Trial Focuses on Hidden World of Arms Dealing

Trial Focuses on Hidden World of Arms Dealing

Published: November 2, 2011 (Issue # 1681)

NEW YORK — The friends of Viktor Bout had code words for him in the emails and text messages they assumed were safe from prying eyes. Often, he was “Boris.” At other times, it was “Primus,” or just “the man.” When their talk turned to weapons, one of those former friends testified in a New York federal courtroom last week, the Russian businessman spoke guardedly of “farming equipment.”

For nearly two decades, as Bout grew infamous as the “Merchant of Death” — his unwanted nickname for the black-market weapons deals in which he was accused but long denied — the world he inhabited remained murky to outsiders. While UN investigators tracked his planes and U.S. Treasury analysts traced his bank accounts, only those few who dealt with him and saw him close up knew exactly how he did his business.

Closing arguments in his federal trial in New York on conspiracy charges were under way Monday and jury deliberations will follow, but Bout’s private world has already spilled wide open thanks to more than 70 transcripts compiled from wiretapped meetings and conversations and scores of phone calls and texts.

Bout’s lawyers say he was aware of the American sting operation aimed at him, and only played along to trick the informants into buying two cargo planes. Whether Bout is found guilty or not, the massive cache of documents and three weeks of testimony have already provided new insights into his everyday dealings. Arms trade experts said the case is also reshaping some of their understanding about how weapons are bought and sold on the world markets.

“We’re seeing some useful snapshots of the way he operated,” said Alex Vines, a former UN arms investigator and a research director at Chatham House, a British international policy organization. “Certainly the gray areas of his involvement with the Russian government and arms industry are becoming clearer,” Vines added.

Earlier this month, official Russian displeasure about the case was made clear in a letter from the State Duma, the country’s national parliament, to U.S. District Judge Shira Scheindlin, who is overseeing the trial. The Russian deputies urged Scheindlin to ensure an impartial trial, describing Bout as an “exemplary family man” and warning that the case’s outcome could affect the ongoing diplomatic “reset” of relations between the U.S. and Russia.

Until last week, much of the prosecution’s case was provided by witnesses who targeted Bout from afar — U.S. narcotics agents and the undercover informants who lured the Russian to his sting arrest in Bangkok in March 2008. But Andrew Smulian, a South African associate who has known Bout since the late 1990s, displayed an insider’s knowledge of Bout and served as a primary witness.

Smulian, 70, spent almost two days on the witness stand, guarded at all times by armed U.S. marshals. Like Bout, he was charged with conspiracy to kill Americans and U.S. officials, deliver anti-aircraft missiles and aid a terrorist organization. Smulian pleaded guilty to all counts and cooperated with the government, hoping to reduce a mandatory minimum 25-year prison sentence. Bout could face life imprisonment if convicted on the same charges.

Smulian said he was running an aviation company in the 1990s when he met Bout. Smulian said he never saw Bout’s planes at the time loaded with weapons, but it was during that period that Bout was first identified by the UN as a prime violator of African arms embargos, accused of transporting small arms and weapons systems into Liberia, Angola and neighboring nations.

“Boris situation not so good,” an acquaintance of Bout’s wrote to Smulian in an email in late November 2007. “Dollars frozen plus all assets plus travel.” The coded note, Smulian testified, meant that Bout was hamstrung by financial sanctions that froze any movement of his funds and assets, and a UN travel ban kept him confined to Moscow.

Bout’s lawyer, Albert Y. Dayan, assailed Smulian’s motives and memory during cross-examination. He suggested that his narrative was shaded to curry favor with prosecutors and reduce his sentence and that he had a porous recollection of his dealings with Bout. Dayan pointed to one of Smulian’s own coded emails that same month warning that Bout did “nothing in gray items” as evidence that the Russian was not involved in any illicit arms deals.

But Smulian testified that when he flew to Moscow in late January 2008, Bout grew intrigued by the prospect of a big black-market weapons delivery to two officials of the Revolutionary Armed Forces of Colombia, or FARC, a South American terror group known for using cocaine deals to support insurgent operations. In actuality, the two terrorist leaders were informants working for the DEA.

The Moscow meeting was a pivotal moment, Smulian testified. He recounted a visit to Bout’s house in a Moscow suburb and a meeting with the Russian in his private office. Bout said nothing about the office complex where he worked, but as Smulian followed him down a corridor, the South African noticed suites that clearly “looked like security or military offices,” filled with defense-related items and paintings of Russian battle scenes.

A former Soviet military officer, Bout has long been linked by U.S. officials to Russia’s intelligence apparatus and arms industry. Smulian’s description of Bout’s inner sanctum and the Russian’s knowledgeable discussion of anti-aircraft missiles, helicopter gunships and other sophisticated weapons gave new credence to those ties.

“It’s why the Russians have always been so defensive about Bout,” Vines said. At the same time, Vines said, the trial’s revelations show that Bout’s operation “looked a little old-fashioned in some ways. Some of the tradecraft is a bit amateurish.” Despite using cell phone memory cards and elaborate code words, for example, Bout’s frequent electronic messages were apparently not protected by modern encryption.

Many of the communications to and from Bout came from Smulian’s laptop, which was seized during his arrest in Bangkok. Bout’s laptop was also taken and analyzed, and prosecutors have displayed some limited contents during the trial.

A U.S. official who insisted on anonymity to discuss the Bout investigation said the Russian’s seized computer also contained evidence that Bout’s business empire had set up hundreds of shell companies around the world for his air cargo and other business ventures, stretching from remote South Pacific islands to the state of Montana.

“Anything and everything he touched, he was at the top of his game,” said Thomas Pasquarello, a police chief in Somerville, Massachusetts, who formerly was the DEA’s lead agent in Thailand for the Bout investigation.

“He was extremely meticulous. He’d be head of a Fortune 500 company if he was in another line of work.”

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