[Media-watch] Iraq: Government deal with a 'Merchant of Death'? - Newsweek - Dec 20 2004 Issue

[Julie-ann Davies]

http://www.msnbc.msn.com/id/6700301/site/newsweek/

Iraq: Government Deal With a 'Merchant of Death'?
By Michael Isikoff
Newsweek

Dec. 20 issue - In an effort to crack down on one of the world's most 
notorious international criminals, President George W. Bush last summer 
signed an order barring U.S. citizens from doing business with Russian arms 
trafficker Victor Bout. But not long afterward, U.S. officials discovered 
Bout's tentacles were wider than anticipated: for much of this year, 
NEWSWEEK has learned, a Texas charter firm allegedly controlled by Bout was 
making repeated flights to Iraq-courtesy of a Pentagon contract allowing it 
to refuel at U.S. military bases. One reason for the flights, sources say, 
was that the firm was flying on behalf of Kellogg Brown & Root, the division 
of Halliburton hired to rebuild Iraq's oilfields.

U.S. officials say Bout-once dubbed a "merchant of death" by a British 
foreign minister-built an empire in the 1990s flying weapons to the Taliban 
and African dictators and rebel groups, in violation of international 
sanctions. Bush's order banning business with Bout, a former Soviet military 
officer, was for supplying guns to the rogue regime of ex-Liberian president 
Charles Taylor. "Our ultimate goal is to shut down his network," says Juan 
Zarate, assistant Treasury secretary.

But U.S. officials feared they were being undermined recently when they got 
evidence that Bout's aircraft were spotted in Iraq. A Pentagon official 
confirmed that, until last summer, a Texas carrier named Air Bas had a "fuel 
purchase agreement" authorizing its planes to refuel at U.S. bases there. 
Air Bas planes landed 142 times at U.S. bases this year, says Jack Hooper of 
the Defense Logistics Agency. The flights began months after a U.N. report 
identified Air Bas as a suspected Bout "front company." Sources say Treasury 
officials recently recommended naming Air Bas to a list of Bout-connected 
firms to be covered by Bush's order. (Air Bas president Richard Chichakli 
acknowledges he was in contact with Bout, but says Bout is not an owner of 
the firm.)

Hooper says his agency had been unaware of the Bout connection and cut off 
the agreement in August after the firm "repeatedly" rebuffed requests to 
identify what business it was conducting for the U.S. government. Chichakli 
says Air Bas had subcontracted with another firm, Falcon Express in Dubai, 
that was hired to haul cargo for two big Iraq contractors-FedEx and Kellogg 
Brown & Root. "I'm like Hertz or Avis," he says. "You rent my planes, you go 
from point A and point
B." A FedEx spokeswoman says the firm recently told Falcon to drop Air Bas 
when it learned of the alleged Bout link. Halliburton spokeswoman Wendy Hall 
says the firm had "no knowledge" of Air Bas's role, but that the firm 
stopped using Falcon Express "six months ago." Still, Lee Wolosky, a former 
National Security Council official who tracked Bout, says it's "seemingly 
inexplicable" that the U.S. government could have been "doing business with 
an international criminal organization."