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Blacklisted Russian Tied to Iraq Deals

The alleged arms broker is behind four air cargo firms used by U.S. contractors, officials say.

December 14, 2004|Stephen Braun, Judy Pasternak and T. Christian Miller | Times Staff Writers

WASHINGTON — Air cargo companies allegedly tied to reputed Russian arms trafficker Victor Bout have received millions of dollars in federal funds from U.S. contractors in Iraq, even though the Bush administration has worked for three years to rein in his enterprises.

Planes linked to Bout's shadowy network continued to fly into Iraq, according to government records and interviews with officials, despite the Treasury Department freezing his assets in July and placing him on a blacklist for allegedly violating international arms sanctions.

Largely under the auspices of the Pentagon, U.S. agencies including the Army Corps of Engineers and the Air Force, and the U.S.-led Coalition Provisional Authority, which governed Iraq until last summer, have allowed their private contractors to do business with the Bout network.

Four firms linked to the network by the CIA and international investigators have flown into Iraq nearly 200 times on U.S. business, government flight and fuel documents show. One such flight landed in Baghdad last week.

The list of the Bout network's suspected clients over the years includes the Taliban, which allegedly bought airplanes for a secret airlift of arms to Afghanistan. The Taliban is known to have shared weapons with Al Qaeda.

CIA officials expressed concern more than a year ago that air cargo firms linked to Bout were cashing in on U.S.-funded reconstruction efforts, but the warning did not reach the Coalition Provisional Authority until May. After conducting its own inquiry, the Coalition Provisional Authority allowed the companies to keep flying, insisting military officials who signed the contracts should deal with the problem. In other cases, officials said it was difficult to know if Bout was behind a particular air cargo firm because he continually changed company names and aircraft registrations.

Other federal officials said they had not known about the ban on dealing with Bout or about the Bush administration's effort to target Bout's network until relatively recently.

In a letter to Sen. Russell D. Feingold (D-Wis.) in June, Paul V. Kelly, an assistant secretary of State for legislative affairs, acknowledged that the department had "inadvertently" allowed contractors to deal with "air charter services believed to be connected with ... Bout." Feingold, a member of the Senate Foreign Relations Committee, has taken a lead role in investigating Bout's activities.

"It befuddles the mind that the Pentagon would continue to work" with suspected Bout firms, said Lee Wolosky, a former White House official who tracked Bout for the Clinton and current Bush administrations.

Feingold said Monday, "What's obviously wrong is that U.S. taxpayer dollars are going to fatten the wallet of someone associated with the Taliban and with atrocities in places like Liberia and Sierra Leone."

An unreleased report prepared for the British Parliament, a copy of which was obtained by the Los Angeles Times, accused one cargo firm reputedly tied to Bout of flying weapons to war-wracked eastern Congo this year. The company is not involved in Iraq.

Reached by phone in Moscow, Bout responded angrily.

"You are not dealing with facts. You are dealing with allegations," he snapped before hanging up. His Moscow lawyer refused to answer questions.

During the chaotic period after the collapse of the Soviet Union, Bout was among the Russian entrepreneurs who seized opportunities to make a fortune. He built a global air cargo network by obtaining old Russian planes and using them to deliver, among other things, munitions to world trouble spots in defiance of U.N. arms embargoes.

A confidant of dictators, warlords and guerrilla leaders, Bout juggled a murky group of companies for much of the 1990s, transferring his planes' registrations from country to country. His fleet, which grew to nearly 60 aircraft by 2000, often carried legitimate wares such as flowers and fish. But U.N., American and British officials who tracked his activities say his empire's stock in trade was weapons, ammunition and helicopter gunships.

"He had his name on some companies but he has been removing himself from the scene, at least in name. He is finding more people to work for him that have no apparent connection to him," a U.S. official said.

Although Bout is wanted for money laundering by Interpol and Belgian authorities and various agencies raised red flags during the last year, his network continued to do business with some U.S. agencies and their contractors, officials said.

U.N. investigations and American officials have linked Air Bas, incorporated in Texas but based in the United Arab Emirates, and Irbis, a company registered in Kazakhstan, to Bout's aviation empire.

The same officials have also scrutinized two other airlines that flew into Iraq, British Gulf International and Jetline, for possible ties to Bout.

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