (p. 45)

Banco Nazionale del Lavaro (BNL) was founded in 1913 and is Italy’s largest bank. The Atlanta branch of BNL was managed by Christopher Drogoul who extended Iraq $270 million in CCC backed credits and an additional $4 billion in unsecured loans creating the largest bank fraud scandal to hit the press until BCCI. Drogoul offered loans with interest as low as 0.0625% above the libor, the London inter-bank offering rate, while using his banks AAA bond rating to borrow at or below libor. (p. 46)

The US-Iraqi business forum was a lobby group formed by major holders of contracts in the steel, petrochemical, and electrical industries and designed to protect export policy to Iraq. The UK-Iraqi Joint Commission was the government body that discussed trade relations between the two countries. (p. 49)

The Iranian Oil Co. was the center of the Iranian arms procurement network. (p.69)

In 1981 20 Iraqi technicians met with the British Aerospace Co. (BAE) to make a bid on 300 hawk “trainer” aircraft and BAE signed 250 million pounds of contracts for the sale of arms related but non-lethal equipment to Iraq. (p.70)

Mark Thatcher, Margaret Thatcher’s son, was involved in the infamous Al Yamamah arms deal to Saudi Arabia and reportedly made his fortune in arms deals to the Middle East during his mother’s presidency. (p.72)

In Dec. 1983 the British Defense Sales Organization (DSO) sent 10,000 chemical weapon protection kits, custom made by PMA ltd., to Iraq. In March 1984 Iran officially accused Britain of selling Iraq the chemical weapons currently Iraq was using in the war. (p.74)

In 1984 Paul Chanon, Britain’s Trade Minister, honored a previous agreement of the UK-Iraqi Joint Trade Commission and extended Iraq 275 million pounds in credit through the Export Credit Guaranteed Department (ECGD). (p.74)

A variety of British companies trained both Iraqi and Iranian pilots throughout the 1980s. Carlisle trained 80 Iraqi pilots in specialist flying techniques. The Lincolnshire Headquarters of the British Manufacture and Research Co. (BMARC), a company owned by the Swiss arms manufacturer Oerlikon Buhrle until its acquisition by Astra Holdings trained Iraqi and Iranian officers to use the Skyguard Air Defense System. Thorn-Emihouse claimed to have trained Iraqis in the use of the Cymbeline radar. 4 Iraqis were enrolled in the British Royal Military Academy and 2 were enrolled in the Royal Naval Academy. (p.78-9)

In April 1989 Baghdad hosted its 1st international exhibition for military production in which 148 companies from 28 countries show cased their products including the US, Britain, France, Egypt, Italy, the Soviet Union, and Greece. (p.80)

Terry Byrne Jr established Allivane International Group ltd. in the 1980s. Its subsidiary, Paper Co., was established to mask illegal arms shipments to Iran and Iraq. Gerald Bull was contracted by Allivane to supply Iraq with a fuse production line to enable Iraq to manufacture fuses for its 155mm shells. Allivane’s London office was raided in 1987 ending Allivane’s involvement with Iraq. Ordtec took over Gerald Bull’s contract and arranged for shipments to be routed through Jordan resulting in the persecution of Ordtec. (p.80-1)

The European Association for the Study of Safety Problems in the Production and Use of Propellant Powders (EASSP), was a cartel of European propellant manufacturers, who used the organization to allocate orders from Iran and Iraq to its member companies. The EASSP had 3 major functions: to make price-fixing arrangements, parcel out large orders between member companies, and share information on competitor activities. The cartel filled illegal contracts through the use of false end-user certificates, the use of conduit countries, and falsely describing military products as industrial products. (p.83-5)

Nobel Kemi and Bofors, subsidiaries of Nobel Industries Sweden and member companies of EASSP, arranged for arms shipments for Iran to be transferred through conduit countries, most notably Singapore. Singapore was the 2nd largest importer of Swedish arms and accounted for 14.4% of all Swedish arms exports. Bofors sold Singapore artillery shells, 155mm guns, 40mm naval guns, and 70 laser guided anti-aircraft missiles that were later shipped to Iran. (p.84)

Spain and Portugal were involved in using Saudi Arabia as a conduit country to ship arms to Iraq. Yugoslavia’s Federal Directorate of Supply and Procurement was used to ship arms to Iran at the same time Iraq began to receive arms shipments from Saudi Arabia. (p.85)

Voest Alpine, Austria’s nationalized arms manufacturer, sold Gerald Bull’s design for the towed 155mm gun that it had acquired in 1978 to Iraq. Voest used Jordan, the largest importer of Austrian arms 1981-90, to transfer the designs to Iraq. Peter Unterwerger, a Noricom official, reported that Voest and Noricom sold Iran Sch 4,000 million in arms from 1984-86. (p.87-8)

Paraguay was a common conduit country that issued false end-user certificates for arms and equipment destined for Iran and Iraq. (p.88)

The London Company Kindrib ltd, incorporated in 1982 and disbanded in 1987, brokered over $700 million of covert arms deals for the Iranian Ministry of Defense including the sale of 23 US F-4E and 90,000 Italian mines. (p.88-9)

Project Babylon, the Iraqi program to construct long-range ballistic missiles and rocket launchers, was the culmination of Gerald Bull’s 1960s High Altitude Research Project (HARP) to build a supergun that could launch a satellite into space. In 1973 Gerald Bull’s Space Research Company (SRC) merged with Belgium’s Poudreries Reunies de Belqique (PRB) to form SRC-1. SRC-1 was contracted in 1975 to covertly supply S. Africa with 15,000 extended range full-bore 155mm shells. The contract was part of a CIA arranged supply route to the UNITA troops in the Angolan civil war. In 1976 ARMSCOR, the S. African state arms manufacturer, entered into negotiations with SRC-1 over the construction of a 155mm long-range gun. The development of the project was interrupted in 1980 when Gerald Bull was indicted for violations of trade sanctions. After a 4-month prison sentence Gerald Bull and Chris Cowley reinitiated SRC-1’s work. In 1982 SRC-1 signed a contract with China for the production of an indigenous 155mm production facility, held a contract with Spain and EASSP’s Rio Tinto for the design of a 155mm gun, was asked by the Pentagon’s Defense Advanced Research Agency to write a proposal for the design of a big gun that could act as an intercontinental ballistic missile-launching system, and worked with the German company, Mannesmann De Mag, on a contract for a turnkey artillery production plant in Iran. In 1988 Bull canceled his contract with Iran in favor of a contract with Iraq for the construction of a 156mm long gun that could launch a satellite into space, Project Babylon. Bull formed the Advanced Technology Institute (ATI) to handle the project. (p. 96-100)

Iraq’s military industrial program was modeled after S. Africa in the mid 1960s. The military industrialization program of Israel, Brazil, Argentina, and Chile were also modeled after S. Africa. (p.100)

Chris Crowley arranged for 2 British companies to construct the supergun barrels for Project Babylon: Walter Sommers who constructed the prototype ‘baby babylon’ and Sheffield Forgemasters who constructed 1,000mm gun barrels. Both companies were also involved in a negotiation with SRC for the construction of petrochemical plant in Iraq. (p. 102)

A Forgemasters subsidiary contracted the Swiss steel company Von Roll to manufacture recoil cylinders, drum housing, and pivot gun sections for Project Babylon. Forgemasters also contracted Uldry Trading and Soceta delle Fucine for the project. All companies were aware of the country and the project they were supplying. (p. 108)

Project Babylon was modeled after the Nazi’s V-3 program to construct a long-range gun that could bomb London. (p.109)

Gerald Bull was murdered in Brussels on March 22 1990. It is alleged his murder was never fully investigated due to Belgian involvement in arms sales to Iraq. (p.117)

The 1981 takeover of Astra Holdings plc by the James and Gumbley management team, made possible with the financial backing of Industrial and Commercial Finance Corp, transformed Astra from a small company into the 2nd largest gun and ammunition manufacturer in the UK. Astra underwent a period of expansion in which it bought Francis Cumner plc, MFA Intl, Unwin Intl., E. Walters Inc., Accudyne, Kilgore Corp., BMARC, and PRB; all of who held contracts with Iraq or produced materials needed to fill contracts with Iraq. Roy Ricks was the owner of MFA and after its buyout became actively involved in the Iraqi procurement program through Meed Intl. Gerald Bull expressed an interest in purchasing PRB because it was the source of Iraq’s propellant supply. (p.125-135)

In 1987 new bankers backed Astra from Midland and Hong Kong Bank. (p.128)

The Astra subsidiary Trafalgar House was involved in the Pergau Dam scandal that also involved Mark Thatcher. (p.135)

The Saudi Investment and Finance Corp. (SIFCORP) was a financier of PRB. (p.136)

On Nov. 17 1988 PRB signed contract #E5397 with the Royal Jordanian Armed Forces for propellant that was then transferred to Iraq. Jordan was a popular conduit country and was paid commission by British companies on contracts with Iraq. It is rumored that the King of Jordan made 5.26% commission on contracts Bilder Training Co. held with Iraq and Gerotin Investment Corp. paid 11.77% to Jordan through the Union Bank of Geneva. (p.139)

The licensing body formula can be used to discover if a country is serving as a conduit to fill contracts to a country with a trade sanction. It determines whether the country suspected of being a conduit has the type of weapon system for which ammunition is being bought. (p.140)

A BMARC order book was discovered that disclosed it had filled orders with Iran and Iraq simultaneously. After the Astra buyout BMARC continued to fill the licensed for Singapore (LISI) exports initiated by Oerlikon Buhrle. The LISI exports were meant to fill contracts with Iran. (p.145-6)

Saudi Arabia was a conduit country used to fill contracts with Iraq. (p.147)

United Arab Emigrantes negotiated a contract with Astra for the American paveway bomb despite having no aircraft to carry it. The contract was meant for Iraq. (p.147-8)

The Astra subsidiary Accudyne supplied fuses to S. Africa that were then shipped to Iraq. (p.148)

Richard Unwin, owner of Unwin Intl. and involved in arms pipelines to Nigeria and the Middle East, closed out to Astra Holdings on the condition that Stephen Kock be included in the management team as a non-executive director. Stephen Kock was the only member of the original management team to remain after Astra’s purchase of PRB. Stephen Kock served on the Special Air Services (SAS) Rhodesian C squadron, worked as an advisor to the Rhodesian prime minister, served in Malay during the Malay insurgency, worked as director of the international Dutch mining and manufacturing group and as the international director for Shell Oil. He was a central figure in the Malaysian arms deal at the center of the Pergau Dam scandal, worked as an advisor/consultant for Midland Bank’s Defense Equipment Finance Department (DEFD), established to finance arms deals. Stephen Kock is suspected of ties to British intelligence and was involved in all Thatcher inspired arms deals. He is the one who reported PRB’s propellant contracts to security services resulting in the indictment of company officials. (p.154-7)

The ‘Savoy Mafia’ was a group of defense-based industrialists who held regular meetings at the Savoy hotel of London. The group included Kenneth Warren, the chairman of the TISC investigating committee. (p.168)

In June 1995 the President of the Board of Trade announced to the House of Commons that LISI exports were part of a conduit chain to equip Iran. He revealed details of the program in which gun parts and machine tools exported by BMARC, gun barrels exported by Oerlikon’s outpost in Brazil, and gun mounts exported by ASCO, a Belgium company, were assembled by Singapore’s national arms manufacturer, Charter Industries, and shipped to Iran. (p. 171)

Jonathan Aitken, the non-executive director of BMARC at the time of the LISI negotiations, worked for both the Thatcher Administration and Astra and served on the board of the Al-Bilad company, formed to promote trade between the UK and the Middle East. The Saudi royal family and Wafic Said’s Co. SIFCOR, which had a significant interest in Jonathan Aitken’s investment company Aitken Hume Intl. plc, underwrote the Al-Bilad Company. (p.172)

The European companies RO and Allivane were also heavy exporters to Singapore during the LISI program. (p. 179)

Monitoring of the Iraqi procurement network was easy for both the US and UK intelligence community and more widespread then acknowledged. The US Government has an in-depth knowledge of the international arms trade due to SIGNIT intelligence, the joint intelligence program that monitors electronic communication, the relatively small number of individuals actively involved in the arms trade, and the amount of intelligence officials spread throughout the defense industry and financial institutions. (p. 189-91)

Governments and intelligence communities have a check-list to identify false end-use or end-user certificates, the paperwork necessary for exports that indicates the country and company an export is shipped to and the end-use to which it will be put. If a country is a known proliferators of illegal arms, if there is too much equipment or it is too sophisticated for the stated end-use, or if the equipment could be easily used to produce a biological agent or vaccine the end-use certificate is probably false. (p.190)

Chris Crowley reported to the TISC that the British, US, and Israeli Governments were aware of Project Babylon before the SRC-1 contract was formalized. He reported that due to the S. African affair Gerald Bull received permission from the Governments before proceeding with the work. (p.197)

In 1988 Paul Grecian, an Ordtec employee, reported to British intelligence MI5 and MI6 that the SRC contract filled by Ordtec for a fuse assembly line was being transported to Iraq for use in Project Babylon through Jordan. (p.201)

The machine tool industry is not dependent on the Government for export licenses due to its ability to provide equipment that could have a dual-use for either domestic or military industrialization. (p. 204)

MI5 received information on the Iraqi military procurement operation from Paul Henderson in the 1970s and Mark Gutteridge of Matrix Churchill in 1986. (p.206)

The SIGNIT intelligence program, formed in 1947 by the US and UK Governments, created a close alliance between the US, UK, Australian, Canadian, and New Zealand intelligence communities as they divided the globe to monitor and share information collected from electronic communications. (p.210)

Colchester Lathes, BSA tools, and Wickman Bennet were companies that supplied machine tools to Iraq at the same time as Matrix Churchill. Charges were brought against BSA tools but were dropped. (p.226)

German and Swiss companies like Gildemeister, SHW, Schaublin, and Oerlikon were at the forefront of Iraq’s machine tool acquisition program. (p. 227)

Matrix Churchill was originally owned by TI Machine Tools ltd but was sold to the Iraqis in a deal negotiated by Safa al-Habobi, a senior Iraqi intelligence official, and Anees Wadi and Roy Ricks of Meed Intl. The Iraqis purchased the Cleveland based subsidiary in 1987 to serve as a front for purchasing US technology for Iraq. John Cuckney, a former MI5 official, was deputy director of TI Machine Tools at the time of the sale. Iraq and Cardeon Industries of Chile were Matrix Churchill’s largest customers during its lifespan from 1987-91. The Matrix Churchill contract to supply Iraq’s Nassr plant with CNC machines was financed by the Atlanta branch of BNL. On August 1, 1990, the day before Iraq invaded Kuwait and launched the 1st gulf war, the Department of Trade and Industry told Matrix Churchill officials that all outstanding export licenses had been approved. On Oct. 16 1990 Matrix Churchill officials were arrested and brought to trail. Information amassed during the trial indicated that British Government officials were aware of and privately approved of the contracts with Iraq. The Government responded by forming the Scott Inquiry to investigate the subject further. (p. 231-57)

The 1935 Royal Commission on the Private Manufacture of and Trade in Armaments was formed due to public outcry over the role of industrialists, nicknamed the ‘Merchants of Death’, in encouraging and perpetuating conflicts by arming both sides. (p. 257)

The policy of western countries to arm and support Iraq during the Iran-Iraq war and facilitate Iraq’s massive rearmament program in the post-war years led to Iraq’s invasion of Kuwait and the subsequent gulf war. (p.291)

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Re: book abstract 'arming Iraq'

Postby Stephen Morgan » Thu Jan 21, 2010 4:27 pm

This is still going on today. The BBC did a radio documentary on it. Radio documentaries are normally the best, the Stem Cell Swindle, File on Four about the PAthfinder Initiative and the arms trade to Iraq, Report on British Mind Control experiments during the second world war and this week's "Report" about the taking of children from immigration centres and the putting of them into sexual exploitation.

On this subject, I started a thread on it when I first posted here, but here's some information:

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IRAQ: Awash in "Missing" Weapons
By Pratap Chatterjee

SAN FRANCISCO, Sep 22, 2008 (IPS) - Clandestine gun suppliers, funded by the U.S. and Iraqi governments, have flooded Iraq with a million weapons since 2003, charges a new Amnesty International investigation.

Because of faulty or non-existent government tracking systems, many of those guns have gone missing, and some have turned up in the hands of insurgents.

Contracts with one of these companies, Taos Industries, account for almost half of the 217 million dollars Baghdad and Washington have officially spent to arm the Iraqi army, police and security forces employed by various Iraqi ministries.

Amnesty's new report "Blood at the Crossroads: Making the Case for a Global Arms Trade Treaty" shines a light on the catastrophic human rights consequences of the kind of unrestrained arms trading that forms much of Taos's business. The report draws lessons from countries to make recommendations on how to prevent human rights abuses when governments sell or transfer conventional arms to other countries. Research for the report was conducted by TransArms, a U.S.-based nonprofit that tracks global arms transfers.

Taos Industries

Taos Industries, the biggest corporate supplier of small arms to Iraq since the invasion in 2003, was founded by David Hogan shortly after he retired from the military in 1989. Hogan had been chief of foreign intelligence for the U.S. Army Missile Command at the Redstone Arsenal in Huntsville, Alabama. The company is run out of the Putnam Industrial Park in Madison, about a mile from the military base.

A few years after Taos was created, Keith R. Hall, deputy assistant secretary of defence for Intelligence under President Bill Clinton, told the U.S. Congress that the fall of the Berlin Wall had created an "opportunity to acquire and exploit major, state-of-the-art weapons systems".

From his vantage point as a former intelligence official in the missile command with knowledge of the "black budget" or secret military contracts used to buy such systems, Hogan was well aware that such opportunities could be profitable.

In the early 1990s, he started bidding on classified contracts put out by the Defence Intelligence Agency, the Pentagon's military intelligence branch.

At first he was beaten out by better-connected dealers, such as Carlyle Group subsidiary BDM International of McLean, Virginia, which won the bid to acquire an S-300, a series of Soviet long-range surface-to-air missile systems (the equivalent of the Patriot missile defence system).

Despite losing this major contract, Taos won lucrative orders over the next decade to sell spare parts to foreign military customers that use older U.S. military equipment. Taos also provides vehicles or spare parts to test ranges that rely on Russian radars and vehicles, and in the last five years, has won a number of orders to provide weapons for the U.S. military-backed governments in Afghanistan and Iraq.

Taos was bought in October 2006 by Agility, a Kuwaiti company that is operated by the family of Jamil Sultan al-Essa, to allow them to bid on classified U.S. military contracts.

The Iraq Sales

Over the last five years since the invasion of Iraq, Taos has received seven of the 47 weapons supply contracts listed by Amnesty, worth 95.1 million dollars out of the 217 million dollars total.

The majority of sales were for Soviet-type infantry weapons. Among the weapons listed in some 35 contract documents reviewed by CorpWatch were requests for assault rifles (AK-47s), M4 Benelli shotguns, portable machine guns (RPK, PKM), sniper rifles, shoulder-fired rocket propelled grenades (RPG-7), UBGL M1 grenade launcher and 9mm pistols (mostly Glocks), and ammunition.

Amnesty investigators have also uncovered documents that suggest that several of Taos's subcontractors were either operating illegally or had been listed by the United Nations for smuggling weapons.

For example, Amnesty alleges that Taos first subcontracted to a Moldovan/Ukrainian company, Aerocom, to transport from Bosnia to Iraq 99 metric tonnes of arms for Iraqi security forces. The sales for the year ending Jun. 31, 2005 were mostly for Kalashnikov rifles.

Aerocom has a history of shady dealings. In 2002 an expert report commissioned by the U.N. Security Council charged the company with smuggling weapons from Serbia to Liberia in violation of a U.N. arms embargo. In August 2004, Moldovan authorities revoked Aerocom's air operating license. Scout d.o.o, a Croatian company named as the broker in these shipments, was not registered in Croatia to deal in arms.

In May 2005 the Italian newspaper, Corriere della Sera, revealed that Taos had supplied thousands of Italian-made Beretta 92S pistols that were among the weapons seized in Iraq from al Qaeda operatives responsible for killing civilians. The Beretta pistols had been dispatched in July 2004 from Britain to the U.S. military base in Baghdad. An Italian court investigation the next year questioned the shadowy methods used in shipping the guns from Italy to Britain.

Despite the Italian reporting and the publication of the Aerocom contracts in a 2006 Amnesty report ("Dead on Time"), the U.S. government continued to award contracts to Taos as recently as October 2007.

Taos Industries refused to answer the specific allegations in Blood at the Crossroads.

"Amnesty International's reporting about Taos Industries is factually inaccurate and misleading. Taos's operations have been conducted transparently and within U.S. Department of Defence guidelines," the company said in a statement released to CorpWatch.

"Taos sells and delivers equipment to only one client: the U.S. government. The company has shared information about the transactions in the Amnesty reports with Congress and the Defence Department."

Amnesty researchers note that blame must also be assigned to the U.S. officials who ran the programme, who admit their arms control systems for contracts such as the Taos one using Aerocom have been flawed.

Missing Weapons

Indeed two U.S. government investigative reports have highlighted this problem.

An October 2006 report by the U.S. Special Inspector General to Iraq calculates that serial numbers were logged for only 2.7 percent of the 370,000 infantry weapons supplied to the Iraqi security forces under U.S. government contracts. In many cases, contractors delivering arms imports did not turn in the obligatory official inspection reports, known as DD-250s, substituting instead "Adequate for Payment" paperwork.

A July 2007 report by the U.S. Government Accountability Office revealed that at least 190,000 weapons were "unaccounted for" in Iraq because of discrepancies between what was authorised for export and what the Multinational Security Transition Command-Iraq (MNSTC-I) recorded for the period between June 2004 and July 2007.

Arms experts say that this was a serious mistake. "It is likely that a large proportion of the hundreds of thousands of small arms and light weapons that have 'gone missing' in Iraq are either in the hands of anti-U.S. insurgents or in other countries, fueling conflicts there," says William Hartung, the director of the Arms and Security Initiative of the New America Foundation.

Amnesty says that the situation in Iraq should also be seen as part of the bigger global problem of unrestricted arms sales.

"The time for an arms trade treaty is now," says Amnesty's Brian Wood. "Sixty years after the signing of the Universal Declaration of Human Rights, the same governments can and should deliver an effective agreement on international arms transfers with human rights at its heart."

*Pratap Chatterjee is the managing editor of Corpwatch, a California-based group that investigates and exposes corporate violations of human rights, environmental crimes, fraud and corruption around the world. An expanded version of this article can be found at ... 1695739583

Belgrade, 21 Dec. (AKI) – Serbia has signed a deal to export weapons and military equipment to Iraq worth 230 million dollars, defence minister Dragan Sutanovac told Belgrade television late on Thursday.

Sutanovac said that the delegation of the Iraqi defence ministry visited Serbia on two occasions in recent months and the deal was signed with the state military trade company Jugoimport SDPR.

He didn’t specify which weapons had been sold to Iraq, but Serbia produces only light arms and ammunition in the Zastava weapons factory in Kragujevac, 100 kilometres south of Belgrade.

The former Yugoslavia had a strong military industry located in several republics before its breakup in 1991. The value of military exports then exceeded two billion dollars annually.

Production was halted by the disintegration of the country, however, and only small segments are still operating in Serbia, Croatia and Bosnia.

The Zastava weapons factory suffered serious damage during the 1999 NATO bombings, but production resumed several years later.
Those who dream by night in the dusty recesses of their minds wake in the day to find that all was vanity; but the dreamers of the day are dangerous men, for they may act their dream with open eyes, and make it possible. -- Lawrence of Arabia
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Stephen Morgan
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