Sleeping With The Devil (4 page)

    The years I spent serving my country as a CIA officer in places like
Lebanon, the Sudan, northern Iraq, and the Muslim states of Central Asia taught me something
else. They showed me the human carnage and suffering that always seem to follow when America
puts its head in the sand or when dollar signs blind us to what’s in front of its nose. Saudi
Arabia is no abstraction. It’s a powder keg waiting to explode. If that happens, it could carry
me and you, our savings and security, with it.

    For a quarter of a century, I’ve been trying to understand the root
causes of violence in the Middle East. I didn’t begin this search after September 11, and I
certainly didn’t undertake it with an eye to Saudi Arabia and its crude oil. I wanted to know
more about the Muslim Brothers: who they were, how they operated, why the U.S. had made common
cause with the Brothers in such far-flung places as Yemen and Afghanistan. The harder I looked
and the closer I got to answers, the more I realized that my search was leading me down two
roads - to Riyadh and to Washington - and to the oil that connects them.

    TO ME, the immediate issue is threefold:

    

    • Can the Wahhabis, the Shi’as, the Muslim Brothers, and everyone
else in Saudi Arabia who wants to bring down the Al Sa’ud lay their hands on enough firepower
to do so? That might sound easy, but believe me, it isn’t.

    • Is the House of Sa’ud beyond redemption or protection as a
ruling authority?

    • Does Washington have the capacity to see the Saudi kingdom for
what it is? Or does it have its hand so deep in the Saudi wallet that it won’t see and won’t
act?

    

    Take the rage in the mosques and streets of Saudi Arabia; add weapons
and a willingness to use them, not just against Western terrorist targets but against the House
of Sa’ud and the petroleum infrastructure that supports it; continue to look the other way
while it all happens; and we can take the last half century of oil-fired industrial prosperity
and kiss it g-o-o-d-b-y-e.

    But it all begins, as Part I of this book does, with firepower. That’s
why I found myself on the Israeli Riviera one sunny day in the spring of 2001.

    

    

    

    

    

    THE MARBLE PALACE perched amid the olive trees above the sea looked
like a lot of other posh resort hotels I’d seen around the Mediterranean. The shiny new
Mercedes and canary yellow Ferrari parked out front fit right in. I knew that if I poked around
a little, I’d find a casino somewhere on the premises.

    It didn’t take me long, though, to notice that a couple things were out
of place: the pack of little blond boys running around on the front lawn, shouting in Russian,
and the young girls wearing identical bandeau bikinis, reading glossy Moscow weeklies by the
pool. When the bellboy greeted me in Russian, I knew I had landed on one of those Russian
beachheads I’d heard so much about. Since the collapse of the Soviet Union, the Russian mob,
Russians fleeing the Russian mob, and just plain rich Russians had been setting up all along
the Riviera, including Israel’s coastline. The fancier the place, the better. Money never
seemed to be a problem. And they liked to keep to themselves.

    I was actually in Caesarea to see a Russian, someone I’d known only by
reputation. Yuri, as I will call him, was a merchant of death. He had made a colossal fortune
in the early 1990s trading small arms for African oil. Over the last several years, with
capital under his belt and the free run of Russia’s state-arms-trading firm, Rosvoorouzhenie,
he’d branched out and started peddling arms everywhere. Supposedly, Yuri could put his hands on
almost any piece of Russian hardware, from a MIG-31 to a T-80 main-battle tank. But he did have
his professional ethics. When a competitor floated the rumor that Yuri was moving weapons-grade
uranium, Yuri had him squashed like a Volga tick. It was one thing to earn an honest living
fueling civil wars in West Africa, but something entirely different to deal in the nasty stuff.

    I saw Yuri come out of the elevator. Dressed in a pair of pressed
Levi’s, suede Italian loafers, and a diaphanous white linen shirt, he could have passed for a
well-heeled tourist. Slim and sandy haired, he looked younger than his forty-five years.

    We settled in a restaurant where Yuri waited glumly for his coffee. My
chitchat about the weather, Caesarea, whatever I could think of that might keep the
conversation from sinking into silence, barely got a nod out of him. I stopped talking and took
a closer look. His waxy yellow skin told me he hadn’t been spending his time on the beach or
the links. To judge by the spiderweb of broken blood vessels in his cheeks, he liked to relax
with a bottle of vodka.

    My business with Yuri, if you want to call it that, was to do a favor
for a friend who wanted to know if Yuri was interested in financing an oil contract, a
perfectly legitimate one. My friend figured that the Russian, with all his loose cash, might
want to get out of the arms trade and clean up his reputation.

    As soon as Yuri finished his second espresso, I popped the question. I
was halfway through it when he held up his hand to stop me. “You’re on your way to Syria, our
friend tells me,” he said.

    He was right. The next day I was flying to Amman, Jordan, and from
there to Damascus. The borders between Syria and Israel had been closed ever since Israel’s
independence over half a century earlier. You had to touch down somewhere else before setting
foot in Syria.

    “I’m in the market for Syrian oil,” Yuri said. “I’ll take as much as
they’ll give me. And you know what? I’ll pay two dollars above market price.”

    That was a curveball I hadn’t seen coming. I didn’t need to be a
professional oil trader to understand that Yuri didn’t have legitimate Syrian oil in mind - no
one pays two dollars a barrel over world market for any oil. What Yuri was after, I had little
doubt, was sanction-busting Iraqi oil, currently selling for a discount of ten to fifteen
dollars a barrel in Syria. It was impossible to nail down the exact amounts involved - Syria
obviously didn’t publish figures - but I’d seen estimates that put the total trade above $3
billion a year, a business big enough to attract Yuri and lots of other vultures of the global
economy.

    Iraq was glad to have another market for its illicit oil, even at a
steeply discounted price. It was thanks to smuggled oil that Saddam Hussein had stayed afloat
since the end of the Gulf War. Saddam used the revenues to feed and equip his elite troops and
intelligence services - his brutal praetorian guard. The clandestine trade in oil had started
as soon as the last American M-16 fired its last round in February 1991. At first the oil moved
via small barges hugging either side of the Persian Gulf coast and traveling at night, thereby
avoiding detection by the American fleet. Iraq then started smuggling it out by truck, mostly
to Turkey and Iran. I had seen miles-long truck convoys when I was in Kurdistan in 1994 and
1995. Syria came late to the game but was more than making up for that in sheer volume. Most
oil went through an old pipeline to the Syrian port of Baniyas. Some came in by truck.

    With all the revenue from Iraqi oil sold outside the United
Nations-imposed oil-for-food regimen, Saddam did quite nicely. Not only could he pay for the
forces that kept him from being overthrown, he had even started reequipping his regular army.
Shipments of new Russian goodies were arriving every day. There was also enough money left over
to keep Saddam’s inner circle, including his vicious son Uday, who ran the oil business, from
worrying about a shortage of Cuban cigars, sports cars, and prostitutes. The Iraqi in the
street never saw a penny of it.

    Syria didn’t do badly, either. By selling the illegal Iraqi oil on its
domestic market, Syria freed up the oil it pumped from its own fields to sell abroad at world
prices. The country’s oil exports rocketed from 320,000 to 450,000 barrels a day. Syria, of
course, denied that the increase had anything to do with Iraqi oil, insisting against all
evidence that the extra 130,000 barrels were squeezed out of its own fields. The fact is, Syria
was making hundreds of millions of dollars a year off illicit Iraqi oil. For a country whose
economy had been about to crater, that was a godsend.

    As for the commission agents and traders - the WD-40 of this lovely end
run around the United Nations sanctions on Iraq - there was plenty of money to treat themselves
to new estates in Saint-Tropez or on Spain’s Gold Coast. Maybe that’s what Yuri was after: He
seemed to have taken a liking to sweeping views of the Mediterranean.

    The problem with Iraqi oil wasn’t buying; it was unloading. Although
the trade in Iraqi crude was an open secret, Syria didn’t want to give anyone the chance to
make a case by seizing a tanker full of the stuff. Syria never knew when some powerful
congressman might hammer the State Department and the navy, forcing them to do something about
the oil. With the screws turned, it wouldn’t take the navy long to find a Syrian oil tanker on
the Mediterranean. Sobered by such an ugly prospect, Syria wouldn’t allow a drop of Iraqi oil
to be exported. Yuri would have to come up with a damn serious sweetener to change Syria’s
mind. Illegal oil trading isn’t my thing, but curiosity is, so I played along. They’d taught us
at Langley that involvement is the first step to understanding.

    “How are
we
going to make any money if we pay two dollars more
than we have to?” I asked.

    Yuri cut me off before I could continue. “Leave the numbers up to me.”
He didn’t say anything for a minute, probably deciding how much he could risk telling me. Like
espionage, the oil and arms business is run on a strict need-to-know basis: Give up only what
you have to.

    “What I’ll tell you is this,” Yuri went on. “I intend to wrap up my
offer in a nice, neat package. I’m talking about PMU-300s. Tomorrow I could put my hand on
twenty TELs and a hundred pencils. You open the door in Damascus, and I’ll convince the Syrians
this is a deal they can’t refuse.”

    Now things were starting to get interesting. In the arms lingo, a TEL
is a transporter-erector-launcher, and a pencil is a missile, but this wasn’t just any TEL. The
PMU-300 is a sophisticated Russian mobile surface-to-air missile system. I wasn’t surprised
Yuri was offering it for sale - he sold Russian arms for a living. What did surprise me was
that he was pitching it here in Israel. Technically, Syria and Israel are at war. Syria’s
possession of PMU-300s would upset the balance of force between the two countries. I couldn’t
imagine Israel would be pleased to find out that sophisticated arms were being sold to its
archenemy on its own soil, one sunny morning halfway between Tel Aviv and the Lebanese border.
Then again, money helps disguise a lot of unpleasant truths.

    I wasn’t going to buy illegal Iraqi oil, and I wasn’t going to buy arms
for Syria, but I was closing in on the answer to a question I’d had for a long time. If Yuri
was prepared to sell PMU-300s from a luxury resort hotel in Caesarea, armed with an
international cell phone and a fat Rolodex, what else could he sell? And to whom? You don’t
need to be ex-CIA to know that globalization isn’t just about Diesel jeans, Sony PlayStations,
and Mercedeses. What I intended to find out was exactly how globalized the shady side of the
arms business had become.

    In all my years in the CIA, I saw very few borders you couldn’t get
arms through, around, or over. [text omitted]Through the 1990s, arms were coming across the Amu
Darya, the river that separates ex-Soviet Central Asia from Afghanistan, in raft loads. A few
Stinger surface-to-air missiles found their way into the former Soviet Union. One errant
Soviet-designed missile even made it to Mambasa, Kenya, where it misfired trying to bring down
an Arkia Israeli Airlines passenger jet in late November 2002.

    Western Europe hasn’t been immune, either. On September 2, 2001, two
young North African immigrants decided they’d had enough of France, or at least French
authority. Armed to the teeth, they launched a military assault on the Beziers municipal
office. After gunning down a mayor’s aide with a Kalashnikov assault rifle as he sat in a car,
they fired a rocket from a Russian-made launcher at an empty police car, which exploded in
flames. They tried to do the same to a second police car - this one with four gendarmes inside
- but the grenade turned out to be a dud. The police were left shaking their heads. Buying
military munitions on the black market, it seemed, was easier than buying dope. Ten years ago
an enterprising French criminal would have been lucky to put his hands on an unregistered
handgun, and it would have cost a fortune. Today he could buy a Kalashnikov for five hundred
dollars in one of Paris’s ghetto suburbs, or a rocket launcher and grenade for three hundred.
Don’t forget: France has one of the most restrictive gun laws in the world.