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Differing Laws Bring U.S., England Into Conflict : London Center of Iran Arms Smuggling


September 03, 1985|WILLIAM C. REMPEL and LARRY GREEN | Times Staff Writers

LONDON — The business conducted at 4 Victoria--a modern, heavily guarded office building near Parliament and Westminster Abbey--is done in private, like most business in this center of international commerce. Recently, however, details of many once-secret transactions originating here have shown up in American court records.

In the last 12 months, federal authorities in the United States have indicted 44 persons for export violations stemming from alleged illegal trade with Iran's military--most of it brokered through London.

The mysterious office at 4 Victoria is the command center of Iran's multibillion-dollar campaign to acquire American-made weapons and military supplies--a campaign that continues today, largely beyond the reach of U.S. agents trying to enforce a 5-year-old embargo on military trade with the Ayatollah Ruhollah Khomeini's regime.

Several London businessmen are among those indicted for weapons shipments to Iran. They are listed as fugitives in the United States, but in Britain--where they are virtually immune from extradition--some continue doing business with Iran. It is business permitted under British law, business that makes London the hub of Iran's global military procurement network, and business that puts some strain on relations between the United States and Britain.

A Times investigation has also found that, from these offices at 4 Victoria, Iran's anti-American government has:

--Secretly financed the creation of weapons-exporting companies in Los Angeles and London.

--Exploited financially troubled American businessmen now accused of helping Iran circumvent the U.S. trade embargo.

--Become the leading black market buyer of American weapons and military spare parts, effectively aided by traditional businessmen and brokers in the centuries-old British trading network.

--Transported military supplies from London to Tehran concealed under diplomatic seal.

--Intimidated and pressured Iranian expatriates living here and in the United States to recruit agents for Iran's sometimes desperate search for the U.S. military supplies that are vital to keeping its American-made military machinery operating in the war against Iraq.

"That pressure includes anything from attempts to exploit loyalty to their homeland to threats to their families still living in Iran," William Fahey, assistant U.S. attorney in Los Angeles, said. Fahey, citing investigative and intelligence reports, said federal authorities have found Iranian agents putting pressure "particularly on those (U.S. Iranians) with connections to the aerospace industry."

Other U.S. prosecutors, frustrated by British reluctance to extradite British citizens indicted in the United States, complain that Iran's arms procurement operation here "is protected" by British authorities.

No Extradition

"We get nowhere (with extradition requests)," said one American prosecutor who asked not to be identified. "And we've got to jump through hoops just to get them (British authorities) to give us background on people we're trying to indict. Sometimes, we don't get much of that, either."

Part of the conflict grows out of differences between British and American laws and customs regulations. For example, Britain does not have a broad conspiracy law, which is a common element of most U.S. indictments aimed at suspected weapons-smuggling rings. Also, Britain has no statutes prohibiting shipments of spare parts to Iran.

"If a British resident violates a law in a foreign country that we do not recognize as a crime here, then we can't extradite," a spokesman for the British government explained.

It is not happenstance, therefore, that Iran located its military procurement center--the Logistics Supply Center (Europe)--in England. England, historically a nation of traders, is positioned midway between the United States and Iran, provides easy access to persons doing business with American firms and enforces few restrictions on trade. Furthermore, like banking interests in Switzerland, London traders conduct business discreetly.

"One knows never to ask anyone who his client is," one London broker said. "That's the kind of question that makes my hair stand on end," said another broker.

Grossly Inflated Prices

However, it is clear from government sources and from interviews with London brokers that Iran is eager to be the client--secret or otherwise--of any trader able to deliver the badly needed military equipment. And it is willing to pay grossly inflated prices--sometimes exceeding 500% to 1,000% of U.S. market value--to make the deals.

"The Iranians are all over town trying to make deals. Everyone knows it," said Gerald H. McDevitt, a longtime British trader who was among the 44 persons indicted in the United States during the last year on Iran-related export violation charges. He told The Times that he had been a middleman in a transaction involving parts for F-4 Phantom and F-5 jet fighters but that he had not been aware that the ultimate customer for the parts was Iran.

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