Small wars, small arms, big graft

The indictment of former Argentine President Carlos Menem last week, on charges of illegally selling $100 million worth of light arms and explosives, is but the latest sign of an ominous post-cold war trend: The booming business in small-scale conflicts has become a major source of corruption.

About half of all the weapons - assault rifles, mortars, and grenades - supplied to civil wars from Sierra Leone to Chechnya are from illegal sources, says a UN report. (Swiss lead effort to track arms, page 9.)

Increasingly global mafias work in association with high-level officials and pay huge fees in exchange for the legitimacy the officials offer.

"It's not politically correct any more for governments to be selling arms to regions in conflict, so the selling has to go underground," says Tamar Gobelnick, director of the arms sales monitoring project at the Federation of American Scientists.

That's what prosecutors allege happened in a scheme to illegally sell weapons from Argentina to Croatia and later to Ecuador during Mr. Menem's first presidential term, between 1990 and 1995. It's also just one of the charges facing ex-Peruvian intelligence chief Vladimiro Montesinos, accused of creating a pipeline of arms - from Eastern Europe and involving Middle Eastern military contacts - that ended up in Colombia's civil conflict.

Corruption in arms sales is also being investigated in South Africa, where $5.5 billion in arms procurement under the ruling African National Congress allegedly resulted in widespread wrongdoing, including kickbacks and favorable contracting with family members of ANC leaders.

Diplomats and weaponsmakers are meeting at the United Nations for the next two weeks to regulate arms brokers and push for a system to trace the movement of light weapons.

The South African case is an example of the kind of corruption that has long affected government arms procurement. But while such cases continue to pose a threat globally, international corruption experts say the most troubling growth area in dirty arms sales results from small regional conflicts, often under international arms-supply embargo, with underworld organizations supplying arms.

"The supplying of arms to smaller wars ... is where there's the greatest growth in arms sales corruption," says Laurence Cockroft, chairman of the London chapter of Transparency International (TI), an anti-corruption watchdog organization in Washington.

According to Mr. Cockroft, the largest sums of corruption money in arms deals tend to be in traditional arms procurement such as in the South Africa case. This is also where TI traditionally focuses its efforts, he says. But he adds that research from the World Bank and other institutions is shedding light on smaller-scale arms purchasing.

Often sought to fight "small" conflicts, the purchases sometimes involve middlemen connected to international drug and money-laundering rings. Such purchasing is exacting a mounting toll on developing countries, such as Angola.

The Argentine case, one of the more complex - the court file so far runs more than 20,000 pages - involves a long trail of officials and middlemen of various Latin American and European nationalities. The arms were sold with "certificates of final use" issued for Panama, Venezuela, and Bolivia - the certificates being the magic passes that governments control but that middlemen need to give arms shipments legitimacy.

But the arms ended up in Croatia while that country was under a United Nations arms embargo. More arms later arrived in Ecuador, which at the time was fighting border conflict with Peru - a conflict in which Argentina was a peace guarantor. The sales and shipments involved middlemen and crime organizations from as far away as Italy, Albania, and Russia, says Eduardo Gamarra, a Latin America specialist at Florida International University in Miami, who is researching a book on the case.

Like many other arms sales scandals, this one shows how arms trafficking has grown over the past decade and become increasingly intertwined with drug-trafficking and money-laundering, says Mr. Gamarra.

"You scratch the surface in a case like this and you find names that appear in other areas of trafficking. It's not arms for drugs," he adds, "it's arms and drugs for profit."

The World Bank and other institutions have repeatedly found in studies that arms trafficking is linked in Latin America to both the narcotics trade and the region's high levels of violence.

Gamarra says some telling information on the Croatia-Ecuador arms supply scheme has come out of Bolivia, where the middleman who falsified the certificates of final use there, Marino Diodato - married to a niece of Bolivian President Hugo Banzer - was convicted and is serving prison time.

And while Gamarra says the argument of former Argentine President Menem that he is innocent is "plausible," it still invites the question of what happened to some $200 million in the transactions that remains unaccounted for. Menem claims that the arms sales his government approved were legal with the legal destinations intended.

But other sources, including some Menem backers, believe the Argentine government got caught up in a scheme hatched by American intelligence circles to get arms to a struggling and embargoed Croatia - something akin to the Iran-Contra deal. Any evidence of this would tarnish the US, which publicly has taken a tough public stance for cracking down on arms trafficking.

The US is one of the few countries that have legislation regulating the activities of arms brokers, says the Federation of American Scientists' Ms. Gobelnick. But she says that while such legislation sounds good in theory, "the government has had a tough time enforcing it."

Just how much information ends up coming out in the Menem prosecution could depend on how far his case goes. Some Argentine observers believe an appeal to a sympathetic supreme court could spare Menem a trial.

But the Argentine public's blase response to the Menem affair shows both the former president's continuing popularity and what TI's Cockroft calls a general public "mystification" over something so arcane as arms sales.

"The fact is that the tons of arms shipped to Croatia, and later to Ecuador, matter very little from the general public standpoint," says Oscar Raul Cardoso, a Buenos Aires political analyst. Pinning Menem as the leader of an "illicit association" - a charge similar to that of "racketeering" in the US - will be very tough in relation to what Menem claims was a political decision.

"The question that remains is, 'Did [Menem] profit from the deal?'" says Mr. Cardoso.

(c) Copyright 2001. The Christian Science Monitor