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SLUG: 2-321064 Pentagon/Bout (L)

DATE=December 9, 2004







HEADLINE: Suspected Arms Dealer Had Pentagon Contracts

INTRO: A suspected arms trafficker, accused of supplying weapons to rebel groups across Africa, has also worked as a sub-contractor with the U.S. military in Iraq. The Pentagon says it has canceled agreements with air carriers run by the suspected arms trafficker. Pentagon Correspondent Nick Simeone has more.

TEXT: Until recently, the Pentagon had agreements to supply fuel to cargo airlines owned by, or run by associates of, accused arms trafficker Victor Bout.

Successive U.S. administrations have known about the Russian-based businessman's alleged involvement in the illegal arms trade. He is accused of violating United Nations sanctions by supplying weapons to some of the world's most brutal regimes and rebel groups, as well as theformer Taleban government in Afghanistan. The U.S. Treasury Department has banned him from business in the United States because of his alleged involvement in flying weapons into Liberia.

Even so, the Pentagon's Defense Logistics Agency, until August, had agreements with British Gulf and Air Bas, two air carriers run by Victor Bout or his associates, which were working as sub-contractors with two U.S. air freight carriers. Jack Hooper is an agency spokesman.

/// HOOPER ACT ///

"That entity was an authorized contract cargo hauler for army and Air Mobility Command, and our job as a fuel supplier is to support those military services and their authorized contractors. We wouldn't have had any reason to question their ability to buy fuel. The companies don't appear on any of the lists that would identify them as an excluded party."

/// END ACT ///

A spokesman for the Air Mobility Command, the Pentagon agency responsible for supporting military units in the field, tells VOA the agency informed the two U.S. air freight companies -- Federal Express and Falcon Express Cargo -- they may be breaking the law by using Victor Bout's airlines as sub-contractors for work on Defense Department contracts. Air Mobility says it is now satisfied that those relationships have ended.

The Army says it has no current contracts with either of Mr. Bout's air carriers. But, a recent report by the liberal-leaning research institute, The Center for American Progress, says the fuel purchase agreement with Victor Bout's airlines go through the end of the year. A Texas-based accountant identified as Mr. Bout's long-time business manager refused to respond to repeated VOA requests for comment.

Victor Bout himself denies all charges of arms trafficking or involvement in any illegal activities. The United Nations accuses him of using old Soviet aircraft to violate weapons bans by delivering arms to rebels in countries from Sierra Leone to the Congo. Belgian prosecutors issued a warrant for his arrest two years ago on money laundering charges. (SIGNED)


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