Things that make you go.........

apnews.myway.com/article/20070812/D8QVLVCG0.html

By CHARLES J. HANLEY and ARIEL DAVID

(AP) Iraqi policemen stand guard with their AK-47 assault rifles, July 26, 2007, in Karbala, Iraq....

Men exchange money for weapons over tea in a Baghdad home, June 20, 2007. Italian authorities have broken up an alleged illegal plot to ship more than 100,000 assault rifles and machine guns into Iraq, a spectacular example of how the country has become a magnet for arms traffickers. It is believed Iraqi civilians, including insurgents and sectarian militias, possess at least 7 million guns. (AP Photo/Karim Kadim)


PERUGIA, Italy (AP) - In a hidden corner of Rome's busy Fiumicino Airport, police dug quietly through a traveler's checked baggage, looking for smuggled drugs. What they found instead was a catalog of weapons, a clue to something bigger.

Their discovery led anti-Mafia investigators down a monthslong trail of telephone and e-mail intercepts, into the midst of a huge black-market transaction, as Iraqi and Italian partners haggled over shipping more than 100,000 Russian-made automatic weapons into the bloodbath of Iraq.

As the secretive, $40 million deal neared completion, Italian authorities moved in, making arrests and breaking it up. But key questions remain unanswered.

For one thing, The Associated Press has learned that Iraqi government officials were involved in the deal, apparently without the knowledge of the U.S. Baghdad command - a departure from the usual pattern of U.S.-overseen arms purchases.

(AP) Men exchange money for weapons over tea in a Baghdad home, June 20, 2007. Italian authorities have...
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Why these officials resorted to "black" channels and where the weapons were headed is unclear.

The purchase would merely have been the most spectacular example of how Iraq has become a magnet for arms traffickers and a place of vanishing weapons stockpiles and uncontrolled gun markets since the 2003 U.S. invasion and the onset of civil war.

Some guns the U.S. bought for Iraq's police and army are unaccounted for, possibly fallen into the hands of insurgents or sectarian militias. Meanwhile, the planned replacement of the army's AK-47s with U.S.-made M-16s may throw more assault rifles onto the black market. And the weapons free-for-all apparently is spilling over borders: Turkey and Iran complain U.S.-supplied guns are flowing from Iraq to anti-government militants on their soil.

Iraqi middlemen in the Italian deal, in intercepted e-mails, claimed the arrangement had official American approval. A U.S. spokesman in Baghdad denied that.

"Iraqi officials did not make MNSTC-I aware that they were making purchases," Lt. Col. Daniel Williams of the Multi-National Security Transition Command-Iraq (MNSTC-I), which oversees arming and training of the Iraqi police and army, told the AP.

(AP) An Iraqi carries a Russian-designed machine gun at a funeral, July 27, 2007, in Karbala, an Iraqi...
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Operation Parabellum, the investigation led by Dario Razzi, anti-Mafia prosecutor in this central Italian city, began in 2005 as a routine investigation into drug trafficking by organized-crime figures, branched out into an inquiry into arms dealing with Libya, and then widened to Iraq.

Court documents obtained by the AP show that Razzi's break came early last year when police monitoring one of the drug suspects covertly opened his luggage as he left on a flight to Libya. Instead of the expected drugs, they found helmets, bulletproof vests and the weapons catalog.

Tapping telephones, monitoring e-mails, Razzi's investigators followed the trail to a group of Italian businessmen, otherwise unrelated to the drug probe, who were working to sell arms to Libya and, by late 2006, to Iraq as well, through offshore companies they set up in Malta and Cyprus.

Four Italians have been arrested and are awaiting court indictment for allegedly creating a criminal association and alleged arms trafficking - trading in weapons without a government license. A fifth Italian is being sought in Africa. In addition, 13 other Italians were arrested on drug charges.

In the documents, Razzi describes it as "strange" that the U.S.-supported Iraqi government would seek such weapons via the black market.

(AP) A view of a building in Pieta, Malta, Monday, July 30, 2007, used as the address of MIR Ltd., one...
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Investigators say the prospect of an Iraq deal was raised last November, when an Iraqi-owned trading firm e-mailed Massimo Bettinotti, 39, owner of the Malta-based MIR Ltd., about whether MIR could supply 100,000 AK-47 assault rifles and 10,000 machine guns "to the Iraqi Interior Ministry," adding that "this deal is approved by America and Iraq."

The go-between - the Al-Handal General Trading Co. in Dubai - apparently had communicated with Bettinotti earlier about buying night visors and had been told MIR could also procure weapons.

Al-Handal has figured in questionable dealings before, having been identified by U.S. investigators three years ago as a "front company" in Iraq's Oil-for-Food scandal.

The Interior Ministry's need at that point for such a massive weapons shipment is unclear. The U.S. training command had already reported it would arm all Interior Ministry police by the end of 2006 through its own three-year-old program, which as of July 26 has bought 701,000 weapons for the Iraqi army and police with $237 million in U.S. government funds.

Negotiations on the deal progressed quickly in e-mail exchanges between the Italians and Iraqi middlemen of the al-Handal company and its parent al-Thuraya Group. But at times the discussion turned murky and nervous.

(AP) The entrance to a building in Pieta, Malta, Monday, July 30, 2007, used as the address of MIR Ltd.,...
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The Iraqis alternately indicated the Interior Ministry or "security ministries" would be the end users. At one point, a worried Bettinotti e-mailed, "We prefer to speak about this deal face to face and not by e-mail."

The Italians sent several offers of various types and quantities of rifles, with photos included. The negotiating focused on the source of the weapons: The Iraqi middlemen said their buyer insisted they be Russian-made, but the Italians wanted to sell AK-47s made in China, where they had better contacts.

"We are in a hurry with this deal," an impatient Waleed Noori al-Handal, Jordan-based general manager of the Iraqi firm, wrote the Italians on Nov. 13 in one of the e-mails seen by AP.

He added, in apparent allusion to the shipment's clandestine nature, "You mustn't worry if it's a problem to import these goods directly into Iraq. We can bring the product to another country and then transfer it to Iraq."

By December, the Italians, having found a Bulgarian broker, were offering Russian-made goods: 50,000 AKM rifles, an improved version of the AK-47; 50,000 AKMS rifles, the same gun with folding stock; and 5,000 PKM machine guns.

(AP) This document released by the Italian government. An Italian group, through the Malta-based...

The Iraqis quibbled over the asking price, $39.7 million, but seemed satisfied. The Italians were set for a $6.6 million profit, the court documents show, and were already discussing air transport for the weapons. At this point prosecutor Razzi acted, seeking an arrest warrant from a Perugia court.

"The negotiation with Iraq is developing very quickly," he wrote the judge.

On Feb. 12, in seven locations across Italy, police arrested the 17 men, including the four alleged arms traffickers: Bettinotti; Gianluca Squarzolo, 39, the man whose luggage had yielded the original clue; Ermete Moretti, 55, and Serafino Rossi, 64. If convicted, they could be sentenced to up to 12 years in prison.

The at-large fifth man, Vittorio Dordi, 42, was believed to be in the Democratic Republic of Congo, where he apparently is involved in the diamond trade. Italian authorities were seeking information on him from the African country.

In the parallel Libya case, the Italians allegedly paid two Libyan Defense Ministry officials about $500,000 in kickbacks to speed that transaction for Chinese-made assault rifles. It isn't known whether such bribes were a factor in the Iraq deal. No Libyans or Iraqis are known to have been detained in connection with the cases.

Al-Handal's operations have caught investigators' notice before. In 1996-2003, the company was involved as a broker in the kickback scandal known as Oil for Food, the CIA says.

In that program, Iraq under U.N. economic sanctions bought food and other necessities with U.N.-supervised oil revenues. Foreign companies, often through intermediaries, surreptitiously kicked back payments to officials of Saddam Hussein's Iraqi government in exchange for such supply contracts.

Those Iraqi middlemen also engaged in "misrepresenting the origin or final destination of goods," said the 2004 report of the CIA's Iraq Survey Group, which investigated both Iraq's defunct advanced weapons programs and Oil for Food.

That report also alleged that during this period Al-Handal General Trading, from its bases in Dubai and Jordan, secretly moved unspecified "equipment" into Iraq that was forbidden by the U.N. sanctions.

Reached at his office in Amman, Jordan, Waleed Noori al-Handal denied the family firm had done anything wrong in the Italian arms case.

"We don't have anything to hide," he told the AP.

Citing the names of "friends" in top U.S. military ranks in Iraq, al-Handal said his company has fulfilled scores of supply and service contracts for the U.S. occupation. Asked why he claimed U.S. approval for the abortive Italian weapons purchase, he said he had a document from the U.S. Army "that says, 'We allow al-Thuraya Group to do all kinds of business.'"

In Baghdad, the Interior Ministry wouldn't discuss the AK-47 transaction on the record. But a senior ministry official, speaking on condition of anonymity because of the matter's sensitivity, acknowledged it had sought the weapons through al-Handal.

Asked about the irregular channels used, he said the ministry "doesn't ask the supplier how these weapons are obtained."

Although this official refused to discuss details, he said "most" of the 105,000 weapons were meant for police in Iraq's western province of Anbar. That statement raised questions, however, since Pentagon reports list only 161,000 trained police across all 18 of Iraq's provinces, and say the ministry has been issued 169,280 AK-47s, 167,789 pistols and 16,398 machine guns for them and 28,000 border police.

A July 26 Pentagon report said 20,847 other AK-47s purchased for the Interior Ministry have not yet been delivered. Iraqi officials complain that the U.S. supply of equipment, from bullets to uniforms, has been slow.

A Pentagon report in June may have touched on another possible destination for weapons obtained via secretive channels, noting that "militia infiltration of local police remains a significant problem." Shiite Muslim militias in Iraq's civil war have long been known to find cover and weapons within the Interior Ministry.

In fact, in a further sign of poor controls on the flow of arms into Iraq, a July 31 audit report by the U.S. Government Accountability Office said the U.S. command's books don't contain records on 190,000 AK-47s and other weapons, more than half those issued in 2004-2005 to Iraqi forces. This makes it difficult to trace weapons that may be passed on to militias or insurgents.

The Pentagon, meanwhile, has described the Interior Ministry's accounting of police equipment as unreliable.

Here in Italy, Razzi expressed puzzlement at the Iraqi officials' circumvention of U.S. supply routes.

"It seems strange that a pro-Western government, supported by the U.S. Army and other NATO countries on its own territory, would seek Russian or Chinese weapons through questionable channels," the anti-Mafia prosecutor wrote in seeking the arrest warrant that short-circuited the complex deal.

100,000 AKs for $40 Million?  Thats 400 dollars each.  Is that a good deal?

Quoted: 100,000 AKs for $40 Million?  Thats 400 dollars each.  Is that a good deal?

for a black-market prices that seems pretty good.

you would think they would get a better quantity discount than that.  Ha

Quoted: you would think they would get a better quantity discount than that.  Ha

maybe from a legitimate sale, but not for a black-market deal.

I would love to know why the Iraqi government is buying Arms covertly and hiding it from US Authorities.

Wasrs, move along nothing to see here.

Quoted: I would love to know why the Iraqi government is buying Arms covertly and hiding it from US Authorities.

Uh, more likely its one of the milita buying weapons illegally using letterhead from sympathizers in the Interior Ministry.

Quoted: Quoted: I would love to know why the Iraqi government is buying Arms covertly and hiding it from US Authorities. Uh, more likely its one of the milita buying weapons illegally using letterhead from sympathizers in the Interior Ministry.

Still interesting, even if that is the case.

About twice a year, Italian police intercept arms shipments and declare them illegal, bring out the media, do the whole dog & pony.

The next week, a quiet retraction is printed stating that the weapons were either due for importation into the US for sale to civilians or a part of a legitimate foreign sale, usually originating from the US.

Kharn

Hey $400 for a new F/A AK is a pretty good deal.

Quoted: I would love to know why the Iraqi government is buying Arms covertly and hiding it from US Authorities.

The Iraqi government has yet to buy any weapons for itself, we've been buying them for them. It would be difficult for them to get a better deal than that.

By December, the Italians, having found a Bulgarian broker, were offering Russian-made goods: 50,000 AKM rifles, an improved version of the AK-47; 50,000 AKMS rifles, the same gun with folding stock; and 5,000 PKM machine guns. The Iraqis quibbled over the asking price, $39.7 million, but seemed satisfied. The Italians were set for a $6.6 million profit, the court documents show, and were already discussing air transport for the weapons. At this point prosecutor Razzi acted, seeking an arrest warrant from a Perugia court.

The Iraqis actually paid $39,700,000 for 105000 firearms.  This is $378.09 per gun.  However, it says that the Italians took $6,600,000 of it as middlemen for setting up the deal.  That means the manufacturing and shipping costs for the gun were really $33,100,000.  Cost per rifle is now $315.24.  Who knows if other middlemen took their share off the top as well?  You also have to factor in that 50,000 of these are underfolding AKs which cost a little more than regular fixed stock AKMs.  Then you also have to factor in that 5,000 are PKMs machine guns which should definitely cost more than an AKM.  So considering all that (especially if there are more middlemen taking money, which there probably are "Bulgarian Brokers") you are probably looking at a fixed stock AKM costing about $250 to be shipped to Iraq if you could avoid the middlemen and buy directly from Russia.  That is a pretty good price if you ask me, especially if they are new production rifles!    

The Russians have not made AKM or AKMS rifles since the late 1970's.  So what ever they are they are not new.  Maybe new old stock?

Interesting thing about this article...they * correctly * used the terminology to describe a full-auto medium caliber longgun -- the assault rifle!  Not the typical handwringing lib blather about 9mm semi-auto machinegun assault weapons with the extra large banana clips and the shroud thingie  BS.

But yeah,  sounds like some militia is just using official credentials.  Heck, look at Basra, there are probably dozens of competing factions of just Shia's (Not Sunni vs Shia) battling it out for control of water, electrical power plants, oil pipelines, oil fields and port facilities...Brits are throwing up their hands and saying they can't deal with it anymore,  they're packing up and leaving.  And into the vacuum rushes the Iranian backed private armies....

Quoted: 100,000 AKs for $40 Million?  Thats 400 dollars each.  Is that a good deal?

That's one hell of a group buy.