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The Merchant of Death's Account Book

Declassified Documents Reveal More Information on Government's Opportunistic Relationship with World's Biggest Arms Smuggler, Sarkis Soghanalian

U.S. Cooperated with Arms Dealer Despite Record of Smuggling, Weapons Sales to Saddam Hussein, and Reported Ties to Armenian Terrorists

Soghanalian Tried to Link House Speaker Newt Gingrich to Bribery Scam in 1990s; and Assisted Ferdinand Marcos in Coup Attempt in 1980s

National Security Archive Electronic Briefing Book No. 502

Edited by Lauren Harper

Posted February 23, 2015

For more information contact:
Lauren Harper - 202/944-7000, nsarchiv@gwu.edu

Related Links

Inside America's Long, Tortured Pursuit of the 'Merchant of Death'
By Justin Rohrlich, VICE News, February 18, 2015

 


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Washington, DC, February 23, 2015Documents posted for the first time — in a collaboration between the National Security Archive and VICE News — provide insight into the U.S. government's paradoxical and opportunistic relationship with arms dealer Sarkis Soghanalian, whose larger-than-life deals were so well known that he was an inspiration for Nicholas Cage's character Yuri Orlov in the 2005 film, Lord of War.

Sarkis Soghanalian was the Cold War's largest arms dealer, made over $12 million a year at his peak, and had his hand in seemingly every major conflict across the globe – with the U.S. government's tacit approval. His largest weapons deal was a $1.6 billion sale to the Saddam Hussein regime at the outset of the Iran-Iraq War that included U.S. helicopters and French artillery, and he sold arms to groups in Lebanon, Libya, Mauritania, and Peru from the 1970s through the 2000s. Soghanalian was nicknamed the "Merchant of Death" for arming so many conflicts, a moniker he dismissed by arguing Alfred Nobel was called the same for inventing gunpowder, "and then they named it the Nobel Prize." At one point the U.S. government indicted Soghanalian for, among other things, wire fraud and violating United Nations (U.N.) sanctions, but then freed him another once he provided useful intelligence.

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Nicolas Cage as Yuri Orlov in the 2005 film, Lord of War, left, inspired by Sarkis Soghnalian, right.

The U.S. relied on Soghanalian's unique intelligence so much that it kept him out of jail – for the most part. In 1982 he was sentenced to only five years probation for wire fraud in connection with reneging on a 1977 $1.1 million machine gun deal to Mauritania, and a federal judge dismissed all charges against him in 1986 after he was arrested at the Miami International Airport for possession of – among other things – two unregistered rocket launchers. Despite his oftentimes illegal arms trade, the longest prison term Soghanalian ever served was two years in connection with the 1983 sale of 103 Hughes helicopters and two rocket launchers to Iraq in violation of U.N. sanctions. The initial sentence was six and a half years, but was reduced after Soghanalian helped Americans infiltrate a sophisticated counterfeiting operation into his native Lebanon. Soghanalian said, "When they needed me, the U.S. government that is, they immediately came and got me out."

According to his October 10, 2011, Washington Post obituary, "He considered himself a fastidious businessman and required proof of his deadly wares' delivery. Once, from Lebanese rebel fighters, he reportedly accepted human ears floating in jars of formaldehyde for assurance." He also kept his lucrative business partners healthy, once flying "an American physician to Iraq to examine Hussein's bad back." Soghanalian allegedly had a particularly close relationship with President George H. W. Bush, who remarked that Soghanalian's humanitarian work, which included airlifting supplies to the Soviet Union after a devastating earthquake left tens of thousands homeless, "strengthened the ties that unite mankind."

After his 2011 death, the Archive filed a series of targeted FOIA requests for documents on Soghanalian to the FBI, the U.S. Central Command, the Defense Intelligence Agency, Immigration and Customs Enforcement, Border Patrol, and the Department of State. The hard work of archivists and declassifiers at these agencies resulted in the declassification of nearly 2,500 pages of documents on the notorious arms dealer, and today the National Security Archive is posting the ‘top 10' documents from this trove. The vast majority of these 2,500 documents were disclosed by the FBI, which is a great resource for FOIA requesters interested in files the Bureau may have on someone who has died (FOIA tip: if you are requesting an FBI file like this, be sure to include an obituary in your request).

The documents posted today include:

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One of Soghanalian's bills of sale found in a February 6, 1981, FBI docket.
  • Evidence the FBI planned to meet with the CIA, Department of State, the Department of Defense, and at least one other unknown agency, in 1981 to coordinate the investigation into the 1977 Mauritania deal.
  • Reports on Soghanalian's close ties with both the Armenian Church and the Armenian Secret Army for the Liberation of Armenia.
  • Further details on the cooperation between Soghanalian and various U.S. government agencies (the FBI's Miami office allegedly had an "excellent rapport" with him, and nearly investigated Newt Gingrich for bribery in 1997 based on Soghanalian's information).
  • Background materials for investigations into Soghanalian for wire fraud and money laundering.
  • Bills of sale for his munitions deals.

What remains unclear is who Soghanalian's primary government contacts were, aside from the FBI's Miami bureau. Most believe he was a CIA informant, although others argue that Soghanalian's handlers were primarily from the Defense Intelligence Agency and the White House, in part because Sarkis found the CIA "largely incompetent… [and] he repeatedly ran into their less than stellar arms buying operations and exposed and embarrassed them."

 


The Documents

Headlines
A snapshot of the documents the Archive received in response to its 2011 FOIA request to the FBI for its files on Soghanalian. Image by Lauren Harper.

Document 1: FBI Automobile Disclosure Act Report, "Title: Sarkis Soghanalian," August 16, 1962.

Source: FBI Freedom of Information Act release.

In one of the earliest instances of the U.S. intelligence community investigating Soghanalian, this August 16, 1962, FBI Auto Information Disclosure Act report details one of Soghanalian's early car dealerships. According to the Bureau, Soghanalian was flying to Germany to purchase new VWs directly, importing them to the U.S. through Newark, New Jersey, and then shipping them in trailers he owned to his auto dealership, where he sold them in violation of New York State and federal auto laws.

 

Document 2: FBI memo for the FBI Director William H. Webster, "Subject: Sarkis Soghanalian, d/b/a United Trade International, etc.," February 6, 1981.

Source: FBI Freedom of Information Act release.

February 6, 1981, FBI docket of 15 documents translated from French to English concerning United Trade International, one of Soghanalian's weapons firms, describes the November 16, 1977, sale of 197 heavy machine guns, ammunition, and cleaning kits to the Islamic Republic of Mauritania, a former French colony, for $1,153,590. Browning Precision Tool, another Soghanalian-owned enterprise, certified the weapons and ammunition as new on November 2, 1977. Soghanalian later reneged on the agreement, was convicted of wire fraud in 1986, and served a five year's probation.

 

Document 3: FBI, "SPIT Request," November 4, 1980.

Source: FBI Freedom of Information Act release.

An earlier November 4, 1980, handwritten FBI "SPIT Request" characterizes the Mauritania case as a "fraudulent weapons case" in which Soghanalian received $1.153 million and failed to deliver any products. The section of the request stating the desired objective of FBI involvement in the wire fraud investigation is withheld pursuant to the b(3) FOIA exemption.


FBI "SPIT Request," November 4, 1980.

 

Document 4: FBI cable to Salt Lake City, "Subject: Re Salt Lake City Airtel to Miami, 10/20/80," January 16, 1981.

Source: FBI Freedom of Information Act release.

This FBI memo concerns likely French involvement in Soghanalian's 1977 arms sale to Mauritania. It states, "FBIHQ and USDJ should be aware that all major arms transactions in France are controlled by the French government or conducted with specific French government authorization and that ‘special relationships' exist between France and former colonial possessions in Africa."

 

Document 5: FBI cable to HQ Director, "Subject: Sarkis Garabet Soghanalian, DBA United Trade International," January 22, 1981, Unclassified.

Source: FBI Freedom of Information Act release.

This unclassified FBI cable concerns the tentative trip by a Special Agent from the Miami bureau to Washington, D.C. According to the document, the purpose of the visit "is to coordinate investigation with the following agencies: 1. CIA, Headquarters, Langley, Virginia; 2. United States Department of State; 3. Department of Defense; 4. [Redacted]. Purpose of coordination visits to CIA, State, and Defense Departments is to review departmental files on subject and ascertain if these agencies have any information which could jeopardize successful prosecution of subject. Purpose of visit [Redacted]."

Soghanalian insisted that despite his line of work, he never acted against U.S. policy interests –in part because constant U.S. surveillance would have made it very difficult. In a 2001 Frontline interview he said, "The Americans knew what I was doing, every minute, every hour. If I drank a glass of water, they were aware of it and what kind of water it was." While Soghanalian insisted he never acted against U.S. foreign policy goals, in the same interview he said when the U.S. approached him about selling weapons to Iran during the Iran-Iraq War he refused, saying arming "Iran is like riding two horses in a horse race. You can't do that."

 

Document 6: FBI memo to Director William H. Webster, "Subject: Armenian Terrorist Matters," January 8, 1988, Secret.

Source: FBI Freedom of Information Act release.

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Soghanalian was indicted on December 2, 1987, for attempting to smuggle 103 Hughes 50 MD/Tow helicopters (pictured) into Iraq.

This FBI memo iterates that the Miami Division has "an excellent rapport with Sarkis Soghanalian and could freely discuss with him his association and knowledge of the Armenian Hunchak party and the independent visit of Armenian Pope Vacker I to Canada."

Soghanalian's relationship with the Miami bureau was so close it nearly led to a 1997 investigation of Speaker of the House Newt Gingrich for bribery. According to Sarkis, he informed the Miami bureau that Gingrich's wife Marianne said in a 1995 meeting that for $10 million she could convince her husband to lift Iraqi sanctions, allowing Soghanalian to collect on the $80 million debt Saddam owed him. The investigation never went forward, however, because there was not enough evidence that Mr. Gingrich had any knowledge of the plot.

The Secret 1988 memo also notes that in "late 1987, Sarkis played a critical role in an attempt to transport former president Ferdinand Marcos from Honolulu, Hawaii to the Philippines in a possible coup attempt."

 

Document 7: FBI report, "Title: Armenian Terrorist Matters," January 15, 1988, Secret.

Source: FBI Freedom of Information Act release.

This Secret FBI report describes information provided by a confidential source who cites Soghanalian's status as a Knight of Antelias – the highest award of the Armenian Church. The source offers other assertions on topics such as land purchased by Soghanalian in Ft. Lauderdale, Florida to build a monastery, as well as his contributions to a monastery in Armenia. The source cited in the report further alleges that Soghanalian made appearances on the West Coast on behalf of the Hunchaks and Dashnaks, the Social Democrat Hunchakian Party and the Armenian Revolutionary Federation, respectively.

 

Document 8: FBI memo, "Subject: Sarkis Soghanalian," Undated, Secret.

Source: FBI Freedom of Information Act release.

This FBI memo states on April 16, 1985, a source informed the bureau that he put Sarkis in contact with Bell Helicopter, and that Soghanalian was providing Iraq with 45 Bell 214ST helicopters at a cost of $4,000,000 each. The source also says that Soghanalian is "well protected and connected with the U.S. government. His contacts are [redacted]."

 

Document 9: FBI interview transcript, File # 281H-LA-199755-30, January 11, 1999.

Source: FBI Freedom of Information Act release.

This FBI transcription of an interview with an unidentified suspect in connection with a multi-million dollar wire fraud case concerns the suspect's fraudulent cashing of a $3,000,000 cashier's check. During the course of the interview, the suspect says he visited Soghanalian to cash the check because Sarkis was "very wealthy," and claimed "Saddam Hussein owes [Soghanalian] $95,000,000 for weapons he sold to Iraq." Soghanalian said he could cash the check "no problem," but that he would have to do so in Europe due to tax troubles in the U.S. Soghanalian was arrested in 2001 for his participation in the check scheme, but was released once he revealed the CIA's support of Peruvian intelligence chief, Vladimiro Montesinos, and his orchestration of a plot that saw 10,000 assault rifles (purchased from Soghanalian under the belief they were intended for the Peruvian military) diverted to the Revolutionary Armed Forces of Colombia (FARC) – a U.S. designated terrorist organization.

 

Document 10: Department of Justice letter to the Acting Chief of the DOJ's Internal Security Section Criminal Division from U.S. Attorney Alejandro Mayorkas, "Subject: Search Request re: Sarkis Soghanalian," June 2, 1999.

Source: FBI Freedom of Information Act release.

This Department of Justice memo summarizes the check scheme as follows: "A number of individuals would recruit various individuals to steal bank cashier's checks from banks and to convert checks into cash by conducting a series of monetary transactions at casinos and other financial institutions. At least two such checks were stolen from a bank made payable in the amounts of $300,000 and $3 million. The $3 million cashier's check was fraudulently made to T.I.D.R., a company believed to be controlled by Soghanalian, who attempted to cash the check at a bank in Paris in August 1995." The memo continues: "Through various co-conspirators who have cooperated with the government, and through other channels, we have learned that Soghanalian has provided information to the government in the past." The U.S. Attorney then writes: "In this regard, this office requests that you ask the relevant components of the intelligence community to conduct a search of Sarkis Soghanalian's files to determine whether Soghanalian has had or currently has any relationship with any intelligence agency and whether any payments (or other benefits or promises) have been made to him."

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