Johan Peleman, one of the world's most prominent arms-trade investigators, has served on several U.N. expert panels and specializes in the financial aspects of war. In a series of interviews between October and December, 2001, Peleman shared his views with FRONTLINE/World producer Rick Young on the larger implications of the illicit international trade in small arms. Drawing on his years of experience following the flow of weapons and investigating the money and paper trails of wars across Africa, he explains the dangers that failed African states pose, and the lessons they offer.

The United Nations and the nation-states into which the world is currently organized, he warns, are systemically incapable of stopping the warlord rule and growing chaos in Africa -- a political state of affairs not seen since the 17th century. Regulating arms brokers -- or "middlemen" -- is key to stemming these wars, Peleman says, and will be one of the main challenges in controlling the global movement of small arms for the foreseeable future. By contextualizing the extraordinary legal case against Leonid Minin, he explains what can be done to stop unscrupulous brokers and correct the lethal flaws in the current international system.

IT'S NOT MY PROBLEM: THE EXPORTER'S PERSPECTIVE

In Ukraine, government officials told us that, from their perspective, Ukraine did everything legally required regarding the arms Minin exported to Liberia.

I would fully agree with that. ... Even more than that, they followed the international procedures for an arms deal. They went beyond it, sending someone with the plane. They even went beyond that, having a document signed by the client, in this case Côte d'Ivoire, that the ammunition would be used ... within the terms of the embargo or the moratorium on small arms in West Africa. So this was an additional guarantee. Strictly speaking, they followed the right procedures.

Did they know whom they were doing business with?

That's something you have to ask them. ... As long as these sorts of practices are allowed by most countries in the world in the international arms trade, you will find them abused. If you allow an offshore-registered company to broker lethal equipment, you are vulnerable to abuse. Ukraine is no exception.

Ukrainian officials say, "We're a poor country. We don't have the resources to go checking into who's really behind these companies. What do you want us to do?"

It's an answer that many officials in many countries will give you. If you would go and check who's behind Technical Engineering and Services [a broker for Minin's shipments], you would just find the names of two individuals. And if you don't have them in your records as being wanted in your country, there's not much you can do about finding out more about them or screening them. Moreover, I guess, from the Ukrainian point of view, the shipment that we are talking about [113 tons of ammunition] was probably peanuts. It was a relatively small volume of ammunition. ...

Obviously, I would like to see more scrutiny in the entire international arms business. But from the point of view of authorities, as long as you follow international procedures, it is legal. I think every country in the world that produces arms or has large stocks of weapons must have thousands of permits each year that need to be checked, usually from a desk, by an officer on the proliferation desk who just screens whether the country of destination is under an embargo, whether all the documents are there. They may ask for an additional stamp on one document or another. Most countries deal this way with an arms transfer; Ukraine did the same. They did follow the international procedure. What you can say is that the international procedures on the arms trade may not be sufficient to root out the sort of arms trafficking we see here. ...

I think Ukraine only has a few embassies in all of Africa. And like many Eastern European countries, they still have enormous amounts of weaponry that they no longer need. They are short of foreign currency and business opportunities, so they try to sell these weapons. And as long as the procedure is followed, I'm sure they have thousands of permits every year that find their way to client countries, through brokers very often. And I guess, of those thousands of cases, you will find a number of cases that are illegal.

A PROLIFERATION OF BROKERS

So how should they make sure they know whom they're doing business with?

It's very difficult to say. At least, screen the broker or make sure that everyone who's involved with an arms transaction should be known to the authorities. And then the next step would be to develop some sort of blacklist, particularly of individuals -- not of companies, because company names can be changed overnight. And then try to find out and make the list exhaustive, comprehensive enough so that it would include most of the known arms traffickers, especially in Africa. But then again, this is not a foolproof system. There's thousands of brokers worldwide. It's very easy to register as an arms broker. So even that would not exclude abuse. ...

And what is the likelihood that the trade will be controlled from the producing end, by confirming who the brokers are and setting up these regulatory systems?

Well, there's a number of issues that are being discussed on an international level. For newly produced weapons, for instance, marking weapons as traceable back to the producer is something. But even there, you would only find out when it is too late, when the arms are already in the hands of nonstate actors in many cases. If you have an embassy in a country that is purchasing those weapons, you can follow up and see whether they are really used by the armed forces of that country. You could even do periodic checks: After three, six months, are the weapons still there? Are they being used? You could also check: Is this the type of ammunition or weaponry that is being used by that country? Have they been a client before?

One of the main solutions would be to deal with the issue of the brokers. Make a list -- a white list this time -- of registered brokers that are well known, that do not have their companies registered offshore, that are transparent at least to the governments that are dealing with them. And let the state retake control over the arms business instead of letting it proliferate in the hands of private parties, because there the problem becomes increasingly complicated. ...

One significant document that was signed last year was the firearms protocol, part of an international convention on transnational organized crime. That explicitly mentioned the words "brokers and shipping agents," which is important because they are really vital in the legal arms trafficking business.

I think we will have to wait for a firm solution until the rich part of the world starts to feel the consequences of the uncontrolled flows of arms, which means that the arms will turn up more and more in Western societies, that there will be more violence caused by firearms on the loose. This is probably when the problem will be taken more seriously, when the issue of brokers and shippers will be firmly and finally dealt with. ...

BROKER LAWS REMAIN UNWRITTEN

We know who the players are. You have said there are about 50 of them in Liberia. Why don't we just go get them and prosecute them?

It's not that easy. Most of the member states of the United Nations have excellent export regulations for arms. But they have no legislation whatsoever on brokers, go-betweens, middlemen that work from a hotel room in -- let's say, Paris -- to set up a complicated deal between a country in Eastern Europe and a country in Africa without the weapons even going through Paris, without the money even going through France.

So, in France, where the arms dealer sits with his fax machine and his telephone, there's nothing that can be done about his actions, because he's only phoning and faxing. He's not shipping weapons through France. He's not obtaining money in France for those deals because he sets that up elsewhere.

Very few countries have the sort of legal instruments to deal with exactly those middlemen or brokers. And they are the ones you should focus on. Plus, of course, the fact that almost every country in the world uses that sort of middleman for its own arms deals. And when you look at the Small Arms Conference at the U.N. level, which was held in July 2001, there was some progress in wanting to do something about this small-arms problem.

But when it comes to making real recommendations and heavy-duty commitments to stop this or that, most countries don't want this practice of middlemen to end. They don't even want to regulate it. They don't even want to start processing legislation that would enable them to go after this go-between who uses their territory to organize his deals abroad but is nevertheless the brains of the operation, who cannot be caught under current legislation.

LEONID MININ AS A TEST CASE

And there's now a case in Italy that's testing exactly that.

Indeed. There is the fact that Minin was living in Italy, although he was traveling a lot, and using Italian territory to, let's say, organize his arms shipments. Although the weapons never went through Italy -- the money payments went through Cyprus and an account in the United States, and the plane may not have even gone through Italian air space -- the prosecutor in Italy still felt up to the challenge of prosecuting Minin for exactly that, for violating U.N. sanctions, which is also quite unique because sanctions have existed for a very long time. ...

So what is the significance of the prosecution of Minin?

I think it's a unique and very important case. Not only for the United Nations to strengthen the instrument of sanctions, but also to show other member states that, despite the fact that these weapons deals may be very complicated and despite the fact that the facts and the drama are countries away from where the investigation takes place, you can actually set an example and do something about it, and take United Nations embargoes seriously.

Do you find any irony in the fact that the Leonid Minin case came about because he was having a party with drugs and prostitutes?

Yes, there is some irony in it. How Minin was eventually arrested is well known. A prostitute goes to the police to complain that her customer has not paid. When the police go to Minin's hotel room, they find him surrounded with other prostitutes. They find cocaine on the table. They arrest him for a minor offense and only later find out who the man really is. They search his premises, find all those documents. And then they start to take an interest in the case. It's indeed a very minor offense that led to these events. ...

ILLEGAL ARMS SALES AS BUSINESS STRATEGY

Are there other, larger forces encouraging this illegal small-arms trafficking? Is it just the bad guys out there doing bad things, or do you find legitimate business involved too?

Well, it is a profit-driven industry, arms trafficking. It is, to a great extent, done by private individuals that set up their own operations without any, or without necessarily any, government or secret-service backing. It is profit driven, although in Africa, with the presence of so many natural resources and commodities, you very often see that investments or extractive industries are at the same time involved with, or at least sponsoring, the forces that be -- be they rebels or dictatorial governments -- for the benefit of their investment. And this is where the sometimes bigger, legitimate interests coincide with the interests of the gray area and the black trade in weapons.

So what you're saying is, it's just another business enterprise.

Indeed. You see it in many countries all across Africa, large commodity deals often go hand in hand with the supply of lethal equipment, the supply of, for instance, mercenaries or trainers. So, if you are doing business with a party involved in a conflict, and he becomes your strategic partner, it becomes important to you as an investor that he wins the conflict. So, you start to support him and sponsor him in every way. And when the final victory is there, you're both victorious. That's the idea. We may be seeing a similar arrangement in Liberia with the case of Minin as a timber investor who then trades in weapons. I couldn't speak about his other business opportunities, but it is a pattern that we have come across several times.

In all the time you've spent investigating, do you ever find anything surprising about the business of arms trading?

What is still often very surprising to see -- not necessarily in the case of the conflict in Liberia or my work for the panels in Liberia or Sierra Leone -- is when I learn that [the dealers] are the main supplier to this or that rebel movement, and, at the same time, they're supplying the other side of the war. This shocks me, in the way that ideology or politics are not at all involved. And it shocks me in that, if I can find out who's supplying these rebels or this government, they themselves can find out as well. So they very often knowingly do business with the very person who's supplying their enemies. That is sometimes very surprising to see. ... Many of the conflicts currently in Africa are insurgencies of gain, I'm afraid to say. ...

ORGANIZED CRIMINALS AS WAR-ZONE FOREIGN INVESTORS

What is the significance, not just of Minin in Liberia but of organized crime coming to Africa and getting involved in this [illegal arms trafficking]?

Well, this is, of course, the tragic thing. What you have in West Africa is a number of disintegrated states. The state is just not powerful enough to exert its control over the entire territory. And it's basically challenged by a bunch of ragtag rebels with guns that terrorize the country for more than 10 years. As a consequence, not only does the state collapse almost completely but also the whole society disintegrates.

You have a phenomenon of child soldiers that go and kill their own parents, their own kin. This is really the disintegration of the fabric of society. It will be very difficult to rebuild this. And what you then see is that the investors that take an interest in those economies of collapsed states are themselves also players in the criminal field. So that only worsens the problem.

You have very dramatic situations already, where states are collapsing or completely out of control. Then, they invite, actively or passively, the sort of investors that breed on this lack of oversight, on this lack of control, on this lack of interest in the background of the investor. You have presidents that then attract investors that are just out to make a few quick millions in those countries, mostly at the expense of the local population or the long-term economy of that country. And that, of course, is a very dramatic situation. You have state collapse on the one hand and, at the same time, real mafia organizations and organized crime being attracted to this kind of situation.

I think the striking thing is that, in a disintegrated society with so many weapons around, so many different groups and rebels, so much banditry, and no real political agenda -- a completely collapsed state -- in this context of violence, you also have the real professionals of violence: organized criminal groups which do their business deals on the basis of violence and intimidation. They find a very comfortable environment in those war zones. And they try to use these war zones, probably for laundering their money, to set up commodity deals. And they basically abuse those countries in order for their money to become part of the legal economy.

Having a big investment in a country like Liberia may be a way to convert your illegally obtained money into commodities and deal with them legally on the international markets, no questions asked. You get a diplomatic passport from that country. You're considered an important businessman. This is the real danger, I think.

You already have completely disintegrated societies: no banking system whatsoever, an economy that is completely a cash economy. Diamonds there are very significant, of course. Diamonds are usually dealt with completely in cash. They're just converted into dollars, easy to travel with. There is an additional danger that this will further the collapse of those states.

THE WESTERN RESPONSE TO COLLAPSED STATES

And meanwhile, the West does what?

Well, the West agrees, among others, through the United Nations, to put investigators in those countries and find out what is happening, not knowing what the investigators will find and then being surprised at the outcome of the investigation. The wider consequences of it [collapsed national states] is that what you see here is really the rawest form of capitalism. Commodity deals are settled with intimidation and violence, with weapons. This is how globalization is proceeding in weak states, in a continent like Africa, which is probably not up to the challenges of globalization.

It has no real banking system yet to control money flows. It has difficulties even tracking the planes that are using its air space. No wonder we find tens of illegally registered planes flying into an airport with one tail number, just painting another number on and departing to do some sort of an illegal deal. It may not only be weapons; it could be smuggling cigarettes or diamonds or whatever.

So, here you see the consequences of a rapidly developing global economy in an environment which is not up to these rapid developments.

So, with all due respect, the West's response is to send in some investigators and write a report that says, "This is happening, and 'shame on you.'"

Well, what I'm telling you here is almost philosophical. It's a wider speculation on what is really happening there. It's a wider analysis of "What are you seeing here?" This, of course, is not within the mandate of a panel like our [U.N. expert panel]. We're supposed to come back with factual evidence: Who does it? When is it done? How can it be stopped?

The wider picture of what to do about the fact that underdevelopment in its worst form, state collapse, is going hand-in-hand with violence and war is not a question we are dealing with. This is something much more difficult, with much wider implications. And that needs to be looked at in a longer term, I think.

There's a lot of challenges here to go and reconstruct these societies, both to reconstruct state power to exert control over the territory and also to get rid of all these groups -- bandits and rebels -- that are controlling certain parts of the territory. But the society must also be built from the bottom up. Even the family must be rebuilt from the bottom up. These children must be reintegrated -- those who have been kidnapped, have become child soldiers, have been given a Kalashnikov to kill their own kin.

How do you reintegrate these people back into their societies? So, this is a wider challenge that is not within our mandate, and we can hardly recommend anything long-term like that. That's not our job. ...

CHASING THE SYMPTOMS

You got a call one day to investigate why arms embargoes and other sanctions weren't working. Then you started to scratch around a little bit. It seems that what you have begun to uncover, or chase after, are just symptoms.

Indeed, the arms deals that we're looking into -- the diamond trafficking going on there, those strange characters showing up as big businessmen in Liberia -- are considered organized crime figures by police services worldwide. But big businessmen in those countries are just a symptom of a wider phenomenon: These countries are in such bad shape that you can hardly still speak of a country or a state.

You also see that the conflicts are contagious. If you look at the wider picture, if you go into the chronology -- first this happened, which resulted in that conflict, and this resulted in the other one -- you see a conflict starting in one country. It then ends up in factionalism. The country is controlled by different warlords who control small parts of whatever lucrative territory there is.

Then it spreads into another country, as if the borders have no meaning. This is another symptom that the state is something which doesn't really exist. For a long time, throughout the war in Liberia -- basically from the early '90s on -- the international community did recognize a transitional government in the capital. But the only thing the capital in that transitional government controlled was the foreign debt of the country. Practically all the refugees that had fled from those warlord-held areas went to the capital. ...

Apart from that, the whole country was run by warlords which did their different deals with multinationals, who just kept on shipping commodities out of the country. The state as we know it in international relations -- a government in a recognized capital -- still existed symbolically, but basically the borders were no longer there. ... What you see here also is almost the collapse of sovereignty under the weight of these conflicts.

A WORLD MAP OF STATES AND GROWING BLACK HOLES

But, so far, it seems that the response of the West has been to deal with the symptoms through sanctions and embargoes.

Yes, I agree. It's just doing something about the symptoms. But you should also look at it this way. The international community, the world as we know it, is a world of states. And we know that the world of states has been so defined for 350 years. If you look at the world map, it's a map full of states.

There are no other entities but states. The United Nations deals with nation-states. They are the only recognized members of the United Nations. The world doesn't know how to deal with any other entities -- black holes on the map, if you want -- state entities that no longer exist, which are not clearly defined and demarcated within a certain territory where a central authority has sovereign control over its borders and its territory.

If the state ceases to exist, as it has in Liberia and, to a certain extent, in Sierra Leone and Somalia, maybe some places in the Balkans, where whole regions of territory are basically run by groups that could only be described as bandits or warlords, that's a phenomenon the world has not had to deal with for hundreds of years.

So, what are the instruments available to deal with those areas? ... This is way beyond the mandate of the work I was hired for by the United Nations as an arms trafficking expert, but the United Nations can send mediators and organize peace conferences, but the main players are representatives of states, and they have no instruments to deal with places like that. ...

How would you explain to viewers in the United States why they should be concerned about the disintegration of societies in West Africa and arms coming from Eastern Europe?

Well, if you mean, Does it have a direct impact on their lives? I think probably not. Certainly not in the short term. In the long term, the disintegration of states in West Africa may be, let's say, an example of what could happen in the inner cities of big countries elsewhere -- with the massive availability of weapons, with economies being liberalized more and more and more, with the private sector becoming stronger, and state overseeing bodies becoming weaker.

This is a phenomenon of which we are only seeing the extremes in Africa. And there it leads to the disintegration of society. States like the United States or states in Europe or elsewhere, of course, have a much longer tradition and do still exert control over their entire territories. But still, I think these extremes can teach us something about the wider phenomenon of what is happening if you let private market forces -- granted, in their lowest possible form in conflict zones in Africa -- if you just let them play themselves out without any state control, this is what might happen.

This is just an example of what may happen if you allow weapons to proliferate the way they do in some bigger cities in heavily populated areas. Sometimes, the state does decide to withdraw. There are many examples of megacities worldwide, including in the United States, where the police consider some areas no-go. This is the withdrawal of the state. What you see happening there is a disintegrated part of society where, indeed, the social fabric completely breaks down. And the only ways people communicate and transact with each other is through intimidation and violence.

A GRADUAL APPROACH TO STOPPING THE WEAPONS FLOW

To stop the weapons from getting into these war zones, should it or could it be a matter of law enforcement just having the will to go after these middlemen, to make an example of them, put some of them away and stop the trade?

Yes, it could. It's a matter of law enforcement but also a political decision, of course, to follow and strongly implement decisions that are taken at the United Nations level -- in this case, to implement them in national legislatures, which is done automatically in most countries. But, then, to really go after the wrong-doers, yes, indeed.

On the other hand, I don't have the feeling that the most sharply developed intelligence agencies, let's say, in Western countries or in the former Soviet Union, that they know all that much about what is going on in Africa. Africa is not high on the agenda. There are no classrooms full of analysts and secret agents looking into the situation in Sierra Leone and Liberia. These countries are just not important enough on the national agendas of those states, I'm afraid. I don't think that in all those cases that we have mentioned, even a big country like the United States would have all the elements necessary to pursue someone in court.

A U.S. State Department report in July of this year basically said "name and shame" has done nothing to impede the flow of weapons: that this is a matter of law enforcement, that all we're really doing is telling people what they already know. We know who is out there doing it, and we're not really accomplishing anything.

It's true to a certain extent. Even when we met with some of Victor Bout's [associates, they really challenged us. ... "Well, then, catch us. Ground one of our arms trafficking planes." The man I'm referring to is Pavel Popov in Moldova, who had set up sort of a front company for Victor Bout to issue false flight plans for him. He basically had the idea that U.N. investigators could arrest people and ground planes and all that, which is not the case. Even so, he was very defiant, saying, "Well, if you know everything, then why don't you catch us?"

They basically laugh about it. As long as the United Nations takes action, puts experts in the field and issues reports, and the countries where these individuals are doing their business do not act, then, indeed, few things can be done. Of course, the United Nations is only as powerful as U.N. member states allow it to be. And the United Nations, as such, cannot arrest people, has no subpoena rights or whatever. It's up to the individual member states to act.

It must be very frustrating.

No, it's not. On the other hand, we do make it more expensive for arms dealers. We should not have the idea that we're out there writing a report that's going to end the war or stop the whole problem. It's much more complicated than that. That would be being a bit over-ambitious, I think.

But, we can do some things about it. We do know that these reports wake states up. Intelligence agencies may start working on the elements that are given in those reports. NGOs in many countries may pick something up and do their own research, or run them through their national media and put some pressure on their national parliaments. So, reports like ours can have many different consequences that do have some impact. But, indeed, there are very, very few cases of people actually caught in the act, where information obtained by the United Nations leads to people being questioned and convicted. Very few cases.