Rogue Planet

US Contractor Targeted For Fraud in Ammunition Contract

AEY, Inc. of Miami was this week's target for the New York Times, who yesterday published a highly detailed and researched article on the fledgling company's dealings with a major ammunition contract with the US government.

In late 2006, a solicitation published by the Joint Munitions Command Rock Island Arsenal was looking for a sole source integrator of all the Afghan National Army/Police force's ammunition. In early 2007 eight proposals were considered, with seven of the eight offers in the $400-500M range. AEY was awarded the contract for under $300M. And apparently no one saw this coming.

Full NYT article can be read here.

As if things weren't bad enough for AEY this week, they have been invited by Chairman Waxman to DC for a little talk.

U.S. Foreign Military Sales Program Builds Momentum in Iraq

(PressMediaWire) WASHINGTON, Feb. 28, 2008 - The U.S. Foreign Military Sales Program continues to grow in Iraq, where the Defense Ministry is buying vehicles, equipment, and other goods and services for its military, a senior military official said today. In a conference call with online journalists and "bloggers," U.S. Air Force Lt. Col. Keith Muschalek, security assistance program manager for Iraq's Defense Ministry, said the Foreign Military Sales program in Iraq is large and is maturing quickly.

Muschalek attributed the program's growth and success to its invulnerability to corruption. "All the procurement is done by the U.S government," he explained. "They have no contracts, (and) they do not negotiate; the FMS does that for them, and so this precludes any corruption whatsoever."

Security assurance officers ensure merchandise is transferred to the appropriate Iraqi official and is signed for on a receipt form, said Muschalek, noting that in a recent sale of tens of thousands of M-16 rifles, 100 percent of the rifles were accounted for.

"With FMS, there is no chance of corruption, and this is precisely why they have chosen to put all this money into the FMS program," he added.

Muschalek said that the Foreign Military Sales procurement process time is extremely fast, which makes it highly attractive to the Iraqis.

"If I receive a signed letter of request, I can expect a letter of offer acceptance ... in about 120 days," Muschalek said.

Then, depending on the product and the urgency of the request, it can take from two weeks to eight months to get a signature accepting the offer from the Iraqi defense minister. Muschalek added that, on average, it takes about a year after the letter offer of acceptance is signed to receive the merchandise.

Bout Pleads Not Guilty, Denied Bail

BANGKOK, March 14 (Itar-Tass) - Suspected Russian arms dealer Viktor Bout pleads non guilty and considers his detention in Thailand illegal, the detainee’s lawyer Yan Dasgupta told Itar-Tass on Friday.

“I had three meetings with my defendant. Viktor Bout pleads non guilty and says his arrest is illegal,” he said.

Thailand has not brought official charges against Bout, but investigators suspect him of assisting terrorists.

“Lawyers will do their utmost to change a measure of restraint and release Viktor Bout on bail. We take all necessary procedural actions and coordinate the work of local lawyers,” Dasgupta said.

“Some sources report that the US filed a request to the Thai Foreign Ministry on Viktor Bout’s extradition, but these facts have not been proved yet and no official procedure has been launched,” the lawyer said. “However, there is a bilateral agreement on extradition between Bangkok and Washington.”

“There are too many questions in this case. We hope that local laws will be complied with in Thailand and the trial will be just, if takes place,” he said.

According to local police, Bout was arrested on March 6 on suspicion of abusing the United Nations embargo on arms supplies to the areas of regional conflicts in Africa.

According to US secret services, Bout in the 1990s used his fleet of cargo aircraft, built back in the Soviet era, to smuggle combat vehicles and armaments to countries in Central and Western Africa.

Bout faces US’ charges of conspiracy to provide arms, including air defence systems, to representatives of the Revolutionary Armed Forces of Colombia, or FARC.

Under the local legislation Bout can be kept in prison for 84 days without official charges being brought against him. In case he is found guilty, he may face up to ten years in prison.

Earlier, the Thai court refused to release the Russian businessman on bail for 500,000 bats (around 15,000 US dollars).

[itar-tass.com]

FY 2009 Security Assistance to Africa

U.S. Security Assistance Programs - The FY 2009 DoS and DoD Budget Request
African Security Research Project (Washington, DC)

ANALYSIS
13 March 2008
Posted to the web 13 March 2008

By Daniel Volman

For Fiscal Year 2009 (which begins on 1 October 2008), the Bush administration is asking Congress to approve the delivery of some $500 million worth of military equipment and training to Africa (including both sub-Saharan Africa and north Africa) in the budget request for the State Department for Fiscal Year (FY) 2009.

The administration is also asking for up to $400 million for deliveries of equipment and training for Africa funded through the Defense Department budget and another $400 million to establish the headquarters for the Pentagon's new Africa Command (Africom).

The State Department budget request includes funding for major new arms deliveries and increased military training to the Democratic Republic of the Congo, Botswana, Djibouti, Ethiopia, Guinea Bissau, Kenya, Liberia, Nigeria, Senegal, South Africa, Sudan, and Uganda. It will be channeled through a variety of programs, including a number of new programs initiated by the Bush administration as part of the "Global War on Terrorism." These include the Trans-Saharan Counter-Terrorism Partnership, the East African Regional Security Initiative, and the Anti-Terrorism Assistance program. The U.S. government is also expected to license up to $100 million worth of private commercial sales of military and police equipment through the State Department's Direct Commercial Sales program in FY 2009.

The following description is based on information contained in the State Department Budget Justification for Foreign Operations for FY 2009 (released by the State Department in March 2008) and the Defense Department Summary Justification for the Budget Request for FY 2009 (released in February 2008).

Death - By Shrapnel

On this day, 166 years ago, former British army Major General Henry Shrapnel died. Shrapnel developed an exploding artillery shell which combined the effectiveness of canister shot with the timing of a delay fuze, allowing for rounds packed with high explosives and 'fragments' to explode above ground, causing maximum damage on unprotected troops. Fortunately he had a relatively cool name, so the fragments of raining death were soon dubbed - wait for it - shrapnel (with is much cooler than saying you were hit by 'Napoleon', 'Clinton', etc.).

Shrapnel was promoted from Captain to Major for his design and, upon retirement, was awarded an annual stipend of 1,200 pounds - which is probably more than Kalashnikov made off the AK-47, even in 1842 dollars.

[wired.com]

Victor Bout Roundup

Now the Fun Begins with Russia Over Bout Arrest

'Most Wanted' Arms Dealer Arrested in Thailand

Russian Charged with Trying to Sell Arms

U.S. wants suspected Russian arms dealer extradited

Brother promises rescue of arms dealer Bout

Weapons Dealing: The go-to guy for warlords

DEA aids arms arrest

Russian arms trader's arrest reflects global web

US to Seek Extradition of Bout

Straight from the horse's mouth - looks like the DEA has done very well. I particularly like the 'here, use my cell phone so the conversation can be legally intercepted' trick. Reports state that Bout and his associate, Andrew Smulian, were offering the SAMs and 'armor piercing rocket launchers' from Bulgaria.

International Arms Dealer Charged in U.S. with
Conspiracy to Provide Surface-to-Air Missiles and
other Weapons to a Foreign Terrorist Organization

Michael J. Garcia, the United States Attorney for the Southern District of New York, and Michele M. Leonhart, the Acting Administrator of the United States Drug Enforcement Administration ("DEA"), announced today the unsealing of charges against Viktor Bout, a/k/a "Boris," a/k/a "Victor Anatoliyevich Bout," a/k/a "Victor But," a/k/a "Viktor Budd," a/k/a "Viktor Butt," a/k/a "Viktor Bulakin," a/k/a "Vadim Markovich Aminov," an international arms dealer, and his associate Andrew Smulian for conspiring to sell millions of dollars worth of weapons to the Fuerzas Armadas Revolucionarias de Colombia (the "FARC") – a designated foreign terrorist organization based in Colombia. Bout was arrested yesterday by Thai authorities in Bangkok. According to the Complaint unsealed today in Manhattan federal court:

Between November 2007 and February 2008, Bout and Smulian agreed to sell to the FARC millions of dollars worth of weapons –- including surface-to-air missile systems ("SAMs") and armor piercing rocket launchers. During a series of recorded telephone calls and emails, Bout and Smulian agreed to sell the weapons to two confidential sources working with the DEA (the "CSs"), who held themselves out as FARC representatives acquiring these weapons for the FARC for use in Colombia.

In addition, during a series of consensually recorded meetings in Romania, Smulian advised the CSs, among other things, that: (1) Bout had 100 SAMs available immediately; (2) Bout could also provide helicopters and armor piercing rocket launchers; (3) Bout could arrange to have a flight crew airdrop the weapons into Colombian territory using combat parachutes; and (4) Bout and Smulian would charge the CSs $5 million to transport the weapons. During one of the meetings with the CSs, Smulian provided one of the CSs with a digital memory stick that contained an article about Bout, and documents containing photographs and specifications for the SAMs and armor piercing rocket launchers that Smulian had previously said Bout could provide.

Victor Bout Arrested in Thailand

Thai police arrested Victor Bout in his Bangkok hotel earlier today, possibly acting with support from the US Drug Enforcement Administration, who has a warrant for his arrest. Bout had enough accusations against him for violating UN embargoes and supporting various crimes against humanity to fill a book (literally), but it appears he was charged for his support of the FARC rebels in Colombia, which would give one reason to believe the DEA's involvement in the matter. And don't forget the previous high profile indictments against gunrunners that the DEA has pulled off in the past.

Is there a rough road ahead for Bout? Time will tell, but along with the possible extradition and trial itself may be the effect (however significant or insignificant it may be) on US relations with Russia, who has been 'harboring' Bout for some time.

Links to various articles:

reuters.com

cnn.com

usatoday.com

RP

Questionable Reward: Arms Sales and the War on Terrorism

Rachel Stohl

In November 2007, Pakistan’s president, General Pervez Musharraf, invoked emergency rule, suspended the constitution, and arrested thousands of opponents and human rights advocates. As other countries, such as the Netherlands and Switzerland, immediately suspended military aid and weapons deals, the United States, which has given Pakistan more than $10 billion in military assistance since September 11, 2001, decided it would review U.S. arms transfers to Pakistan. Washington also indicated it would likely not prevent any weapons transfers, asserting such a decision could undermine counterterrorism efforts.[1]

U.S. policy toward Pakistan is part of a larger trend of U.S. arms export policy since the September 11 attacks, whereby the United States has made the “global war on terror” its priority in determining arms transfers and military assistance. In the last six years, Washington has stepped up its sales and transfers of high-technology weapons, military training, and other military assistance to governments regardless of their respect for human rights, democratic principles, or nonproliferation. All that matters is that they have pledged their assistance in the global war on terrorism.

U.S. Arms Sales and Export Policy Before and After September 11

To be sure, the United States traditionally has used arms sales to “reward” those countries willing to support its policies. The claimed motivations of such policies have changed over time from anti-communism to democracy building to anti-terrorism. The basic notion of using arms sales as a means of promoting loyalty to U.S. goals has been consistent.

Throughout this period, the United States has dominated the global arms market and continues to do so today. In 2006, Washington concluded the largest number of new arms deals ($16.9 billion worth in 2006, 41.9 percent of the global total) and made the most actual arms deliveries ($14 billion, nearly 52 percent of global arms deliveries).[2] The United States’ closest competitors were Russia and the United Kingdom, which made $8.7 billion and $3.1 billion in new deals, respectively, and delivered $5.8 billion and $3.3 billion worth of weapons. The United States has also regained its position atop exporters to the developing world, the largest purchasers of arms. Although the total global value of arms agreements fell in 2006, the United States saw multibillion-dollar increases in the value of its arms transfer agreements worldwide and with the developing world.

DDTC Notice Regarding Applications Submitted for Firearms

I'd love to see the list of 'commonly asked questions from Congressional staffers':

25 February 2008

Under 123.15(a)(3) of the ITAR, a license application for the export of firearms with a total value of $1 million or higher will require Congressional notification. To assist in expediting the certification process, and to respond to commonly asked questions from Congressional staffers, additional information is required to be submitted with your application for firearms exports totaling $1 million or higher:

* If the end-user is a defense ministry or a law enforcement agency:
What will happen to the weapons in their inventory? (E.g., current inventory will be sold, reassigned to another service branch, destroyed)
* Provide information on the ultimate end-user (i.e., branch of military, unit designation) and location (if known).
* If the end-user is a firearms dealer importing the firearms for commercial resale:
Provide as much information as you have regarding the ultimate end-use/end-user

[state.gov]