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HOW U.S. ARMS DEALERS ARE MAKING A KILLING
16 Feb 1987 —*... Adnan Khashoggi, a mastermind behind the U.S. arms sales to Iran.
"The most notorious weapons merchant is Saudi Arabian
Adnan Khashoggi, a mastermind behind the U.S. arms sales to Iran. But dozens of lesser-knowns share
Khashoggi's zest for arms deals, intrigue, and big, big profits. In the U.S. they include: wisecracking Sam Cummings, one of the world's largest sellers of small arms;
Sarkis Soghanalian, a Lebanese citizen of Armenian descent who operates out of Miami and frequents battlefronts with customers; and David Duncan, a redheaded former intelligence agent and
James Bond look- alike who competitors say runs guns to the Nicaraguan contras for the Central Intelligence Agency. Some of these middlemen stick to the legitimate, or ''white,'' market. Cummings trades carloads of surplus military equipment among friendly Third World nations and represents buyers and sellers too small to operate their own international networks. Others, like Khashoggi and Duncan, concentrate on the ''gray'' market, making clandestine deals on behalf of the very governments, like the U.S., whose laws the sales sometimes violate. Theirs is a shadowy world of unlisted phone numbers, Swiss bank accounts, and front corporations where the only constants are illusion and profits. Still others dip into the ''black'' market, where sales are patently illegal, the dealers do not have clandestine government backing, and the returns reflect the risks. In one recent transaction, a jet fighter part stolen from the U.S. Navy in San Diego and sold to Iran was marked up 1,000%. Though clearly the glamour guys of the industry, arms dealers handle only a small portion of the world trade in weaponry. Governments and weapons manufacturers dominate the white market in international arms sales, which amounted to $30 billion or so last year. About two-thirds of those deals are direct government-to-government sales. Most others are negotiated by major corporations under the watchful eyes of their governments. The gray and black markets, dominated by the freelancers, total only a few billion dollars a year, according to most authorities. But unlike the legitimate trade, which has dropped sharply since 1982 (see page 68), the gray and black markets are awash with orders. Says arms expert Michael Klare of Hampshire College in Massachusetts: ''It's boom city.'' The importance of these back alley fixers far exceeds the dollar value of their transactions. They supply the world's hot spots, the warring countries and revolutionary groups put off limits by most governments. Among them: Iran, Iraq, South Africa, and rebels in Central America, Afghanistan, and Angola. For the buyers, a timely planeload of spare parts and ammunition can mean the difference between victory and defeat. Moreover, since the tight-lipped brokers often operate as fronts for governments anxious to hide their arms trafficking, they can have inordinate sway over the course of nations. Witness the bungled U.S. sales to Iran."
https://archive.fortune.com/magazines/fortune/fortune_archive/1987/02/16/68671/index.htm
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