U.S. arms deals elude required scrutiny

By Bruce Finley
Denver Post Staff Writer

Post / Larry C. Price
An Afghan mujahedeen fighter carries a U.S.-made Stinger shoulder-launched missile during the 1989 Jalalabad offensive. The missiles were supplied to guerrillas fighting the Soviet-backed government, and many of them are now unaccounted for.

Washington - The United States is failing to safeguard much of the highly sought weaponry it sends abroad - from assault rifles to sophisticated combat technology, a review by The Denver Post concludes.

Lax oversight of weapons exports opens the door for adversaries to get their hands on lethal missiles, assault guns and components for larger weapons systems, sources say.

Homeland Security agents recently have uncovered plots to divert night-vision lenses to Iran, fighter-jet parts to China, grenade launchers to Colombian guerrillas, nuclear triggers to Pakistan, and more.

And despite internal warnings, government-sanctioned sales worth more than $10 billion a year continue spreading more weapons worldwide.

Congressional leaders responding to The Post's review are promising legislation. Among the problems that caught their attention:

Tens of thousands of arms deals aren't fully reviewed, nor are weapons inspected abroad as required under the U.S. Arms Control Export Act to prevent diversion or misuse.

When government officials do review arms deals, they find increasing problems - including diversions to at least one criminal and several hostile nations. Nearly one in five arms deals checked last year - 76 out of 413 - had such problems.

Homeland Security agents investigating illegal dealing say sophisticated weaponry probably already has reached adversaries. Total arrests for illegal arms dealing doubled from 62 in 2002 to 125 last year. Customs agents last year made 665 seizures of arms worth $106 million.

The problems grow from a core dilemma. On one hand, the United States long has relied on arms exports to support private defense contractors and to get allies to support U.S. foreign policy goals. On the other, uncontrolled weapons mean a more dangerous world at a time when terrorist activity is increasing.

"At a time when many consider the greatest threat to our national security to be terrorists getting their hands on weapons of mass destruction, I am extremely concerned that the U.S. government is not doing enough to make sure that we ourselves are not the source of any weapons that may be used against us either domestically or against our citizens, soldiers or allies abroad," said Sen. Dianne Feinstein, D-Calif., ranking member of the subcommittee on terrorism and homeland security and member of the Select Committee on Intelligence.

Feinstein will work on legislation that will "close some of the loopholes that allow American technology and products to get into the wrong hands," she said.

"Simply put, the way business is done now, we have no way of knowing if much of this technology - including advanced computers, telecommunications and information systems, lasers, toxins, and even certain nuclear material and technology, and the like - has been diverted or is being misused," Feinstein said.

Defense, Commerce and State department officials responsible for regulating what goes where acknowledged deficiencies.

Bush administration foreign policy has created pressure to move weapons quickly to allies, overwhelming controls, Air Force Lt. Gen. Tome Walters, head of the Defense Security Cooperation Agency, said in an interview before his retirement in July. The agency is charged with facilitating sales to foreign governments as well as making sure weapons aren't diverted or misused.

"A big problem" is the lack of inspectors to keep track of weapons, Walters said. "And that's the challenge ... the manpower. ... Our system is not designed to do this."

Diversions exposed by limited reviews raise the possibility of more diversions not detected.

"I am not comfortable at all," said Greg Suchan, deputy assistant secretary of state for defense trade controls.

Even some defense industry leaders - traditional advocates for relaxing controls - now favor a safer approach.

"A lot of the health and strength of the U.S economy is based on exports, and it is going to be for some time. But we've got to find a way to manage those exports in a fairly uncertain world," said Bob Bauerlein, a former Air Force undersecretary who now serves as Boeing's vice president for international operations.

U.S. arms in high demand

Senior Bush administration officials defended the status quo. U.S. small arms "have not been the weapons that end up in the hands of child soldiers," said Lincoln Bloomfield, assistant secretary of state for political-military affairs. And accelerated sales since Sept. 11, 2001, will help in the war on terrorism, he said. "Most of the major arms exports the U.S. does are to armed forces who are going to do things we want them to do."

Today, more and more countries - from booming East Asia to the volatile Middle East - are seeking advanced items for their arsenals.

And the United States is by far the world's leading arms supplier, with annual industry sales topping $300 million and government sales topping $13 billion last year - a figure expected to reach $13.8 billion this year, government data show.

In Colorado, some 300 companies are registered to export military technology - mostly dual-use items that have commercial as well as military uses. The State Department lists 4,000 companies nationwide. Names are kept secret.

All deals are supposed to be screened - with congressional oversight to make sure Defense, Commerce and State department officials do their jobs. But government documents and interviews with senior officials, arms control experts, industry lobbyists, and consultants reveal a systemic failure to control weapons exports as required by law.

Eye on portable missiles

Consider the case of Stinger shoulder-launched missiles - which the United States supplies to at least 17 countries, including Egypt, Israel, Pakistan and Saudi Arabia. Experts agree that if any U.S. weapon must be controlled, this is it.

One man can carry a 40- pound, heat-seeking Stinger and, with a bit of training, shoot down a jumbo jet up to 3 miles away as high as 15,000 feet. In the past 20 years, shoulder- launched missiles have hit at least 40 civilian planes around the world, causing crashes and deaths, security analysts estimate. In November 2002, terrorists firing two Russian- made shoulder-launched missiles almost hit a Boeing 757 airliner chartered to evacuate Israeli tourists from Kenya.

Thousands are beyond U.S. government control, according to a study released in May by the Government Accountability Office, the investigative arm of Congress.

The Defense Department office responsible "does not know how many Stingers have been sold overseas," it said. "Records on the number and destination of Stingers sold overseas are incomplete, unreliable and largely in hard-copy form."

The study followed an August 2000 GAO study that identified similar problems - which defense officials had promised to fix.

Stinger missiles still move out. A Defense Department spokesman, who spoke on condition of anonymity, said the Army has sent out 237 this year and is in the process of sending 249 more. He declined to say where.

Overall, State and Defense department regulators last year approved more than 49,500 deals involving all types of weapons without full review - let alone monitoring and inspection abroad, documents show. Arms deals are screened by staffers who process electronic applications but generally lack time and expertise to conduct detailed investigations of buyers and sellers. Even in cases where an application is flagged for closer scrutiny, the most detailed reviews seldom involve inspections.

Still more deals, involving dual-use technology, were approved without full review at the Commerce Department. A GAO study released in March found Commerce officials conducted inspection visits for only 1 percent of 22,490 sales of missile-related technology they approved between 1998 and 2002.

The GAO also addressed dual-use technology sent to government-designated "countries of concern" such as China, India and Russia that are supposed to receive extra scrutiny. Of 26,340 approved dual-use sales during that period, 7,680 involved countries of concern. Commerce officials reviewed 428, or 5.6 percent, of those, according to another GAO study. It concluded that the government "cannot ensure that dual-use items exported to countries of concern are not misused or diverted."

Congressional leaders are considering action to deal with "lagging oversight," said Sen. Ben Nelson, D-Neb., a member of the Senate Armed Services Committee.

"It seems incongruous to say one of the primary purposes of the war on terrorism is to make sure weapons of mass destruction don't get into the hands of evildoers, and then not to enforce our own safeguards on weapons sales," Nelson said.

Probes uncover trouble

When the government does scrutinize arms deals, it finds trouble.

Last year, State Department officials charged with overseeing private-company deals selected 413 for more careful review, though still not inspections to verify where weapons are and how they are used.These targeted reviews found irregularities with 76, or 18.4 percent, of those deals. That's the highest percentage ever, up from 11 percent, or 50, of the deals reviewed in 2002, State Department documents said.

The 413 reviews interrupted a plan to move firearms to a criminal in Central America, sales of helicopter parts to a hostile country, and misuse of electronics and communications equipment sent to Asia, records show. Details were omitted.

The findings indicate more weapons may have slipped through in deals not reviewed. At a recent industry conference in Colorado Springs, Suchan, the State Department's chief regulator, appealed to defense companies for help. He urged senior managers to make sure their companies police themselves and voluntarily disclose violations.

State Department supervisors said 32 inspectors - including contract employees - must process applications for some 50,000 commercial arms deals each year.

At the Defense Department, officials couldn't say how many inspections they may have conducted or what they found. Instead, Walters, the chief overseer, described how after Sept. 11 he faced pressure to speed up sales.

Defense Secretary Donald Rumsfeld "was frequently getting phone calls from the king of Jordan, from folks who were in countries that were friends of ours that were close by Afghanistan, close by Iraq. We needed their help, and they needed things," Walters said. "The spotlight was really turned on us to work faster and to provide things, to help Jordan if Jordan needed equipment, to help Pakistan."

Weapons on the loose

Now evidence is mounting that weapons likely are reaching adversaries including terrorists - via legal and illegal channels.

In Iraq, customs agents picking through stockpiles recently found much U.S.-origin weaponry and dual-use technology - evidence for "at least 40 cases involving U.S. companies or people that we suspect of exporting illegally to Iraq," Homeland Security spokesman Dean Boyd said.

And across the world "there is all sorts of material out there ... a lot of things we don't have any control over," Boyd said.

Agents last year opened nearly 3,000 new criminal investigations of suspected illegal arms deals.

In June, a Jordanian man accused of trying to sell fighter- jet parts illegally to China pleaded guilty in Los Angeles. In May, a federal grand jury in Philadelphia indicted a former television journalist from Houston accused of illegally selling night-vision lenses to Iran.

In April, Immigration and Customs Enforcement agents arrested a Florida businessman on charges of attempting to purchase more than 6,000 machine guns, grenades, grenade launchers and pistols, weapons worth nearly $4 million, and send them to the Revolutionary Armed Forces of Colombia - a group the government labels as terrorist.

In January in Denver, immigration agents arrested a South African man on charges he illegally exported nuclear trigger devices from a company in Massachusetts, via South Africa and the United Arab Emirates, to Pakistan.

Spreading insecurity

The failure to control weaponry presents a major threat to U.S. and global security, according to critics who question the use of weapons exports as a tool of foreign policy.

"What we've done is spread insecurity around the world," said former U.S. Sen. Tim Wirth, who also served in the State Department and now runs the United Nations Foundation.

Arms control advocates contend the rise of terrorism requires stricter control at home - as well as internationally through better treaties.

Americans "have to be certain who they are shipping arms to," said Wade Boese, research director for the Arms Control Association, a Washington think tank. "If there is any blind spot, any place arms slip through cracks, they can reach terrorists."

But many defense industry leaders oppose increased regulation. They argue weapons exports are essential even if there are risks. And some regard arms control as a political tactic at best.

"You can't control technology," said retired Air Force Lt. Gen. Larry Farrell, president of the National Defense Industrial Association. "There are going to be weapons. There are going to be people who wish other people trouble."

Terrorists have shown they can harness even ordinary technology to kill Americans, Farrell pointed out.

And inevitably today's cutting-edge weaponry "will be discovered somewhere else," he said. "It's just the way people are. ... You've got to protect yourself."

Staff writer Bruce Finley can be reached at 303-820-1700 or bfinley@denverpost.com.